U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
Amendment No. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
INTERACTIVE MULTIMEDIA NETWORK, INC.
(Name of Small Business Issuer in Its Charter)
Delaware 65-0488983
(State of Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
3163 Kennedy Boulevard, Jersey City, New Jersey 07306
(Address of Principal Executive Offices) (Zip Code)
Telephone (201) 217-4137
Facsimile (201) 798-4627
(Registrant's Telephone Number, including Area Code)
With copies to: Irving Rothstein, Esq.
Heller, Horowitz & Feit, P.C.
292 Madison Avenue
New York, New York 10017
Tel. (212) 685-7600 Fax. (212)696-9459
Securities to be registered pursuant to Section 12(b) of the Act:
None.
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock, par value $0.001
Common Stock, par value $0.001
<PAGE>
TABLE OF CONTENTS
DESCRIPTION PAGE
PART I
ITEM 1 DESCRIPTION OF BUSINESS 3
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 7
ITEM 3 DESCRIPTION OF PROPERTY 10
ITEM 4 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 10
ITEM 5 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
OWNING MORE THAN 10% 11
ITEM 6 EXECUTIVE COMPENSATION 11
ITEM 7 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 13
ITEM 8 DESCRIPTION OF SECURITIES 13
PART II
ITEM 1 MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS 15
ITEM 2 LEGAL PROCEEDINGS 16
ITEM 3 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 16
ITEM 4 RECENT SALES OF UNREGISTERED SECURITIES 16
ITEM 5 INDEMNIFICATION OF DIRECTORS AND OFFICERS 19
PART F/S 20
PART III
ITEM 1 INDEX TO EXHIBITS 31
ITEM 2 DESCRIPTION OF EXHIBITS 31
SIGNATURES 31
<PAGE> 2
PART I
ITEM I - DESCRIPTION OF BUSINESS
INTRODUCTION
The Company is an Internet based marketing company. The Company's primary
business activity is marketing through multiple media channels for the purpose
of facilitating on-line purchases of a variety of products and services. The
Company markets products and services primarily for itself (85%) and sometimes
for others (15%). In both cases it utilizes Interactive Convergence which is
the simultaneous utilization of television, the Internet and retail exposure to
promote a product or service. The Company uses multiple channels of
distribution, such as the Internet, online computer services, broadcast, cable
and satellite television and retail exposure, for the introduction of new
products, new services, inventions and concepts. In addition to marketing
other people's products or services for a fee, the Company also sells cars,
trucks and sport utility vehicles directly to consumers through two wholly-owned
subsidiaries.
The principal executive offices of the Company are located at 3163 Kennedy
Boulevard, Jersey City, New Jersey, tel. (201) 217-4137. The Company's stock
symbol on the Over-the-Counter Bulletin Board is "IMNI". As of January 13,
2000, the Company's stock was removed from the over the counter bulletin board
and it is presently traded on the "Pink Sheets". Upon acceptance of this filing
by the Securities and Exchange Commission the Company anticipates being
reinstated.
HISTORY
The Company was incorporated in the State of New Jersey on March 4, 1994.
On June 13, 1995, the New Jersey corporation migrated to Delaware via a merger
with a Delaware corporation formed for that purpose. There are 5,000,000 shares
of preferred stock authorized of which none are presently issued and outstanding
and there are 25,000,000 shares of common stock authorized of which 6,615,464
were issued and outstanding as of August 31, 1999.
The Company has three subsidiaries. AutoSmartUSA, Inc. and AutoSmartUSA
Leasing, Inc. are both wholly-owned subsidiaries. These subsidiaries operate in
tandem to operate the vehicle sales operations of the Company. CPM Associates
Holding Corp., a wholly-owned subsidiary owns an 80% interest in Contracting,
Planning and Management Associates, Inc., which, prior to its Chapter 7
Bankruptcy proceeding, operated the architectural wood products and store
fixture business of the Company.
BUSINESS ACTIVITIES
For its clients, the Company provides complete marketing plans enabling
individuals or entities that contract with the Company an advertising program
specifically tailored to their products or services and their budget. This
includes recommended media buys, target demographics, print, television,
Internet advertising and other necessary information and plans to attempt to
successfully bring that product or service to market. Certain larger clients
only require that the Company design and produce a web site for them to host on
their own site. Others require the Company to also host the site, provide all
of the necessary e-commerce tools and provide the telemarketing/customer service
functions as well. For small to medium size companies the Company can function
as their marketing department and for larger companies the Company can function
to augment their existing marketing programs. The Company uses television, the
<PAGE> 3
Internet and retail exposure simultaneously, to promote sales and brand
awareness for its clients' products and services. One avenue which the Company
uses is through the Internet web site known as Shop-the-Net.com
(www.shop-the-net.com), which is a site owned and operated by the Company.
"Shop-The-Net"' is a virtual shopping mall available over the World Wide Web.
In this mall, the Company rents showroom space to companies and individuals. A
showroom is a section of the mall wherein a client's product and/or services are
highlighted and available for sale. There are approximately 45 clients
represented in Shop-the-Net.com, offering approximately 500 different products.
Less than 5% of the Company's revenue is derived from Shop-the-Net.com.
In February 1999, the Company formed two wholly-owned subsidiaries,
AutoSmart USA, Inc., a Nevada corporation and AutoSmart USA Leasing, Inc.,
a Florida corporation, collectively, AutoSmartUSA. AutoSmartUSA sells cars,
trucks and sport utility vehicles through the Internet at another of the
Company's websites, www.autosmartusa.com, and through a walk-in new car
showroom located in Pompano Beach, Florida.
AutoSmartUSA sells and leases all models of new cars, trucks and SUV's for
as low as 1% over factory invoice. AutoSmartUSA has made arrangements with more
than 1,500 new car dealers across the United States to furnish AutoSmartUSA's
customers with vehicles at appreciable discounts from MSRP (Manufacturer's
Suggested Retail Price). Through this dealer network AutoSmartUSA can deliver a
vehicle to a customer at the location of their choice at a price that is
typically lower than the customer could negotiate directly because of the volume
pricing that has been previously negotiated with AutoSmartUSA's dealers at the
time of their joining the network of dealers.
The AutoSmartUSA.com website allows customers to build their own car by
specifying the make, model, options and color choices desired. Usually within 4
hours, during normal business hours, a personalized printout is sent to the
customer containing the MSRP and factory invoice for the vehicle specified.
With this information the customer can then make their purchasing decision and
determine whether to buy, lease or finance their new vehicle.
AutoSmartUSA has in-direct lending and leasing arrangements with more than
40 financing sources and can generally obtain financing for the customer at a
competitive rate based on published market rates. AutoSmartUSA maintains its
own finance and insurance department, just like most new car dealers, and in
most cases processes all of the necessary paperwork to complete the transaction.
When it is in the consumers' best interest, i.e. access to a better finance
rate, better terms, etc., AutoSmartUSA will allow the dealer who is delivering
the vehicle to handle the transactional paperwork. This is necessary because
AutoSmartUSA is not a franchise dealer and as such cannot offer manufacturer
subsidized financing.
The American public has had a love affair with the Automobile for the past
100 years. The automotive industry has long recognized the appreciative and
collective nature of certain examples of cars that have been created and
manufactured throughout its history. Many of these "collectible" cars are sought
after due to a uniqueness of design or perhaps interesting or special features.
However, most are cherished, garnered and collected because of an intangible
referred to as nostalgia.
AutoSmartUSA recognizes the value and marketability of these special
vehicles and has begun to actively offer only the finest examples of these types
of collectibles in its Internet website. These collectibles are offered in two
ways, either through a free direct listing of the vehicle which includes a full,
accurate description of the vehicle, the vehicle identification number or VIN
and in most cases a recent color photograph or through the Silent Auction method
<PAGE> 4
of selling whereby the vehicle is sold to the highest bidder. Most cars carry a
"reserve price", thus insuring that the vehicle is only released for sale when
the winning bidder achieves a minimum price set by the vehicle owner. In both
cases, the seller and buyer pay a fee of one percent to AutoSmartUSA for its
services.
AutoSmartUSA is careful to select only the finest vehicles with authentic
lineage. No kit cars, replicas or vehicles that are not already totally restored
or near-perfect original examples are accepted for sale on the site. All
vehicles are inspected via digital images and the complete vehicle history is
documented to ensure the lineage.
Through March 31, 2000, more than 200 collectible cars have been
represented in the site and more than 20% have sold. The sales of collectible
cars have accounted for approximately 8% of the Company's revenue as of March
31, 2000.
AutoSmartUSA has been fortunate to assemble 10 automotive consultants who
are thoroughly knowledgeable in this field and as such are able to answer any
questions on most vintage or collectible cars from a perspective buyer. The
collectible car market is one that continues to expand, the growth of which has
been recently fueled by the vast number of baby boomers seeking to regain a
piece of history and their youth.
The Company's revenue comes from the sale of its own marketing services and
from the business activities of its subsidiaries. In the twelve month period
ended March 31, 2000, AutoSmart USA accounted for $ 801,521 (or 92% of
revenue) and the core marketing business accounted for $69,284 (or 8% of
revenue). Contracting, Planning and Management Associates, Inc., an indirect
majority owned subsidiary is currently the subject of a Chapter 7 Bankruptcy
proceeding and will not return to operations.
DIFFERENTIATION FROM COMPETITION
The Company as a whole differentiates itself from competitors by offering
a diverse range of services to its clients and by offering a wide range of
products to consumers through multiple channels of distribution.
There are several companies that operate similar businesses to that of the
Company. For example E4L, Inc., produces and airs product oriented television
content (informercials), that is linked to their web site, www.e4l.com.
Similarly, Buyitnow.com, LLC operates an Internet site known as
www.Buyitnow.com, that is promoted through infomercials for products produced
and aired by Buyitnow.com. Additionally, there are numerous, probably
thousands, of companies that design web sites and that can provide electronic
commerce solutions for all manner of businesses that are interested in selling a
product or service over the Internet. Some of these companies are substantially
larger and have far greater resources.
AutoSmart USA relies on its ability to satisfy customers requests through
its ever growing dealer network on a national basis. To this end, AutoSmart USA
currently operates in 38 states. There are currently approximately two dozen
companies that are active in the online automotive sales industry. Most of these
competitors are predominantly referral based businesses, such as AutobyTel.com,
AutoWeb.com, CarPoint.com and Cars.com. These referral businesses earn their
revenue from fees paid to them by their member dealers in return for the leads
that are given to them. The majority of the referral businesses charge a fee to
the dealer to join the service. AutoSmartUSA charges no up-front fees or lead
fees. There is one company that is directly in competition with AutoSmart USA,
CarsDirect.com which sell vehicles directly to the consumer, this company is
<PAGE> 5
better financed. AutoSmart USA also has competition in the form of web sites
established by the vehicle manufactures such as GMBuyPower.com, Toyota.com, etc.
all of these types of sites refer the consumer to the local franchised dealer in
the consumer's local market.
SEASONALITY
The Company's business activities are not adversely affected by seasonality
since they are not seasonal in nature.
MARKETING
The Company and its subsidiaries market their respective products and
services by direct sales, television, print, radio advertising and Internet
banner advertising. Specifically, the Company markets its marketing services
through direct sales, television commercials, print and radio ads and Internet
banner ads. AutoSmart USA utilizes direct sales, television commercials,
print and radio ads and Internet banner advertisements.
The Company and its subsidiaries' current customer base is composed
of commercial accounts and individuals throughout the United States.
Specifically, the Company has approximately 45 active marketing services
clients. Regarding AutoSmart USA, the number of clients using its service
increases every day and to date tens of thousands of individuals have benefited
from AutoSmartUSA's services.
While it is impossible to predict future usage patterns, during the past
fiscal year the Company's advertising expenditures were approximately 30%
television (broadcast, cable and satellite), 35% print, 15% radio and 20%
Internet banner ads. The advertising expenditures for AutoSmart USA were broken
down in a similar manner as the Company's. These percentages are subject to
change based on market conditions, pricing and availability of various media and
other considerations that may be beyond management's ability to foresee at this
time.
FINANCING
The Company currently internally finances its routine operating activities
and does not presently have any outside financing sources available.
COMPETITION
Competition for the services offered by the Company is based on service,
quality, distribution, and price. Management believes it can successfully
compete in the marketplace. The Company believes that there are other companies
that operate in the same businesses as the Company and its subsidiaries. Many
of the competitors that operate in the same business are more established,
better financed and have greater market penetration.
GOVERNMENT REGULATION
AutoSmart USA operates in a highly regulated industry. A number of state
and federal laws and regulations affect its business. In every state in which it
operates, it must obtain various licenses in order to operate its businesses,
including sales, finance and insurance related licenses issued by state
regulatory authorities. Numerous laws and regulations govern our conduct of
business, including those relating to our sales, operating, advertising and
employment practices. These laws and regulations include state franchise laws
and regulations and other extensive laws and regulations applicable to new and
used motor vehicle dealers, as well as a variety of other laws and regulations.
<PAGE> 6
These laws also include federal and state wage-hour, anti-discrimination and
other employment practices laws. Our financing activities with customers are
subject to federal truth-in-lending, consumer leasing and equal credit
opportunity regulations as well as state and local motor vehicle finance laws,
installment finance laws, usury laws and other installment sales laws. All
states regulate finance fees and charges that may be paid as a result of vehicle
sales. Our operations are also subject to the National Traffic and Motor Vehicle
Safety Act, Federal Motor Vehicle Safety Standards promulgated by the United
States Department of Transportation and various state motor vehicle regulatory
agencies. Possible penalties for violation of any of these laws include
revocation of our licenses and fines. In addition, many laws may give customers
a private cause of action.
TRADEMARKS
The Company has United States trademarks for the names "Interactive
Multimedia Network, Inc.", and "In Your Neighborhood". The retention of
these trademarks is not material to the future operations of the Company.
EMPLOYEES
As of August 31, 1999, the Company had 25 employees of which 5 are in
management and 6 are part-time employees. The Company believes that its
labor relations are good. No employee is represented by a labor union.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The following Management Discussion and Analysis of Financial
Condition is qualified by reference to, and should be read in conjunction with,
the Company's Consolidated Financial Statements and the Notes thereto as set
forth beginning on page F-I.
FORWARD-LOOKING STATEMENT AND INFORMATION
The Company is including the following cautionary statement in this Form
10-SB for any forward-looking statements made by, or on behalf of, the
Company. Forward-looking statements include statements concerning plans,
objectives, goals, strategies, expectations, future events or performance
and underlying assumptions and other statements which are other than
statements of historical facts. Certain statements contained herein are
forward-looking statements and accordingly, involve risks and uncertainties
which could cause actual results or outcomes to differ materially from those
expressed in the forward-looking statements. The Company's expectations,
beliefs and projections are expressed in good faith and are believed by the
Company to have a reasonable basis, including without limitations,
management's examination of historical operating trends, data contained in
the Company's records and other data available from third parties, but there
can be no assurance that management's expectations, beliefs or projections
will result or be achieved or accomplished. In addition to other factors and
matters discussed elsewhere herein, the following are important factors
that, in the view of the Company, could cause actual results to differ
materially from those discussed in the forward-looking statements: the ability
of the Company to effectuate and successfully operate acquisitions and the
ability of the Company to obtain acceptable forms and amounts of financing to
fund planned acquisitions.
INTRODUCTION
The Company has the fiscal year end, March 31. The following presentation
of the Management Discussion and Analysis of Financial Condition covers the
years ended March 31, 2000 and 1999.
<paqe> 7
The Company and each of its subsidiaries maintain their own books and
records which are presented here as an audited consolidation for the years ended
March 31, 2000 and 1999.
Based upon accounting principles, due to CPM's Chapter 7 bankruptcy filing,
the Company's consolidated financial statements have been re-stated to omit the
impact of CPM's operations.
TWELVE MONTHS ENDED MARCH 31, 2000 AND 1999
For the year ended March 31, 2000, the Company's principal source of
revenue consisted of revenue derived from providing marketing services to
clients, which was $69,284 and the revenue derived from vehicle sales made by
its subsidiary, AutoSmart USA, which was $801,521 for the period, compared to
revenues derived from the Company's provision of marketing services to clients
for the year ended March 31, 1999 of $991,968. More specifically, this decrease
in overall revenue was do to the change in focus of the Company to concentrate
on building the business of AutoSmart USA and continue servicing the marketing
needs of existing clients. Revenue from AutoSmart USA increased from $2,033 in
revenues in its first two months since its incorporation, February, 1999 to
March 31, 1999 to $801,521 which reflects revenue through December 31, 1999.
Cost of Revenue increased from $73,40 for fiscal 1999 to $622,993 for
fiscal 2000 primarily due to the increase in cost of revenue associated with
vehicle sales for AutoSmart USA which includes the cost of Company owned
vehicles sold and sales related commissions. The change in focus from the
provision of marketing services to the sale of cars, which requires the Company
to book the cost of the car as an expense, also accounts for the increase of
costs of revenues as a percentage of revenues from 7.4% in 1999 to 72% in 2000.
Operating expenses for the year ended March 31, 2000 consisted of
general expenses of $867,874 for the Company as a whole versus $984,961 for
the same period ended March 31, 1999. This decrease stems from lower marketing
expenditures of approximately 61% and a decrease in consulting expenses of
approximately 55% However certain line items increased because of the business
activities of AutoSmart USA such as: rent 293%, payroll 100% and selling,
general and administrative (S, G & A) expenses 185%. The increase in rent was
directly attributable to the rent payable for AutoSmart USA as was the increase
in payroll. Of the S, G & A expenses for fiscal 2000, $265,958 was the Company
and the balance of $121,458 was AutoSmart USA. The increase in S, G & A is
attributable to professional fees mostly lawyers, accountants and consultants
(all unrelated third parties).
The Company reported a Loss on Investment in Bankrupt Subsidiary in fiscal
2000 of $253,054 and of $129,854 for fiscal 1999. This reflects a complete
(2000) and partial (1999) write-off of certain loans made to CPM that the
Company believes will be compromised through the Chapter 7 of CPM.
The Company, and its subsidiaries, had a net loss of $(881,355) for
fiscal 2000 and $(196,184) for fiscal 1999. The fiscal 2000 loss of $(724,527)
was primarily that of the Company.
LIQUIDITY DISCUSSION
Certain balance sheets items reflect changes as well. The Company's cash
position decreased from $96,802 to $10,958 as of March 31, 1999 and 2000
respectively due to the continued capital requirements of AutoSmart USA.
Inventory increased over the same period from zero in 1999 to $65,470, because
of AutoSmart USA having purchased vehicles for resale. Other Current Assets and
Other Assets decreased because of the complete write-off of the loan to Ansam (a
<PAGE> 8
related party) due to the high probability of the security for such note being
uncollectible. Property and Equipment increased due to the increase in capital
expenditures of AutoSmart USA.
Accounts Payable increased 537% from $18,377 to $117,005 during the same
period attributable to the business activities of AutoSmart USA. Other
Liabilities increased from zero to $189,819 during the period because of loans
taken by the Company to fund the development of AutoSmart USA.
Several areas of the Shareholder's Equity section of the Company's balance
sheet reflect changes, the net affect of which is an overall decrease of
Shareholder's Equity from $371,761 to $(95,434) a decrease of 126%. The main
contributing factors were the Net Loss for the fiscal period of $(881,355) and
the complete write-off of the investment in and loans to CPM and the loans to
Ansam all necessitated by the conversion of CPM's Chapter 11 Bankruptcy filing
to a Chapter 7 during the period.
The Company believes that its own present operations require that the
Company obtain additional capital during the next twelve months. The
Company is exploring various options including, revolving bank credit lines,
equity and or debt financing through private placements. The Company is also
conducting preliminary discussions with various venture capital groups. The
Company is seeking an immediate capital infusion of between three and five
million dollars, the terms of such infusion have not been determined. No
assurance can be given that the Company will be successful in any of its
financing plans. The Company believes that it has sufficient cash on hand to
maintain its present operations until appropriate financing can be obtained.
However if financing is not obtained within six months the Company will be
required to curtail certain of its operations in an effort to conserve funds.
The Company believes that it can continue to generate sufficient revenues for
the foreseeable future to maintain operations at a reduced level. It is unknown
at this time whether the Company will be successful in raising capital on
reasonable terms.
During December of 1999 the Company raised $970,000 through the sale of
2,000,000 shares of common stock.
Additionally, the Company is seeking funding to increase its working
capital for the AutoSmartUSA division, the majority of which will be utilized
for advertising and floor-plan financing. Floor plan financing is a specific
type of financing that is utilized by car dealers to purchase vehicle inventory.
The Company anticipates substantial growth in the business activities
of the AutoSmart USA division. The accompanying audited financial statements
for the year ended March 31, 1999 reflect negligible revenues from
AutoSmart USA because the Pompano Beach location did not become fully
functional until after the fiscal year ending March 31, 1999. During the nine
month period ended December 31, 1999, AutoSmart USA reported revenue of
$801,521.
On December 17, 1999 the Company's temporary business acquisition, CPM was
converted from a Chapter 11 to a Chapter 7 Bankruptcy filing. As a result, all
business activities ceased and a trustee was appointed. As of March 31, 2000 the
Company has completely written off the full amount of its investment in CPM, all
loans made to CPM and the loans made to Ansam (a related party who borrowed
funds from the Company and then loaned those same funds to CPM under a court
order securing said funds). To date, the Company has not received any proceeds
from the estate of CPM or from Ansam. Ansam will forward all funds received by
it from the trustee for CPM directly to the Company. As of this filing the
Company deems the collection of these funds to be highly unlikely.
<PAGE> 9
Another avenue which the Company may pursue is to make strategic
acquisitions that would help enhance the Company's cash flow position. To date
the Company has not been active in this regard. Under its present circumstances,
the Company would not consider any acquisition that is not self sufficient or
that would otherwise not enhance the Company's overall financial position, i.e.
increased asset base and/or increased net revenue and profitability. In the
event the Company is successful in its financing activities the Company may also
seek to make acquisitions of complementary businesses. The Company anticipates
that most, if not all, of any acquisitions it may make during the next twelve
months would be of operating entities that have employees, or of assets
that have employees associated with such assets. Accordingly, the Company
anticipates there would be a significant increase in the number of its
employees at the operating unit or subsidiary level, at such time, if any, that
acquisitions may be consummated.
YEAR 2000 ISSUES
The Company has not experienced any adverse affects. All of its operating
systems are operating normally, in the same manner as prior to the new year.
Management does not anticipate any problems in this regard.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company's principal executive offices are located at 3163 Kennedy
Boulevard, Jersey City, New Jersey 07306 in 1,000 square feet of office space on
a month to month basis. There is no rent paid for the use of this office
space; it is located in the same building as Verdiramo & Verdiramo, P.A., a
law firm operated by the Company's former president, who is also the father of
the current president and the other partner of this firm is Vincent S. Verdiramo
the son of Vincent L. Verdiramo and the brother of the Company's current
president, Richard J. Verdiramo. The Company also maintains a 1,400 square
foot office located in Boca Raton, Florida on an annually renewable lease
which expires in May 2001. The Company believes that it will successfully
renew this lease.
AutoSmart USA, Inc., and AutoSmart USA Leasing, Inc., occupy an 8,000
square foot facility which is all office space located on 3 acres of
land. This facility is leased for a three year term and the current lease
expires in February 2002 and is renewable for three additional terms.
The Company believes that its properties are adequate for its present
needs and that suitable space will be available to accommodate its future
needs.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information as of August 31,
2000, with respect to the beneficial ownership of shares of common stock by (i)
each person who is known to the Company to beneficially own more than 5% of the
outstanding shares of common stock (ii) each director of the Company, (iii)
each executive officer of the Company and (iv) all executive officers and
directors of the Company as a group. Unless otherwise indicated, each
stockholder has sole voting and investment power with respect to the shares
shown.
<PAGE> 10
<TABLE>
Title Name and Address Amount and Nature
of Class of Beneficial Owner of Beneficial Ownership Percent of Class
-------- ---------------------------- ----------------------- ----------------
<S> <C> <C> <C>
Common William J. Auletta (1) 1,215,750 18.69%
5581 B Coach House Circle
Boca Raton, Florida 33486
Common Richard J. Verdiramo (2) 100,000 1.54%
3163 Kennedy Boulevard
Jersey City, New Jersey 07306
Common Marion H. Verdiramo (3) 3,400,930 39.47%
3163 Kennedy Boulevard
Jersey City, New Jersey 07306
Common All Officers and Directors
as a Group- Two Persons 1,315,750 20.23%
</TABLE>
(1) 1,115,750 of the shares are issued to Small Business Development Group,
Inc., a Florida Corporation of which William J. Auletta is the sole stockholder.
(2) President and son of Marion H. Verdiramo
(3) Mother of Richard J. Verdiramo. Includes 2,000,000 currently exercisable
stock options.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
The following table sets forth the directors and executive officers
of the Company.
Name Age Position
-------------------------- --- ----------------------------------
Richard J. Verdiramo 36 Director, President, CEO
William J. Auletta 59 Director, Vice-President, COO
BIOGRAPHIES
Richard J. Verdiramo, 35, became President of the Company on March 1, 2000.
Prior thereto, he served as a Vice-President from May 1996. Mr. Verdiramo has
experience in the marketing of consumer products and brand development. From
1988 through 1996, Mr. Verdiramo was self-employed as a marketing consultant,
developing marketing programs for various companies in a range of industries.
Mr. Verdiramo has a B.S. degree from Providence College.
Mr. William J. Auletta, 58, has served as COO and Vice President of the
Company since its inception. Prior thereto, he worked, as founder, president and
sole stockholder of Small Business Development Group, Inc., a marketing
consultancy, from 1980 through the inception of the Company. Mr. Auletta
attended Fairleigh Dickinson University and Rutgers University.
ITEM 6. EXECUTIVE COMPENSATION.
The following table reflects compensation for services to the Company for
the fiscal years ended March 31, 2000 and 1999 of the executive officers. No
other executive officer of the Company received compensation which exceeded
$100,000 during this period.
<PAGE> 11
<TABLE>
Summary Compensation Table
-------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
------------------------------------------------- ----------------------
Name Other Restricted
and Annual Restricted Stock
Principal Year Salary Bonus Comp. Awards
Position ($) ($) ($) ($)
------------------ ---- -------- ----- ------ -----------------------
<S> <C> <C> <C> <C> <C>
Vincent L.
Verdiramo, 2000 $ -0- -0- -0- -0-
President (2) 1999 $ -0- -0- -0- -0-
William J.
Auletta 2000 $ -0- -0- -0- -0-
COO, VP 1999 $ 8,005 -0- -0- 100,000
Richard J.
Verdiramo 2000 $16,000 -0- -0- -0-
VP/President(3) 1999 $25,000 -0- -0- 100,000
</TABLE>
(1) In December 1998 the Board of Directors issued shares under Section 4(2)
of the Securities Act to Messrs. Verdiramo and Auletta for prior services
rendered to the Company. This award was valued at $20,000 per recipient. The
value was determined by applying a 60% discount to the market price of the
shares sold as a part of a 504 offering conducted in the same month, December
1998, due to the two year restriction placed on these shares at issuance.
(2) Vincent L. Verdiramo retired as president on March 1, 2000.
(3) Richard J. Verdiramo became president on March 1, 2000
.
EMPLOYEE STOCK OPTION PLAN
The Company believes that equity ownership is an important factor in its
ability to attract and retain skilled personnel and the Board of Directors of
the Company intends to adopt an employee stock option program. The terms and
conditions of this plan, such as the exercise price of options or the number of
options to be granted under such plan have not been determined. However, the
current intent is not to issue options with an exercise price below fair market
value on the date of issuance. The purpose of the stock option program will be
to further the interest of the Company, its subsidiaries and its stockholders by
providing incentives in the form of stock options to employees, consultants and
directors who contribute materially to the success and profitability of the
Company. The grants will recognize and reward outstanding individual
performances and contributions and will give such persons a proprietary
interest in the Company, thus enhancing their personal interest in the
Company's continued success and progress. This program will also assist the
Company and its subsidiaries in attracting and retaining employees and
directors.
<PAGE> 12
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The current Board of Directors of the Company has adopted a policy that
Company affairs will be conducted in all respects by standards applicable to
publicly-held corporations and that the Company will not enter into any
transactions and/or loans between the Company and its officers and directors and
5% stockholders, unless the terms, as determined by the Board of Directors, are
110% more favorable than could be obtained from independent third parties and
unless such transactions are approved by a majority of the independent,
disinterested directors of the Company.
The CPM Acquisition Agreement called for the Company to fund CPM in the
amount of $350,000, which it did. Concurrently, management of the Company and
CPM met unsuccessfully with multiple possible lending sources in an effort to
secure additional financing for CPM. The initial funds put into CPM by the
Company were unsecured and subject to the Chapter 11 Bankruptcy filing. The
Company determined to supply additional funds to CPM. However, the funds could
not be secured if they were delivered directly to CPM from the Company.
Accordingly, under advice of its bankruptcy counsel CPM sought and was granted
court approval to obtain secured financing from an affiliated party. To
expedite the transfer and minimize expenses, the Company utilized ANSAM, Inc.,
an affiliated entity owned by the Verdiramo family and controlled by Richard J.
Verdiramo, the President and CEO of the Company. Absent any other viable
alternative, the Company loaned $332,400 to Ansam, Inc., which then passed
through these funds directly to CPM under the direction of a court order issued
by the Bankruptcy Court. The court order placed Ansam's loan to CPM in a super
priority position with the loan being collateralized by the accounts receivable
of CPM. Since that time, the Company has written off this loan in its entirety
due to management's belief that under CPM's Chapter 7 Bankruptcy filing, the
outstanding receivables to be collected by the trustee are likely to be
compromised to a high degree. Additionally the Company's loan to Ansam and
Ansam's loan to CPM are at a rate of 8% interest. At the time of this loan, the
Company's management and the management of CPM had been unable to secure any
other form of financing for CPM. It was determined that if these funds were not
loaned in this manner in reliance on the court order issued by the Bankruptcy
Court, than the operations of CPM would have ceased during the summer of 1999.
The Company had no knowledge that the Court appointed Trustee would decide to
convert CPM's bankruptcy filing from Chapter 11, which would have preserved the
business and the Company's investment, into a Chapter 7 filing.
ANSAM is totally reliant on the receipt of funds from CPM to repay the
funds it borrowed from the Company. ANSAM has no other assets nor any active
business operations from which to repay this loan. ANSAM has notified the
Company of its inability to repay this loan, as such the entire amount has been
written off by the Company.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 5,000,000 shares of
preferred stock, $0.001 par value and 25,000,000 shares of common stock, $0.001
par value. As of August 31, 2000 the Company had issued and outstanding
6,615,464 shares of common stock and no shares of preferred stock.
The following summary description of the securities of the Company is
qualified in its entirety by reference to the Articles of Incorporation
("Articles") and the Bylaws of the Company, copies of which are filed as
exhibits to this Form 10-SB.
<PAGE> 13
PREFERRED STOCK
The Company is authorized to issue up to 5 million shares of non cumulative
preferred stock. As of the date hereof no shares of preferred stock have been
issued. The Board of Directors has the authority to set the terms of the
preferred shares upon their issuance such as the dividend rate, voting rights,
liquidation value, conversion features, etc.
COMMON STOCK
The holders of common stock are entitled to one vote per share with respect
to all matters required by law to be submitted to stockholders of the Company.
The holders of common stock have the sole right to vote. The common stock does
not have any cumulative voting, preemptive, subscription or conversion rights.
The holders of common stock have a right to receive a dividend if and when such
is declared by the board. The election of directors and other general
stockholder action requires the affirmative vote of a majority of shares
represented at a meeting in which a quorum is represented.
SHARES ELIGIBLE FOR FUTURE SALE
Of the 6,615,464 outstanding shares of common stock of the Company as of
August 31, 2000, approximately 4,325,700 are free trading shares, and
approximately 2,289,764 shares are restricted securities as that term is defined
in Rule 144 adopted under the Act ("Restricted Securities"). Rule 144 governs
resales of Restricted Securities for the account of any person, other than an
issuer, and restricted and unrestricted securities for the account of an
"affiliate" of the issuer. Restricted securities generally include any
securities acquired directly or indirectly from an issuer or its affiliates
which were not issued or sold in connection with a public offering registered
under the Securities Act. An affiliate of the issuer is any person who directly
or indirectly controls, is controlled by, or is under common control with, the
issuer. Affiliates of the Company may include its directors, executive officers,
and persons directly or indirectly owning 10% or more of the outstanding
common stock. Under Rule 144, unregistered resales of restricted common stock
cannot be made until it has been held for one year from the later of its
acquisition from the Company or an affiliate of the Company. Thereafter, shares
of common stock may be resold without registration subject to Rule 144's volume
limitation, aggregation, broker transaction, notice filing requirements, and
requirements concerning publicly available information about the Company
("Applicable Requirements"). Resales by the Company's affiliates of restricted
and unrestricted common stock are subject to the Applicable Requirements. The
volume limitations provide that a person, or persons who must aggregate their
sales, cannot, within any three-month period, sell more than the greater of (1)
one percent of the then outstanding shares, or (ii) the average weekly reported
trading volume during the four calendar weeks preceding each such sale. A
person who is not deemed an "affiliate" of the Company and who has beneficially
owned shares for at least two years would be entitled to sell such shares under
Rule 144 without regard to the Applicable Requirements.
No prediction can be made as to the effect, if any, that sales of shares of
common stock or the availability of such shares for sale will have on the market
prices prevailing from time to time. Nevertheless, the possibility that
substantial amounts of common stock may be sold in the public market would
likely have a material adverse effect on prevailing market prices for the common
stock and could impair the Company's ability to raise capital through the sale
of its equity securities.
<PAGE> 14
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON STOCK AND OTHER
SHAREHOLDER MATTERS.
The Company's trading symbol is "IMNI".
To the best of the Company's knowledge, from March 1994 to February 1997,
no broker-dealer made an active market or regularly submitted quotations for
the Company's stock, and that during this period, there were only a de minimis
and infrequent number of trades and de minimis trading volume. The following
information is from the National Association of Securities Dealers Automated
Quotation Service.
QUARTER ENDED HIGH LOW
BID BID
--------------- ---------------
March 31, 1997 $ 8.00 $ 8.00
June 30, 1997 $ 8.00 $ 8.00
September 30, 1997 $ 8.00 $ 8.00
December 31, 1997 $ 8.00 $ 6.00
March 31, 1998 $ 5.67 $ 2.00
June 30, 1998 $ 2.63 $ 2.00
September 30, 1998 $ 2.63 $ 1.75
December 31, 1998 $ 2.56 $ 0.75
March 31, 1999 $ 3.00 $ 0.97
June 30, 1999 $ 1.03 $ 1.09
September 30, 1999 $ 1.12 $ 0.60
December 31, 1999 $ 0.60 $ 0.10
March 31, 2000 $ 0.10 $ 0.10
June 30, 2000 $ 0.10 $ 0.07
From February 1997 through December 10, 1999 the Company's common stock was
quoted on the OTC:BB. Since then it has been quoted on the Pink Sheets. The
bid price on the Company's common stock was $0.07 per share on June 30, 2000.
As of March 31, 2000 there were approximately 88 holders of record of the
Company's common stock.
The Company's transfer agent is Jersey Transfer and Trust Company, Inc.,
201 Bloomfield Avenue, Verona, New Jersey 07044, (973) 239-2712.
DIVIDEND POLICY
The Company has not paid, and the Company does not currently intend to pay
cash dividends on its common stock in the foreseeable future. The current policy
of the Company's Board of Directors is for the Company to retain all earnings,
if any, to provide funds for operation and expansion of the Company's business.
The declaration of dividends, if any, will be subject to the discretion of the
Board of Directors, which may consider such factors as the Company's results of
operations, financial condition, capital needs and acquisition strategy, among
others.
<PAGE> 15
ITEM 2. LEGAL PROCEEDINGS
The Company is a party to a legal action arising in the ordinary course of
business. The matter in question involves a failure to provide services. The
plaintiff in this matter is seeking damages in the amount of approximately six
million dollars. Management has retained the services of two independent law
firms to defend this matter and it is their conclusion that this matter is
totally without merit and a motion for summary judgement has been filed on
September, 1999. On March 9, 2000 the Court issued a decision in favor of the
Company's motion for summary judgement dismissing all but three of the counts in
the complaint, reducing the total potential damages down to an immaterial
amount. Management does not expect any adverse effect on the Company to result
from this matter.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Williams & Webster, C.P.A., conducted the audit of the Company for the
years ended March 31, 1999 and 1998. The Company's relationship with Williams
& Webster ended on July 10, 2000. On July 12, 2000 the Company engaged Mark
Cohen, C.P.A. to conduct the audit for March 31, 2000. The Company's
relationship with its current auditor is ongoing.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
During the past three years, the following transactions were affected by
the Company in reliance upon exemptions from registration under the Securities
Act of 1933 as amended (the "Act"). Each certificate issued for unregistered
securities contained a legend stating that the securities have not been
registered under the Act and setting forth the restrictions on the
transferability and the sale of the securities. No underwriter participated in,
nor did the Company pay any commissions or fees to any underwriter in connection
with any of these transactions. None of the transactions involved a public
offering.
In June 1997 the Board of Directors issued 10,000 shares of common stock,
pursuant to Regulation S of the Securities Act, to Gino Zeppettini, as
compensation for services, specifically consulting services, rendered to the
Company valued at $10,000. The number of shares issued and the value placed on
such shares were based on negotiation between the Company and the recipient.
In June 1997 the Board of Directors issued 20,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Daniel J. Welsh, as
compensation for services, specifically legal consulting services, rendered to
the Company valued at $20,000. The number of shares issued and the value placed
on such shares were based on negotiation between the Company and the recipient.
In August 1997 the Board of Directors issued 31,875 shares of common stock,
pursuant to Regulation S of the Securities Act, to Christian Fave, as
compensation for services, specifically consulting services, rendered to the
Company valued at $31,875. The number of shares issued and the value placed on
such shares were based on negotiation between the Company and the recipient.
In August 1997 the Board of Directors issued 2,500 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Henry Finkelstein, as
compensation for services, specifically accounting services preformed by Myron
Finkelstein, father of Henry, rendered to the Company valued at $ 2,500. The
number of shares issued and the value placed on such shares were based on
negotiation between the Company and the recipient.
<PAGE> 16
In November 1997 the Board of Directors issued 1,000 shares of common
stock, pursuant to Section 4(2) of the Securities Act, to Patrick Desfosso, as
compensation for business consulting services, rendered to the Company valued
at $ 1,000. The number of shares issued and the value placed on such shares were
based on negotiation between the Company and the recipient.
In May 1998 the Board of Directors issued 2,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Tom Gavel as compensation
for services, specifically web design services, rendered to the Company valued
at $ 2,000. The number of shares issued and the value placed on such shares were
based on negotiation between the Company and the recipient.
In June 1998 the Board of Directors issued 500 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Milton Hinojosa as
compensation for services, specifically consulting services, rendered to the
Company valued at $ 500. The number of shares issued and the value placed on
such shares were based on negotiation between the Company and the recipient.
In September 1998 the Board of Directors issued 25,000 shares of common
stock, pursuant to Rule 504 of the Securities Act, to Marjan Skubic as a direct
investment into the Company. The shares were sold to Mr. Skubic for $1.00 per
share.
In December 1998, the Company raised approximately $970,000 in cash
through the sale of 2,000,000 shares of its common stock in an offering
conducted under Rule 504 of Regulation D.
In December 1998 the Board of Directors issued 100,000 shares of common
stock, pursuant to Section 4(2) of the Securities Act, to William J. Auletta,
Director, CEO and Vice President of the Company, as compensation for prior
services rendered to the Company valued at $ 20,000. The value was determined by
applying a 60% discount to the market price of the shares sold as a part of a
504 offering conducted in the same month, December 1998, due to the two year
restriction placed on these shares at issuance.
In December 1998 the Board of Directors issued 200,000 shares of common
stock, pursuant to Regulation S of the Securities Act, to Bernard Gecker as
compensation for services, specifically consulting services, rendered to the
Company valued at $40,000. The value was determined by applying a 60% discount
to the market price of the shares sold as a part of a 504 offering conducted in
the same month, December 1998, due to the two year restriction placed on these
shares at issuance.
In December 1998 the Board of Directors issued 100,000 shares of common
stock, pursuant to Section 4(2) of the Securities Act, to Maureen Hogan,
Secretary of the Company, as compensation for prior services rendered to the
Company valued at $20,000. The value was determined by applying a 60% discount
to the market price of the shares sold as a part of a 504 offering conducted in
the same month, December 1998, due to the two year restriction placed on these
shares at issuance.
In December 1998 the Board of Directors issued 100,000 shares of common
stock, pursuant to Section 4(2) of the Securities Act, to Richard J. Verdiramo,
Vice President of the Company, as compensation for prior services rendered to
the Company valued at $20,000. The value was determined by applying a 60%
discount to the market price of the shares sold as a part of a 504 offering
conducted in the same month, December 1998, due to the two year restriction
placed on these shares at issuance.
<PAGE> 17
In December 1998 the Board of Directors issued 100,000 shares of common
stock, pursuant to Section 4(2) of the Securities Act, to Vincent S. Verdiramo
as compensation for services, specifically legal services, rendered to the
Company valued at $20,000. Mr. Vincent S. Verdiramo is the son of Vincent L.
Verdiramo, the Company's former president, with whom he co-founded Verdiramo &
Verdiramo, P.A., the Company's legal counsel. Additionally, Mr. Vincent S.
Verdiramo is the brother of Richard J. Verdiramo, the president of the Company.
The value was determined by applying a 60% discount to the market price of the
shares sold as a part of a 504 offering conducted in the same month, December
1998, due to the two year restriction placed on these shares at issuance.
In January 1999 the Board of Directors issued 4,000 shares of common
stock, to various employees and middle management personnel of CPM Associates,
Inc. The stock was given to the employees as an indication of goodwill by the
Company to CPM's employees. The stock was valued, based on the market price at
the time of issuance, at $1,400. This amount was not included in the purchase
price of CPM.
In March 1999 the Board of Directors issued 15,000 shares of common stock
to, pursuant to Section 4(2) of the Securities Act, Lee Lingreen as compensation
for services, specifically consulting services, rendered to the Company valued
at $15,000. The number of shares issued and the value placed on such shares were
based on negotiation between the Company and the recipient.
In March 1999 the Board of Directors issued 16,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Pompano Motor Company to be
held as a part of the lease agreement between AutoSmartUSA, Inc. and Pompano
Motor Company for the premises occupied by AutoSmartUSA, Inc. Said shares were
issued in lieu of rent valued at $24,000 or $1.50 per share. The number of
shares issued and the value placed on such shares were based on negotiation
between the Company and the recipient.
In March 1999 the Board of Directors issued 15,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Kerri Robertson as
compensation for services, specifically consulting services, rendered to the
Company valued at $15,000. The number of shares issued and the value placed on
such shares were based on negotiation between the Company and the recipient.
In March 1999 the Board of Directors issued 5,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Mark Tihasek as compensation
for services, specifically consulting services, rendered to the Company, valued
at $ 5,000. The number of shares issued and the value placed on such shares were
based on negotiation between the Company and the recipient.
In April 1999 the Board of Directors issued 30,000 shares of common stock,
pursuant to Regulation S of the Securities Act, to Bernard Gecker as
compensation for services, specifically consulting services, rendered to the
Company valued at $20,000. The number of shares issued and the value placed on
such shares were based on negotiation between the Company and the recipient.
In April 1999 the Board of Directors issued 1,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Bruce Hotchkiss as
compensation for services rendered, specifically the installation of the burglar
system at the AutoSmartUSA location, to the Company valued at $1,000. The number
of shares issued and the value placed on such shares were based on negotiation
between the Company and the recipient.
<PAGE> 18
In April 1999 the Board of Directors issued 1,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Silvia Hotchkiss as
compensation for services rendered, specifically the installation of the burglar
system at the AutoSmartUSA location, to the Company valued at $1,000. The number
of shares issued and the value placed on such shares were based on negotiation
between the Company and the recipient.
In April 1999 the Board of Directors issued 2,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to John F. Kenneally, as
compensation for services, specifically consulting services, rendered to the
Company valued at $2,000. The number of shares issued and the value placed on
such shares were based on negotiation between the Company and the recipient.
In April 1999 the Board of Directors issued 5,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Frank Reynolds as
compensation for services, specifically office renovation services, rendered to
the Company valued at $5,000. The number of shares issued and the value placed
on such shares were based on negotiation between the Company and the recipient.
The number of shares issued and the value placed on such shares were based on
negotiation between the Company and the recipient.
In April 1999 the Board of Directors issued 5,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Robert Moser as compensation
for services, specifically technology consulting services, rendered to the
Company valued at $5,000. The number of shares issued and the value placed on
such shares were based on negotiation between the Company and the recipient.
In April 1999 the Board of Directors issued 1,000 shares of common stock,
pursuant to Section 4(2) of the Securities Act, to Joshua Ungerleider as
compensation for services, specifically consulting services, rendered by
Granville Ungerleider, the father of Joshua Ungerleider, rendered to the Company
valued at $1,000. The number of shares issued and the value placed on such
shares were based on negotiation between the Company and the recipient.
In June 1999 the Board of Directors issued 20,000 shares of common stock,
pursuant to Regulation S of the Securities Act, to Domonick Roelandt as
compensation for services, specifically public relations services, rendered to
the Company valued at $20,000. The number of shares issued and the value placed
on such shares were based on negotiation between the Company and the recipient.
In September 1999 the Board of Directors issued 100,000 shares of common
stock, pursuant to Regulation S of the Securities Act, to Big Plans Investment
as a direct investment into the Company. The shares were sold to Big Plans
Investment for $0.50 per share.
In September 1999 the Board of Directors issued 10,000 shares of common
stock, pursuant to Rule 504 of the Securities Act, to DEM Consulting, Inc., as a
direct investment into the Company. The shares were sold to DEM Consulting,
Inc., for $0.50 per share.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, as amended, authorizes the
Company to Indemnify any director or officer under certain prescribed
circumstances and subject to certain limitations against certain costs and
expenses, including attorney's fees actually and reasonably incurred in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which a person is a party by reason of being
a director or officer of the Company if it is determined that such person is a
party by reason of being a director or officer of the Company if it is
determined that such person acted in accordance with the applicable standard of
<PAGE> 19
conduct set forth in such statutory provisions. The Company's Certificate of
Incorporation and By-Laws extends such indemnities to the full extent permitted
by Delaware law.
The Company may also purchase and maintain insurance for the benefit of any
director or officer which may cover claims for which the Company could not
indemnify such persons.
PART F/S
MARK COHEN C.P.A.
1772 East Trafalgar Circle
Hollywood, Fl 33020
(954) 922 - 6042
INDEPENDENT AUDITORS' REPORT
Board of Directors
Interactive Multimedia Networks, Inc.
We have audited the accompanying consolidated balance sheet of Interactive
Multimedia Networks, Inc. and subsidiaries as of March 31, 2000 and the related
consolidated statements of income, shareholders' equity (deficiency) and cash
flows for the year ended. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Interactive
Multimedia Networks, Inc. and subsidiaries as of March 31, 2000, and the results
of its operations and its cash flows for the year then ended, 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 5 to the
financial statements, the Company has experienced an operating loss that raises
substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 5. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Mark Cohen C.P.A.
A Sole Proprietor Firm
Hollywood, Florida
August 11, 2000
<PAGE> 20
Interactive Multimedia Network, Inc.
Consolidated Balance Sheet
March 31, 2000 and 1999
<TABLE>
2000 1999
------------- -------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 10,958 $ 96,802
Accounts Receivable - net 6,350 -
Inventory 65,470 -
Other Current Assets 28,400 103,124
------------- -------------
Total current assets 111,178 199,926
Property and equipment, net 112,733 79,301
Other assets 15,962 120,781
------------- -------------
TOTAL ASSETS 239,873 400,008
============= ==============
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities
Accounts payable 117,005 18,377
Other current liabilities 28,484 9,870
------------- -------------
Total current liabilities 145,489 28,247
Other Liabilities (principally related parties) 189,819 -
Shareholder's Equity
Preferred Stock, $.001 par value;
authorized 5,000,000 shares:
issued and outstanding none in 2000 and 1999 - -
Common Stock, $.001 par value; authorized
25,000,000 shares; issued and outstanding
6,615,464 in 2000 and 6,440,464 in 1999 6,615 6,440
Paid in Capital 1,931,926 2,174,501
Subscription Receivable - (656,560)
Common Stock options; 2,000,000 issued
and outstanding 330,000 330,000
Deficit accumulated during the
development stage (2,363,975) (1,482,620)
------------- -------------
Total Shareholder's Equity/(Deficit) (95,434) 371,761
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 239,873 $ 400,008
============= =============
</TABLE>
Read the accompanying summary of significant accounting policies and notes to
financial statements, both of which are an integral part of this financial
statement.
<PAGE> 21
Interactive Multimedia Network, Inc.
Consolidated Statement of Income
For the years ended March 31, 2000 and 1999
<TABLE>
Years Ended
---------------------------------
March 31, 2000 March 31, 1999
--------------- ---------------
<S> <C> <C>
Revenue $ 870,805 $ 991,968
Cost of Revenue 622,993 73,401
--------------- ---------------
Gross Profit 247,812 918,567
Operating expenses:
Marketing 242,318 618,715
Consulting services 96,800 213,647
Rent 65,313 16,611
Payroll and related benefits 76,027 -
Selling, general and administrative expenses 387,416 135,988
--------------- ---------------
Total operating expenses 867,874 984,961
Loss before other income (expense) (620,062) (66,394)
Other income (expense):
Interest income - 64
Interest expense (8,239) -
Loss on investment in Temporary
Business Acquisition (253,054) (129,854)
--------------- ---------------
Total other income (expense) (261,293) (129,790)
Net Loss (881,355) (196,184)
=============== ===============
Basic weighted average common
shares outstanding 6,498,957 5,555,589
=============== ===============
Basic Loss per common share $ (0.14) $ (0.04)
=============== ===============
</TABLE>
Read the accompanying summary of significant accounting policies and notes to
financial statements, both of which are an integral part of this financial
statement.
<PAGE> 22
Interactive Multimedia Network, Inc.
Consolidated Statement of Shareholders' Deficit
March 31, 2000 and 1999
<TABLE>
Total
Preferred Stock Receivable Share-
--------------------- Common Stock Shares holders
Par -------------------------------- Paid-in Stock Sub- Equity/
Shares Value Amount Shares Par Value Amount Capital Options scription Deficit Deficit
------ ------- ------ ---------- ---------- ---------- ---------- ------- ---------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance,
April 01, 1998 - $ - $ - 5,757,964 $ 0.001 $ 5,758 $1,298,683 - $ - $(1,286,436) $ 18,005
September 1998 -
Issuance of common
Stock at $1.00 per
share for services 2,500 0.001 2 2498 - - - 2,500
September 1998 -
Issuance of common
Stock at $1.00 per
share for services 25,000 0.001 25 24,975 - - - 25,000
December 1998 -
Issuance of
common stock at
minimum value of
$0.20 per share
for services 600,000 0.001 600 119,400 - - - 120,000
December 1998 -
Capital Stock
Reorganization (2,000,000) 0.001 (2,000) (328,000) 330,000 - - -
December 1998 -
Issuance of
common stock at
$0.50 per share
for cash and notes 2,000,000 0.001 2,000 998,000 - (656,560) - 343,440
Issuance of common
Stock at par value
in acquisition of
bankrupted subsidiary 4,000 0.001 4 (4) - - - -
March 1999 - Issuance
of common stock at
$1.00 per share
for services 35,000 0.001 35 34,965 - - - 35,000
March 1999 - Issuance
of common stock at
$1.50 per share
in settlement of
office rent agreement 16,000 0.001 16 23,984 - - - 24,000
Net loss year ended
March 31, 1999 - - - - - - (196,184) (196,184)
------ ------- ------ ---------- ---------- ---------- ---------- ------- ---------- ------------ -----------
Balance at
March 31, 1999 - - - 6,440,464 - 6,440 2,174,501 330,000 (656,560) (1,482,620) 371,761
August 1999 -
Issuance of common
stock at $0.50 per
share for cash 110,000 0.001 110 54,890 - - - 55,000
August 1999 -
Issuance of common
stock at $1.00 per
share for services 65,000 0.001 65 64,935 - - - 65,000
December 1999 -
Record receipts
and write off
uncollectable
subscription
receivable - - - (30,000) - 656,560 - 626,560
March 31, 2000 -
Write off
Receivable
due from
Ansam, Inc., a
related party - - - (332,400) - - - (332,400)
Net loss year
ended March 31, 2000 - - - - - - (881,355) (881,355)
------ ------- ------ ---------- ---------- ---------- ---------- ------- ---------- ------------ -----------
Balance, ending
March 31, 2000 - $ - 6,615,464 $ 6,615 $1,931,926 330,000 - (2,363,975) (95,434)
====== ====== ========== ========== ========== ======= ========== ============ ===========
</TABLE>
Read the accompanying summary of significant accounting policies and notes to
financial statements, both of which are an integral part of this financial
statement.
<PAGE> 23
Interactive Multimedia Network, Inc.
Consolidated Statement of Cash Flows
For the years ended March 31, 2000 and 1999
<TABLE>
Years Ended
---------------------------------
March 31, 2000 March 31, 1999
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (881,355) $ (196,184)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 20,577 12,106
Issuance of stock for services 65,000 181,500
Loss on investment in Temporary
Business Acquisition 253,054 129,854
Accrued interest - Shareholders loan 13,819 -
Changes in Operating assets and liabilities:
Accounts Receivable (6,350) -
Inventory (65,470) -
Other Current Assets 74,724 (103,124)
Other Assets 104,819
Accounts Payable and Accrued Liabilities 117,242 1,206
--------------- ---------------
Net cash provided by/(used in)
operating activities (303,941) 25,358
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property and equipment (54,009) (57,892)
Loss on write-off of related party - Ansam, Inc. (332,400) -
Loss on investment in Temporary
Business Acquisition (253,054) (249,637)
--------------- ---------------
Net cash provided by/(used in)
investing activities (639,463) (307,529)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from:
Notes payable, principally related parties - 4,770
Share subscriptions collected 626,560 -
Loans from Shareholders 176,000 -
Issuance of stock 55,000 368,440
--------------- ---------------
Net cash provided by/(used in)
financing activities 857,560 373,210
--------------- ---------------
Net increase (decrease) in cash and
cash equivalents (85,844) 91,039
Cash and cash equivalents, beginning of period 96,802 5,763
--------------- ---------------
Cash and cash equivalents, end of period $ 10,958 $ 96,802
=============== ===============
</TABLE>
Read the accompanying summary of significant accounting policies and notes to
financial statements, both of which are an integral part of this financial
statement.
<PAGE> 24
INTERACTIVE MULTIMEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION
Interactive Multimedia Network, Inc. (the "Company") was organized in the
State of New Jersey on March 04, 1994 and reincorporated in the State of
Delaware on June 13, 1995. The Company's primary business activity is marketing
through multiple media channels for the purpose of facilitating on-line
purchases of a variety of products and services.
The Company has three subsidiaries: AutoSmart USA, Inc., a Nevada
corporation and AutoSmart USA Leasing, Inc., a Florida corporation, which
operate in tandem the vehicle sales operations of the Company. The third
subsidiary, CPM Associates Holding Corp., is a New Jersey corporation.
Interactive Multimedia Network, Inc. prepares its financial statements in
accordance with generally accepted accounting principles. This basis of
accounting involves the application of accrual accounting; consequently,
revenues and gains are recognized when earned, and expenses and losses are
recognized when incurred. Financial statement items are recorded at historical
cost and may not necessarily represent current values.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and all of its wholly-owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.
The consolidated financial statements do not include the accounts of a
subsidiary which at December 31, 1999 filed Chapter 7 with the Bankruptcy
Courts, since control was temporary.
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
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. Certain amounts included in the financial statements are
estimated based on currently available information and management's judgment as
to the outcome of future conditions and circumstances. Changes in the status of
certain facts or circumstances could result in material changes to the estimates
used in the preparation of financial statements and actual results could differ
from the estimates and assumptions. Every effort is made to ensure the
integrity of such estimates.
Fair value of Financial Instruments
The carrying amounts reported in the balance sheet for cash and cash
equivalents, accounts receivable, other receivables, accounts payable and
accrued expenses and other liabilities approximate fair value because of the
immediate or short-term maturity of these financial instruments.
Inventories
Inventories are stated at the lower of cost or market determined by the
LIFO method and specific identification.
<PAGE> 25
INTERACTIVE MULTIMEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
Property and Equipment:
Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives when the property and equipment is placed in service.
Estimate Useful Life
(In Years)
Furniture and fixtures 7
Equipment & Vehicles . 5
Computer Equipment & Software 3
Leasehold improvements are amortized over their estimated useful lives or
the estimated useful lives of the leasehold improvements, whichever is shorter.
The cost of fixed assets retired or sold, together with the related
accumulated depreciation, are removed from the appropriate asset and
depreciation accounts, and the resulting gain or loss is included in net
earnings. Maintenance and repairs are expensed as incurred.
Revenue Recognition
Revenues are derived principally from services and commissions in the
internet marketing arena and sales or commissions from the sale or lease of
vehicles from dealers who have agreed to provide these vehicles to the company
and its customer.
Recent Accounting Pronouncements:
The Statement of Financial Accounting Standards Board (SFAS) No. 130,
"Reporting Comprehensive Income," was issued by the Financial Accounting
Standards Board (FASB) in June 1997. This Statement establishes standards for
the reporting and display of comprehensive income and its components.
Comprehensive income including, among other things, foreign currency translation
adjustments and unrealized gains and losses on certain investments in debt and
equity securities. This Statement is effective for fiscal periods beginning
after December 15, 1997. The Company does not expect the adoption of this
statements to have a material impact on its financial condition or results of
operations.
In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards Board (SFAS) No. 131, "Disclosure
about Segments of an Enterprise and Related Information." This Statement
establishes standards for reporting information about operating segments in
annual financial statements, and requires that an enterprise report selected
information about operating segments in interim reports issued to shareholders.
This Statement is effective for fiscal periods beginning after December 15,
1997. The Company does not expect the adoption of this statements to have a
material impact on its financial condition or results of operations.
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards Board (SFAS) No. 133, "Accounting
for Derivative Instruments and Hedging Activities." This new standard
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that entities recognize all derivatives as
either assets or liabilities in the consolidated balance sheet and measure those
instruments at fair value.
<PAGE> 26
INTERACTIVE MULTIMEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):
Earnings Per Share of Common Stock
Basic earnings (loss) per share is computed using the weighted-average
number of common shares outstanding during the period. Options and warrants are
not considered since considering such items would have an antidilutive effect.
Statement of Cash Flows
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments with original maturities of three months or less to be
cash equivalents.
NOTE 3 - DETAILS OF FINANCIAL STATEMENT COMPONENTS
Property and Equipment: 2000 1999
---------------- ----------------
Furniture and Fixtures $ 11,090 $ 6,307
Equipment 20,849 13,446
Computer Equipment 56,816 29,312
Software 202,859 199,564
Website 53,250 53,250
Leasehold Improvements 11,025 -
---------------- ----------------
355,889 301,879
Less: Accumulated depreciation 243,156 222,578
---------------- ----------------
Property and equipment, net $ 112,733 $ 79,301
NOTE 4 - COMMITMENTS AND CONTINGENCIES
Leases:
In February 1999, the Company entered into an agreement to lease office
space for AutoSmart USA, Inc. The initial term of the lease is for three years
expiring in February 2002 with a renewal option for an additional three years.
The monthly base rent amount is $6,000.
Litigation:
The Company is a party to a legal action arising in the ordinary course of
business. Management has retained the services of two law firms to defend this
matter and it is their conclusion that the matter is totally without merit and a
motion for summary judgement has been filed. Management does not expect any
adverse effect on the Company to result from this matter.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. The company reported net losses of
$881,355 and $196,184 for the years ended March 31, 2000 and 1999 respectively.
Management anticipates that an additional investment of several million dollars
will be needed to develop an effective sales and marketing program before the
organization will generate sufficient cash flow from operations to meet current
operating expenses and overhead. Management has continued to develop a
strategic plan to develop a management team, maintain reporting compliance and
seek new expansive areas in marketing through multiple media channels.
Management intends to seek new capital from new equity security issuance's that
will provide funds needed to increase liquidity, fund internal growth, and fully
implement its business plan.
<PAGE> 27
INTERACTIVE MULTIMEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
NOTE 6 - TEMPORARY BUSINESS ACQUISITION
On January 02, 1999, the Company, through its subsidiary CPM Holdings,
Inc., acquired 80% of the common stock of Contracting, Planning, and Management
Associates, Inc. ("CPM"), a wood products manufacturer located in Brentwood, New
Hampshire. The transaction, which was to be accounted for as a purchase,
involved the payment of $50,000 in cash to CPM's shareholders in exchange for
stock. As part of the transaction, the Company obligated itself to provide
working capital financing of $350,000 to CPM. As part of the acquisition, the
Company acquired property and equipment with a fair value of $729,119 which is
equivalent to the book value of the assets in CPM's records. These assets will
be depreciated over lives of five to thirteen years. The Company also acquired
control of inventory, receivables and other current assets valued at $336,454.
On January 08, 1999, CPM (the "Debtor") filed petitions for relief under
Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court
for the District of New Hampshire. Under Chapter 11, certain claims against the
Debtor in existence prior to the filing of the petitions for relief under the
federal bankruptcy laws are stayed while the Debtor continues business
operations as Debtor-In-Possession.
The activities of the Company and CPM are not consolidated for the years
ended March 31, 2000 and 1999 since the control of CPM was never achieved due to
the January 08, 1999 Chapter 11 filing and the subsequent conversion by the
bankruptcy court to a liquidation under Chapter 7 of the Bankruptcy Code in
December 1999.
Other than the original investment of $50,000, the Company had loaned an
additional $332,909 as of December 31, 1999. This loan was to have interest
paid at 8%. No interest has been accrued as of March 31, 2000 due to the
uncollectibility from the court imposed liquidation of CPM. At March 31, 1999,
the Company reduced its investment in the temporary controlled subsidiary with a
charge to loss on investments in the amount of $50,000 for the stock investment.
At March 31, 1999 the Company also reduced its notes receivable balance due from
CPM by $79,854 which represented 40% of the outstanding balance. Due to the
subsequent conversion by the bankruptcy court to a liquidation under Chapter 7
of the Bankruptcy Code in December 1999, the Company reduced its notes
receivable balance at March 31, 2000 due from CPM to zero by charging $253,054
to loss on investments since the likelihood of collection from CPM is remote.
CPM received additional loans in the amount of $332,400 form Ansam, Inc., a
corporation controlled by the Verdiramo family (See Note 7).
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company has been involved in periodic transactions, whereby money has
been advanced to the former President of the Company and the former President of
the Company has advanced money to the Company. As of March 31, 2000 the Company
was obligated to the former President for a total of $2,870.
The Company routinely sends funds to Small Business Development Group, Inc.
a corporation owned solely by William J. Auletta. These funds are reimbursement
of administrative expenses paid by Small Business Development Group on behalf of
Interactive Multimedia Networks, Inc.
Legal services to Interactive Multimedia Network, Inc. have been performed
by Verdiramo & Verdiramo, P.AThis professional association is owned by Vincent
L. Verdiramo, the former President of Interactive Multimedia Network, Inc. and
his son Vincent S. Verdiramo. Verdiramo & Verdiramo, P.A. is providing limited
use of office space to Interactive Multimedia Networks, Inc. with no charge for
rent.
<PAGE> 28
INTERACTIVE MULTIMEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
NOTE 7 - RELATED PARTY TRANSACTIONS (continued):
In December 1999 the Company loaned $332,400 to Ansam, Inc., an entity
controlled by the Verdiramo family. The purpose of this loan was for Ansam to
loan funds to Contracting, Planning and Management Associates, Inc.("CPM"), an
entity which Interactive Multimedia Networks, Inc. acquired temporary control in
January 1999 due to CPM filing a petition for relief under Chapter 11 of the
federal bankruptcy laws in the United States Bankruptcy Court for the District
of New Hampshire. In December 1999, the Bankruptcy Court converted the
bankruptcy to a liquidation under Chapter 7 of the Bankruptcy Code. Ansam has
notified Interactive Multimedia Networks, Inc. of its inability to repay the
loan since it has not collected the funds necessary and considers the likelihood
of collection from CPM are remote. At March 31, 2000, the entire receivable of
$332,400 due from Ansam, Inc. has been written off and treated as a dividend to
affiliate and applied against paid in capital.
The Company has received loans and advances from stockholders during the
year. These transactions are in the form of unsecured demand loans bearing
interest of 8% per annum. The balance due at March 31, 2000 is $189,819 which
includes approximately $7,500 accrued interest on these loans.
NOTE 8 - STOCKHOLDER'S EQUITY
Preferred Stock
The company has 5,000,000 shares of preferred stock with a par value of
$0.001, which to date have never been issued. The preferred stock contains no
voting privileges and is not entitled to accrue dividends or convert into shares
of the Company's common stock.
Common Stock
During the period ending March 31, 1999, the Company issued 2,000,000
common stock shares under Regulation D, Rule 504 at $0.50 per share. These
2,000,000 common stock shares were not the same shares returned to the Company
by Marion Verdiramo, nor did Marion Verdiramo participate in the Regulation D,
Rule 504 offering (See Note 9). Another 25, 000 common shares were issued for
cash at $1.00 per share and 637,500 common shares were issued for services at
values of $0.20 to $1.00 per share. The Company valued these services at
$157,500. The Company also issued 16,000 common shares for prepaid rent valued
at $24,000 for its new subsidiary, AutoSmart USA, IncAs part of the failed
acquisition of CPM, the Company had issued 4,000 shares of common stock for no
additional value.
As of March 31, 1999, outstanding stock subscriptions resulting from the
Regulation D, Rule 504 issuance totaled $656,560 and were secured by the common
stock. During the year ended March 31, 2000, $626,650 was collected from these
subscriptions and $30,000 was deemed uncollectible and charged against paid-in
capital.
In August 1999, the Company issued 110,000 shares of common stock for
$55,000 in cash. Also in 1999, the Company issued 65,000 shares of common stock
in exchange for services valued at $65,000.
NOTE 9 - OPTIONS AND WARRANTS
In December 1998, Marion Verdiramo, a related party, returned 2,000,000
shares of common stock to the Company as part of a capital restructuring and in
return received 2,000,000 common stock options at $0.10 per share which can be
exercised any time during the subsequent three years. This exchange was
believed to be beneficial to the Company as it reduced its outstanding float.
These options were valued at $330,000 based upon the minimal value of the common
stock at the time of the options' issuance.
<PAGE> 29
INTERACTIVE MULTIMEDIA NETWORKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000 AND 1999
NOTE 9 - OPTIONS AND WARRANTS (continued):
Marion Verdiramo has never been an employee, officer, director or independent
consultant for the Company. Marion Verdiramo converted a loan to the Company
for 2,000,000 shares of restricted common stock. Subsequently, those shares
were never freed from restrictive legend and returned to the Company.
NOTE 10 - INCOME TAXES
The Company did not provide any current or deferred United States federal,
state or foreign income tax provision or benefit for the period presented
because it has experienced operating losses since inception. The Company has
provided a full valuation allowance on the deferred tax asset, consisting
primarily of net operating loss carryforwards, because of uncertainty regarding
its realizability.
<PAGE> 30
PART III
ITEM 1. INDEX TO EXHIBITS.
3.1 Certificate of Incorporation and Amendments thereto.*
3.2 By-laws and Amendments thereto.*
4.1 Common Stock Certificate*
10.1 CPM Associates, Inc. Acquisition Agreement December 1999*
16.1 Letter on change of certifying accountant*
21.1 Subsidiaries of the registrant*
23.1 Consent of accountant
27 Financial Data Schedule
_______________
* Previously filed
ITEM 2. DESCRIPTION OF EXHIBITS.
The Exhibits required by this item are included as set forth in the Exhibit
Index.
SIGNATURES
----------
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERACTIVE MULTIMEDIA NETWORK, INC.
Date: September 29, 2000 /s/Richard J. Verdiramo
------------------------------------
Richard J. Verdiramo, President,
CEO and Director
Date: September 29, 2000 /s/William J. Auletta
------------------------------------
William J. Auletta, VP, COO
and Director