SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1998
Commission File No.
RAVEN MOON INTERNATIONAL, INC.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-348779
- -------------------------------- -------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
120 International Parkway, Suite 220, Heathrow, Florida
-------------------------------------------------------
(Address of principal executive office and zip code)
Registrant's telephone number: (407) 304-4764
Securities registered pursuant to Section 12(b) of the Act:
Shares of Preferred Stock - None
Shares of Common Stock - None
Securities registered pursuant to Section 12(g) of the Act:
Preferred Stock, $0.0001
Common Stock, $0.0001 par value, 860,512 shares
Indicate by check mark whether the Registrant (1) has 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 Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
There was no public trading of the common stock of the Registrant as of December
31, 1998.
No shares of Registrant's Preferred Stock and 860,512 shares of Registrant's
Common Stock, $0.001, were outstanding on December 31, 1998.
DOCUMENTS INCORPORATED BY REFERENCE.
None.
<PAGE>
CONTENTS
Page
PART I
Item 1. BUSINESS
Item 2. PROPERTY
Item 3. LEGAL PROCEEDINGS
Item 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER
MATTERS
Item 6. SELECTED FINANCIAL DATA
Item 7. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION
Item 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
Item 9. DISAGREEMENTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS
OF REGISTRANT
Item 11. EXECUTIVE COMPENSATION
Item 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENTS
SCHEDULES AND REPORTS ON FORM 8-K
<PAGE>
PART I
Item 1. BUSINESS
Ybor City Shuttle Service, Inc. was formed on January 7, 1998, pursuant to
the Articles of Incorporation filed with the Office of Secretary of State of the
State of Florida on January 8, 1998. On December 31, 1998, Articles of Merger
for the merger of Ybor City Shuttle Service, Inc., Raven Moon Entertainment,
Inc. and International Resorts and Entertainment Group, Inc. were filed with the
State of Florida merging those three corporations. The name of the surviving
entity, Ybor City Shuttle Services, Inc., was changed to Raven Moon
International, Inc. as a part of the merger.
In those Articles of Merger, the Articles of Incorporation were amended to
increase the capitalization from 50,000,000 shares of Common Stock to
100,000,000 shares of Common Stock with a par value of $0.0001 per share. The
authorized Preferred Stock remained at 50,000,000 shares having a par value of
$0.0001 per share.
The original business of Ybor City Shuttle Service, Inc. was intended to be
the operation of a shuttle bus service initially operating in Tampa, Florida,
and intended to be expanded throughout the Tampa Bay area and ultimately to
other cities. Management of the company has subsequently determined not to
pursue that line of business. During 1998 the company was involved in the
vacation resort business formerly operated by International Resorts and
Entertainment Group, Inc. On June 1, 1998, that business was sold to North
American Resorts, Inc. because this company determined it to be unprofitable.
The business of the company is primarily involved with the development and
production of children's television programs and videos, CD music production,
e-commerce internet websites focused on the entertainment industry and music
publishing and talent management. The market for this product and these services
is worldwide, although the company will devote most of its efforts within the
continental United States. The company has received a letter of intent from Don
Taftner's Entertainment Ltd., in which they have expressed an interest in
marketing the company's initial product consisting of 65 television programs
targeted to the two to five year old children. The company is in the process of
complying with the requirements of Don Taftner Entertainment Ltd. To provide
them with one completed episode, thereby enabling them to seek broadcasters for
the program. Don Taftner's group will also participate in the merchandising of
what are termed "back end" products related to this series.
The main competition in this industry comes from the major studios, such as
Disney and Universal Studios that produce a large percentage of children's
programming. The next level of competition is from other independents like this
company. To be competitive the company has to produce high quality creative
productions and must develop the reputation and contacts to meet with the
principal players in this industry. The company excepts its
syndicator/distributor, Don Taftner's Entertainment Ltd., 31 West 56th Street,
New York, New York 10019 to provide the support necessary to enable the company
to compete in this marketplace.
The company will be able to obtain the talent necessary to develop and
produce this programming from sub-contractors available in the metropolitan
Orlando, Florida area, many of whom presently develop and produce materials and
productions for Disney and Universal Studios.
The company is not dependant on a few major customers because every
television station in the country is involved in filling its production day and
is constantly seeking quality program material to enable it to meet that demand.
The company has obtained the licensing and royalty agreements to market its
products from Joey and Bernadette DiFrancesco and J&B DiFrancesco, Inc., who
developed the company's principle intellectual properties.
There is no need for any governmental approval of products or services of
this type. The Federal Communications Commission Rules of Broadcast mandate that
broadcasters must broadcast educational programs for children or lose their
broadcast license. The programs that Raven Moon International, Inc. produces
will be educationally sound, original with fresh characters, have new music
along with interesting and appealing promotional tie-in concepts for children
<PAGE>
and their parents and will thus comply fully with those Rules of Broadcast.
Accordingly, the company believes that governmental regulation on the business
will have a positive effect on this company's business activities.
Joey and Bernadette DiFrancesco, the company's principle creative officers
and directors have spent a substantial time developing these properties and
products during the last two fiscal years. They will be in charge of the
production of the product on an ongoing basis. There is no impact on this
company's business from environmental laws. The company presently has no
full-time employees other than its officers and does not plan to hire any
full-time employees in the immediate future.
Any interested party is in the process of completing its annual report and
will voluntarily send that report to its Shareholders. The report will include
audited financial statements. This company is a reporting company and is in the
process of preparing and filing the 10K Reports and information with the SEC
required pursuant to its regulations.
The company may read and copy any materials filed with the SEC at its
Public Reference Room at 450 5th Street, NW, Washington, DC 20549. The public
may also obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The company is an electronic filer. The SEC
maintains an internet site that contains reports, proxy and information
statements, and other information regarding issuers that file electronically
with the SEC. The address of that site is http://www.SEC.gov. This company's
internet address is .
Item 2. PROPERTY
The company continues to own the exclusive production rights to the
following named projects or intellectual properties:
"Chief Rainbird and Friends"
"Highway Angel"
"The Last Feather"
"The Village of Many Tribes" project
"The Terry Jones Story - Venom in my Veins"
"Praise-r-cise"
"The Jokes on You"
"Team Amazon"
International Resorts and Entertainment Group, Inc. acquired those rights from
St. Anthony Entertainment, Inc. and this company is therefore obligated to pay
the agreed upon five percent (5%) royalty on the revenue received from the above
productions, except for marketing revenues received from the "Village of Many
Tribes." The company has also agreed to pay five percent (5%) royalty on gross
revenues as defined, to North American Resorts, Inc. Any such royalties due to
North American Resorts, Inc. will be used to reduce the receivable of
$1,000,000, which is owed by North American Resorts, Inc. for the repurchase of
the Vacation Resort business. (See Notes to Consolidated Financial Statement).
The Board of Directors of the company has determined that the company will
focus its primary efforts on audio and video production for television or motion
pictures and more specifically on the present development of a series of
television productions designed for children's entertainment. The company owns
the exclusive rights to those intellectual properties pursuant to an agreement
between J & B DiFrancesco, Inc. and its principals, Joey DiFrancesco and
Bernadette DiFrancesco. The Company also owns rights for television, video and
audio programming and recording for licensed characters known as "Baby and the
Transistor Sisters" and "TV Ted."
Because the company's primary business will be conducted in the
professional recording studios and facilities of subcontractors used in the
television, motion picture, and recording business, the company no longer has a
need for a large office setting and has vacated its former office location in
Heathrow, Florida. The company presently maintains a small office located at 120
International Parkway, Suite 220, Heathrow, Florida, and has reduced its
overhead significantly because of this operational change.
<PAGE>
Item 3. LEGAL PROCEEDINGS.
The company vacated its former office space located in Heathrow, Florida,
and was involved in litigation with the Landlord, Gaedeke Landers, LLC, in the
Circuit Court of the Eighteenth Judicial Circuit in and for Seminole County,
Florida, which was initiated on September 24, 1999, concerning a dispute over
that termination. That legal proceeding has been settled with the company
agreeing to pay the sum of $44,000.00 on or before July 1, 2000, and if not paid
by that date, has agreed to the entry of a judgment for $60,000.00 plus any
additional costs and attorney's fees which may be incurred in obtaining that
judgment.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock has been the subject of little or no trading
activity. No brokerage firms were making a market in the company's Common Stock
during 1999.
There are 610 holders of the Common Stock of the company. None of the
Preferred Stock has been issued. There has never been any dividend, cash, or
otherwise, paid on the Common or Preferred Stock of the company.
The Common Stock of the company is subject to the "penny stock rules" of
Rule 15(g) of the Securities Act of 1934. These rules impose additional sales
requirements on broker-dealers selling securities to persons other than
established customers and accredited investors as defined in the Securities Act
of 1933. Brokerage transactions falling within these Rules require brokers to
make a special suitability determination for the purchaser and to obtain the
purchaser's written consent to make the trade before accepting the sale.
Accordingly, these penny stock rules may adversely affect the ability of
purchasers to resell these securities.
Item 6. SELECTED FINANCIAL DATA
Fiscal year ended December 31
-----------------------------
1998 1997
Income Statement Data
- ---------------------
REVENUES:
Marketing fees $ 230,030 $ 175,145
Other 18,500 3,910
----------- -----------
Total Revenues 248,530 179,055
COSTS AND EXPENSES:
Cost of revenues 867,671 153,603
Depreciation 907 122
Selling expense 65,492 134,912
General and administrative expense 221,388 232,950
----------- -----------
Total costs and expenses 1,155,458 521,587
----------- -----------
Net loss before discontinued operations (906,928) (342,532)
Loss from discontinued operations 400,792 --
----------- -----------
<PAGE>
Net loss (1,307,720) (342,532)
Accumulated deficit, prior year (342,532) --
----------- -----------
Accumulated deficit, current year $(1,650,252) $ (342,532)
=========== ===========
Net loss per share $ (3.17) $ (9.26)
=========== ===========
Balance Sheet Data
Total assets $ 134,680 $ 109,096
Total current liabilities 246,796 22,238
Stockholder equity (112,116) 86,858
----------- -----------
Total liabilities $ 134,680 $ 109,096
=========== ===========
Item 7. PLAN OF OPERATION AND MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
(a) PLAN OF OPERATION
During 1997 and 1998, the predecessor company, International Resorts and
Entertainment Group, Inc. incurred net losses of $342,588 in 1997 and $1,307,720
during 1998 most of which was related to start up expenses and operation of its
vacation (time share) business. These losses included the expense of maintaining
offices, sales facilities, and salaries for the personnel and staff employed in
that endeavor. That business has now been sold to North American Resorts, Inc.
(See Note 5 to Consolidated Financial Statement.)
In an effort to minimize its losses, the Company vacated its office space
and closed its vacation business sales location. It also laid off all paid
personnel and presently operates with no employees except for its officers who
have deferred the payment of salaries.
Raven Moon International, Inc. plans to produce up to 65 half-hour TV programs
based on licensed characters known as Baby & The Transistor Sisters and TV TED.
To accomplish this goal, the company will need to raise five to ten million
dollars ($5,000,000-$10,000,000) through a public stock offering.
Raven Moon International, Inc. intends to do this in two steps. First, the
company is planning to raise $1,000,000 with a private placement offering. With
these funds, the company plans to develop a half-hour television show and a
ten-minute promotional video, which will be shown to major Television
Syndication Companies; Home Video Production Companies; Foreign Distributors,
and potential investors. Until this initial private placement has been
concluded, the company will be unable to initiate preparation of the first
television show.
Funds from the private offering will also be allocated for the preparation of
the secondary offering and working capital. This first step is proposed to be
completed by April 30, 2000. The Company will then undertake its efforts to
issue $5,000,000 to $10,000,000 in new publicly traded shares of the company
through a fully registered public offering.
The Company plans to use this new capital to build a library of up to 65
half-hour television episodes. In addition, the funds will be used to create as
many as three new Internet Websites to market tied-in branded products and to
create music CD's, Video games, stuffed and plastic toys, and other children
related products for distribution in the United States and abroad.
<PAGE>
With these resources in place and with the expected market penetration and
acceptance of the company's TV characters, Raven Moon will be in a position to
attempt to exploit this fast growing and very profitable segment of the market
(Entertainment items for 2 year olds to 5 year olds).
The company will be unable to produce the series of 65 half-hour television
episodes or to properly market its TV characters unless the public offering is
completed because it has no other source of revenue at the present time.
The music and cartoon characters and copyrights are owned by J&B DiFrancesco,
Inc., and are licensed exclusively to Raven Moon International, Inc. by J&B
DiFrancesco, Inc. This license is in perpetuity, subject to the company
delivering $3,250,000 for the production costs, including the $100,000 initial
non-refundable fee to develop the first half-hour show.
The full cost of the production and editing of three (3) half-hour television
Pilot Episodes, and editing of a 10 minute Promotional Video is not to exceed
$500,000 and is budgeted under the initial private placement. This material will
be used by the company's syndicator/distributor to be shown to Television
Stations, Home Video Distributors, Foreign Distributors and potential Investors
and Brokers. The cost quote includes the full cost of designing and building
sets, costumes and other materials that will be used in the other 62 episodes.
Therefore, these additional episodes will average only $50,000 per episode.
Also budgeted under this initial offering are anticipated legal expenses, SEC
filing fees, auditing costs, some debt repayment, marketing, printing,
syndication, production, talent, operating, administration, travel and
entertainment expenses. The balance of the proceeds will be for general
operating expenses.
Except for management, there is no expectation that the company will hire any
full-time employees in the foreseeable future. The production personnel will be
independent contractors. The source of independent contractors is readily
available in Central Florida from many different sources including the talent
pool of professionals who have worked with companies such as Disney/MGM,
Universal Studios and Nickelodeon.
The company will voluntarily send an annual report to persons requesting a
printed copy. The report will contain audited financial statements. Quarterly
and annual reports will be filed with the Securities and Exchange Commission.
The public may read and copy any material filed with the SEC at the SEC's Public
Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549, and may obtain
information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The company is an electronic filer. The SEC maintains an
internet site (http://www.SEC.gov) At which the public may view all
electronically filed information.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements are attached following Item 14.
Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
<PAGE>
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers and directors of the company, with a brief
description are as follows:
Name Age Position Term
---- --- -------- ----
Joey DiFrancesco 57 President/Director 1 year
Bernadette DiFrancesco 55 Vice President/Secretary/Director 1 year
John G. Pierce 63 Executive Vice President/Director 1 year
Stephen Chrystie 64 Director 1 year
Joey DiFrancesco, 57 years of age, is the President and a Director. Mr.
DiFrancesco has been a producer and director of children's television programs
for more than 20 years. Prior to that, he was employed in the music publishing
and record production business in New York City with Laurie Records, RCA,
Columbia/Sony and MCA. Mr. DiFrancesco has been self-employed in the fields of
television, audio and video programming for more than the past ten years. He has
been a Director in this company since November of 1999.
Bernadette DiFrancesco, 55 years of age, is the Vice President, Secretary
and a Director. She has been self-employed with her husband, Joey DiFrancesco
for more than 20 years where she and Mr. DiFrancesco have produced television
programs, developed the "Praise-R-Cise" alternative to aerobic dancing, produced
26 half hour episodes of "Curly's Kids" with former Harlem Globetrotter star
Curly Neil. She has been actively involved in development of all of the
company's present intellectual properties described in Item 7 above. She has
been a Director in this company since November of 1999.
John G. Pierce, 63 years of age, Executive Vice President and a Director.
Mr. Pierce has been employed as a practicing attorney in the state of Florida
since 1966. His law firm, John G. Pierce, P.A., specializes in corporate,
business and securities law. He has been a Director since November, 1999.
Stephen Chrystie, 64 years of age, has been a Director of the company since
November, 1999. Mr. Chrystie has been a practicing attorney in the state of
California since 1963, where he specialized in banking, bankruptcy, commercial
and entertainment law. Mr. Chrystie retired from the practice of law in 1998,
and now serves as the Director of a non-profit corporation with offices in Los
Angeles, California.
The Directors of the company are elected annually by the Shareholders for a
term of one year, or until their successors are elected and qualified. The
Officers serve at the pleasure of the Board of Directors.
Item 11. EXECUTIVE COMPENSATION
Joey DiFrancesco shall receive as compensation for his services the sum of
Two Hundred Sixteen Thousand & 00/100ths Dollars ($216,000.00).
Bernadette DiFrancesco shall receive as compensation for her servies the
sum of Seventy-Two Thousand & 00/0\100ths Dollars ($72,000.00).
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There are presently 5,977,925 shares of the company's common shares
outstanding and 1,452,358 preferred shares outstanding. The following table sets
forth the information as to the ownership of each person who, as of the date of
this report, owns of record, or is known by the company to own beneficially more
than 5% of the company's common stock, and the Officers and Directors of the
company.
<PAGE>
COMMON STOCK
Title of Class Name & Address of Amount of Percent
- -------------- ----------------- --------- -------
Beneficial Owner Shares of Class
---------------- --------- --------
Common J&B DiFrancesco, Inc. 1,200,000 20%
2221 Springs Landing Blvd.
Longwood, FL 32779
Common Joseph & Bernadette DiFrancesco 352,052 5%
2221 Springs Landing Blvd.
Longwood, FL 32779
Common Raven Moon, Inc. 2,014,443 34%
2221 Springs Landing Blvd.
Longwood, FL 32779
Common Beyond The Kingdom, LP 537,325 11%
120 I1H Parkway, #220
Heathrow, FL 32746
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The merger of Ybor City Shuttle Service, Inc., Raven Moon Entertainment and
International Resorts and Entertainment Group, Inc. on December 31, 1998,
resulted in Joey DiFrancesco and Bernadette DiFrancesco becoming Shareholders in
the company, both individually and as owners of corporate entities they control,
and both are now Officers and Directors of the company.
John G. Pierce received 15,000 shares issued by the company in lieu of
compensation due to him for legal services rendered to the corporation and
275,000 shares from J&B DiFrancesco, Inc. for a total holding of 290,000 shares.
Stephen Christie is the owner of 52,668 shares of the company's common
stock issued to him by the company, in consideration for his agreement to act as
a Director.
J&B DiFrancesco, Inc. a corporation owned and controlled by Joey and
Bernadette DiFrancesco and Joey DiFrancesco and Bernadette DiFrancesco have
received a convertible debenture in the amount of $2,500,000 convertible to
common stock of the corporation at 80% of the initial proposed public offering
anticipated to be made in the year 2000. That debenture is convertible at any
time during the five year period beginning April, 2000.
Each Director is the holder of 250,000 warrants to purchase 250,000 share
of the company's preferred stock at an offering price equal to 80% of the
company's common stock anticipated to be sold in the public offering for the
year 2000. The warrants are for 10 years and are exercisable at the election of
the holder thereof at any time during such period. The preferred shares are
non-voting and may be converted to common stock at any time at the election of
the holders thereof.
<PAGE>
PART IV
Item 14. FINANCIAL STATEMENT SCHEDULES AND REPORTS
(a) Attached are the financial statements and independent auditors
reports on examination of financial statements for this years
ended December 31, 1997 and December 31, 1998.
(b) Attached are the following financial statement schedules and
auditors report on schedules:
Independent Auditors Report on Schedules
All other schedules are omitted because they are not required or are not
applicable, or the information is shown in the consolidated financial statements
or notes thereto.
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors and Stockholders of
Raven Moon International, Inc.
(Formerly Ybor City Shuttle Service, Inc.)
We have audited the consolidated balance sheets of Raven Moon International,
Inc. and subsidiaries as of December 31, 1998 and 1997, and the related
consolidated statements of operations and accumulated deficit, stockholders'
equity and cash flows for the year ended December 31, 1998 and the period from
May 18, 1997 to December 31, 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 audit.
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 audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Raven Moon
International, Inc. as of December 31, 1998 and 1997 and the results of its
operations and its cash flows for the year ended December 31, 1998 and the
period from May 18, 1997 through December 31, 1997 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has suffered losses from
operations and must obtain additional financing which raises substantial doubt
about its ability to continue as a going concern. Management plans in regard to
these matters are described in Note 3. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
Tampa, Florida
December 2, 1999
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
Consolidated Balance Sheets
December 31, 1998 and 1997
ASSETS
1998 1997
CURRENT ASSETS:
Cash and cash equivalents $ 5,669 $ 5,524
Accounts receivable 1,400 --
Receivable from affiliated companies -- 44,500
----------- -----------
Total current assets 7,069 50,024
OFFICE EQUIPMENT, net of $1,029 and $122 of
accumulated depreciation, respectively 4,119 3,526
MASTER PRODUCTION COSTS 50,754 --
ROYALTY RIGHTS 50,000 50,000
PRODUCTION RIGHTS 3,000 3,000
ORGANIZATION COSTS, net of
amortization of $2,346 17,192 --
DEPOSITS 2,546 2,546
----------- -----------
$ 134,680 $ 109,096
=========== ===========
LIABILITIES
CURRENT LIABILITIES:
Accounts payable $ -- $ 3,105
Accrued liabilities 3,508 18,333
Note payable - Officer 28,700 --
Note payable 186,193 --
Payable to affiliated company 28,395 800
----------- -----------
Total current liabilities 246,796 22,238
----------- -----------
COMMITMENTS AND CONTINGENCIES (see note 8)
STOCKHOLDERS' EQUITY
Common stock, $.001 par value
(authorized 10,000,000 shares;
issued and outstanding 860,512
in 1998 and 62,168 in 1997 861 62
Additional paid-in capital 1,537,275 429,328
----------- -----------
Accumulated deficit (1,650,252) (342,532)
----------- -----------
Total stockholders' equity (112,116) 86,858
----------- -----------
$ 143,680 $ 109,096
=========== ===========
See notes to Consolidated Financial Statements.
2
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT
For the year ended December 31, 1998 and the period from May 18, 1997
through December 31,1997
1998 1997
REVENUES:
Marketing fees $ 230,030 $ 175,145
Other 18,500 3,910
----------- -----------
Total revenues 248,530 179,055
COSTS AND EXPENSES:
Cost of revenues 867,671 153,603
Depreciation 907 122
Selling expense 65,492 134,912
General and administative expense 221,388 232,950
----------- -----------
Total costs and expenses 1,155,458 521,587
----------- -----------
Net loss before discontinued operations (906,928) (342,532)
Loss from discontinued operations 400,792 --
----------- -----------
Net loss (1,307,720) (342,532)
Accumulated deficit, prior year (342,532) --
----------- -----------
Accumulated deficit, current year $(1,650,252) $ (342,532)
=========== ===========
Net loss per share $ (3.17) $ (9.26)
=========== ===========
See notes to Consolidated Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the year ended December 31,1998 and the period from May 18, 1997
through December 31, 1997
Common Stock Additional
----------------------------- paid-in Accumulated
Shares Amount capital deficit Total
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance May 18, 1997 13,613 $ 13 -- $ 13
Shares issued for cash 4,716 5 $ 153,872 153,877
Shares issued for acquisition
of production rights 20,000 20 2,980 3,000
Shares issued for expenses 14,333 14 222,486 222,500
Shares issued for royalty rights 9,506 10 49,990 50,000
Net loss for the period (342,532) (342,532)
----------- ----------- ----------- ----------- -----------
Balance December 31, 1997 62,168 $ 62 $ 429,328 $ (342,532) $ 86,858
----------- ----------- ----------- ----------- -----------
Founders Shares 200,000 200 200
Shares issued for cash 300,814 301 900,017 900,318
Shares issued for expenses 286,404 287 82,209 82,496
Private placement shares issued
for expenses 4,933 5 735 740
Private placement, shares issued
for cash 6,193 6 124,986 124,992
Net loss for the period (1,307,720) (1,307,720)
----------- ----------- ----------- ----------- -----------
Balance December 31, 1998 860,512 $ 861 $ 1,537,275 $(1,650,252) $ (112,116)
=========== =========== =========== =========== ===========
See notes to Consolidated Financial Statements.
4
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended December 31, 1998 and the period from May 18,
1997 through December 31,1997
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (1,307,720) $ (342,532)
Adjustments to reconcile net loss to net cash used
by operating activities:
(Increase) in receivables (1,400) --
Decrease (increase) in receivables from
affiliated company 44,500 (44,500)
(Increase) in master production costs (50,754) --
Depreciation and amortization 3,253 122
Increase in organization costs (19,538) --
(Decrease) increase in accounts payable (3,105) 3,105
(Decrease) increase in accrued expenses (14,825) 18,333
Increase in payable to affiliated company 27,595 800
Shares issued for expenses 83,236 222,500
----------- -----------
Net cash used by operations (1,238,758) (142,172)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (1,500) (3,648)
Deposit on leased premises -- (2,546)
Net cash used by investing activities (1,500) (6,194)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sale of common stock 1,025,510 153,890
Notes payable - officers 28,700 --
Notes payable 186,193 --
----------- -----------
Net cash provided by financing activities 1,240,403 153,890
Net increase in cash 145 5,524
Cash at beginning of period 5,524 --
----------- -----------
Cash at end of period $ 5,669 $ 5,524
=========== ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Acquisition of Production Rights $ 3,000
===========
Acquisition of Royalty Rights $ 50,000
===========
See notes to Consolidated Financial Statements.
5
</TABLE>
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note l - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of Raven Moon International, Inc. (formerly Ybor City Shuttle Service,
Inc.) and its wholly owned subsidiaries, International Resorts and Entertainment
Group, Inc., and Raven Moon Entertainment, Inc. (formerly International
Entertainment Group, Inc.) All material inter-company accounts and transactions
have been eliminated. The December 31, 1998 merger (See Note 3) was accounted
for as a pooling of interests, therefore, the comparative financial statements
for 1997 are from International Resorts and Entertainment Group, Inc.'s
financial statements.
MANAGEMENT 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.
Actual results could differ from those estimates.
NET LOSS PER SHARE - Primary loss per share computations are based on the
weighted average number of shares outstanding during the period. The weighted
average number of shares outstanding was 521,343 and 36,998 for the period ended
December 31, 1998 and 1997, respectively. There were no outstanding common stock
equivalents during the fiscal period.
INCOME TAXES - The Company has incurred approximately $1,650,000 of net
operating losses which may be carried forward and used to reduce taxable income
in future years. Deferred tax assets created by the net operating losses are
offset by an equal valuation allowance.
OFFICE EQUIPMENT - Office equipment is recorded at cost. Depreciation is
calculated using the straightline method.
Note 2 - BUSINESS AND OPERATIONS
The Company and its subsidiaries are currently working to establish the
following lines of business:
Movie and Television Productions
Music
Internet Retail Sales
6
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
These financial statements are prepared on a going concern basis which assumes
that the Company will be able to realize assets and discharge liabilities in the
normal course of business. Accordingly, it does not give effect to adjustments,
if any, that would be necessary should the Company be unable to continue as a
going concern and therefore be required to realize assets and liquidate its
liabilities, contingent obligations and commitments in other than the normal
course of business and at amounts which may be different from those shown in
these financial statements. The ability to continue as a going concern is
dependent on its ability to:
Generate profitable operations in the future.
Obtain additional financing.
These factors raise doubt about the Company's ability to continue as a going
concern. These financial statements do not include any adjustments that might
result from the outcome of these uncertainties.
Management plans to raise capital through the issuance of additional common
stock and by actively seeking to develop its lines of business.
Note 3 - HISTORY OF COMPANY AND RECAPITALIZATION
The Company was incorporated on January 7, 1998 in the State of Florida under
the name Ybor City Shuttle Services, Inc., by issuing 200,000 shares of its
common stock to the Founders. On March 14, 1998 and December of 1998, the
company sold 45,620 and 97,000 shares of its common stock to investors under the
provisions of Section 4(2) of the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder. The Company kept 100% of the
proceeds from the sale of securities and no underwriters were used and no
commission or discounts were paid.
A reverse stock split of 10 to 1 was approved at a special Board of directors
meeting on June 17, 1999. The reverse stock split was effective immediately. The
effects of this reverse split have been reflected in the financial statements.
Through a plan and agreement of Merger dated October 21, 1998, effective
December 31, 1998, the
7
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
(Continued)
Company merged with Raven Moon Entertainment, Inc., (formerly International
Entertainment Group, Inc.) and International Resorts and Entertainment Group,
Inc. Each share of Raven Moon Entertainment, Inc.'s common stock issued and
outstanding at December 31, 1998 was exchanged for one share of common stock of
the Company. At December 31, 1998 there were 112,955 shares of common stock
issued and outstanding.
In addition, as part of the merger agreement, each 15 shares of International
Resorts and Entertainment, Inc. common stock issued and outstanding at December
31, 1998, was exchanged for one share of common stock of the Company (adjusted
for the subsequent 10 for 1 reverse stock split). At December 31, 1998 there
were 60,740,117 shares of common stock issued and outstanding which resulted in
404,932 of new shares.
Note 4 - BUSINESS ACQUISITIONS
St. Anthony Entertainment, Inc. On May 18, 1997, in a transaction accounted for
by the purchase method, International Resorts and Entertainment, Inc. acquired
the Exclusive Production Rights to certain projects developed and owned by St.
Anthony Entertainment, Inc., for 20,000 shares of its common stock. Following is
a summary of the production properties acquired:
"Chief Rainbird and Friends"
"Highway Angel"
"The Last Feather"
"The Village of Many Tribes" project
"The Terry Jones Story" - "Venom in My Veins"
"Praise-R-Cise"
"The Jokes on You"
"Team Amazon"
The agreement also provides that St. Anthony receive a 5% royalty on the revenue
received from the above productions, except for marketing revenues received from
"The Village of Many Tribes". The Company has also agreed to pay a 5% royalty on
gross revenues, as defined, to North American Resorts, Inc. Any royalties due to
North American will be used to reduce the receivable of $1,000,000 (See Note 5).
Through December 31, 1997, the Company has reacquired a portion of the royalty
rights for 9,506 shares of the Company's common stock. (See Note 8 for
additional acquisitions of royalty rights.)
8
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
As of the date this transaction was consummated, there were no outstanding
agreements or contracts related to the above productions. While management
believes these intellectual properties have significant value, establishing this
value in the absence of definitive agreements cannot be accomplished. Therefore,
the Company has recorded the production rights at nominal value of $3,000 which
represents the par value of the shares issued.
Note 5 - BUSINESS DISPOSITIONS
Under a letter of intent dated January 22, 1998, the Company agreed to be
acquired by North American Resorts, Inc. for shares of common stock. The terms
of the letter of intent were effectively a reverse merger where the Company
becomes the acquirer. The letter of intent provided for an exchange of shares
based on relative market values at the date of consummation. Under a letter of
intent dated January 29, 1998, the Company agreed to acquire The Flagship
Companies, Inc.
On April 25, 1998, the Company rescinded and terminated both letters of intent.
The Company sold International Resorts, Inc. to North American Resorts, Inc. for
$1,000,000, which has not been recorded as a receivable because collection is
doubtful.
Note 6 - SUMMARY OF COMMON STOCK
Common stock transactions as restated in the quasi-reorganization (see Note 2)
for the period January 7, 1998 through December 31, 1998 are summarized as
follows:
Number
of shares Amount
--------- ------
Founders shares 200,000 $ 200
For cash 142, 83,512
From Merger - International
Resorts and Entertainment, Inc. 404,932 1,397,945
From Merger - Raven Moon
Entertainment, Inc. 1 56,479
---------
Total $ 1,538,136
===========
9
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
International Resorts and Entertainment, Inc.
Original outstanding shares 13,613 -
For cash 4,716 $ 153,890
For royalty rights 9,506 50,000
For production rights 20,000 3,000
For expenses 14,333 222,500
------- ----------
Balance, December 31, 1997 62,168 429,390
For cash 158,189 816,806
For expenses 173,449 26,017
Private placement for expense 4,933 740
Private placement for cash 6,193 124,992
------- ----------
Total 404,932 $1,397,945
======= ==========
Raven Moon Entertainment, Inc.
For expenses 112,955 $ 56,479
======= ==========
Note 7 - RELATED PARTY TRANSACTIONS
The Company is affiliated through ownership of shares of the Company's common
stock by the following companies:
North American Resorts, Inc.
St. Anthony Entertainment, Inc.
Raven Moon, Entertainment
a) Assets and liabilities due from and to related parties are on an open
account basis and are summarized as follows:
1998 1997
---- ----
Due from North American Resorts, Inc. - $ 44,500
===== ========
10
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Due from/(to) St. Anthony Entertainment, Inc. - $ (800)
=========
Included in accounts payable and
accrued liabilities:
Payable to officers, directors
and senior consultants - $ 18,333
=========
b) Shares of common stock issued to officers and directors for expenses
is summarized as follows:
Shares Amount
------ ------
143,333 $ 222,500
======== =========
c) The Company has incurred aggregate consulting, marketing and
management fees with:
1998 1997
---- ----
Officers, directors and
senior consultants $ 76,000 $ 231,458
========= ==========
Affiliates $ 146,000 $ 65,000
========= ==========
Note 8 - COMMITMENTS AND CONTINGENCIES
a) Under the agreement with St. Anthony Entertainment, Inc. to acquire
exclusive production rights, the Company is obligated to pay a 5%
royalty on all gross revenue, as defined. The Company has a similar
agreement with North American Resorts, Inc.
11
<PAGE>
RAVEN MOON INTERNATIONAL, INC.
(Formerly Ybor City Shuttle Services, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
b) Under an arrangement approved by the board of directors, the Company
is obligated to pay the Chief Executive Officer and his spouse,
(Vice-president/Secretary) a 10% royalty on all gross revenues, as
defined, received from production, sale, etc., of the intellectual
properties acquired from St. Anthony Entertainment, Inc. In addition,
the Company has agreed to pay up to 20% of the gross profits, if any
to persons or corporations that assisted in the development of the
intellectual properties.
c) The Company has entered into one-year employment contracts with the
officers and senior consultant. Under the terms of the agreement, the
company is obligated to pay an aggregate of $35,000 monthly.
d) The Company has entered into a marketing consulting agreement with St.
Anthony Entertainment, Inc. for $8,500 a month. The agreement can be
terminated by either party with appropriate notice.
e) The Company has entered into various month to month verbal agreements
with unrelated third parties to provide production, marketing and
administrative services. Payments are made based on invoices rendered
for specific services provided.
Note 9 - DISCONTINUED OPERATIONS
During 1998 the Company discontinued operations for the following business
lines:
Vacation Membership Plans
Insurance and Finance
These business lines were sold to North American Resorts, Inc. for $1,000,000,
which has not been recorded as an accounts receivable because collection is
doubtful. There are no remaining assets or liabilities for these business lines.
During 1998, the Company had revenues of $39,000 and expenses of $439,792
related to these business lines.
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 5,669
<SECURITIES> 0
<RECEIVABLES> 1,400
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,069
<PP&E> 4,119
<DEPRECIATION> 1,029
<TOTAL-ASSETS> 134,680
<CURRENT-LIABILITIES> 246,796
<BONDS> 0
0
0
<COMMON> 754
<OTHER-SE> 1,537,181
<TOTAL-LIABILITY-AND-EQUITY> 134,680
<SALES> 248,530
<TOTAL-REVENUES> 248,530
<CGS> 867,671
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 287,787
<LOSS-PROVISION> (906,928)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 400,792
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,307,720)
<EPS-BASIC> (3.17)
<EPS-DILUTED> 0
</TABLE>
