U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ending June 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 0-28607
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INNOVATIVE HOLDINGS & TECHNOLOGIES, INC.
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(Name of Small Business Issuer in its Charter)
COLORADO 74-2929034
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(State of Incorporation) (IRS Employer Identification No.)
100 South Orange Ave., Ste. 100,Orlando, FL 32801
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number,( 407 ) 481 - 8900
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Former Name, former address and former fiscal year if changed since last report
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
--- ---
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes No
--- ---
Applicable on to corporate issuers
State the number of shares outstanding of each of the issuer's class of
common equity, as of the latest practicable date:
Transitional Small Business Disclosure Format
(Check One)
Yes No
<PAGE>
INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
WITH ACCOUNTANTS' REPORT
FOR THE SIX MONTHS ENDED
JUNE 30, 2000
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TABLE OF CONTENTS
Page
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Accountants' Review Report.............................................. 1
Condensed Consolidated Financial Statements
Balance Sheets......................................................... 2
Statements of Operations............................................... 3
Statements of Cash Flows............................................... 4
Notes to Condensed Consolidated
Financial Statements................................................... 5 - 6
<PAGE>
DIROCCO & DOMBROW, P.A.
3601 W. COMMERCIAL BLVD, SUITE #39
FT. LAUDERDALE, FL 33309
(954) 731-8181
REPORT ON REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
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Board of Directors
Innovative Holdings & Technologies, Inc. and Subsidiary
Orlando, Florida
We have reviewed the accompanying condensed consolidated balance sheets of
Innovative Holdings & Technologies, Inc. and Subsidiary as of June 30, 2000 and
the related condensed consolidated statements of operations for the three months
and six months ended June 30, 2000 and 1999, and cash flows for the six months
ended June 30, 2000 and 1999, included in the accompanying Securities and
Exchange Commission Form 10-Q for the period ended June 30, 2000. These
condensed consolidated financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modification that should
be made to the accompanying condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 4 to the
consolidated financial statements, the Company's significant operating losses
raise substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note 4. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
We have previously audited, in accordance with generally accepted auditing
standards, the balance sheets as of December 31, 1999 and the related
consolidated statements of operations, stockholders' equity and cash flows for
the year then ended (not presented herein). In our report dated March 16, 2000,
we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying balance sheet as of June
30, 2000, is fairly stated in all material respects in relation to the balance
sheet from which it has been derived.
August 1, 2000
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<TABLE>
<CAPTION>
INNOVATIVE HOLDINGS AND TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
2000 1999
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(Audited)
<S> <C> <C>
Current assets
Cash $ 3,642 $ 2,011
Prepaid expenses -- 3,681
Note receivable 10,250 10,250
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Total current assets 13,892 15,942
Property and equipment 20,053 23,121
Other assets 5,931 4,263
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Total assets $ 39,876 $ 43,326
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable and accrued
expenses $ 19,109 $ 25,826
Withholding taxes payable 163,803 163,250
Notes payable 125,000 25,000
Due to affiliate 128,103 43,751
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Total current liabilities 436,015 257,827
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Stockholders' equity (deficit)
Preferred stock, $.001 par value,
50,000,000 shares authorized,
no shares issued and
outstanding, respectively -- --
Common stock, $.0001 par value,
450,000,000 shares authorized,
27,124,884 and 23,124,884 issued
and outstanding, respectively 2,713 2,313
Additional paid-in capital 3,280,219 3,080,619
Stock subscriptions receivable (534,000) (334,000)
Deficit (3,145,071) (2,963,433)
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Total stockholders' equity (deficit) (396,139) (214,501)
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Total liabilities and stockholders' equity (deficit) $ 39,876 $ 43,326
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</TABLE>
See accompanying summary of notes to unaudited condensed consolidated financial
statements.
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<PAGE>
<TABLE>
<CAPTION>
INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended June 30, Six Months Ended June 30,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Expenses
General and administrative $ 64,747 $ 75,921 $ 174,997 $ 158,643
Research and development 0 12,208 -- 13,989
Interest expense 5,883 3,036 6,641 3,036
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Total expenses 70,630 91,165 181,638 175,668
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Net loss $ (70,630) $ (91,165) $ (181,638) $ (175,668)
============ ============ ============ ============
Basic loss per share $ (0.003) $ (0.004) $ (0.008) $ (0.008)
============ ============ ============ ============
Weighted Average Common Shares 23,960,049 22,254,884 23,542,466 22,072,840
============ ============ ============ ============
</TABLE>
See accompanying summary of notes to unaudited condensed consolidated financial
statements.
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<PAGE>
INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30,
2000 1999
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Cash flows from operating activities:
Net loss $(181,638) $(175,668)
Adjustments to reconcile net
loss to net cash used by
operating activities:
Depreciation 3,068 --
(Increase) decrease in:
Prepaid insurance 3,681 --
Other assets (1,668) (3,473)
Increase (decrease) in:
Accounts payable and accrued expenses (6,717) 373
Withholding taxes payable 553 --
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Net cash used by operating activities (182,271) (178,768)
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Cash flows from investing activities:
Purchase of property and equipment ( -- ) (1,900)
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Net cash used by investing activities ( -- ) (1,900)
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Cash flows from financing activities:
Proceeds from notes payable 100,000 --
Proceeds from affiliate 84,352 13,000
Proceeds from issuance of stock -- 210,000
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Net cash provided by financing activities 184,352 223,000
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Increase (Decrease) in cash 1,631 42,332
Cash at beginning of period 2,011 4,303
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Cash at end of period $ 3,642 $ 46,635
========= =========
See accompanying summary of notes to unaudited condensed consolidated financial
statements.
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<PAGE>
INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Presentation of Interim Information
In the opinion of the management of Innovative Holdings & Technologies, Inc. and
Subsidiary, Inc. (the Company), the accompanying unaudited condensed
consolidated financial statements include all normal adjustments considered
necessary to present fairly the financial position as of June 30, 2000, and the
results of its operations and cash flows for the six months ended June 30, 2000
and 1999. Interim results are not necessarily indicative of results for a full
year.
The condensed consolidated financial statements and notes are presented as
permitted by Form 10-Q, and do not contain certain information included in the
Company's audited consolidated financial statements and notes for the year ended
December 31, 1999.
2. Financial Statements
The condensed consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary. All significant intercompany
transactions and balances have been eliminated.
3. Supplemental Disclosures of Cash Flow Information
Six months ended June 30,
--------------------------
2000 1999
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Operating Activities:
Interest paid $ 758 $ --
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4. Going Concern
As shown in the accompanying financial statements, the Company incurred net
losses of $181,638 for the six months ended June 30, 2000. The Company's current
liabilities exceeded its current assets by $422,123 at June 30, 2000. The
ability of the Company to continue as a going concern is dependent on the
development and marketing of products to be offered by its subsidiary. The
Company will offer additional shares of its common stock to raise capital on an
as needed basis.
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<PAGE>
INNOVATIVE HOLDINGS & TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5. Stock Options
On January March 10, 1998, the Company entered unto a stock option agreement in
which the Company grants the option to shareholders and consultants to purchase
up to 21,000,000 shares of common stock for an exercise price of $0.05 per share
at any time through March 9, 2003
The following is a summary of stock option plan activity for the three months
ended June 30, 2000.
Number of options outstanding on April 1, 2000 21,000,000
Number of options exercised in 2000 (4,000,000)
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Number of options outstanding on June 30, 2000 17,000,000
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Number of options exercisable at June 30, 2000 17,000,000
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Weighted average exercise price per share
outstanding and exercisable $ 0.05
==========
Weighted average remaining contractual life of
options outstanding and exercisable 2.9
==========
No options were forfeited or expired in 2000 and 1999.
The calculation of the fair values of the options, under the minimum value
method, assumes that no corporate dividends will be issued prior to the exercise
of the options, and that the options will be exercised immediately prior to the
exercise expiration date. The risk free interest rate used in the calculation
was based on the zero coupon government issue rate of approximately 6 percent.
The Company has accounted for the stock options under APB Opinion 25, an
accounting standard under which no related compensation expense was recognized
in 1998, the year of the grant. Under an alternative accounting standard, FAS
123, compensation expense of $60,000 would have been recognized related to the
grant, resulting in net loss of $241,638.
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