SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K-A
(AMENDMENT NO. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 27, 2000
MAXX INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Utah 000-26971 87-0284871
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
c/o Solomon Broadcasting International, Inc.
130 El Camino Drive, Beverly Hills 90212
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number: (516) 827-5500
Area Investment and Development Company
(Former name or former address, if changed since last report.)
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This form 8-K-A (Amendment No. 1) amends the Registrant's Current Report on
Form 8-K dated March 27, 2000 and filed on April 11, 2000.
Item 2. Acquisition or Disposition of Assets.
Item 2 is incorporated herein by reference to the Registrant's Current
Report on Form 8-K dated March 27, 2000 and filed on April 11, 2000.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
Audited financial statements of Pure Vision Internet, Inc. for the years
ended December 31, 1999 and 1998.
(b) Pro Forma Financial Information.
Pro forma balance sheet of the Registrant (formally known as Area
Investment and Development Company) as of December 31, 1999, pro forma statement
of operations for the year ended December 31, 1999 and pro forma statement of
operations for the three months ended March 31, 2000 giving effect to the pro
forma adjustments related to the acquisition of assets from Maxx International,
Inc. (a Nevada corporation) and the acquisition of Pure Vision Internet, Inc.
(c) Exhibits.
Exhibit No. Document
----------- --------
(2.1) Stock Purchase Agreement Dated February 2000, by
and between the Company and Holders of 100% of the
Outstanding Shares of Pure Vision Internet, Inc.
Common Stock (incorporated by reference from the
Annual Report on Form 10-KSB filed with the
Securities and Exchange Commission under File No.
000-26971)
(23) Consent of Jim Clouse, CPA
(99.1) Press Release dated February 16, 2000
(incorporated by reference to the Registrant's
Current Report on Form 8-K dated March 27, 2000
and filed on April 11, 2000 with the Securities
and Exchange Commission)
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PURE VISION INTERNET, INC.
INDEPENDENT AUDITOR'S REPORT
FOR THE YEARS ENDING DECEMBER 31, 1999 & 1998
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PURE VISION INTERNET, INC.
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT ............................................. 3
FINANCIAL STATEMENTS
BALANCE SHEET ................................................... 4
STATEMENT OF INCOME AND RETAINED EARNINGS ....................... 5
STATEMENT OF CASH FLOWS ......................................... 6
NOTES TO FINANCIAL STATEMENTS ................................... 7-8
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Jim Clouse, CPA
4665 Bowling Green Road
Franklin, KY 42134
(270) 586 - 0224
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Pure Vision Internet, Inc.
San Clemente, CA
We have audited the accompanying balance sheets of Pure Vision Internet, Inc. (a
corporation) as of December 31, 1999 and 1998, and the related statements of
income, retained earnings, and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of Pure Vision
Internet, Inc. as of December 31, 1999 and 1998, and the results of its
operations and cash flows for the years then ended in conformity with generally
accepted accounting principles.
As discussed in Note 8 to the financial statements, the Company was acquired by
Maxx International, Inc., a publicly held company. The purchase was consummated
on March 27, 2000.
/s/ Jim Clouse, CPA
Jim Clouse, CPA
June 1, 2000
3
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PURE VISION INTERNET, INC.
BALANCE SHEET
DECEMBER 31, 1999 AND 1998
1999 1998
-------- --------
ASSETS
Current Assets
Cash & cash equivalents $ -- $ 926
Accounts receivable 2,166 9,327
-------- --------
Total Current Assets 2,166 10,253
-------- --------
Fixed Assets
Property and equipment, net 6,678 10,081
-------- --------
Other Assets
Organization cost, net 466 777
-------- --------
TOTAL ASSETS $ 9,310 $ 21,111
======== ========
LIABILITIES & STOCKHOLDER'S EQUITY
Liabilities
Current Liabilities
Accounts payable - overdraft $ 1,327 $ --
Accounts payable 8,830 2,528
Income taxes payable 800 800
Note payable - current 5,286 --
-------- --------
Total Current Liabilities 16,243 3,328
-------- --------
Long Term Liabilities
Due to stockholder 57,015 55,005
-------- --------
Total Liabilities 73,258 58,333
-------- --------
Stockholder's Equity
Common Stock 3,000 shares issued and outstanding 3,000 3,000
Retained earnings (66,948) (40,222)
-------- --------
Total Stockholder's Equity (63,948) (37,222)
-------- --------
TOTAL LIABILITIES & EQUITY $ 9,310 $ 21,111
======== ========
The accompanying notes are an intergral part of these financial statements.
4
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PURE VISION INTERNET, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEARS ENDING DECEMBER 31, 1999 AND 1998
1999 1998
--------- ---------
Income
Services $ 130,937 $ 89,852
Expenses
Advertising 5,303 1,000
Automobile expense 1,538 3,611
Bad debt expense 3,610 --
Bandwith 22,219 11,714
Bank service charges 2,019 1,917
Depreciation expense 6,251 4,767
Amortization expense 311 311
Dues and subscriptions 1,200 --
Employee benefits 3,375 425
Equipment rental 1,272 --
Insurance 11,319 6,927
Interest expense 505 --
Taxes and licenses 2,416 1,107
Miscellaneous 483 1,796
Office expenses 1,742 1,179
Outside services 49,417 46,229
Professional fees 4,773 1,736
Rent 10,207 5,037
Repairs 5,475 3,559
Seminars and training 1,500 846
Travel and entertainment 14,115 3,496
Utilities 7,813 9,267
--------- ---------
Total Expense 156,863 104,924
--------- ---------
Net income (loss) before income taxes (25,926) (15,072)
--------- ---------
Income tax expense 800 800
--------- ---------
Net income (loss) after income taxes . (26,726) (15,872)
--------- ---------
Retained earnings at beginning of year (40,222) (24,350)
--------- ---------
Retained earnings at end of year $ (66,948) $ (40,222)
========= =========
The accompanying notes are an intergral part of these financial statements.
5
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PURE VISION INTERNET, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEARS ENDING DECEMBER 31, 1999 AND 1998
1999 1998
-------- --------
Cash Flows from Operating Activities:
Net Loss $(26,726) $(15,872)
Adjustments to reconcile Net Loss
to net cash provided by operations:
Depreciation expense 6,251 4,767
Amortization expense 311 311
Decrease/(Increase) in Accounts receivable 7,161 (9,327)
Increase/(Decrease) in Accounts payable 6,302 (2,528)
Increase/(Decrease) in Acccounts payable - overdraft 1,327 --
-------- --------
Net cash provided by Operating Activities (5,374) (22,649)
-------- --------
Cash Flows from Investing Activities:
Purchase of computer equipment (2,848) (7,082)
-------- --------
Net cash provided by Investing Activities (2,848) (7,082)
-------- --------
Cash Flows from Financing Activities:
Proceeds from borrowing 5,286 --
Loans from stockholder 2,010 32,827
-------- --------
Net cash provided by Financing Activities 7,296 32,827
-------- --------
Net cash increase (decrease) for period (926) 3,096
-------- --------
Cash and Cash Equivalents, Beginning of Year 926 (2,170)
-------- --------
Cash and Cash Equivalents, End of Year $ -- $ 926
======== ========
Supplemental Information:
Interest paid $ 505 $ --
Income taxes paid 800 800
The accompanying notes are an intergral part of these financial statements
6
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PURE VISION INTERNET, INC.
NOTES TO THE FINANCIAL STATEMENTS
For The Years Ended December 31, 1999 and 1998
Note 1: Nature of Organization
Pure Vision Internet, Inc. (The Company) was organized on July 1, 1996 to
provide web hosting, web development, and audio and video encoding. The
Company's services are provided through their single office located in San
Clemente, California. The Company grants credit to customers. Consequently, the
Company's ability to collect the amounts due from customers is affected by
economic fluctuations in the web hosting and development industry.
Note 2: Significant Accounting Policies
Revenues and Expenses. The Company's primary source of revenue is from web
hosting and web development. All revenues are recognized in the period earned
and expenses are recorded when incurred in accordance with the accrual basis of
accounting.
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents. Cash and cash equivalents consist of cash held in
checking and savings accounts. At year-end and throughout the year, The
Company's cash balances were deposited in one bank account. Management believes
The Company is not exposed to any significant credit risk on cash and cash
equivalents.
Property, Plant and Equipment. Property, plant, and equipment acquisitions are
recorded at cost. Depreciation is provided over the estimated useful lives of
the assets and computed on the straight-line basis.
Organization Costs. Expenses related to organizing the corporation have been
recorded as an asset and will be amortized over 5 years on a straight-line
basis.
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due for financial and income
tax reporting.
7
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Note 3: Property and Equipment
1999 1998
Computer Equipment $19,688 $16,841
Accumulated Depreciation (13,010) (6,760)
------- -------
Book Value $ 6,678 $10,081
======= =======
Depreciation expense for 1999 and 1998 was 6,251 and $4,767, respectively.
Note 4: Leasing Arrangements
The Company conducts its operations from a facility that is leased under
two-year operating lease expiring in June 2002. The month to month leasing
agreement stipulates a monthly rate of $1,511. The future minimum lease payments
are as follows:
2000: $14,632
2001: 18,132
2002: 18,132
Rent expense for 1999 and 1998 was $10,207 and $5,037, respectively.
Note 5: Concentration of Risk
The Company receives primarily all of its revenues from web hosting and web
development for religious organizations. If significant policy changes are made
by the sponsors or mandated by federal regulatory changes, the amount of
revenues The Company receives could be reduced and could have an adverse impact
on The Company's operations. Management is not aware of any actions that will
adversely affect the amount of revenue The Company will receive in the next
year.
Note 6: Related Party Transactions
The Company's sole stockholder funded its working capital needs since inception.
The amounts Due to Stockholder were $57,015 and $55,005 as of December 31, 1999
and 1998, respectively. The amount Due to Stockholder is unsecured, does not
bear interest, and is payable on demand.
Note 7: Net Operating Loss Carryforward
The Company has elected to carryforward operating losses. Net operating loss
carryforwards at December 31, 1999 and 1998 were $66,948 and $40,222,
respectively.
Note 8: Subsequent Events
In January 2000, the Company entered into an agreement with Maxx International,
Inc., a publicly traded company, to sell all its stock in exchange for 14% of
the stock in Maxx International, Inc. This transaction was consummated on March
27, 2000.
As part of the purchase agreement, Maxx International, Inc. agreed to fund
working capital of $100,000 per month for twelve months. These payments
commenced in February 2000 and as of May 31, 2000, $250,000 had been funded.
8
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AREA INVESTMENT AND DEVELOPMENT COMPANY
PRO FORMA BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Current Assets:
Cash $ 127,394
Accounts Receivable 2,166
Compact Disc and Video Production Costs 316,914
----------
Total Current Assets 446,474
COMPUTER EQUIPMENT AND LEASEHOLD
IMPROVEMENTS , Net of Accumulated
Depreciation and Amortization 6,678
BOOK RIGHTS,Net of Accumulated Amortization 513,094
ORGANIZATION COSTS, Net of
Accumulated Amortization 22,966
GOODWILL, Net of Accumulated Amortization 37,222
----------
TOTAL ASSETS $1,026,434
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 41,407
Income Taxes Payable 800
Note Payable, Current 5,286
Loan Payable, Former Stockholder 57,015
Loans Payable 1,889,768
----------
Total Current Liabilities 1,994,276
----------
Stockholders' Equity:
Common Stock, $0.01 Par Value, 50,000,000 Authorized,
9,048,171 Shares Issued and Outstanding 90,482
Additional Paid-in Capital 116,700
Accumulated Deficit -1,175,024
----------
Total Stockholders' Equity -967,842
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,026,434
==========
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AREA INVESTMENT AND DEVELOPMENT COMPANY
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
INCOME
Net Sales $ 130,937
Interest Income 489
----------
GROSS INCOME 131,426
----------
EXPENSES
General and Administrative 1,209,268
----------
Total Expenses 1,209,268
----------
LOSS FROM OPERATIONS -1,077,842
----------
NET LOSS -$1,077,842
==========
BASIC LOSS PER SHARE -$0.14
==========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,634,474
==========
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AREA INVESTMENT AND DEVELOPMENT COMPANY
PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
INCOME
Net Sales $ 56,821
Interest Income 280
----------
GROSS INCOME 57,101
----------
EXPENSES
General and Administrative 1,047,899
----------
Total Expenses 1,047,899
----------
LOSS FROM OPERATIONS -990,798
----------
NET LOSS -$990,798
==========
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized, this 10th day of October, 2000.
MAXX INTERNATIONAL, INC.
By: /s/ Adley Samson
----------------------------
Adley Samson, C.F.O.
