UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO.1
TO
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): July 25, 2000
ANGELAUDIO.COM, INC.
(Formerly Core Systems, Inc.)
(Exact name of registrant as specified in its charter)
Nevada
(State of Incorporation)
000-26493
(Commission File Number)
88-0390251
(I.R.S. Employer Identification Number)
Suite 1200
1130 West Pender Street
Vancouver, British Columbia
V6E 4A4
(Address of principal executive offices, including zip code)
(604)642-6435
(Registrant's telephone Number, including area code)
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
Under a share purchase agreement dated April 26, 2000, the Registrant acquired
all of the issued and outstanding common shares of Angelaudio.com, Inc., a
private Nevada company ("Angelaudio"). The Registrant issued 2,000,000 common
shares at a par value of $0.001 per share to Fanoon Foundation, Chapster
Foundation and Freedom Investments Ltd., the former shareholders of Angelaudio.
The former shareholders of Angelaudio are at arm's length to the Registrant and
its directors and officers.
The Registrant will develop the business which it acquired in its acquisition of
Angelaudio namely the universal resource locator "Angelaudio.com" and the
business of downloading music from the internet in the form of a hard copy CD or
directly onto a hard drive. The business to be developed by the Registrant also
provides independent recording artists a site to showcase their music directly
online with the added feature of launching their own CD through the Registrant's
manufacturing department.
Financial statements prepared in accordance with item 7 of Form 8K are in the
process of being prepared by the Registrant's auditors and will be filed by
amendment to this Form 8K within 30 days of the filing of this initial Form 8K.
Item 5. Other Events
Following the Registrant's acquisition of Angelaudio, the Registrant changed its
name to Angelaudio.com, Inc. (formerly Core Systems, Inc.) which name change was
accepted by the Nevada Secretary of State on April 18, 2000.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
AngelAudio Systems Inc. (private Nevada corporation, formerly
Angelaudio.com, Inc.) audited financial statements for the year ending
December 31, 1999 are attached.
(b) Pro Forma Financial Information
Angelaudio.com, Inc. (formerly Core Systems Inc.) Pro Forma Financial
Statements (combined with AngelAudio Systems Inc.) for the period
ending December 31, 1999; and Angelaudio.com, Inc. (formerly Core
Systems Inc.) Pro Forma Financial Statements (combined with AngelAudio
Systems Inc.) for the period ending March 31, 2000 are attached.
(c) Exhibits
Not Applicable
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned.
ANGELAUDIO.COM, INC.
(formerly Core Systems, Inc.)
Per: /s/Ian Stuart
-------------------------------
Ian Stuart, President/Secretary
3
<PAGE>
ANGELAUDIO SYSTEMS INC.
(A DEVELOPMENT STAGE COMPANY)
(FORMERLY ANGELAUDIO.COM, INC.)
FINANCIAL STATEMENTS
(Expressed in US Dollars)
DECEMBER 31, 1999
--------------------------------------------------------------------------------
ANGELAUDIO SYSTEMS INC.
(FORMERLY ANGELAUDIO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31, 1999 PAGE
--------------------------------------------------------------------------------
<S> <C>
Auditors' Report 5
Statement of Operations 6
Balance Sheet 7
Statement of Cash Flows 8
Notes to the Financial Statements 9 - 11
</TABLE>
4
<PAGE>
[MacKay & Partners Letterhead]
AUDITORS' REPORT
TO THE SHAREHOLDERS OF
ANGELAUDIO SYSTEMS INC.
(FORMERLY ANGELAUDIO.COM, INC.)
We have audited the balance sheet of Angelaudio Systems Inc. (formerly
Angelaudio.com, Inc.) as at December 31, 1999 and the statement of operations
and deficit, and cash flows from inception, December 22, 1999 to December 31,
1999. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with Canadian generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance 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.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at December 31, 1999 and the
results of its operations and the changes in its cash flows for the period from
inception, December 22, 1999 to December 31, 1999 in accordance with Canadian
generally accepted accounting principles, consistently applied.
"MACKAY & PARTNERS"
VANCOUVER, CANADA. CHARTERED ACCOUNTANTS
JULY 14, 2000
COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA - UNITED STATES REPORTING
DIFFERENCES
In the United States, reporting standards for auditors would require the
addition of an explanatory paragraph following the opinion paragraph when the
financial statements are affected by a significant uncertainty such as referred
to in Note 2(b) regarding the Company's ability to continue as a going concern.
Our report to the shareholders dated July 14, 2000 is expressed in accordance
with Canadian reporting standards which do not permit a reference to such
uncertainties in the auditors' report when the uncertainties are adequately
disclosed in the financial statements.
"MACKAY & PARTNERS"
VANCOUVER, CANADA. CHARTERED ACCOUNTANTS
JULY 14, 2000
5
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO SYSTEMS INC.
(FORMERLY ANGELAUDIO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS (US DOLLARS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cumulative
from inception
December 22, 1999
to December 31, 1999
--------------------------------------------------------------------------------
<S> <C>
REVENUE $ -
--------------------------------------------------------------------------------
EXPENSES -
--------------------------------------------------------------------------------
WRITE OFF OF GOODWILL (note 7) (82,957)
--------------------------------------------------------------------------------
LOSS FOR THE PERIOD (82,957)
RETAINED EARNINGS, BEGINNING OF PERIOD -
--------------------------------------------------------------------------------
DEFICIT, END OF PERIOD $(82,957)
--------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO SYSTEMS INC.
(FORMERLY ANGELAUDIO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET (US DOLLARS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31, 1999
--------------------------------------------------------------------------------
<S> <C>
ASSETS
CURRENT
Cash $ 1,950
Accounts receivable 3,782
Prepaid expenses 15,649
--------------------------------------------------------------------------------
21,381
CAPITAL ASSETS (note 3) 42,354
--------------------------------------------------------------------------------
$63,735
--------------------------------------------------------------------------------
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 18,969
Due to officers (note 5) 91,866
--------------------------------------------------------------------------------
110,835
LONG-TERM DEBT (note 4) 35,607
--------------------------------------------------------------------------------
146,442
--------------------------------------------------------------------------------
SHARE CAPITAL AND DEFICIT
SHARE CAPITAL (note 6) 250
DEFICIT (82,957)
--------------------------------------------------------------------------------
(82,707)
--------------------------------------------------------------------------------
$ 63,735
--------------------------------------------------------------------------------
</TABLE>
APPROVED BY THE DIRECTORS:
________________________________ Director
________________________________ Director
7
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO SYSTEMS INC.
(FORMERLY ANGELAUDIO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS (US DOLLARS)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Cumulative
from inception
December 22, 1999
to December 31, 1999
--------------------------------------------------------------------------------
<S> <C>
CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Loss for the period $(82,957)
Write down of goodwill 82,957
--------------------------------------------------------------------------------
-
--------------------------------------------------------------------------------
FINANCING ACTIVITIES
Due to officers 1,700
Issuance of share capital 250
--------------------------------------------------------------------------------
1,950
--------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,950
CASH AND CASH EQUIVALENTS, BEGINNING -
--------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, ENDING $ 1,950
--------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO SYSTEMS INC.
(FORMERLY ANGELAUDIO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
DECEMBER 31, 1999
--------------------------------------------------------------------------------
1. INCORPORATION AND NATURE OF OPERATIONS
The company was incorporated on December 22, 1999 under the laws of the
State of Nevada, USA.
The company was organized to conduct business on the internet. The company is in
the development stage as defined in Statement of Financial Accounting Standard
No. 7.
2. ACCOUNTING POLICIES
(A) GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
These statements are prepared in accordance with Canadian
generally accepted accounting principles and unless otherwise
disclosed there is no significant difference with U.S.
generally accepted accounting principles.
(B) BASIS OF PRESENTATION
The accompanying financial statements have been prepared on
the basis of accounting principles applicable to a going
concern. Accordingly, they do not give effect to adjustments
that might be necessary should the company be unable to
continue as a going concern and therefore be required to
realize its assets, and retire its liabilities in other than
the normal course of business and at amounts different from
those in the accompanying financial statements.
(C) CAPITAL ASSETS
Capital assets are recorded at cost. Amortization will be
calculated by the declining balance method at the following
annual rates:
<TABLE>
<S> <C>
Computer hardware 30%
Office furniture and equipment 20%
Website design 30%
</TABLE>
(D) FINANCIAL INSTRUMENTS
All significant financial assets, financial liabilities and equity
instruments of the company are either recognized or disclosed in the
financial statements together with available information for a
reasonable assessment of future cash flows, interest rate risk and
credit risk.
9
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO SYSTEMS INC.
(FORMERLY ANGELAUDIO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
DECEMBER 31, 1999
--------------------------------------------------------------------------------
2. ACCOUNTING POLICIES (CONT'D)
(E) ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenditures during the
reporting period. Actual results could differ from those
reported.
(F) FOREIGN CURRENCY TRANSLATION
Amounts recorded in foreign currencies have been translated
into US dollars as follows:
Current monetary assets and liabilities are translated at the
rates prevailing at the balance sheet date;
Fixed assets and shareholder equity accounts are translated at
the rates prevailing on the transaction dates; and
Deferred expenditures, income and expenses are translated at
average rates during the year incurred.
Any gain or loss on translation of foreign currencies has been
included in net income.
3. CAPITAL ASSETS
<TABLE>
<CAPTION>
1999
ACCUMULATED NET
COST AMORTIZATION VALUE
<S> <C> <C> <C>
Computer hardware $32,141 $ - $32,141
Office furniture and equipment 3,153 - 3,153
Website design 7,060 - 7,060
--------------------------------------------------------------------------------
$42,354 $ - $42,354
--------------------------------------------------------------------------------
</TABLE>
Capital assets have not been amortized during the period from
incorporation to December 31, 1999 as they were not in use.
Amortization will commence in the next fiscal year.
4. LONG-TERM DEBT
<TABLE>
<S> <C>
Payable to related parties, interest at 8% per annum
no fixed terms of repayment $35,607
-----------------------------------------------------------------------
$35,607
-----------------------------------------------------------------------
</TABLE>
10
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO SYSTEMS INC.
(FORMERLY ANGELAUDIO.COM, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
DECEMBER 31, 1999
--------------------------------------------------------------------------------
5. DUE TO OFFICERS
Amounts due to officers do not bear interest and have no fixed terms of
repayment.
6. SHARE CAPITAL
AUTHORIZED
25,000 Class A, voting, common shares, no par value
ISSUED
25,000 Class A - common shares $ 250
--------------------------------------------------------------------------------
7. RELATED PARTY TRANSACTIONS
Pursuant to an agreement signed December 23, 1999 by the Company and an
officer, the Company assumed an agency agreement between the officer
and a related company. This agreement entitles the Company to the
assets, liabilities, and concepts developed under an original
agreement, for the development of an internet based music store. The
asset and liabilities were recorded at their carrying amounts. The
costs of developing the business were recorded as goodwill and have
been written off as the net realizable value is not determinable.
8. SUBSEQUENT EVENT
Effective April 3, 2000 the company changed its name from
Angelaudio.com, Inc. to Angelaudio Systems Inc.
11
<PAGE>
ANGELAUDIO.COM INC.
(FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
(UNAUDITED - SEE COMPILATION REPORT)
DRIVER ANDERSON
CHARTERED ACCOUNTANTS
12
<PAGE>
[DRIVER ANDERSON LETTERHEAD]
COMPILATION REPORT
We have reviewed, as to compilation only, the accompanying pro forma interim
consolidated balance sheet of Angelaudio.com Inc. (formerly Core Systems, Inc.)
as at December 31, 1999 and the pro forma interim consolidated statements of
operations, shareholders' equity and cash flows for the three months then ended
from information provided by management. The pro forma interim consolidated
financial statements have been compiled to give effect to the acquisition and
assumptions described in Note 1 of these pro forma interim consolidated
financial statements.
"DRIVER ANDERSON"
Vancouver, BC CHARTERED ACCOUNTANTS
July 14, 2000
13
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
PRO FORMA INTERIM CONSOLIDATED BALANCE SHEET (US DOLLARS)
--------------------------------------------------------------------------------
DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 2,240
Accounts receivable 3,782
Deposits 15,649
--------------------------------------------------------------------------------
21,671
CAPITAL ASSETS (NOTE 3) 42,354
--------------------------------------------------------------------------------
$ 64,025
--------------------------------------------------------------------------------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 18,969
Due to related parties 91,866
--------------------------------------------------------------------------------
110,835
LONG TERM DEBT (NOTE 4) 35,607
--------------------------------------------------------------------------------
146,442
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
SHARE CAPITAL 3,069
PAID IN CAPITAL 6,231
DEFICIT (91,717)
--------------------------------------------------------------------------------
(82,417)
--------------------------------------------------------------------------------
$ 64,025
--------------------------------------------------------------------------------
</TABLE>
APPROVED BY THE DIRECTOR:
"Ian Stuart"
----------------------------------
14
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
PRO FORMA INTERIM CONSOLIDATED STATEMENT OF OPERATIONS (US DOLLARS)
--------------------------------------------------------------------------------
FOR THE YEAR THREE MONTHS ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
GENERAL AND ADMINISTRATIVE EXPENSES
Bank charges and interest $ 45
Licences and fees 1,000
Office and miscellaneous 298
Write off of goodwill 82,707
--------------------------------------------------------------------------------
LOSS FOR THE PERIOD $84,050
--------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
PRO FORMA INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (US
DOLLARS)
--------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SHARES PAID IN ACCUMULATED
NUMBERS AMOUNT CAPITAL DEFICIT
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance September 30, 1998 - $ - $ - $ -
March 1999 shares issued
for services 20,000 20 1,980
March 1999 changed par value
from no par value to $0.001
April 1999 shares issued
for cash 73,000 73 7,227
April 1999 forward stock
split 32 for 1 2,976,000 2,976 (2,976)
Net loss year ended
September 30, 1999 (7,667)
--------------------------------------------------------------------------------------------------------------------
Balance September 30, 1999 3,069,000 3,069 6,231 (7,667)
--------------------------------------------------------------------------------------------------------------------
Net loss for the period
October 1, 1999 to
December 31, 1999 (84,050)
--------------------------------------------------------------------------------------------------------------------
Balance December 31, 1999 3,069,000 $3,069 $ 6,231 $(91,717)
--------------------------------------------------------------------------------------------------------------------
</TABLE>
The authorized share capital of the company is 50,000,000 common shares with a
par value of $0.001 per share.
16
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
PRO FORMA INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (US DOLLARS)
--------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Loss for the period $(84,050)
Items not affecting cash
Write off of goodwill 82,707
--------------------------------------------------------------------------------
(1,343)
--------------------------------------------------------------------------------
INVESTING ACTIVITIES
Cash received on acquisition of business 1,950
--------------------------------------------------------------------------------
INCREASE IN CASH 607
CASH, BEGINNING OF PERIOD 1,633
--------------------------------------------------------------------------------
CASH, END OF PERIOD $ 2,240
--------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
NOTES TO THE PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
--------------------------------------------------------------------------------
DECEMBER 31, 1999
--------------------------------------------------------------------------------
1. INCORPORATION AND NATURE OF OPERATIONS
The Company was incorporated February 19, 1997, under the laws of the
State of Nevada. The Company acquired Angelaudio Systems Inc., a
private Nevada corporation incorporated in December, 1999, in April,
2000 and changed its name to Angelaudio.com Inc. These pro forma
financial statements represent the financial position of the Company as
at December 31, 1999 and the results of operation, changes in
shareholders' equity and cash flows for the period then ended on the
basis that the acquisition occurred at October 1, 1999, the beginning
of the current period of the Company. The Company's September 30, 1999
year end financial statements have not been presented on a pro forma
basis as Angelaudio Systems Inc. was not incorporated until later, as
noted above.
2. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
The financial statements have been prepared in accordance with
generally accepted accounting principles on a going concern
basis, which presumes the realization of assets and discharge
of liabilities in the normal course of business for the
foreseeable future. The company's ability to continue as a
going concern is dependent upon achieving profitable
operations and upon obtaining additional financing. The
outcome of these matters can not be predicted at this time.
These financial statements do not include any adjustments to
the amounts and classification of assets and liabilities that
might be necessary should the company be unable to continue in
business.
Because of the speculative nature of the company, there are
significant risks which are summarized as follows:
- the company is newly formed with no operating history
and minimal assets;
- the company has limited funds available for
acquisition or operations;
- the company has no employees other than its officers
and directors.
The company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7.
(B) CAPITAL ASSETS
Capital assets are recorded at cost and are amortized on the
declining balance basis at the following annual rates:
<TABLE>
<S> <C>
Computer hardware 30%
Office furniture and equipment 20%
Website design 30%
</TABLE>
(C) TRANSLATION OF FOREIGN CURRENCIES
Amounts recorded in foreign currencies have been translated
into United States dollars as follows:
- current monetary assets and liabilities are
translated at the rates prevailing at the balance
sheet date
- fixed assets and shareholder equity accounts are
translated at the rates prevailing on the transaction
dates
18
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
NOTES TO THE PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
--------------------------------------------------------------------------------
DECEMBER 31, 1999
--------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(C) TRANSLATION OF FOREIGN CURRENCIES (continued)
- deferred expenditures, income and expenses are
translated at the average rate for the year.
Any gain or loss on translation of foreign currencies is
included in net income.
(D) FINANCIAL INSTRUMENTS
All significant assets, financial liabilities and equity
instruments of the company are either recognized or disclosed
in the financial statements together with available
information for a reasonable assessment of future cash flows,
interest rate risk and credit risk.
(E) ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenditures during the
reporting period. Actual results could differ from those
reported.
3. CAPITAL ASSETS
<TABLE>
<CAPTION>
ACCUMULATED NET BOOK
COST AMORTIZATION VALUE
---------------------------------------------------------------------------------
<S> <C> <C> <C>
Computer hardware $32,141 $ - $32,141
Office furniture and equipment 3,153 - 3,153
Web site design 7,060 - 7,060
---------------------------------------------------------------------------------
$42,354 $ - $42,354
---------------------------------------------------------------------------------
</TABLE>
4. LONG TERM DEBT
LOAN PAYABLE
<TABLE>
<S> <C>
Note payable with no specific terms of repayment and
bearing interest at 8% per annum $35,607
---------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
NOTES TO THE PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
--------------------------------------------------------------------------------
DECEMBER 31, 1999
--------------------------------------------------------------------------------
5. INCOME TAXES
Income taxes are provided for using the liability method of accounting
in accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." A deferred tax asset or liability is
recorded for all temporary differences between financial and tax
reporting. Deferred tax expense (benefit) results from the net change
during the year of deferred tax assets and liabilities.
20
<PAGE>
ANGELAUDIO.COM INC.
(FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(UNAUDITED - SEE COMPILATION REPORT)
DRIVER ANDERSON
CHARTERED ACCOUNTANTS
21
<PAGE>
[DRIVER ANDERSON LETTERHEAD]
COMPILATION REPORT
We have reviewed, as to compilation only, the accompanying pro forma interim
consolidated balance sheet of Angelaudio.com Inc. (formerly Core Systems, Inc.)
as at March 31, 2000 and the pro forma interim consolidated statements of
operations, shareholders' equity and cash flows for the six months then ended
from information provided by management. The pro forma interim consolidated
financial statements have been compiled to give effect to the acquisition and
assumptions described in Note 1 of these pro forma interim consolidated
financial statements.
"DRIVER ANDERSON"
Vancouver, BC CHARTERED ACCOUNTANTS
July 14, 2000
22
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
PRO FORMA INTERIM CONSOLIDATED BALANCE SHEET (US DOLLARS)
--------------------------------------------------------------------------------
MARCH 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 13,534
Accounts receivable 8,341
Deposits 13,941
--------------------------------------------------------------------------------
35,816
CAPITAL ASSETS (Note 3) 244,993
--------------------------------------------------------------------------------
$280,809
--------------------------------------------------------------------------------
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 84,937
Due to related parties 174,042
Share subscriptions received 213,461
--------------------------------------------------------------------------------
472,440
LONG TERM DEBT (NOTE 4) 36,143
--------------------------------------------------------------------------------
508,583
--------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
SHARE CAPITAL 5,217
PAID IN CAPITAL 4,083
DEFICIT (237,074)
--------------------------------------------------------------------------------
(227,774)
--------------------------------------------------------------------------------
$280,809
--------------------------------------------------------------------------------
</TABLE>
APPROVED BY THE DIRECTOR:
"Ian Stuart"
----------------------------------
23
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
PRO FORMA INTERIM CONSOLIDATED STATEMENT OF OPERATIONS (US DOLLARS)
--------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
GENERAL AND ADMINISTRATIVE EXPENSES
Accounting and audit $ 10,000
Advertising and marketing 45,006
Amortization 19,829
Bank charges and interest 1,362
Consulting 6,462
Foreign exchange 1,837
Legal 1,312
Licences and fees 2,500
Office and miscellaneous 26,105
Salaries and benefits 30,797
Travel and promotion 1,490
Write off of goodwill 82,707
--------------------------------------------------------------------------------
Loss for the period $(229,407)
--------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
PRO FORMA INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (US
DOLLARS)
--------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SHARES PAID IN ACCUMULATED
NUMBERS AMOUNT CAPITAL DEFICIT
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance September 30, 1998 - $ - $ - $ -
March 1999 shares issued
for services 20,000 20 1,980
March 1999 changed par value
from no par value to $0.001
April 1999 shares issued
for cash 73,000 73 7,227
April 1999 forward stock
split 32 for 1 2,976,000 2,976 (2,976)
Net loss year ended
September 30, 1999 (7,667)
----------------------------------------------------------------------------------------------------------------
Balance September 30, 1999 3,069,000 3,069 6,231 (7,667)
----------------------------------------------------------------------------------------------------------------
February, 2000 forward stock
split 1.7 for 1 2,148,300 2,148 (2,148)
Net loss for period
October 1, 1999, to
March 31, 2000 (229,407)
----------------------------------------------------------------------------------------------------------------
Balance March 31, 2000 5,217,300 $5,217 $ 4,083 $(237,074)
----------------------------------------------------------------------------------------------------------------
</TABLE>
The authorized share capital of the company is 50,000,000 common shares with a
par value of $0.001 per share.
25
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
PRO FORMA INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (US DOLLARS)
--------------------------------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 2000
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
OPERATING ACTIVITIES
Loss for the period $(229,407)
Items not affecting cash
Amortization 19,829
Interest expense 536
Write off of goodwill 82,707
Changes in non-cash working capital
Accounts receivable (4,559)
Deposits 1,708
Accounts payable and accrued liabilities 65,968
--------------------------------------------------------------------------------
(63,218)
--------------------------------------------------------------------------------
FINANCING ACTIVITIES
Share subscriptions received 213,461
Advances from related parties 82,176
--------------------------------------------------------------------------------
295,637
--------------------------------------------------------------------------------
INVESTING ACTIVITIES
Cash received on acquisition of business 1,950
Acquisition of capital assets (222,468)
--------------------------------------------------------------------------------
(220,518)
--------------------------------------------------------------------------------
INCREASE IN CASH 11,901
CASH, BEGINNING OF PERIOD 1,633
--------------------------------------------------------------------------------
CASH, END OF PERIOD $ 13,534
--------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
NOTES TO THE PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
--------------------------------------------------------------------------------
MARCH 31, 2000
--------------------------------------------------------------------------------
1. INCORPORATION AND NATURE OF OPERATIONS
The Company was incorporated February 19, 1997, under the laws of the
State of Nevada. The Company acquired Angelaudio Systems Inc., a
private Nevada corporation incorporated in December, 1999, in April,
2000 and changed its name to Angelaudio.com Inc. These pro forma
financial statements represent the financial position of the Company as
at March 31, 2000 and the results of operation, changes in
shareholders' equity and cash flows for the period then ended on the
basis that the acquisition occurred at October 1, 1999, the beginning
of the current period of the Company. The Company's September 30, 1999
year end financial statements have not been presented on a pro forma
basis as Angelaudio Systems Inc. was not incorporated until later, as
noted above.
2. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
The financial statements have been prepared in accordance with
generally accepted accounting principles on a going concern
basis, which presume the realization of assets and discharge
of liabilities in the normal course of business for the
foreseeable future. The company's ability to continue as a
"going concern" is dependent upon achieving profitable
operations and upon obtaining additional financing. The
outcome of these matters can not be predicted at this time.
These financial statements do not include any adjustments to
the amounts and classification of assets and liabilities that
might be necessary should the company be unable to continue in
business.
Because of the speculative nature of the company, there are
significant risks which are summarized as follows:
- the company is newly formed with no operating history
and minimal assets;
- the company has limited funds available for
acquisition or operations;
- the company has no employees other than its officers
and directors.
The company is considered to be in the development stage as
defined in Statement of Financial Accounting Standards No. 7.
(B) CAPITAL ASSETS
Capital assets are recorded at cost and are amortized on the
following basis:
<TABLE>
<S> <C>
Computer hardware 30% declining balance
Office furniture and equipment 20% declining balance
Website design 30% declining balance
Leasehold improvements 3 year straight line
</TABLE>
(C) TRANSLATION OF FOREIGN CURRENCIES
Amounts recorded in foreign currencies have been translated
into United States dollars as follows:
- current monetary assets and liabilities are
translated at the rates prevailing at the balance
sheet date
- fixed assets and shareholder equity accounts are
translated at the rates prevailing on the transaction
dates
27
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
NOTES TO THE PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
--------------------------------------------------------------------------------
MARCH 31, 2000
--------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
(C) TRANSLATION OF FOREIGN CURRENCIES (continued)
- deferred expenditures, income and expenses are
translated at the average rate for the year
Any gain or loss on translation of foreign currencies is
included in net income.
(D) FINANCIAL INSTRUMENTS
All significant assets, financial liabilities and equity
instruments of the company are either recognized or disclosed
in the financial statements together with available
information for a reasonable assessment of future cash flows,
interest rate risk and credit risk.
(E) ESTIMATES
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenditures during the
reporting period. Actual results could differ from those
reported.
(F) GOODWILL
Goodwill is amortized on a straight line basis over a period
of five years.
3. CAPITAL ASSETS
<TABLE>
<CAPTION>
ACCUMULATED NET BOOK
COST AMORTIZATION VALUE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computer hardware $182,007 $13,651 $168,356
Office furniture and equipment 4,623 232 4,391
Web site design 68,433 5,133 63,300
Leasehold improvements 9,759 813 8,946
--------------------------------------------------------------------------------------------
$264,822 $19,829 $244,993
--------------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
-------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED - SEE COMPILATION REPORT)
NOTES TO THE PRO FORMA INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
--------------------------------------------------------------------------------
MARCH 31, 2000
--------------------------------------------------------------------------------
4. LONG TERM DEBT
LOAN PAYABLE
Note payable with no specific term of repayment and
bearing interest at 8% per annum $ 36,143
-----------------------------------------------------------------------
5. INCOME TAXES
Income taxes are provided for using the liability method of accounting
in accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." A deferred tax asset or liability is
recorded for all temporary differences between financial and tax
reporting. Deferred tax expense (benefit) results from the net change
during the year of deferred tax assets and liabilities.
