UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC. 20549
FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from ________ to ________
Commission file number: 333-39629
OMNI DOORS, INC.
(Name of small business issuer as specified in its charter)
Florida 59-2549529
(State of Incorporation) (I.R.S. Employer Identification No.)
30 Rockefeller Plaza, 19th Floor, New York, NY 10112
(Address of principal executive offices)
(212) 332-7222
(Issuer's telephone number)
Securities registered pursuant to Section 12 (b) of the Exchange Act: Common
Stock
Securities registered pursuant to Section 12 (g) of the Exchange Act: None
Check whether issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant 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 there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained herein and will not 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]
The issuer's revenues for the fiscal year ended June 30, 1998 were
$530,932.
The aggregate market value of the Common Stock held by non-affiliates
as of September 29, 1998 was $216,600 (computed by reference to the average bid
and asked prices of such stock, as reported in the over the counter market, that
is, 1,140,000 shares times $.19 per share). As of September 29, 1998, the
registrant had 11,400,000 shares of Common Stock outstanding.
Transitional Small Business Disclosure Format: Yes ___ No__X__
1
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Part I Page
<S> <C>
1. Description of Business 1
2. Description of Property 2
3. Legal Proceedings 3
4. Submission of Matters to a Vote of Security Holders 3
Part II
5. Market for the Company's Common Stock and Related Stockholder Matters 3
6. Management's Discussion and Analysis of Financial Condition
and Results of Operations 4
7. Index to Financial Statements 6
8. Changes In and Disagreements with Accountants on Accounting
and Financial Disclosure 6
Part III
9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act 6
10. Executive Compensation 8
11. Security Ownership of Certain Beneficial Owners and Management 9
12. Certain Relationships and Related Transactions 9
13. Exhibits and Reports on Form 8-K 10
</TABLE>
2
<PAGE>
CAUTION REGARDING FORWARD-LOOKING INFORMATION
This report contains certain forward-looking statements and information relating
to the Company that are based on beliefs held by the Company or its management
as well as assumptions made by and information currently available to the
Company or its management. When used in this document , the words "anticipate",
"believe", "estimate", "expect", and "intend" and similar expressions , as they
relate to the Company or its management, are intended to identify
forward-looking statements. Such statements reflect the current view of the
Company regarding future events and are subject to certain risks, uncertainties
and assumptions, including the risks and uncertainties noted. Should one or more
of these risks or uncertainties materialize, or should underlying assumptions
prove incorrect, actual results may vary materially from those described herein
as anticipated, believed, estimated, expected or intended. In each instance,
forward-looking information should be considered in light of the accompanying
meaningful cautionary statements contained herein.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
The Company, Omni Doors, Inc., is a Florida corporation ("Omni") which was
incorporated on July 19, 1985. At June 30, 1998 Omni's primary business was the
assembly and distribution of industrial doors for sale to building contractors
in the South Florida market. Currently, the Company does not actively conduct
any business.
See Recent Developments, below.
The address of the Company's principal executive office is 30 Rockefeller Plaza,
19th Floor, New York, NY 10112 and its telephone number is (212) 332-7222.
Recent Developments
On April 6, 1998, the Board of Directors of Millennia Inc., a Delaware
corporation, ("Millennia") which at that time owned 100% of the outstanding
stock of Omni, declared the payment of a stock dividend to Millennia's
stockholders. Stockholders of record of Millennia on April 17, 1998 received one
share of the common stock of Omni for each four shares of common stock of
Millennia owned on that record date. No fractional shares were issued since all
fractions were rounded up to the nearest whole share; thus, shareholders who
would otherwise have been entitled to a fraction of a share of Omni were issued
one full share in lieu thereof. This distribution of approximately 570,000
shares of Omni represented five percent of the total issued and outstanding
shares of Omni.
On July 10,1998, Millennia incorporated a new wholly-owned subsidiary, Millennia
Doors, Inc., a Texas corporation, so that all of the assets and liabilities of
Omni Doors, Inc. at that time ,as well as the business operations then conducted
by Omni, could be transferred into this new corporation. Pursuant to a contract
dated
1
<PAGE>
July 14, 1998, Millennia sold 10,260,000 shares (representing 90% of the total
outstanding shares) of the common stock of Omni to an unrelated firm, China
Economic Growth Investment Corp. LLC. Sometime in the next year this new
controlling stockholder of Omni intends to acquire by merger an operating
business with a history of profitable operations.
BUSINESS
PRODUCTS
As of June 30, 1998 Omni assembled and distributed industrial doors in the South
Florida region of the United States. Omni offered its services and products to
building contractors who construct such projects as hotels and motels, self
storage facilities and other construction projects requiring industrial doors.
Once assembled, the doors were either delivered to the construction site or
picked up by the contractor at Omni's warehouse facility,
RAW MATERIALS
Omni was an authorized distributor for Republic Builder Products, Inc.
("Republic) and purchased the majority of its unassembled industrial doors from
Republic. These unassembled doors along with other materials used by Omni are
readily available from several suppliers. While Omni's management does not
anticipate, and has not experienced, any disruption in its relationship with
Republic, any future interruption would likely have a material adverse effect on
the financial stability of Omni. Omni's assembly operation does not require any
specialized tools or equipment; such tools and equipment is readily available
from multiple sources in Omni's marketplace.
PROPERTIES
As of June 30, 1998 Omni assembled and distributed industrial doors from its
combination warehouse and office facility located in Pembroke Park, Florida.
This facility is leased under an operating lease agreement which expires in
February 1999. The facility contains approximately 4,800 square feet.
COMPETITION
The industry that Omni engaged in is highly competitive. There are other
industrial door distributors which compete directly with Omni in its marketplace
and which have greater resources and sales volume than Omni. To maintain its
relationship with existing customers and attract new customers Omni depended on
its ability to provide quality service at competitive prices.
EMPLOYEES
For several years Omni has operated with three full-time employees. None of the
employees are represented by a labor union. Omni believes that it has good
relations with its employees.
ITEM 2. DESCRIPTION OF PROPERTY
Until July 14, 1998, Omni conducted its business from a combination warehouse
and office located in Pembroke Park Florida. This facility, consisting of
approximately 4800 square feet, was used as a sales office and to assemble
2
<PAGE>
the garage doors which the Company sold. This facility was leased under a lease
which expires in February 1999.
Omni's current office is in the leased offices occupied by China Economic Growth
Investment Corp. LLC, its principal stockholder.
ITEM 3. LEGAL PROCEEDINGS
The Company may from time to time be party to various legal actions arising in
the ordinary course of its business. The Company is not currently involved in
any pending actions that will have a material adverse effect on its business,
financial condition and results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders in the fourth
quarter of the Company's fiscal year which ended June 30, 1998.
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The Common Stock of the Company has been quoted on the NASDAQ over the counter
market, starting May 4, 1998, under the symbol "OMDO." During the period May 4,
1998 through June 30, 1998 the range of representative high and low closing bid
prices for the Common Stock were $.10 and $.06, respectively. During the period
July 1, 1998 through September 30, 1998 the range of representative high and low
closing bid prices for the Common Stock were $1.00 and $.13, respectively.
Quotations represent inter-dealer prices, do not include retail markups,
markdowns or commissions and may not represent actual transactions.
On September 29, 1998, the closing bid price of the Common Stock was $.19 per
share. On September 29, 1998, there were 440 stockholders of record of the
Common Stock. Additionally, the Company believes that there are approximately
500 additional beneficial holders of the Common Stock whose shares are held in
brokerage accounts.
Omni has never paid any cash dividends. The Company currently intends to retain
all earnings to finance future acquisitions. The Company does not anticipate
paying cash dividends on its shares of Common Stock in the foreseeable future.
The Company's future dividend policy will be determined by its Board of
Directors on the
3
<PAGE>
basis of various factors, including but not limited to the Company's results of
operations, financial condition, business opportunities and capital
requirements.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion and analysis should be read in conjunction with the
Company's consolidated financial statements and the notes associated with them
as contained elsewhere in this report. This discussion should not be construed
to imply that the results discussed herein will necessarily continue into the
future or that any conclusion reached herein will necessarily be indicative of
actual operating results in the future. This discussion represents only the best
present assessment of the Company.
General Comments
Historically, the Company's sales levels generally followed trends in the
commercial construction market and the activity level for new construction in
the South Florida region. Therefore, the Company's operations were subject to
all of the economic conditions and other influences affecting that region,
including those resulting from adverse weather conditions. The Company's
marketing efforts were directed to general contractors in the South Florida
region who might desire to avail themselves of the Company's services,
especially in connection with new industrial or commercial construction.
Fiscal Year ended June 30, 1998 compared to Fiscal Year ended June 30, 1997
Results of Operations
Net sales decreased by $5400 to approximately $531,000 for the fiscal year ended
June 30, 1998 as compared to approximately $536,000 for the comparable period
ended June 30, 1997. The decline represents the natural fluctuations and
competitive nature of the construction industry in South Florida. Additionally,
due to pricing pressures from both the Company's supplier and various customers,
the Company experienced increased cost of sales of approximately $66,000 from
approximately $411,000 for the year ended June 30, 1997 to approximately
$477,000 for the same period ended June 30, 1998.
Due to management's monitoring, operating expenses declined by approximately
$4,000 to approximately $113,000 for the year ended June 30, 1998 as compared to
approximately $117,000 for the comparable period ended June 30, 1997. The
Company experienced a net loss of approximately $60,000 for the year ended June
30, 1998 as compared to net income of approximately $7700 for the same period in
1997. This increase in the net loss between comparable periods is related to
various cost, customer demand and construction volume pressures experienced in
the South Florida region. Selling and general and administrative expenses as a
percentage of sales for the Company were relatively consistent with the prior
year.
Capital Resources
The Company does not currently have any material commitments for capital
expenditures and does not anticipate any in the foreseeable future.
4
<PAGE>
Liquidity
The Company does not currently have any needs for liquidity. In the future, when
the Company has selected an acquisition target, the Company anticipates that its
principal and controlling stockholder, China Economic Growth Investment Corp.,
LLC, will provide funds to meet its liquidity needs. The Company's new
management and Board of Directors are of the opinion that either future bank
financing or equity placements may be available to provide liquidity in future
periods. However, there is no assurance that such financing or equity placements
will be available in amounts or at rates favorable to the Company.
Fiscal Year ended June 30, 1997 compared to Fiscal Year ended June 30, 1996
Results of Operations
Net sales approximated $536,000 for the fiscal year ended June 30,1997 as
compared to approximately $468,000 for the fiscal year ended June 30, 1996. In
September of 1996, a Metropolitan Dade County Product Control Notice of
Acceptance was received which permitted the Company to sell an approved exterior
door in Dade County, Florida. Because of stringent new building codes enacted in
Dade County, Florida after Hurricane Andrew, certain building materials are
required to be approved by county officials before they can be utilized. The
acceptance of one of the Company's products allowed sales of this product within
Dade County, Florida and, along with the overall strong commercial building
climate in the South Florida area, led to the approximately 15% increase in
sales.
This Company generated net income of approximately $7,000 for the fiscal year
ended June 30, 1997. During Fiscal 1997 the Company was able to obtain a slight
increase in average sales prices relative to any cost increases which led to a
reduction in the cost of goods sold as a percentage of sales from 80.3% to 79.6%
for the years ended June 30, 1996 and 1997, respectively. Selling and general
and administrative expenses as a percentage of sales for the Company were
relatively consistent with the prior year.
Year 2000 Concerns
The Company's operations were not reliant upon or contingent upon any software
or other equipment which is dependent on "system dating". Further, the Company
utilized readily available personal computer commercial software for its
accounting and financial reporting processes. It is anticipated that the cost of
conversion to updated versions of the commercial accounting software will be
nominal and have no significant impact on the operations of the Company.
5
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Index to Financial Statements
Consolidated Financial Statements of the Company (Audited)
Independent Auditor's Reports F-1
Balance Sheet as of June 30,1998 F-2
Statements of Operations and Comprehensive Loss
for the years ended June 30, 1998 and 1997 F-3
Statements of Changes in Stockholders' Equity
for the years ended June 30, 1998 and 1997 F-4
Statements of Cash Flows for the years ended June 30, 1998 and 1997 F-5
Notes to Financial Statements F-6
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16 (A) OF THE EXCHANGE ACT
As of June 30, 1998 the executive officers and directors of the Company were:
NAME AGE POSITION
Kevin B. Halter 62 President, Chairman of the
Board and Chief Executive
Officer
Kevin B. Halter, Jr. 38 Secretary and Director
James Smith 61 Director
6
<PAGE>
Set forth below is a description of the backgrounds of the executive
officers and directors of the Omni at June 30, 1998.
Kevin B. Halter served as Chairman of the Board, President, Chief Executive
Officer and a director of Omni from 1995 until July 14, 1998. He has served as
President, Chief Executive Officer and Chairman of the Board of Millennia since
June 28, 1994. Mr. Halter also served as Vice Chairman of the Board of Millennia
from January 1994 to June 28, 1994. In addition, Mr. Halter has served as
Chairman of the Board and Chief Executive Officer of Halter Capital Corporation
("HCC"), a privately-held investment and consulting company, since 1987 and as
its President since June 1995. Mr. Halter is the father of Kevin B. Halter, Jr.
Kevin B. Halter, Jr. served as Secretary and a director of Omni from 1995
until July 14, 1998. He has served as Vice President, Secretary and a director
of Millennia since January 1994. He is the President of Securities Transfer
Corporation, a registered stock transfer company, a position he has held since
1987. Mr. Halter is also Vice President and Secretary of HCC. Mr. Halter is the
son of Kevin B. Halter.
James Smith served as a director of Omni from September 1997 until July 14,
1998. Mr. Smith has served as a director of Millennia since March 1995. Mr.
Smith has served as President of Pension Analysis Bureau, Inc., a consulting
firm specializing in the administration of company retirement and profit sharing
plans, since 1993. Mr. Smith served as Vice President of Pension Analysis
Bureau, Inc. from 1988 to 1992.
NEW DIRECTORS AND OFFICERS
As of July 14, 1998 (see Recent Developments, above), and resulting from the
sale of control of Omni to China Economic Growth Investment Corp. LLC, Omni has
three new directors and officers, replacing those who resigned on that date.
As of September 30, 1998 the executive officers and directors of the Company
are:
NAME AGE POSITION
Chen Yong 62 Chairman of the Board of
Directors and Director
Sophia Yao 30 President, Treasurer and Director
Huang Zuxiang 41 Vice Chairman of the Board of
Directors, Secretary and Director
Set forth below is a brief description of the backgrounds of the current
executive officers and directors of Omni.
Since August 1995 Mr. Chen Yong has been Executive Vice Chairman of the
Board of Directors and President of Zhonghao Financial Company Ltd., a company
which he founded and which is headquartered in Beijing. This company is in the
business of providing commercial credits and investment advisory services. From
1990 until August 1995 he was Deputy General Manager of the Fund Development
Department at China International Trust & Investment Corporation.
7
<PAGE>
Mr. Haung Zuxiang is Chairman of the Board of Directors of Credit China Group
which he founded in 1992 while he was working as a financial advisor to the
People's Bank of China. Under his leadership, Credit China Group, which is
headquartered in Beijing, has become an international investment banking firm
with more than 1000 employees, successfully engaging in merger and acquisition
activities both inside and outside of China. From 1990 until 1992 he was
employed by the People's Bank of China. From 1988 until 1990 he was an Associate
Professor in Finance at Haerbin Finance Institute.
Ms. Sophia Yao has been President of Credit China Corporation, a Delaware
corporation headquartered in New York City, since 1995. She is in charge of all
this company's operations in the United States and performs some financial
responsibilities for Credit China Corporation in Beijing. She has banking
experience in the United States, having worked from 1993 to 1995 at the Federal
Reserve Bank in New York City.
Directors of the Company hold office until the next annual meeting of
stockholders or until their successors have been elected and qualified. Officers
are elected by the Company's Board of Directors to hold office until their
respective successors are elected and qualified.
The Company's Bylaws provide that directors may be paid their expenses, if any,
and may be paid a fixed sum for attendance at each Board of Directors meeting.
During fiscal year ended June 30, 1998 none of the directors were paid any
director's fees.
Committees of the Board of Directors
The Board of Directors currently has no committees.
ITEM 10. EXECUTIVE COMPENSATION
None of the officers and directors of Omni were compensated in any way for their
service to the Company during the fiscal years ended June 30, 1997 and 1998.None
of these officers and directors were paid a cash salary, bonus or any other form
of cash compensation. The Company did not award any stock options or other form
of non-cash compensation to any person during these two fiscal years.
8
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 30, 1998
with regard to the beneficial ownership of the Common Stock by (i) each person
known to the Company to be the beneficial owner of 5% or more of its outstanding
Common Stock, (ii) by the officers, directors and key employees of the Company
individually and (iii) by the officers and directors as a group.
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE
BENEFICIALLY OWNED
China Economic Growth 10,260,000 90%
Investment Corp., LLC
30 Rockefeller Plaza
New York NY 10112
Millennia, Inc. 570,017 5%
16910 Dallas Parkway, Suite 100
Dallas TX 75248
Chen Yong -0- -0-
Sophia Yao -0- -0-
Huang Zuxiang -0- -0-
All Officers and Directors -0-
as a group (3 persons)
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Omni paid management fees to Millennia, Inc. of $4,800 during the fiscal year
ended June 30, 1997 and $4,800 during the fiscal year ended June 30, 1998.
9
<PAGE>
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Articles of Incorporation of the Company (1)
3.2 Bylaws of the Company (1)
4.1 Specimen Stock Certificate for Common Shares, no par value (1)
(1) These exhibits were previously filed by the Company as Exhibits to the
Company's Registration Statement No. 333-39629, dated April 3, 1998, and
are incorporated herein by specific reference thereto.
(b) Reports on Form 8-K
July 20, 1998 - relating to the sale of shares representing 90% of the
Company's outstanding common stock to China Economic Growth Investment
Corp., LLC
10
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf of the undersigned, being duly authorized by law.
OMNI DOORS, INC.
/s/ Sophia Yao October 12, 1998
------------------------------------
Sophia Yao, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities on the date indicated.
/s/ Chen Yong October 12, 1998
------------------------------------
Chen Yong, Chairman of the
Board of Directors and Director
/s/ Sophia Yao October 12, 1998
------------------------------------
Sophia Yao, President, Treasurer,
(Principal Executive & accounting
Officer) and Director
/s/ Huang Zuxiang October 12, 1998
------------------------------------
Huang Zuxiang, Vice Chairman of the
Board of Directors, Secretary and
Director
<PAGE>
OMNI DOORS, INC.
(a subsidiary of Millennia, Inc.)
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Stockholders
Omni Doors, Inc.
We have audited the accompanying balance sheet of Omni Doors, Inc. ( a
subsidiary of Millennia, Inc.) as of June 30, 1998, and the related statements
of operations and comprehensive loss, changes in stockholders' equity and cash
flows for the years ended June 30, 1998 and 1997. 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 audits.
We conducted our audits 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 audits provide 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 Omni Doors, Inc. as of June 30,
1998, and the results of its operations, and its cash flows for the years ended
June 30, 1998 and 1997, in conformity with generally accepted accounting
principles.
As discussed in Note 6 to the financial statements, the Company transferred all
its assets and liabilities to an affiliated company in July 1998.
HEIN + ASSOCIATES LLP
Dallas, Texas
August 20, 1998
F-1
<PAGE>
<TABLE>
<CAPTION>
OMNI DOORS, INC.
(a subsidiary of Millennia, Inc.)
BALANCE SHEET
JUNE 30, 1998
ASSETS
UNAUDITED
PRO FORMA
(NOTE 6) HISTORICAL
---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ -- $ 4,217
Trade accounts receivable, net of allowance for doubtful accounts of
$30,000 -- 90,021
Inventory, net of allowance for obsolescence of $35,141 -- 52,711
Prepaid expenses and other -- 2,887
--------- ---------
Total current assets -- 149,836
PROPERTY AND EQUIPMENT:
Vehicle -- 19,635
Machinery and equipment -- 13,034
Leasehold improvements -- 4,193
Office furniture and equipment -- 991
--------- ---------
-- 37,853
Accumulated depreciation -- (29,070)
--------- ---------
Net property and equipment -- 8,783
OTHER ASSETS -- 6,811
--------- ---------
TOTAL ASSETS $ -- $ 165,430
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ -- $ 32,515
Accrued liabilities -- 2,321
Note payable to parent company -- 4,470
--------- ---------
Total current liabilities -- 39,306
COMMITMENT (NOTE 3)
STOCKHOLDERS' EQUITY:
Common stock - no par value, 25,000,000 shares authorized;
11,400,000 issued and outstanding 55,767 55,767
Contributed capital 172,463 172,463
Accumulated deficit (228,230) (102,106)
--------- ---------
Total stockholders' equity -- 126,124
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ -- $ 165,430
========= =========
</TABLE>
See accompanying notes to these financial statements.
F-2
<PAGE>
OMNI DOORS, INC.
(a subsidiary of Millennia, Inc.)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
YEARS ENDED JUNE 30,
----------------------------
1998 1997
------------ ------------
NET SALES $ 530,932 $ 536,311
COST OF SALES 476,804 411,486
------------ ------------
GROSS PROFIT 54,128 124,825
OPERATING EXPENSES:
Selling 52,100 54,174
General and administrative 57,454 58,448
Depreciation 3,638 4,526
------------ ------------
Total operating expenses 113,192 117,148
------------ ------------
(LOSS) INCOME FROM OPERATIONS (59,064) 7,677
INTEREST EXPENSE (1,052) (1,006)
------------ ------------
NET AND COMPREHENSIVE (LOSS) INCOME $ (60,116) $ 6,671
------------ ------------
NET (LOSS) INCOME PER SHARE - BASIC AND DILUTED $ * $ *
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 11,400,000 11,400,000
============ ============
* Less than $.01 per share.
See accompanying notes to these financial statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
OMNI DOORS, INC.
(a subsidiary of Millennia, Inc.)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED JUNE 30, 1998 AND 1997
COMMON STOCK
----------------------- CONTRIBUTED ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C>
BALANCES, July 1, 1996 11,400,000 $ 55,767 $ 172,463 $ (48,661) $ 179,569
Net and comprehensive income for the year -- -- -- 6,671 6,671
---------- ---------- ---------- ---------- ----------
BALANCES, June 30, 1997 11,400,000 55,767 172,463 (41,990) 186,240
Net and comprehensive loss for the year -- -- -- (60,116) (60,116)
---------- ---------- ---------- ---------- ----------
BALANCES, June 30, 1998 11,400,000 $ 55,767 $ 172,463 $ (102,106) $ 126,124
========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to these financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
OMNI DOORS, INC.
(a subsidiary of Millennia, Inc.)
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30,
1998 1997
--------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income for the year $(60,116) $ 6,671
Adjustments to reconcile to net cash (used) provided by
operating activities:
Depreciation expense 3,638 4,526
Provision for losses on accounts receivable 5,000 9,500
Provision for losses on inventory 32,141 --
(Increase) Decrease in:
Accounts receivable (25,538) (7,116)
Due from parent and other receivables -- 2,999
Inventory 21,588 (680)
Prepaid expenses and other (3,008) (18)
Increase (Decrease) in:
Accounts payable (1,158) (5,577)
Accrued liabilities (3,237) 1,103
-------- --------
Net cash (used) provided by operating activities (30,690) 11,408
CASH FLOWS FROM INVESTING ACTIVITIES -
Cash paid to acquire furniture and equipment (991) --
CASH FLOWS FROM FINANCING ACTIVITIES -
Repayment of parent company advances and loans (4,469) (4,877)
-------- --------
(DECREASE) INCREASE IN CASH (36,150) 6,531
CASH, beginning of year 40,367 33,836
-------- --------
CASH, end of year $ 4,217 $ 40,367
======== ========
SUPPLEMENTAL INFORMATION -
Interest paid for the period $ 1,052 $ 1,006
======== ========
</TABLE>
See accompanying notes to these financial statements.
F-5
<PAGE>
OMNI DOORS, INC.
(a subsidiary of Millennia, Inc.)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES:
-------------------------------------------------
Organization and Nature of Operations
-------------------------------------
Omni Doors, Inc. (the Company) was incorporated on July 19, 1985 as a
wholly-owned subsidiary of Millennia, Inc. (the Parent) under the laws of
the State of Florida. The Company assembles and distributes industrial
metal doors in the South Florida region of the United States.
On October 1, 1997, in anticipation of filing a Registration Statement
under The Securities Act of 1933, the Company approved a forward split of
the issued and outstanding shares of common stock raising the number of
issued shares from the initially issued amount of 1,000 shares to
11,400,000 shares. All amounts related to issued and outstanding shares in
the accompanying financial statements reflect the effect of this forward
stock split as if it had occurred at the beginning of the first period
presented.
In connection with the Registration Statement, the Parent spun off 5% of
the Company's common stock outstanding to the Parent's shareholders. As
such, the Company is no longer a wholly-owned subsidiary of the Parent as
of June 30, 1998.
The Company is dependent upon the Parent for working capital financing. The
Parent intends to continue providing the necessary working capital support
for foreseeable future periods.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Cash Equivalents
----------------
The Company considers cash in banks, certificates of deposit and other
highly-liquid investments with a maturity of three months or less at the
date of purchase to be cash equivalents.
Accounts Receivable and Revenue Recognition
-------------------------------------------
The Company recognizes revenue at the time that product is shipped to the
Company's customers. In the normal course of business, the Company extends
unsecured credit to virtually all of its customers, which are principally
located in the south Florida region of the United States. Because of the
credit risk involved, management analyzes all accounts receivable and
provides an allowance for doubtful accounts which reflects its opinion of
amounts which will eventually become uncollectible. As of June 30, 1998,
the allowance for doubtful accounts is $30,000.
Inventory
---------
Inventory consists of purchased doors, related door parts and other
supplies and raw materials necessary to assemble commercial metal doors for
resale. These items are valued at the lower of cost or market. Cost is
determined by using the first-in, first-out method.
Property and Equipment
----------------------
Property and equipment are recorded at historical cost. These costs are
depreciated over the estimated useful lives, generally five to seven years,
of the individual assets using the straight-line method.
F-6
<PAGE>
OMNI DOORS, INC.
(a subsidiary of Millennia, Inc.)
NOTES TO FINANCIAL STATEMENTS
Expenditures for repairs and maintenance are charged to expense as
incurred. Renewals and betterments which extend the economic life of the
respective asset are capitalized. Gains and losses from disposition of
property and equipment are recognized as incurred and are included in
operations.
Income Taxes
------------
Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due, if any, plus
net deferred taxes related primarily to differences between the bases of
assets and liabilities for financial and income tax reporting purposes.
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 tax assets at June 30, 1998 are primarily due to recognition of
operating losses that are available to offset future taxable income. A
valuation allowance is recognized to fully limit recognition of deferred
tax assets at June 30, 1998. Deferred tax liabilities at June 30, 1998 are
immaterial.
The Company's operating results are included in the consolidated income tax
return of the Parent. The Company calculates income tax expense or benefits
based on the applicable Federal and state income tax rates in effect at the
end of each operating year as a payable to or receivable from the Parent.
Income (Loss) Per Share
-----------------------
Income (loss) per share is calculated in accordance with Financial
Accounting Standards Board Statement No. 128, "Earnings Per Share". Basic
income (loss) per share is computed based upon the weighted average number
of common shares outstanding during the period. Diluted income (loss) per
share takes common equivalent shares into consideration. However, common
equivalent shares are not considered if their effect is antidilutive.
Common stock equivalents consist of outstanding stock options and warrants.
Common stock equivalents are assumed to be exercised with the related
proceeds used to repurchase outstanding shares except when the effect would
be antidilutive. There were no common stock equivalents for the years ended
June 30, 1998 and 1997.
Reclassifications
-----------------
Certain reclassifications have been made to conform 1997 financial
statements to the presentation in 1998. The reclassifications had no effect
on net income.
2. INVENTORY
---------
Inventory consists of the following components as of June 30, 1998:
Finished goods and purchased product $ 81,866
Raw materials and supplies 5,986
Reserve for inventory obsolescence (35,141)
-----------
$ 52,711
===========
3. COMMITMENT
----------
The Company leases office and warehouse facilities under an operating lease
agreement. The lease expires in 1999 and contains an annual lease payment
escalation clause whereby the base monthly rental increases by the greater
of 6.0% per year or the actual increase in the published consumer price
index. Rent expense under this lease agreement for the years ended June 30,
1998 and 1997 was $35,500 and $33,530, respectively. Aggregate future
non-cancelable rental payments under this agreement are $24,600 at June 30,
1998.
F-7
<PAGE>
OMNI DOORS, INC.
(a subsidiary of Millennia, Inc.)
NOTES TO FINANCIAL STATEMENTS
4. RELATED PARTY TRANSACTIONS
--------------------------
The Parent has made advances to the Company and has made various payments
on the Company's behalf. These advances have been unsecured and
non-interest bearing. There was no balance outstanding at June 30, 1998.
In April 1995, the Company executed a $19,504 note payable to the Parent
for the purchase of a vehicle. The note bears interest at 9.5% and is
payable in monthly installments of approximately $406 plus accrued
interest. The final payment is due in April 1999 and is collateralized by
the related vehicle. The balance at June 30, 1998 was $4,470.
The Company paid the Parent $4,800 for management fees for each of the
years ended June 30, 1998 and 1997.
5. CONCENTRATIONS OF CREDIT RISK
-----------------------------
In the normal course of business, the Company extends unsecured credit to
virtually all of its customers which are located principally in the South
Florida region of the United States. As the Company's products are used
principally in real property construction, the Company has the right to
file materialman's liens against its customers and/or the respective
project where the Company's materials are installed to collateralize its
accounts receivable under the pertinent provisions of the Uniform
Commercial Code and under the State of Florida laws. Management believes
this limits the maximum exposure to the Company in the event of complete
non-performance by entities owing the Company. One customer accounted for
11% of the Company's accounts receivable at June 30, 1998.
Because of the credit risk involved, management has provided an allowance
for doubtful accounts that reflects its opinion of amounts which will
eventually become uncollectible (See Note 1).
6. SUBSEQUENT EVENT AND UNAUDITED PRO FORMA INFORMATION
----------------------------------------------------
In July 1998, the Parent transferred all of the Company's assets and
liabilities to Millennia Doors, Inc. a newly-formed Texas corporation.
Millennia Doors is a wholly-owned subsidiary of the Parent and an affiliate
of the Company. Due to the significance of this transaction, the
accompanying unaudited pro forma balance sheet has been prepared as if the
transaction had occurred on June 30, 1998.
F-8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0001049011
<NAME> Omni Doors Inc.
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> Year
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 4,217
<SECURITIES> 0
<RECEIVABLES> 120,021
<ALLOWANCES> 30,000
<INVENTORY> 52,711
<CURRENT-ASSETS> 149,836
<PP&E> 37,853
<DEPRECIATION> 29,070
<TOTAL-ASSETS> 165,430
<CURRENT-LIABILITIES> 39,306
<BONDS> 0
0
0
<COMMON> 55,767
<OTHER-SE> 70,357
<TOTAL-LIABILITY-AND-EQUITY> 165,430
<SALES> 530,932
<TOTAL-REVENUES> 530,932
<CGS> 476,804
<TOTAL-COSTS> 113,192
<OTHER-EXPENSES> 1,052
<LOSS-PROVISION> 5,000
<INTEREST-EXPENSE> 1,052
<INCOME-PRETAX> (60,116)
<INCOME-TAX> 0
<INCOME-CONTINUING> (60,116)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (60,116)
<EPS-PRIMARY> (.005)
<EPS-DILUTED> (.005)
</TABLE>
