<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2000
--------------
Commission file number: 0-29973
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SOLOMON ALLIANCE GROUP, INC.
(Exact name of small business issuer as specified in its charter)
Arizona 86-0843235
------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3025 Windward Plaza
Suite 300
Alpharetta, GA 30005
--------------------
(Address of principal executive offices)
(770) 753-3130
(Issuer's telephone number)
MADISON HOLDINGS, INC.
39 Broadway, Suite 2250
New York, New York 10006
------------------------
(Former Name and Former Address)
Check whether the registrant (1) 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 / /
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 21,534,745 shares as of May 31, 2000.
Transitional Small Business Disclosure Format (Check one): Yes / / No /X/
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
Registrant's Financial Statements are filed herewith following the signature
page.
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with the generally
accepted accounting principles may have been omitted. However, in the opinion of
management, all adjustments (which include only normal recurring accruals)
necessary to present fairly the financial position and results of operations for
the period presented have been made. The results for interim periods are not
necessarily indicative of trends or of results to be expected for the full year.
These financial statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Form 8-K, as amended.
The consolidated financial statements included herein have been subjected to a
limited review by Stokes & Company P.C., independent auditor for the Company,
whose report is included herein as Exhibit 15.
ITEM 2. PLAN OF OPERATION
GENERAL
The Company is a development stage enterprise focused on the emerging wireless
data industry. The Company does not, at this moment, have any business and is
seeking to acquire or merge with other existing, operating businesses. During
March 2000, the Company entered into non-binding letters of intent to acquire
all or part of three separate businesses within the wireless industry as part of
its EXPANSION THROUGH ACQUISITION strategy.
The Company plans to become a leading provider of customized wireless data
communications solutions for individual and business needs. The Company designs,
develops and markets wireless network products and services under the
"Knowledge2Go" brand that provide low-cost, high performance, easy-to-use
IP-based data communications. The products can be used in a broad range of
personal computer and industrial applications.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company has had virtually no revenues from operations
and has relied almost exclusively on officer loans, convertible debenture issues
and sale of securities to raise working capital to fund operations. At March 31,
2000 the company had $17,647 in cash.
The Company intends to continue the development, deployment and
commercialization of its Knowledge2Go services. The timing and amount of capital
expenditures may vary significantly depending on numerous factors including
market acceptance of its services, availability and financial terms of site
agreements for the Company's network infrastructure, technological
<PAGE>
feasibility, availability of modems, and availability of sufficient management,
technical, marketing and financial resources.
The Company will need to raise additional funds through the sale of its equity
or debt securities in private or public financing or through strategic
partnerships in order to complete the deployment and commercialization of
Knowledge2Go. There can be no assurance that such funds will be sufficient to
fund such deployment as planned. If thecompany is unable to obtain needed funds,
it could be forced to curtail or cease its activities.
The company has, in the past, issued shares of common stock to various parties
as payment for services rendered. The company intends to continue this practice.
Management has instituted a cost reduction program that included a reduction in
labor and fringe costs as well as the operating overhead. In addition, the
Company has converted substantial debt to capital and is actively seeking
additional capital resources. Management believes these factors will contribute
toward achieving profitability
ITEM 3. - FORWARD LOOKING STATEMENTS
When used in this report and in future filings by the company with the
Commission in the Registrants' press release or other public or stockholder
communications, and in oral statements made with the approval of an authorized
executive officer, the words or phrases "WILL LIKELY RESULT", "ARE EXPECTED TO",
"WILL CONTINUE", "IS ANTICIPATED", "ESTIMATE", "PROJECT" or similar expressions
are intended to identify "FORWARD LOOKING STATEMENTS" within the earning of the
Private Securities Litigation Reform Act of 1955. Such statements are subject to
certain risks and uncertainties, including the Company's liquidity constraints,
potential increases in costs and delays, pending litigation, availability of raw
materials, competition, demand for the product and other proprietary products
and delays in the distribution process that could cause actual results to differ
materially from those presently anticipated or projected. The company wishes to
caution readers not to place undue reliance on any such forward-looking
statements which speak only as of the date made. The company wishes to advise
readers that actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods in any current
statements.
The company does not undertake - and specifically, declines any obligation - to
publicly release the result of any revisions which may be made to any
forward-looking statements to reflect the occurrence of anticipated or
unanticipated events.
Part II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
<PAGE>
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit(s).
<TABLE>
<CAPTION>
NUMBER DESCRIPTION METHOD OF FILING
------ ----------- ----------------
<S> <C> <C>
27 Financial Data Schedule Filed with this Form 10-QSB
15 Independent Accountant's Report Filed with this Form 10-QSB
</TABLE>
(b) Reports on Form 8-K
1) On May 15, 2000, Solomon filed a Current Report on Form 8-K/A.
2) On March 16, 2000, Solomon filed a Notice of Securities of a
Successor Issuer Deemed to be Registered on Form 8-K12G3.
SIGNATURES
In accordance with the requirements of the exchange act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SOLOMON ALLIANCE GROUP, INC.
By: /s/ Thomas I. Weston, Jr.
------------------------------
Thomas I. Weston, Jr.
President
DATED: June 15, 2000
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
Consolidated Financial Statements
March 31, 2000 and 1999
(Unaudited)
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FINANCIAL STATEMENTS
Consolidated Balance Sheet 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Notes to Financial Statements 6 - 10
</TABLE>
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 17,647
PROPERTY AND EQUIPMENT - AT COST
Furniture and office equipment, net of accumulated
depreciation of $18,492 52,422
OTHER ASSETS
Goodwill, net of accumulated amortization $94,183 188,366
-----------
$ 258,435
-----------
-----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 337,197
Accrued salaries 78,750
Accrued payroll taxes 34,934
Officer loans 145,875
Note payable 50,000
-----------
Total current liabilities 646,756
-----------
LONG-TERM LIABILITIES
Convertible debentures 5,529
-----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 par value; 100,000,000 shares authorized;
22,848,116 shares issued and 21,239,745 outstanding 21,240
Additional paid in capital 1,394,059
Deficit accumulated during development stage (1,809,149)
-----------
(393,850)
-----------
$ 258,435
-----------
-----------
</TABLE>
The accompanying notes are an integral part of this financial statement.
3
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999 AND THE
PERIOD FROM OCTOBER 25, 1996 (INCEPTION) TO MARCH 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
October 25, 1996
(Inception) to
March 31,
2000 1999 2000
---- ---- ----------------
<S> <C> <C> <C>
REVENUE
Sales $ -- $ 2,400 $ 7,856
COST OF MERCHANDISE SOLD -- 2,035 6,989
----------- ----------- -----------
Gross profit -- 365 867
----------- ----------- -----------
EXPENSES
Interest 6,243 12,500 87,875
Depreciation and amortization 17,673 15,811 112,675
Selling and administrative 261,626 299,536 2,062,505
----------- ----------- -----------
285,542 327,847 2,263,055
----------- ----------- -----------
Loss from operations (285,542) (327,482) (2,262,188)
OTHER INCOME AND EXPENSE
Interest income -- 493 3,039
----------- ----------- -----------
Loss before income tax expense
and extraordinary item (285,542) (326,989) (2,259,149)
INCOME TAXES -- -- --
----------- ----------- -----------
Loss before extraordinary item (285,542) (326,989) (2,259,149)
EXTRAORDINARY ITEM:
Gain on extinquishment of debt, less applicable tax -- -- 450,000
----------- ----------- -----------
Net loss $ (285,542) $ (326,989) $(1,809,149)
----------- ----------- -----------
----------- ----------- -----------
EARNINGS (LOSS) PER COMMON SHARE:
Loss before extraordinary item $ (0.01) $ (0.03)
Extraordinary item -- --
----------- -----------
Net loss $ (0.01) $ (0.03)
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of this financial statement.
4
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999 AND THE
PERIOD FROM OCTOBER 25, 1996 (INCEPTION) TO MARCH 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
October 25, 1996
(Inception) to
December 31,
2000 1999 1999
---- ---- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales $ -- $ 2,400 $ 7,856
Interest income -- 493 3,039
Payments to vendors, suppliers and employees (64,823) (234,164) (1,600,696)
----------- ----------- -----------
NET CASH USED BY OPERATING ACTIVITIES
(64,823) (231,271) (1,589,801)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment -- (24,406) (51,023)
----------- ----------- -----------
NET CASH USED BY INVESTING ACTIVITIES -- (24,406) (51,023)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans 80,000 -- 156,900
Repayments of loans -- (10,000) (36,900)
Proceeds from convertible debentures -- 346,958 1,289,900
Proceeds from warrants -- -- 2,500
Proceeds from issuance of common stock -- -- 51,890
Proceeds from acquisition of subsidiary -- -- 194,181
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 80,000 336,958 1,658,471
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH 15,177 81,281 17,647
CASH at beginning of year 2,470 78,386 --
----------- ----------- -----------
CASH at end of year $ 17,647 $ 159,667 $ 17,647
----------- ----------- -----------
----------- ----------- -----------
RECONCILIATION OF NET LOSS TO NET CASH
USED BY OPERATING ACTIVITIES:
Net Loss $ (285,542) $ (326,989) $(1,809,149)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 17,673 15,811 112,675
Accrued interest not paid 5,537 12,500 86,415
Debt forgiveness -- -- (450,000)
(Increase) decrease in assets:
Employee receivables 5,719 (6,875) --
Prepaids -- 7,084 --
Increase (decrease) in liabilities:
Accounts payable 158,040 27,052 356,574
Accrued salaries 33,750 4,508 78,750
Accrued payroll taxes -- 35,638 34,934
----------- ----------- -----------
NET CASH USED BY OPERATING ACTIVITIES $ (64,823) $ (231,271) $(1,589,801)
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of this financial statement.
5
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
Three Months Ended March 31, 2000 and 1999
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF ORGANIZATION
Solomon Alliance Group, Inc. was incorporated in the State of Arizona on October
25, 1996. The Company was incorporated for the purpose of seeking potential
business ventures. The Company is classified as a development stage enterprise
because it has had no significant operations since its inception. In 1998, the
Company decided to target the emerging wireless data industry and on July 17,
1998 the Company acquired 100% of the common stock of Visual Link Wireless, Inc.
(VLW), which became a wholly owned subsidiary. VLW was a startup company in the
wireless data industry focusing on applications for the mobile professional. On
August 5, 1999, the Company acquired MPTG Communications, Inc., another startup
company that designed wireless data devices for niche markets. During the fourth
quarter of 1999 the Company was reorganized and is now repositioning itself to
take advantage of new opportunities in the wireless industry. On March 8, 2000
as further discussed in Note B in these footnotes the Company acquired Madison
Holdings, Inc.
Solomon is positioning itself to be a premier wireless data solutions provider
in the new and rapidly expanding wireless data market. Under the Knowledge2Go
brand, it focuses on integrated wireless Internet products and services for both
the business to business and personal use markets. In addition, Solomon plans to
expand into other segments of the industry through selected acquisitions and
joint ventures.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary. All material intercompany accounts,
transactions, and profits are eliminated in consolidation.
CASH AND CASH EQUIVALENTS
The Company considers deposits that can be redeemed on demand and investments
that have original maturities of less than three months, when purchased, to be
cash equivalents. As of March 31, 2000, the Company had no cash equivalents.
PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Expenditures for major additions
and improvements are capitalized, and minor replacements, maintenance, and
repairs are charged to expense as incurred. When property and equipment are
retired or otherwise disposed of, the cost and accumulated depreciation are
removed from the accounts and any resulting gain or loss is included in the
results of operations for the respective period. Depreciation is provided over
the estimated useful lives of the related assets using the straight-line method
for financial statement purposes. The Company uses other depreciation methods
(generally accelerated) for tax purposes where appropriate. The estimated useful
lives for significant property and equipment categories are as follows:
Computers and Equipment 5 years
Office Furniture and Fixtures 5 years
6
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements (Continued)
Three Months Ended March 31, 2000 and 1999
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
USE OF ESTIMATES
Preparing the Company's financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INCOME TAXES
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date. Deferred income tax expense represents the change during the
period in the deferred tax assets and deferred tax liabilities. The components
of the deferred tax assets and liabilities are individually classified as
current and non-current based on their characteristics. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. As of March 31, 2000 there were no deferred tax assets or liabilities.
GOODWILL
The excess of acquisition cost over the fair value of net assets (goodwill) of
Visual Link Wireless, Inc. (VLW), the Company's operating subsidiary is being
amortized using the straight-line method over 5 years. Management believes that
there has been no impairment of the goodwill as reflected in the Company's
consolidated financial statements as of March 31, 2000. The Company has adopted
a reduced period of amortization reflecting the approximate utility of the
purchased goodwill. The subsidiary is subject to changes occurring in the
high-tech communications industry. Cost in excess of net assets of VLW, net of
amortization, was $188,366 as of March 31, 2000. Amortization for the three
months ending March 31, 2000 and 1999 was $14,127 and $14,127, respectively.
EARNINGS PER SHARE
Basic net earnings (loss) per common share (EPS) is computed by dividing net
earnings (loss) applicable to common shareholders by the weighted-average number
of common shares outstanding during the period. Diluted net earnings (loss) per
common share is determined using the weighted-average number of common shares
outstanding during the period, adjusted for the dilutive effect of common stock
equivalents, consisting of shares that might be issued upon the conversion of
debt. In periods where losses are reported, the weighted-average number of
common shares outstanding excludes common stock equivalents, because their
inclusion would be anti-dilutive.
The average shares outstanding for basic EPS during the first quarter of 2000
and 1999, were 20,871,918 and 11,454,000, respectively.
7
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements (Continued)
Three Months Ended March 31, 2000 and 1999
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
GOING CONCERN
As shown in the accompanying consolidated financial statements, the Company has
incurred recurring losses from operations, and as of March 31, 2000, the
Company's current liabilities exceeded its current assets by $629,109 and its
total liabilities exceeded its total assets by $393,850. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management has instituted a cost reduction program that included a reduction in
labor and fringe costs as well as the operating overhead. In addition, the
Company has converted substantial debt to capital and is actively seeking
additional capital resources. Management believes these factors will contribute
toward achieving profitability. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern.
NOTE B--MERGERS AND ACQUISITIONS
On March 8, 2000, the Company entered into a stock exchange agreement with
Madison Holdings, Inc. (MHI) under which Solomon acquired MHI, a fully reporting
and SEC registered company. In connection with the stock exchange, Solomon
elected successor issuer status to become a fully reporting company under Rule
12g of the 1934 Securities Exchange Act and filed a Form 8-K with the SEC. The
Company will transfer 300,000 shares of its common stock for 100% of the
outstanding shares of MHI.
This acquisition has been accounted for under the purchase method of accounting.
MHI never had any operations, and no assets or liabilities at the date of
acquisition. Therefore, the Company is not required to reflect MHI's results of
operations within its consolidated financial statements. The Company incurred
$150,000 of expenses in connection with the acquisition.
There were no transactions between MHI and VLW or Solomon Alliance Group, Inc.
before the acquisition and no adjustments were necessary to conform MHI's
accounting policies.
NOTE C--PROPERTY AND EQUIPMENT
Property and equipment are summarized by major classifications as follows:
<TABLE>
<CAPTION>
1999
----
<S> <C>
Computer and Equipment $62,963
Office Furniture and Fixtures 7,951
-------
70,914
Less accumulated depreciation 18,492
-------
$52,422
-------
-------
</TABLE>
8
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements (Continued)
Three Months Ended March 31, 2000 and 1999
NOTE D--NOTE PAYABLE AND CONVERTIBLE DEBENTURES
During 1999, the Company assumed $789,900 in 8% Convertible Debentures in
connection with its subsidiary's merger with MPTG. The Debentures have a
maturity date of three years from the date of issue. During the year ending
December 31, 1999, $89,500 of the Debentures along with $8,032 of accrued
interest was converted to common stock of the Company. During the quarter ending
March 31, 2000 the Company converted $695,400 of principal and $57,991 of
accrued interest into 3,445,102 shares of common stock. The balance of the
Debenture at March 31, 2000 consists of a $5,000 in principal and $529 in
accrued interest
The Company is obligated on a demand note for $50,000, at 0% interest, which
represents the remaining balance of an obligation assumed at the time it
purchased its subsidiary, Visual Link Wireless, Inc. The balance of this
obligation is reflected as a current liability.
NOTE E--CAPITAL STOCK
During the years ended December 31, 1999, and December 31, 1998, the board of
directors approved the issuance of warrants to purchase an aggregate of
3,500,000 shares of the Company's common stock. Such warrants are exercisable at
prices ranging from $.001 to $4.00 per share, all of which are fully vested at
December 31, 1999, and expire at various times through July 2002. As of March
31, 2000, 1,000,000 warrants remain exercisable at $4.00 per share.
During July 1999, the board authorized the issue of non-qualified stock options
for 350,000 shares of the Company's common stock. Options representing 150,000
shares at an average exercise price of $.194 vested upon issue, the remaining
200,000 shares which may be exercised for 50% of the prior two months average
trading price at the date of exercise, vested on January 7, 2000. At March 31,
2000, none of the options has been exercised and all of the options will expire
on July 7, 2000.
NOTE F--COMPENSATION OF OFFICERS
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
---------------------------------
Annual Compensation Awards Payouts
------------------------- --------- --------- ------------------------------- ---------------------------------
Qtr Other Restricted Securities
Name and Principal Ending Annual Stock Underlying LTIP All Other
Position Mar. 31 Salary Bonus Compensation Awards Options/SARs Payouts Compensation
$ $ $ $ # $ $
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tom Weston-CEO 1999 33,750
------------------------- --------- --------- ------------- ---------------- ---------- ----------- ---------- -----------
Tom Weston-CEO 2000 33,750
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
SOLOMON ALLIANCE GROUP, INC. AND SUBSIDIARIES
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements (Continued)
Three Months Ended March 31, 2000 and 1999
NOTE G--SUBSEQUENT EVENTS
During March 2000, the Company entered into non-binding letters of intent to
acquire all or part of three separate businesses within the wireless industry as
part of its EXPANSION THROUGH ACQUISITION strategy. Solomon's goal is to enter
into business combinations which will result in an increased valuation per share
in both the near and long term, based on both a balance sheet and a going
concern analysis. It is the Company's strategy to complete two or more
acquisitions during 2000 with companies that, upon completion, would
significantly increase Solomon's asset base and revenue stream.
NOTE H--SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
2000
----
<S> <C>
Noncash Investing and Financing Activities:
Conversion of Debentures to Common Stock $695,400
Conversion of Accrued Interest to Common Stock $ 57,991
</TABLE>
NOTE I--RELATED PARTY TRANSACTIONS
As of March 31, 2000, the Company has borrowed $192,595 for its operations from
an officer. Of this amount $145,875 is represented by direct loans to the
Company and $46,720 is included in the Company's accounts payable. All loans and
advances bear interest at 8% per annum. The amounts are due on demand and
unsecured.
10
