UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
[xx] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
Commission file Number: 000-26493
ANGELAUDIO.COM, INC.
(FORMERLY CORE SYSTEMS, INC.)
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
88-0390251
(I.R.S. Employer Identification Number)
Suite 1200
1130 West Pender Street
Vancouver, British Columbia
V6E 4A4
(Address of principal executive offices)
(604)642-6435
(Issuer's telephone number)
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 10,417,300 common shares as at June
30, 2000
Transitional Small Business Disclosure Format (check one): Yes [ ] No [ X ]
<PAGE>
ANGELAUDIO.COM, INC.
(formerly Core Systems, Inc.)
INDEX
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheet as of June 30, 2000
Statement of Loss and Deficit for the period ended
June 30, 2000
Statements of Cash Flows for the period ended
June 30, 2000
Item 2. Plan of Operations
PART II. OTHER INFORMATION
SIGNATURES
<PAGE>
ANGELAUDIO.COM INC.
(FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
INTERIM CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
DRIVER ANDERSON
CHARTERED ACCOUNTANTS
<PAGE>
DRIVER ANDERSON
CHARTERED ACCOUNTANTS
P.O. BOX 10123 IBM TOWER CLARK ANDERSON INC.
1620 - 701 WEST GEORGIA STREET CYRUS DRIVER
VANCOUVER, B.C. V7Y 1C6 GARY V. ARCA INC.
TEL: (604) 689-2919 FAX: (604) 685-2900
NOTICE TO READER
We have compiled the interim consolidated balance sheet of Angelaudio.com Inc.
(formerly Core Systems, Inc.) as at June 30, 2000 and the interim consolidated
statements of operations, shareholders' equity and cash flow for the nine months
then ended from information provided by management. We have not audited,
reviewed or otherwise attempted to verify the accuracy or completeness of such
information. Readers are cautioned that these statements may not be appropriate
for their purposes.
/S/ DRIVER ANDERSON
DRIVER ANDERSON
Vancouver, BC CHARTERED ACCOUNTANTS
August 11, 2000
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
INTERIM CONSOLIDATED BALANCE SHEET (US DOLLARS)
--------------------------------------------------------------------------------
JUNE 30 2000 1999
--------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash $ 375,522 $ 5,644
Accounts receivable 8,646 -
Deposits and prepaid expenses 65,680 -
--------------------------------------------------------------------------------
449,848 $ 5,644
CAPITAL ASSETS (NOTE 5) 279,687 -
GOODWILL 220,600 -
--------------------------------------------------------------------------------
$ 950,135 $ 5,644
================================================================================
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 98,893 $ -
Loans payable 162,740 -
Due to related parties 178,558 -
--------------------------------------------------------------------------------
440,191 -
LONG TERM DEBT (NOTE 6) 35,555 -
--------------------------------------------------------------------------------
475,746 -
SHAREHOLDERS' EQUITY
SHARE CAPITAL 10,417 3,069
PAID IN CAPITAL 800,883 6,231
DEFICIT (336,911) (3,656)
--------------------------------------------------------------------------------
474,389 5,644
--------------------------------------------------------------------------------
$ 950,135 $ 5,644
================================================================================
APPROVED BY THE DIRECTOR:
/s/Ian Stuart", Director
----------------------------------
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
INTERIM CONSOLIDATED STATEMENT OF OPERATIONS (US DOLLARS)
================================================================================
FOR THE NINE MONTHS ENDED JUNE 30 2000 1999
--------------------------------------------------------------------------------
GENERAL AND ADMINISTRATIVE EXPENSES
Accounting and audit $ 22,517 $ 1,500
Advertising and promotion 31,711 -
Amortization 23,926 -
Bank charges and interest 961 71
Consulting 71,742 -
Foreign exchange 4,371 -
Legal 1,768 -
Licences and fees 12,529 85
Management fees - 2,000
Marketing 17,461 -
Office and miscellaneous 19,145 -
Rent 5,356 -
Salaries and benefits 59,592 -
Travel 58,165 -
--------------------------------------------------------------------------------
Loss for the period $ (329,244) $ (3,656)
================================================================================
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
INTERIM CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (US DOLLARS)
================================================================================
FOR THE NINE MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
ADDITIONAL
COMMON PAID IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance September 30, 1998 - $ - $ - $ -
March, 1999 stock 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)
April, 2000 stock issued
for acquisition of
subsidiary 2,000,000 2,000 -
May, 2000 stock issued
pursuant to a private
placement 3,200,000 3,200 796,800
Net loss for nine months
ended June 30, 2000 (329,244)
--------------------------------------------------------------------------------------------------------------------
Balance June 30, 2000 10,417,300 $ 10,417 $ 800,883 $ (336,911)
====================================================================================================================
</TABLE>
The authorized share capital of the company is 50,000,000 common shares with a
par value of $0.001 per share.
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS (US DOLLARS)
================================================================================
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED JUNE 30 2000 1999
---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Loss for the period $ (329,244) $ (3,656)
Add: Amortization 23,926 -
Changes in non-cash working capital
Deposits and prepaid expenses (51,923) -
Accounts payable and accrued liabilities 28,408 -
----------------------------------------------------------------------------------------------------------------
(328,833) (3,656)
----------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issue of share capital 3,200 3,069
Paid in capital 796,800 6,231
Advances from related parties 55,653 -
----------------------------------------------------------------------------------------------------------------
855,653 9,300
----------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Cash received on acquisition of subsidiary 5,984 -
Acquisition of capital assets (158,915) -
----------------------------------------------------------------------------------------------------------------
INCREASE IN CASH 373,889 5,644
CASH, BEGINNING OF PERIOD 1,633 -
----------------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $ 375,522 $ 5,644
================================================================================================================
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
================================================================================
June 30, 2000
--------------------------------------------------------------------------------
1. MANAGEMENT'S OPINION
In the opinion of management, the accompanying interim consolidated
financial statements contain all adjustments necessary to present
fairly the financial position of the company as of June 30, 2000, and
the results of operations then ended, and the changes in cash for the
nine months then ended. The accompanying interim consolidated financial
statements have been adjusted as of June 30, 2000 as required by Item
310 (b) of Regulation S-B to include all adjustments which in the
opinion of management are necessary in order to make the financial
statements not misleading.
2. INTERIM REPORTING
The results of operations for the nine months ended June 30, 2000 are
not necessarily indicative of the results to be expected for the
remainder of the year.
3. INCORPORATION AND NATURE OF OPERATIONS
The company was incorporated on February 19, 1997 under the laws of the
State of Nevada, USA and changed its name to Angelaudio.com Inc. on
April 15, 2000.
On April 15, 2000, the company acquired all the issued and outstanding
shares of Angelaudio.com Inc., a private company incorporated under the
laws of the state of Nevada, USA in return for the issuance of
2,000,000 common shares out of the treasury of the company, having a
par value of $2,000. Angelaudio.com Inc. subsequently changed its name
to Angelaudio Systems Inc. (ASI)
The acquisition has been accounted for using the purchase method with
the results of operations of ASI included in the consolidated financial
statements from the date of acquisition.
These consolidated financial statements reflect the purchase of net
assets at April 15, 2000 as follows:
Current assets $ 28,386
Capital assets 144,699
Goodwill 220,600
Current liabilities and loans payable (356,480)
Long term debt (35,205)
--------------------------------------------------------------------------------
Total consideration funded by
issuance of 2,000,000 shares $ 2,000
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
================================================================================
June 30, 2000
--------------------------------------------------------------------------------
4. 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 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 at the following
annual rates:
Computer hardware 30% declining balance
Computer software 50% declining balance
Office furniture and equipment 20% declining
balance Website design 30% declining balance
Leasehold improvements 3 year straight line
(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
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) CASH AND EQUIVALENTS
For the purpose of the statement of cash flows, all investments
with a maturity of three months or less are considered to be
cash equivalents. There were no cash equivalents as of June 30,
2000.
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
================================================================================
June 30, 2000
--------------------------------------------------------------------------------
4. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(E) 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.
(F) 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.
(G) GOODWILL
Goodwill is amortized on a straight line basis over a period of
five years.
5. CAPITAL ASSETS
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
2000 1999
---------------------------------------------------------------------------------------
ACCUMULATED NET BOOK NET BOOK
COST AMORTIZATION VALUE VALUE
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Computer hardware $249,764 $ 32,111 $217,653 $ --
Computer software 6,123 765 5,358 --
Office furniture and
equipment 12,707 1,165 11,542 --
Web site design 45,008 7,784 37,224 --
Leasehold
improvements 9,652 1,742 7,910 --
---------------------------------------------------------------------------------------
$323,254 $ 43,567 $279,687 $ --
=======================================================================================
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
ANGELAUDIO.COM INC. (FORMERLY CORE SYSTEMS, INC.)
(A DEVELOPMENT STAGE COMPANY)
(PREPARED WITHOUT AUDIT - SEE NOTICE TO READER)
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (US DOLLARS)
================================================================================
June 30, 2000
-------------------------------------------------------------------------------
6. LONG TERM DEBT
LOAN PAYABLE
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C> <C>
Note payable with no specific term of repayment and
bearing interest at 8% per annum $ 35,555 $ -
============================================================================================
</TABLE>
7. 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.
<PAGE>
PLAN OF OPERATION
Angelaudio.com is an interactive online music distribution service specializing
in the secure delivery of digital "downloadable music files".
Angelaudio.com's mission is to become the preferred destination for online music
sales combined with CD reproduction services for the music industry. Using
software that digitally watermarks files to calculate royalties, Angelaudio.com
is the first online music web site to be in full compliance with the music
industry.
Angelaudio.com will allow the listener to preview and purchase music in the form
of an artist's standard CD or as a compilation of the listeners selections.
Songs can be downloaded to your hard drive and stored in a library system and be
played at anytime or "burned" on a CD and delivered to the purchaser. The
consumer may also make a copy or record the song to a compact disk "one time
only" from the original file received on their own CD-Writer. CD-R's are fast
replacing the CD-ROM as the preferred drive on computers in today's marketplace
due to lowering costs and storage capabilities.
Angelaudio.com uses the worlds most advanced digital technologies and e-commerce
software to assure the most privacy and absolute security available today. In a
growing $40 billion a year music industry, online sales of CD's are projected to
increase annually until overtaking traditional music outlets.
<PAGE>
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
None
Item 3 DEFAULTS UPON SENIOR SECURITIES
None
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5 OTHER INFORMATION
None
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K
The Issuer filed a Form 8K on April 26, 2000 stating:
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.
<PAGE>
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.
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.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELAUDIO.COM, INC.
(formerly Core Systems, Inc.)
Dated: August 14, 2000 Per: /s/ Ian Stuart
--------------------------
Ian Stuart, President and Director
