IMAGES OF LIFE, INC.
(A Development Stage Company)
AUDITED FINANCIAL STATEMENTS
Period From May 1, 1998 to December 31, 1999
Images of Life, Inc.
(A Development Stage Company)
AUDITED FINANCIAL STATEMENTS
December 31, 1999
CONTENTS
Page
INDEPENDENT AUDITORS' REPORT . . . . . 1
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . 5
FINANCIAL STATEMENTS:
BALANCE SHEETS . . . . . . . 7
STATEMENTS OF OPERATIONS . . . . . 8
STATEMENTS OF STOCKHOLDERS' EQUITY . . . 10
STATEMENTS OF CASH FLOWS . . . . . 11
NOTES TO FINANCIAL STATEMENTS . . . . . 13
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Images of Life, Inc.
Tucson, Arizona
We have audited the accompanying balance sheet of Images of
Life, Inc., (a development stage company) (the "Company"),
as of December 31, 1999 and 1998, and the related
statements of operations, cash flows and stockholders'
equity for the year ended December 31, 1999 and the eight
month period ended December 31, 1998. 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. The
financial statements for the period September 23, 1997
(inception) through April 30, 1998 were audited by other
auditors whose report dated June 23, 1998 expressed an
unqualified opinion.
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 Images of Life, Inc. as of December 31, 1999,
and 1998 and the results of its operations and its cash
flows for the year ended December 31, 1999 and the eight
month period ended December 31, 1998 are in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As
discussed in Note 9 to the financial statements, the
Company has incurred net losses since inception and has not
yet commenced operations which raises substantial doubt
about its ability to continue as a going concern. The
financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
On the statements of operations and cash flows, a
cumulative column is presented for the period September 23,
1997 (date of inception) through December 31, 1999 in
accordance with SFAS No.7. The statements of operations
and cash flows for the year ended December 31, 1998and for
the period September 23, 1997 (date of inception) through
December 31, 1999 have been compiled by us. The statements
of stockholder's equity for the period September 23, 1997
(date of inception) through April 30, 1998 have also been
compiled by us. We did not audit or review those
financial statements and, accordingly, express no opinion
or other form of assurance on them.
Tucson, Arizona
March 2, 2000
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Images of Life, Inc. (the Company) was incorporated in
September, 1997 and operated as an internet marketing
company specializing in the sale of wooden sculptures until
1998. The Company had not received any revenue from
planned principal operations during that time and in
November of 1998 it determined that it would be in the best
interests of the shareholders to terminate the sale of
wooden sculptures and acquire the rights to purchase an
interest in another development stage company and the
exclusive rights to market their products in the Canadian
market. In January 1999 the Company entered into agreement
with Richard R. Powell to acquire up to a 35% interest in a
development stage private company Glacier Medical LLC, a
Florida company. The purpose of this company is to develop
and market a single use needle safety device intended to
protect patients and health care workers. The Company is
primarily engaged in the financing and development of
specialty medical equipment. It continues not to generate
revenues from its primary activity, accordingly, the
Company is considered to be in the development stage.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1998 the Company had a working capital
deficit of $1,158 compared with a positive working capital
of $21,446 at December 31, 1999. Stockholders' equity at
years end 1998 and 1999 was $610 and $219,214 respectively.
In January 1999 the Company entered into a private
placement financing agreement with Trimont Capital Ltd. a
Company registered in the Cayman Islands, to provide
$500,000 in financing at a price of $1.00 per share. As of
December 31, 1999 Trimont Capital Ltd. had provided
$265,000 to the Company under the Private Placement
Agreement.
CORPORATE PLANS FOR 2000 AND BEYOND
The Company is assisting its affiliate Glacier Medical LLC
in taking the necessary steps to secure the approval of
the Food and Drug Administration (FDA) and subsequent to
that approval, preparing to market its products worldwide.
Funding committed under the private placement Agreement
should be adequate to meet the needs of achieving these
goals. Longer term the Company may acquire additional
assets by issuing additional stock or committing to funding
to develop or market other products which meet its
investment criteria. There is no assurance however, that
these efforts will be successful.
RESULTS OF OPERATIONS
1999 COMPARED TO 1998
The Company activities were focused on restructuring and
acquiring new business during 1999. In 1998 the company
was inactive for much of the year. In 1999, much of
management's time and energy activities were limited to
maintaining its status as a public company and establishing
new a direction for the Company. This generated of net
loss of and $48,054 in 1999 (per share $0.005) compared to
a loss of $9,556 in 1998(per share $0.002).
During the partial year (3 months) 1997, the Company
incurred losses of $62,139.
Since its inception the Company has generated losses
totaling $119,749
Tucson, Arizona
March, 10 2000
<TABLE>
BALANCE SHEETS
<CAPTION>
December 31, December 31,
1999 1998
<S> <C> <C>
ASSETS
Current Assets - Cash $ 33,846 $ 242
Total Current Assets 33,846 242
Investment in Start Up Business 195,000
Other Assets 2,768 1,768
TOTAL ASSETS $ 231,614 $ 2,010
LIABILITIES & STOCKHOLDERS EQUITY
Liabilities
Current Liabilities
Accounts Payable $ 1,900 $ 1,400
Total Current Liabilities 1,900 1,900
Commitments And Contingencies - Note 3
Common Stock$0.001 par value;
15,000,000 shares authorized;
9,665,000 and 5,000,000 shares issued
and outstanding as at December 31,
1999 respectively 2,165 5,000
Additional Paid In Capital 336,798 67,305
Accumulated Deficit (119,749) (71,695)
TOTAL STOCKHOLDER'S EQUITY 219,214 610
TOTAL LIABILITIES &
STOCKHOLDER'S EQUITY $ 231,614 $ 2,010
<FN>
The accompanying notes are an integral part of these Financial Statements
</FN>
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS (1 of 2)
<CAPTION>
Cumulative
For the
Period From
September 23,
1997 (Date of
Inception) to
December 31, Year Ended Year Ended
1999 December 31 December 31
(unaudited) 1999 1998
<S> <C> <C> <C>
REVENUES- development stage only
From Operations $ 712 $ $ 712
Cost of operations 5,765 2,973
Gross Profit (5,053) (2,261)
Other Income 3,500 3,500
(1,553) 3,500 (2,261)
EXPENSES
Compensation 16,844 4,000 4,494
Consulting - Note 4 49,500 45,000 0
Web-site Development 15,000 0 0
Marketing &
Advertising 10,000 0 0
Investment Banking 15,000 0 0
General & Admin. 11,620 2,554 2,669
Other 232 0__
118,196 51,554 7,294
LOSS FROM OPERATIONS (119,749) (48,054) (9,556)
Provision for Income
Taxes - Note 6 0 0 0
NET LOSS $(119,749) $(48,054) $ (9,556)
BASIC EARNINGS PER
SHARE: (Net Loss) $(0.005) $(0.002)
Weighted Average
Shares Outstanding 9,268,000 5,000,000
DILUTED EARNINGS
PER SHARE: (Net Loss) $(0.005) $(0.002)
Weighted Average
Shares Outstanding 9,268,000 5,000,000
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS (2 of 2)
<CAPTION>
Period From Period From
May, 1 1998 to January 1, 1998
December 31 1998 April 31, 1998
<S> <C> <C>
REVENUES-development stage
only From Operations $ 0 $ 712
Cost of operations 0 2,973
Gross Profit 0 (2,261)
Other Income 0 0
0 (2,261)
EXPENSES
Compensation 0 4,494
Consulting - Note 4 0 0
Web-site Development 0 0
Marketing &
Advertising 0 0
Investment Banking 0 0
General & Admin. 0 2,669
Other 0 132
0 7,295
LOSS FROM OPERATIONS 0 (9,556)
Provision for Income
Taxes - Note 6 0 0
NET LOSS $ 0 $ (9,556)
</TABLE>
<TABLE>
STATEMENT OF STOCKHOLDERS EQUITY
<CAPTION>
Deficit -
Accumulated
Addit'l During
Common Stock Paid-In Development
Shares Amount Capital Stage
<S> <C> <C> <C> <C>
Balance at 9/23/97(inception)
Shares Issued for Cash in Public
Offering net $6,125
(offering cost) 1,500,000 $1,500 $67,305
Common Stock Issued
for Services 3,500,000 3,500
Net Loss-9/23/97
to 12/31/97 . . . $(62,139)
Balance at
12/31/98 5,000,000 5,000 67,305 (62,139)
Net Loss for 4 month period
Ended 4/30/98 (9,556)
Net Loss for 8 month period
4/30/98 to 12/31/98 0
--------- -------- -------- --------
Balances at 12/31/98 5,000,000 5,000 67,305 (71,695)
Other Capital
- Expenses Paid by Shareholders 1,158
- Shares received 1/22/99
Previously recorded
as expense (3,500,000) (3,500)
- Shares Issued to Shareholders
under a six for one split 7,500,000
- Shares issued for Services
rendered the Company 400,000 400 3,600
- Shares Issued for
Cash Note - 5 265,000 265 264,735
Net Loss for Period (48,054)
5/1/98 to 12/3199
Balances at 12/31/99 9,665,000 $2,165 $336,798 $(119,749)
</TABLE>
<TABLE>
STATEMENTS OF CASHFLOWS (1 of 2)
<CAPTION>
(Compiled) Cumulative
For the Period From
September 23, 1997 (Compiled)
(Date of Inception) Year Ended Year Ended
December 31, 1999 December 31 December 31
(unaudited) 1999 1998.
<S> <C> <C> <C>
CASH FLOW FROM OPERATIONS
-Net Loss $(119,749) $ (48,054) $ (9,556)
-Adjustments to reconcile
net loss to cash from
operating activities:
-Other Income from
Exchange of personality
for Common Stock (3,500) (3,500)
-Expenses paid by
Stockholders 1,158 1,158
Amortization 232 132
Stock for services 7,500 4,000
Changes in Assets &
Liabilities:
-Prepaid Assets 5,000
-Other Assets (3,000) (1,000)
-Accounts Payable 1,900 11,000 1,200
(115,459) (36,396) (3,224)
CASH FLOWS FROM INVESTING
ACTIVITIES
- Investment in Start
Up Business (195,000) (195,000) .
(195,000) (195,000)
CASH FLOWS FROM FINANCING
ACTIVITIES
-Proceeds from issuance of
common stock
net issuance costs 333,805 265,000
Increase In Cash 23,846 33,604 (3,224)
Cash Beginning/Period 0 242 0
Cash End/Period $ 33,846 $ 33,846 $ 242
NON-Cash Investing &
Financing Activities
-Common Stock Issued
for Services Rendered $ 7,500 $ 4,000
<FN>
The accompanying notes are an integral part of these Financial Statements
</FN>
</TABLE>
<TABLE>
STATEMENTS OF CASHFLOWS (2 of 2)
<CAPTION>
Period From Period From
May, 1 1998 to January 1, 1998
December 31 1998 April 31, 1998
<S> <C> <C>
CASH FLOW FROM OPERATIONS
-Net Loss $ 0 $ (9,556)
-Adjustments to reconcile
net loss to cash from
operating activities:
-Other Income from
Exchange of personally
or Common Stock 0 0
-Expenses paid by
Stockholders 0 0
Amortization 0 132
Stock for services 0 0
Changes in Assets & Liabilities:
-Prepaid Assets 0 5,000
-Other Assets 0 0
-Accounts Payable 0 1,200
0 (3,224)
CASH FLOWS FROM INVESTING ACTIVITIES
- Investment in Start
Up Business 0 0
0 0
CASH FLOWS FROM FINANCING ACTIVITIES
-Proceeds from issuance of common stock
net issuance costs 0 0
Increase In Cash 0 (3,224)
Cash Beginning/Period 242 3,466
Cash End/Period $ 242 $ 242
<FN>
The accompanying notes are an integral part of these Financial Statements
</FN>
</TABLE>
IMAGES OF LIFE,INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1 - NATURE OF OPERATIONS, SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES, USE OF ESTIMATES
NATURE OF OPERATIONS
Images of Life, Inc. (the Company) was incorporated in the
State of Nevada on September 25, 1997. The Company is in
the development stage.
The Company was originally formed to manufacture and
distribute various products for retail distribution through
novelty and other retail stores. The Company has abandoned
these efforts.
The Company is currently investing in a start-up company
that is developing a medical supply product for use in the
medical field, primarily by hospitals, but usable by other
medical practitioners. This start-up company has certain
patents pending.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed by the Company and the
methods of applying those policies, which materially affect
the determination of its financial position, results of
operations, or cash flows are summarized below.
Cash and Cash Equivalents - The Company considers all
highly liquid investments, having a maturity of three
months or less when purchased to be cash equivalents.
Revenue Recognition - Revenue is recorded when
products are delivered and accepted by the customers.
Income Taxes - The provision for income taxes includes
deferred income taxes resulting from temporary
differences in the recognition of certain income and
expense items for financial reporting purposes in
different periods than for tax purposes.
IMAGES OF LIFE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
Non-Cash Common Stock Issuances - Shares of common
stock issued for other than cash have been assigned
amounts equivalent to the fair value of the service or
assets received in exchange.
Fair Value Of Financial Instruments - The carrying
amounts for cash, receivables, and accounts payable
approximate their fair value due to the short maturity
of these instruments. It is not practicable to
measure the fair value of the investment in start-up
business due to the non-marketability of this
investment.
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 the
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 significantly from those estimated.
Material estimates that are particularly susceptible to
significant change in the near-term relate to the
determination of the collectability of receivables and
advances, estimated liabilities for litigation settlements
and disputed claims, the valuation allowance for deferred
tax assets, and the amortization period for deferred
marketing costs.
NOTE 2 - INVESTMENT IN START-UP BUSINESS
The Company entered into an agreement dated January 20,
1999 with Glacier Medical, LLC (Glacier) to provide funding
for research and general and administrative costs in
Glacier's efforts to develop a medical supply product. The
Company's total commitment to fund Glacier is $1,000,000.
If totally funded the Company will receive a 35% interest
in Glacier. For the first $500,000 of funding, the Company
receives a 1.25% interest for each $25,000 funded. For the
IMAGES OF LIFE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
last $500,000 of funding, the Company receives a 2.00%
interest for each $100,000 funded.
The investment in Glacier Medical, LLC is stated at cost.
In Management's opinion there is no permanent impairment to
the value of this investment at this time, although this
assessment of impairment could change in the near term and
be material.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
On January 12, 2000 the Company entered into an agreement
to purchase marketing services for the twelve months
following signing of the agreement. The vendor will be
paid in Company shares. The agreement calls for a total
payment of 900,000 shares to be paid as progress is made,
contingent upon the satisfaction of each party.
NOTE 4 - RELATED PARTY TRANSACTIONS
The Company compensates the Chairman of the Board for
consulting services he provides to the Company in the
amount of $5,000 per month. These services are performed
on a month-to-month basis and may be terminated at any time
by either party.
NOTE 5 - COMMON STOCK TRANSACTIONS
On January 20, 1999 the Company entered into a "Private
Placement Funding Agreement" with Trimont Capital, Ltd. of
the Grand Cayman Islands to provide the Company with
capital funding. Trimont Capital, Ltd. has committed to
purchasing 500,000 shares of the Company's stock at $1.00
per share. Upon reaching $250,000 the Company will issue a
stock certificate of 250,000 shares to Trimont. For
purposes of the earnings per share calculation, the shares
were treated as outstanding during 1999. Trimont had
provided $265,000 by December 31, 1999.
IMAGES OF LIFE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 6 - PROVISION FOR INCOME TAXES
There is no current or deferred income tax benefit for the
periods ended December 31, 1999 and April 30, 1998.
At December 31, 1999 the Company has unused net operating
losses of approximately $118,000 expiring from 2018 through
2020. No deferred tax asset has been recorded as the
Company has provided a valuation allowance in the full
amount of the benefit until such time as deferred tax
liabilities are realized or future earnings are considered
likely.
The deferred tax consequences of temporary differences in
reporting items for financial statement and income tax
purposes are recognized, if appropriate. Realization of
the future tax benefits related to the deferred tax assets
is dependent on many factors, including the Company's
ability to generate taxable income within the net operating
loss period. The Company has considered these factors in
reaching its conclusion as to the valuation allowance for
financial reporting purposes.
IMAGES OF LIFE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 7 - EARNINGS PER SHARE
Earnings per share are calculated in accordance with the
Statement of Financial Accounting Standards ("SFAS") No.
128 "Earnings Per Share". The following is a
reconciliation of the numerator and denominator of the
basic and diluted per share computations for the periods
ended:
December 31, December 31,
1999 1998.
Basic:
Net loss applicable to common
stockholders $ (37,554) $ (71,695)
Weighted shares 7,637,000 5,000,000
Basic loss per share $(.005) $(.002)
Diluted:
Net loss applicable to common
stockholders $ (37,554) $ (71,695)
Weighted shares 7,637,000 5,000,000
Diluted shares outstanding 7,637,000 5,000,000
Diluted loss per share $(.005) $(.002)
NOTE 8 - STOCK SPLIT
On January 22, 1999 the Company's Directors authorized a 6
for 1 stock split, thereby increasing the number of issued
and outstanding shares to 9,000,000. The number of shares
reflected in the April 30, 1998 financial statements have
not been restated since such restatement would cause the
number of outstanding shares to exceed the number of
authorized shares.
IMAGES OF LIFE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 9 - GOING CONCERN
The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. The
Company has incurred net losses since inception and has not
yet commenced operations which raises substantial doubt
about its ability to continue as a going concern. In
addition, it is entirely dependent upon raising working
capital from its stockholders. Management's plans include
raising an additional $235,000 from its stockholders,
through the efforts of Trimont Capital, Ltd., and to
receive cash flow from Glacier Medical, LLC. The financial
statements do not include any adjustments that might result
from the outcome of this uncertainty.
NOTE 10 - STOCK OPTIONS
The Company issued options to board members who are
shareholders and to the majority member of Glacier Medical,
LLC totaling 300,000 shares of the Company's common stock
exercisable at $1 per share. These options are exercisable
upon certain future events happening, approval is required
of the Board. There is no dilutive effect as of December
31, 1999.
