SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
[ ] Transitional Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
Commission File No. 000-23301
SpinPlanet.com, Inc.
-----------------
(Name of small business issuer in its charter)
3PM HOLDING CORP.
-----------------------
(Former Name of Small Business Issuer)
Colorado 84-1284185
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number
801 E. Tahquitz Canyon Way
Palm Springs, California 92262
(760) 327-2424
--------------
(Address, including zip code and telephone number, including area
code, of registrant's executive offices)
5650 Greenwood Plaza Blvd., Suite 216
Englewood, Colorado 80111
-----------------------
(Former Address of Small Business Issuer)
Securities registered under Section 12(b) of the Exchange Act:
none
Securities registered under to Section 12(g) of
the Exchange Act:
Common Stock $0.0001 Par Value
------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Company was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No ___
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X
Issuer's revenues for its most recent fiscal year: $ -0-
State the aggregate market value of the voting stock held by non-affiliates,
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days: As of April 20, 2000: $0.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of April 20, 2000 there were
14,500,000 shares of the Company's $0.0001 Par Value Common Stock issued and
outstanding.
Transitional Small Business Disclosure Format:
Yes ___ No X
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
General
SpinPlanet.com, Inc. (formerly 3PM Holding Corp.) (the "Company"), was
incorporated on October 19, 1994, under the laws of the State of Colorado under
the name 3PM, Inc. to engage in any lawful corporate undertaking. The Company
has been in the developmental stage since 1997 and initially was engaged in the
business of retail service and repair of electronic equipment under franchises.
The Company acquired the rights to purchase five franchises, two of which were
acquired and operated in the Denver Metropolitan area. In April 1997, the
Company's Board of Directors elected to terminate the initial business plan,
sold its repair franchises and rights thereto, and adopted a plan to seek out,
investigate and possibly acquire an interest in business opportunities. During
the fiscal year ended December 31, 1997, the Company filed a registration
statement with the Securities and Exchange Commission on Form 10-SB pursuant to
the rules and regulations included under the Securities Exchange Act of 1934, as
amended, wherein the Company caused to be registered its common stock. This
registration statement became effective on or about January 29, 1998. The
purpose of the registration statement was management's belief that the primary
attraction of the Company as a merger partner or acquisition vehicle will be its
status as a public company. As such, the Company was defined as a "shell"
company, whose sole purpose was to locate and consummate a merger or acquisition
with a private entity. The plan was implemented on October 29, 1999 resulting in
the acquisition of certain assets owned by Shadowrock Entertainment, Inc. (see
below).
Effective October 29, 1999, the Company acquired certain assets owned by
Shadowrock Entertainment, Inc. ("Shadowrock"), including an exclusive license to
market recordings currently owned by Shadowrock on the Internet (the "Assets").
The relevant terms of the transaction provide for the Company to issue to
Shadowrock an aggregate of 13,000,000 "restricted" common shares (post split)
for the Assets and certain services. The shares issued represent approximately
90% of the Company's outstanding common stock after the Company undertook a
"forward split" of its common stock, whereby 3 shares of common stock were
issued in exchange for each share of common stock issued and outstanding in
order to establish the number of issued and outstanding common shares of the
Company immediately prior to Closing to be 1,500,000 shares.
In addition, the Company's shareholders approved an amendment to the Company's
Articles of Incorporation, changing the name of the Company to "SpinPlanet.com,
Inc."
Since October 29, 1999 there has been no activity in the Company other than
necessary administrative functions.
Employees
During the fiscal year ended December 31, 1999, the Company had no full time
employees. The Company's President and Secretary have agreed to allocate a
portion of their time to the activities of the Company, without compensation.
ITEM 2. DESCRIPTION OF PROPERTY
Facilities. The Company operates from its offices at 801 E. Tahquitz Canyon Way,
Suite 216, Palm Springs, California. This space is provided to the Company on a
rent free basis by the Chief Executive Officer of the Company and it is
anticipated that this arrangement will remain until such time as the Company
successfully generates revenues. Management believes that this space will meet
the Company's needs for the foreseeable future.
Other Property. The Company has no properties other than the certain assets
acquired from Shadowrock Entertainment, Inc consisting of an exclusive license
to market recordings on the Internet described in item 1.
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings which are pending or have been
threatened against the Company of which management is aware.
No director, officer or affiliate of the company, and now owner of record or
beneficial owner of more than 5% of the securities of the Company, or any
associate of any such director, officer or security holder is a party adverse to
the Company or has a material interest adverse to the Company in reference to
pending litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of the fiscal year ended December 31, 1999 the
shareholders approved the change of the Company's name from 3PM Holding Corp. to
SpinPlanet.com, Inc.
2
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
(a) Market Information. There is presently no trading market for the common
or preferred equity of the Company.
(b) Holders. There are eleven (11) holders of the Company's Common Stock.
As of the date of this report, 1,500,00 shares of the Company's Common Stock are
eligible for sale under Rule 144 promulgated under the Securities Act of 1933,
as amended, subject to certain limitations included in said Rule. In general,
under Rule 144, a person (or persons whose shares are aggregated), who has
satisfied a one year holding period, under certain circumstances, may sell
within any three month period a number of shares which does not exceed the
greater of one percent of the then outstanding Common Stock or the average
weekly trading volume during the four calendar weeks prior to such sale. Rule
144 also permits, under certain circumstances, the sale of shares without any
quantity limitation by a person who has satisfied a two year holding period and
who is not, and has not been for the preceding three months, an affiliate of the
Company.
(c) Dividends. The Company has not paid any dividends on its Common Stock. It
is not anticipated that any dividends will be declared or paid in the
foreseeable future.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Company's
audited financial statements and notes thereto included herein. In connection
with, and because it desires to take advantage of, the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995, the Company cautions
readers regarding certain forward looking statements in the following discussion
and elsewhere in this report and in any other statement made by, or on the
behalf of the Company, whether or not in future filings with the Securities and
Exchange Commission. Forward looking statements are statements not based on
historical information and which relate to future operations, strategies,
financial results or other developments. Forward looking statements are
necessarily based upon estimates and assumptions that are inherently subject to
significant business, economic and competitive uncertainties and contingencies,
many of which are beyond the Company's control and many of which, with respect
to future business decisions, are subject to change. These uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking statements made by, or on
behalf of, the Company. The Company disclaims any obligation to update forward
looking statements.
Plan of Operation.
The Company intends to market and otherwise exploit the exclusive license to
certain master recordings obtained from Shadowrock Entertainment, Inc. by means
of so-called "downloading" and other forms of purely electronic transmission via
the internet.
The Company has no full time employees. The Company's CEO and Secretary has
agreed to allocate a portion of his time to the activities of the Company,
without compensation until there are sufficient resources to compensate the
officers.
Results of operations
During the period from January 1, 1997 through December 31, 1999, the Company
has engaged in no significant operations other than organizational activities.
The Company has not generated revenues since the divestiture of the VCR Doctor
Franchises and it became a development stage company in 1997.
For the current fiscal year, the Company incurred a loss of $9,300 compared with
a loss of $14,000 for the corresponding period in 1998, a decrease in loss of
approximately $4,700. The principle reason for the decrease was a $4,000
decrease in professional fees combined with a decrease of $700 in interest
expense.
Liquidity and capital resources
The Company remains in the development stage and since inception, has
experienced no significant change in liquidity of capital resources other than
the receipt of proceeds from the sale of its common stock. The balance sheet
reflects cash of $434 and payables of $2,865 which gives rise a negative current
ratio.
The Company cannot carry out its plan of business as discussed above without a
significant infusion of capital resources. No commitments to provide funding has
been made and accordingly, there can be no assurance that any additional funding
will be available to the Company to allow it to implement its plan of business.
3
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
The audited financial statements of the Company, and related notes thereto, as
of December 31, 1999 and for the years ended December 31, 1999 and 1998
accompanied by the independent auditors' report are included herewith at pages
F-1 to F-10.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None
4
<PAGE>
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT.
Directors are elected for one-year terms or until the next annual meeting of
shareholders and until their successors are duly elected and qualified. Officers
continue in office at the pleasure of the Board of Directors.
The Directors and Officers of the Company as of the date of this report are
as follows:
Name Age Position
- ---- --- --------
Greg McDonald 50 Chief Executive Officer, Secretary , Director
Jeffrey P. Kranzdorf 44 Director
Robert L Siner 57 Director
All Directors of the Company will hold office until the next annual meeting of
the shareholders and until successors have been elected and qualified. Officers
of the Company are elected by the Board of Directors and hold office until their
death or until they resign or are removed from office.
There are no family relationships among the officers and directors. There is no
arrangement or understanding between the Company (or any of its directors or
officers) and any other person pursuant to which such person was or is to be
selected as a director or officer.
Resumes:
Greg McDonald ,Chief Executive Officer and Directory--is a seasoned television
and music producer and personal manager who numbered among his clients, the late
Rick Nelson. His early career featured a long stint with Elvis Presley, working
for Mr. Presley's personal manager, Col. Tom Parker
Jeffrey P. Kranzdorf, Director--is an entertainment industry lawyer. He has been
an American Film Institute nominated producer-writer and both an American
Advertising Federation and Direct Marketing Creative Guild award winner for his
writing and production of music related advertisements.
Robert L. Siner, Director--is the former President of MCA Records, Inc.
ITEM 10. EXECUTIVE COMPENSATION.
The Company's officers and directors received no remuneration from the Company
during the fiscal year ending in 1999 or 1998. Until the Company acquires
additional capital, the Company's officers and directors will receive
compensation from the Company for reimbursement only of out-of-pocket expenses
if such is available. The Company has no stock option, retirement, pension, or
profit-sharing programs for the benefit of directors, officers or other
employees, but the Board of Directors may recommend adoption of one or more such
programs in the future. There are no bonus or incentive plans in effect, nor are
there any understandings in place concerning additional compensation to the
Company's officers.
In addition to the cash compensation set forth above, the Company reimburses
each executive officer for expenses incurred on behalf of the Company on an
out-of-pocket basis. The Company cannot determine, without undue expense, the
exact amount of such expense reimbursement. However, the Company believes that
such reimbursements did not exceed, in the aggregate, $1,000 during fiscal year
1999.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) and (b) Security Ownership of Certain Beneficial Owners and Management.
5
<PAGE>
The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as by all directors and officers of the
issuer. Unless otherwise indicated, the shareholders listed possess sole voting
and investment power with respect to the shares shown.
Name and Number of Shares Percent of
Address Owned Beneficially Class Owned
------- ------------------ -----------
Shadowrock Entertainment, Inc (a) 13,000,000 90%
801 E. Tahquitz Canyon Way
Palm Springs, California 92262
All directors and
executive officers (a) 13,000,000 90%
(a) Greg McDonald, Chief Executive Officer, is the sole shareholder of
Shadowrock Entertainment, Inc.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
There have been no other related party transactions, or any other
transactions or relationships required to be disclosed pursuant to Item 404 of
Regulation S-B.
6
<PAGE>
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
- ------------
3.1* Certificate and Articles of Incorporation
3.2* Bylaws
3.3(b) Amendment to Articles of Incorporation
10.2(b) Purchase and Sale Agreement between the Company and Shadowrock
Entertainment, Inc.
EX-27 Financial Data Schedule
* Filed with the Securities and Exchange Commission in the Exhibits to Form
10-SB, filed on October 13, 1998 and are incorporated by reference herein.
(b) Reports on Form 8-K
- -----------------------
The Company filed one report on Form 8-K during the last quarter of the
fiscal year ended December 31, 1999 relating to the change in control of the
Company, the acquisition of certain assets from Shadowrock Entertainment, Inc.
and the change of the name.
7
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, on April 24, 2000.
SpinPlanet.com, Inc.
(Registrant)
By: /s/ Greg McDonald
---------------------
Greg McDonald, Chief Executive Officer
By: /s/ Jeffrey P. Kranzdorf
----------------------------
Jeffrey P. Kranzdorf, Director
By: /s/ Robert L Siner
----------------------
Robert L. Siner, Director
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities indicated on
April 24, 2000.
By: /s/ Greg McDonald
---------------------
Greg McDonald, Chief Executive Officer
By: /s/ Jeffrey P. Kranzdorf
----------------------------
Jeffrey P. Kranzdorf, Director
By: /s/ Robert L Siner
----------------------
Robert L. Siner, Director
Exhibit Index to Annual Report on Form 10-KSB For the Fiscal Year Ended
December 31, 1999
EXHIBITS
EX-27 Financial Data Schedule
8
<PAGE>
SPINPLANET.COM, INC.
(fka 3PM HOLDING CORP.)
FINANCIAL STATEMENTS
with
INDEPENDENT AUDITORS' REPORT
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
AND FOR THE PERIOD JANUARY 1, 1997 (INCEPTION)
THROUGH DECEMBER 31, 1999
TABLE OF CONTENTS
Page
----
Independent Auditors' Report F-1
Balance Sheet F-2
Statement of Operations F-3
Statement of Changes in Stockholders' Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6 to F-10
<PAGE>
Independent Auditors' Report
Board of Directors
SpinPlanet.com, Inc.
(fka 3PM Holding Corp.)
We have audited the accompanying balance sheet of SpinPlanet.com, Inc., fka 3PM
Holding Corp., (a Developmental Stage Company), as of December 31, 1999, and the
related statements of operations, changes in stockholders' equity, and cash
flows for the fiscal years ended December 31, 1999 and 1998 and the period
January 1, 1997 (Inception) through December 31, 1999. 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 accounting principles used and significant estimates made by
management, as well as evaluating 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 above present fairly, in
all material respects, the financial position of SpinPlanet.com, Inc., fka 3PM
Holding Corp., as of December 31, 1999, and the results of its operations and
its cash flows for the fiscal years ended December 31, 1999 and 1998 and the
period January 1, 1997 (Inception) through December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The deficiency in working capital as
of December 31, 1999 and the Company's operating loss since inception raise
substantial doubt about its ability to continue as a going concern. Management's
plans concerning these matters are described in Note 7. The financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.
/s/ Kish, Leake & Associates, P.C.
- ----------------------------------
Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
March 29, 2000
F-1
<PAGE>
SpinPlanet.com., Inc.
(fka 3PM Holding Corp.)
(A Development Stage Company)
Balance Sheet
- --------------------------------------------------------------------------------
Audited
December
31, 1999
--------
ASSETS
Current Assets:
Cash $ 434
Other Assets:
Master Sound Recording License Agreement 0
---------
TOTAL ASSETS 434
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities:
Accounts Payable Trade 2,865
---------
TOTAL LIABILITIES 2,865
---------
SHAREHOLDERS' EQUITY
Preferred Stock, Par Value $.01;
Authorized 20,000,000 Shares
Issued and Outstanding 0 Shares 0
Common Stock
Authorized 100,000,000 Shares, $.0001 Par Value
Issued and Outstanding 14,500,000 1,450
Additional Paid In Capital 159,727
Retained Deficit (163,608)
---------
TOTAL SHAREHOLDERS' EQUITY (2,431)
---------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 434
=========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
SpinPlanet.com., Inc.
(fka 3PM Holding Corp.)
(A Development Stage Company)
Statement Of Operations
- --------------------------------------------------------------------------------------
January
1, 1997
(Inception)
Year Ended Year Ended through
December December December
31, 1999 31, 1998 31, 1999
-------- -------- --------
<S> <C> <C> <C>
REVENUE: $ 0 $ 0 $ 0
----------- ----------- -----------
EXPENSES:
Administrative Expense 0 25 25
Bank Charges 97 111 245
Professional Fees 5,391 9,365 17,044
----------- ----------- -----------
Total 5,488 9,501 17,314
----------- ----------- -----------
(Loss) From Operations (5,488) (9,501) (17,314)
----------- ----------- -----------
Other Income ( Expense):
Interest Expense (3,861) (4,487) (12,519)
----------- ----------- -----------
Total Other Income (Expense) (3,861) (4,487) (12,519)
----------- ----------- -----------
Net (Loss) Before Taxes ($ 9,349) ($ 13,988) ($ 29,833)
=========== =========== ===========
Income Tax 0 0 0
----------- ----------- -----------
Net (Loss) ($ 9,349) ($ 13,988) ($ 29,833)
=========== =========== ===========
Basic (Loss) Per Common Share ($ 0.00) ($ 0.01)
=========== ===========
Weighted Average Common Shares Outstanding 3,666,667 1,500,000
=========== ===========
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SpinPlanet.com., Inc.
(fka 3PM Holding Corp.)
(A Development Stage Company)
Statement Of Shareholders' Equity
- --------------------------------------------------------------------------------------------------------------
Number Of Additional
Common Common Paid-In Retained
Shares ** Stock Capital Earnings Total
--------- ----- ------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance At December 31, 1994 1,500,000 $ 150 $ 59,850 ($ 14,212) $ 45,788
-----------
Net Loss December 31, 1995 (66,726) (66,726)
Balance At December 31, 1995 1,500,000 150 59,850 (80,938) (20,938)
----------- ----------- ----------- ----------- -----------
Net Loss December 31, 1996 (52,837) (52,837)
Balance At December 31, 1996 1,500,000 150 59,850 (133,775) (73,775)
----------- ----------- ----------- ----------- -----------
Net Loss December 31, 1997 (6,496) (6,496)
Balance At December 31, 1997 1,500,000 150 59,850 (140,271) (80,271)
----------- ----------- ----------- ----------- -----------
Net Loss December 31, 1998 (13,988) (13,988)
===========
Balance At December 31, 1998 1,500,000 150 59,850 (154,259) (94,259)
----------- ----------- ----------- ----------- -----------
Net Loss December 31, 1999 (9,349) (9,349)
October 29, 1999 Shareholder Notes
Payable Converted to Equity 96,385 96,385
October 29, 1999 Expenses Paid
By Shareholder on Behalf of Company 3,492 3,492
October 29, 1999 Services
Valued @ $.0001 Per Share 13,000,000 1,300 1,300
Balance At December 31, 1999 14,500,000 $ 1,450 $ 159,727 ($ 163,608) ($ 2,431)
=========== =========== =========== =========== ===========
** Reflects 10 for 1 Forward Stock Split on September 15, 1997 and a 3 for 1
Forward Stock Split on October 29, 1999.
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SpinPlanet.com., Inc.
(fka 3PM Holding Corp.)
(A Development Stage Company)
Statement Of Cash Flows
- ---------------------------------------------------------------------------------------------
January
1, 1997
(Inception)
Year Ended Year Ended through
December December December
31, 1999 31, 1998 31, 1999
-------- -------- --------
<S> <C> <C> <C>
Net (Loss) ($ 9,349) ($ 13,988) ($ 29,833)
Items Not Affecting Cash Flow:
Common Stock Issued for Services 1,300 0 1,300
Expenses Paid by Shareholder on Behalf of Company 3,492 0 3,492
Total (4,557) (13,988) (25,041)
--------- --------- ---------
Increase (Decrease) In Accounts Payable Trade (1,500) 2,365 (1,526)
Increase (Decrease) In Other Accrued Expenses (15,315) 4,483 (6,661)
--------- --------- ---------
Net Cash Flows Used In Operations (21,372) (7,140) (33,228)
--------- --------- ---------
Cash Flows From Investing Activities:
Net Cash Flows Provided From Investing Activities 0 0 0
--------- --------- ---------
Cash Flows From Financing Activities:
Advances From Shareholders 96,385 5,200 103,585
Shareholders' Notes Converted to Equity (74,710) 0 (74,710)
--------- --------- ---------
Net Cash Flows Provided From Financing Activities 21,675 5,200 28,875
--------- --------- ---------
Net Increase (Decrease) In Cash 303 (1,940) (4,353)
Cash At Beginning Of Period 131 2,071 4,787
--------- --------- ---------
Cash At End Of Period $ 434 $ 131 $ 434
========= ========= =========
Summary Of Non-Cash Investing And Financing Activities:
Common Stock Issued for Services $ 1,300 $ 1,300
Shareholders' Notes Converted to Equity $ 74,710 $ 74,710
Expense Paid By Shareholder on Behalf of Company $ 3,492 $ 3,492
The Accompanying Notes Are An Integral Part Of These Financial Statements.
F-5
</TABLE>
<PAGE>
SpinPlanet.com, Inc. (fka 3PM Holding Corp.)
(A Development Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 1999 and 1998
- ----------------------------------------------
Note 1 - Organization and Summary of Significant Accounting Policies
- --------------------------------------------------------------------
Organization
On October 19, 1994, SpinPlanet.com, Inc. fka 3PM Holding Corp. (The Company),
was incorporated under the laws of Colorado. The Company's primary purpose is
any lawful business or activity.
The Company purchased three VCR Doctor franchises whose primary purpose is the
operation of retail VCR repair stores. In April 1996, company management sold
the VCR Doctor franchise and the related assets for $25,000 in the form of a
note. The sale agreement was completed in May 1996 with a down payment and 48
monthly payments, however, the note was defaulted on and written off. Losses
applicable to the discontinued franchise operations segment were $7,117 in 1996.
There were no assets or liabilities from the franchise operations remaining
after the sale and the Company ceased operations.
On January 1, 1997 the Company's management decided to search for a merger or
acquisition candidate and, therefore, entered into the development stage. On
October 29, 1999 the Company entered into an acquisition agreement. (See Note
4).
Development Stage
The Company is currently in the developmental stage and has no significant
operations to date.
Property and Equipment
Furniture and equipment are stated at cost and are depreciated over their
estimated economic lives. Depreciation is computed using the straight-line
method.
F-6
<PAGE>
SpinPlanet.com, Inc. (fka 3PM Holding Corp.)
(A Developmental Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 1999 and 1998
- ----------------------------------------------
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of three
months or less to be cash equivalents.
Cash paid for interest in 1999 and 1998 was -0-.
Cash paid for income taxes in 1999 and 1998 was -0-.
Basic Earnings (Loss) Per Common Stock
The basic earnings (loss) per common share is computed by dividing the net
income (loss) for the period by the weighted average number of shares
outstanding at December 31, 1999 and 1998.
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. Actual results could differ from those estimates.
Note 2 - Capital Stock
- ----------------------
Common Stock:
The Company initially authorized 100,000 shares of $.001 par value common stock.
In September 1996 the Company amended and restated its Articles of Incorporation
and authorized 100,000,000 shares of $.0001 par value common stock.
F-7
<PAGE>
SpinPlanet.com, Inc. (fka 3PM Holding Corp.)
(A Developmental Stage Company)
Notes to Financial Statements
For The Years Ended December 31, 1999 and 1998
- ----------------------------------------------
On September 15, 1997 the board and the shareholders of the Company adopted a
forward stock split of the then issued and outstanding common stock, whereby 10
shares of common stock were issued in exchange for each share then issued and
outstanding.
On October 29, 1999 the board and the shareholders of the Company adopted a
forward stock split of the then issued and outstanding common stock , whereby 3
shares of common stock were issued in exchange for each share then issued and
outstanding.
The Company's authorized capital remained the same.
On October 29, 1999 the Board authorized the issuance of 13,000,000 shares of
the Company's common stock (post forward split) for services rendered in the
acquisition of another company (see Note 4). Additionally, as part of the
acquisition the shareholder loans outstanding were forgiven and added to equity.
The Company has declared no dividends through December 31, 1999 and 1998.
Preferred Stock:
In September 1996 the Company amended and restated its Articles of Incorporation
and authorized 20,000,000 shares $.01 par value non-voting preferred stock, the
rights and preferences of which to be determined by the Board of Directors at
the time of issuance.
Note 3 - Notes Payable
- ----------------------
The Company maintains a $5,000 line of credit. The amount outstanding under this
line at December 31, 1999 was $-0- bearing a 11.25% annual interest rate.
F-8
<PAGE>
SpinPlanet.com, Inc. (fka 3PM Holding Corp.)
(A Developmental State Company)
Notes to Financial Statements
For The Years Ended December 31, 1999 and 1998
- ----------------------------------------------
Note 4 - Acquisition
- --------------------
On October 29, 1999 the Company entered into an agreement with Shadowrock
Entertainment, Inc., a California corporation to acquire a certain asset owned
by Shadowrock Entertainment, Inc. The asset acquired had a fair value of $-0-
and the acquisition was accounted for as a purchase.
At this time, the Board of Directors approved a name change to SpinPlanet.com,
Inc., and the management of Shadowrock assumed the management of 3PM.
The asset acquired in the acquisition consisted of a Master Sound Recording
License Agreement for the Internet. Under this agreement, Shadowrock
Entertainment, Inc. (Licensor) is entitled to twenty-five percent (25%) of all
receipts (i.e. monies or other consideration actually received by
SpinPlanet.com, Inc. Licensee) as a result of the commercial electronic
exploitation of the Masters via the Internet. In the event Licensor receives not
less than $100,000 from Licensee during the Term, this Agreement shall
automatically renew and a renewal term of like duration.
Note 5 - Related Party Events
- -----------------------------
Shareholders in the Company loaned money to the Company at various times during
the previous years. On October 29, 1999, as part of the acquisition agreement,
notes payable and accrued interest payable to the shareholders were converted to
equity.
Note 6 - Income Taxes
- ---------------------
In 1995 the Company elected to have its income taxed under section 1372 of the
Internal Revenue Code which provides that, in lieu of corporation income taxes,
the shareholders are taxed on their proportionate share of the Company's taxable
income. Therefore, no provision or liability for federal or state income taxes
are included in the financial statements for the year ended December 31, 1997.
On January 1, 1998 this election was revoked and the Corporation is now subject
to Federal and State income taxation.
F-9
<PAGE>
SpinPlanet.com, Inc. (fka 3PM Holding Corp.)
(A Developmental State Company)
Notes to Financial Statements
For The Years Ended December 31, 1999 and 1998
- ----------------------------------------------
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and tax basis
of assets and liabilities for financial and income tax reporting. The deferred
tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset federal income taxes.
Due to the Company's net operating loss in the year ended December 31, 1999 of
$9,349 there are no income taxes currently due. As of December 31, 1999 the
Company has a deferred tax asset of $4,667 primarily from its net operating loss
carry forward which has been fully reserved through a valuation allowance.
The change in the valuation allowance at December 31, 1999 was $1,869
At December 31, 1999, the Company had a net operating loss carryforward
available for financial statement and Federal income tax purposes of
approximately $23,337 which, if not used, will expire in varying amounts during
the years 2013 and 2014.
Note 7 - Basis Of Presentation
- ------------------------------
In the course of its development activities, the Company has sustained
continuing losses and expects such losses to continue in the foreseeable future.
The Company's ability to continue as a going concern is dependent upon finding a
successful merger or acquisition candidate or commencing operations.
F-10
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 435
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 435
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 434
<CURRENT-LIABILITIES> 2,865
<BONDS> 0
0
0
<COMMON> 1,450
<OTHER-SE> (981)
<TOTAL-LIABILITY-AND-EQUITY> 434
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 5,488
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,861
<INCOME-PRETAX> (9,349)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,349)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,349)
<EPS-BASIC> 0.00
<EPS-DILUTED> 0.00
</TABLE>
