U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-SB/A1
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file no.
-------------------------
REDMOND CAPITAL CORP.
---------------------
(Name of Small Business Issuer in Its Charter)
Florida N/A
---------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1255 West Pender Street
Vancouver, British Columbia,
Canada V6E 2V1
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (604) 638-1636
Securities to be registered pursuant to Section 12(b) of the Act.
Title of each class Name of each exchange of which registered
None
----------------------------------- -----------------------------------------
----------------------------------- -----------------------------------------
Securities to be registered pursuant to Section 12(g) of the Act.
Common Stock, Par Value $0.001 per share
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(Title of Class)
<PAGE>
TABLE OF CONTENTS
Item Page
PART I
Item 1 Description of Business 1
Item 2 Management's Discussion and Analysis or Plan of Operation 3
Item 3 Description of Property 4
Item 4 Security Ownership of Certain Beneficial Owners and Management 5
Item 5 Directors, Executive Officers, Promoters and Control Persons 6
Item 6 Executive Compensation 7
Item 7 Certain Relationships and Related Transactions 9
Item 8 Description of Securities 9
PART II
Item 1 Market Price of Registrant's Common Equity and Other
Shareholder Matters 11
Item 2 Legal Proceedings 12
Item 3 Changes in and Disagreements With Accountants 12
Item 4 Recent Sales of Unregistered Securities 13
Item 5 Indemnification of Directors and Officers 14
PART F/S
Financial Statements 16
PART III
Item 1 Index to Exhibits 51
Signature Page 51
DOCUMENTS INCORPORATED BY REFERENCE
Documents incorporated by reference: None
<PAGE>
Page 1
Item 1. Description of Business.
Historical Overview of the Company
Redmond Capital Corp. (the "Company") was incorporated on September 12, 1996
under the name "Minex Minerals, Inc." under the laws of the State of Florida,
U.S.A. On February 3, 1999, the Company filed Articles of Amendment effecting
the change of the Company's name to Redmond Capital Corp. The Company's
executive office is located at 1255 West Pender Street, Vancouver, British
Columbia, Canada.
The Company was formerly quoted on the NASD OTC Bulletin Board under the symbol
"REDM". The Company is currently quoted on the National Quotation Bureau Inc.'s
"Pink Sheets" under the symbol "REDME".
The Company was originally organized to pursue opportunities in the exploration
and exploitation of hydrocarbons in North and South America. On July 4, 1997,
the Company, through its subsidiary Minex S.A., acquired a concession permit for
the exploration and exploitation of hydrocarbons on four properties in the Gulf
of San Jorge, Province of Chubut, Argentina. On September 15, 1997, the Company,
through Minex S.A., purchased concession permits for three additional properties
located in the Gulf of San Jorge. During 1998, the Company determined that both
permits were of limited potential and entered into agreements to sell the
majority of their interests in both permits. Currently, the Company retains a 5%
interest in one concession. The Company is no longer actively pursuing
opportunities in the oil and gas sector and its subsidiary Minex S.A. no longer
has any operations.
In light of the Company's change of direction, in February of 1999, the Company
changed its name to Redmond Capital Corp. Since then, the Company has focused
on acquiring start-up businesses that offer substantial growth opportunities to
the Company and its shareholders. As a result of this change in focus, by
agreement dated July 1, 1999, the Company acquired 100% of the outstanding
shares of Sirius Animation Inc. ("Sirius"), a company incorporated under the
laws of the Province of British Columbia, Canada on October 22, 1998. The
Company paid a total purchase price of $400,000 for Sirius satisfied through the
issuance of the 186,048 common shares of the Company's stock to the former
Sirius shareholders. Sirius is a 3-D animation company developing a multi-part,
animated television series entitled "The Elf King". Sirius expects to finish
the first episode of the series in August of 2000. On April 26, 2000 signed a
worldwide distribution agreement (excluding Canada) with Bruder Releasing Inc.
of Santa Monica, California for the marketing and promotion of The Elf King
series.
On July 22, 1999, the Company incorporated a company, Moxy Resources, Inc.
("Moxy"), under the laws of the State of Nevada. At the time, it was
management's intention to spin-off any remaining interests held by Minex S.A. to
the Company's shareholders through Moxy. As of July 17, 2000, Moxy has yet to
be fully organized and has carried on no business. Present management does not
intend to proceed with a spin-off due to the limited potential of the remaining
assets of Minex S.A.
On September 9, 1999, the Company entered into an agreement to acquire 35% of
the shares of RedCell Canada Inc. ("RedCell"), a battery packager and
wholesaler, incorporated on June 15, 1998 under the laws of the Province of
Alberta, Canada. On October 8, 1999, the Company's board of directors approved
a new agreement for the acquisition of 56.31% of the shares of RedCell. Under
the terms of the October agreement, the Company would issue 30,000 shares in the
common stock of the Company for every one percent holding in RedCell. Pursuant
to the agreement, 2,197,045 common shares of the Company were placed in trust
<PAGE>
Page 2
with the Company's attorney. The October 8, 1999 agreement was superseded by a
February 7, 2000 agreement whereby the Company agreed to acquire 100% of the
outstanding shares of RedCell on the same terms as the October 8, 1999
agreement. Additionally, certain loans due to RedCell shareholders in the
amount of $4,153,954 would be cancelled by the issuance of 923,101 warrants
allowing the holder to purchase one common share of the Company's stock for
$4.50. The acquisition of RedCell as contemplated by the February 7, 2000
agreement has yet to close as a condition of closing requires that the Company
be a reporting issuer. As of July 17, 2000, the Company had not yet become a
reporting issuer.
As of July 17, 2000, the Company has 21 full-time employee located at the
Company's headquarters in Vancouver, British Columbia. Four employees are
corporate staff directly employed by the Company. Another 17 employees are
animators and associated staff working for the Company's subsidiary Sirius.
Sirius Animation
Sirius has only one product at the present time - The Elf King series. Sirius
is currently finishing off the first episode of the series. Completion of
episode one is scheduled for August 2000. This 30 minute animated television
show features high-definition three-dimensional animation and a storyline based
on a Brother's Grimm fairytale. The creative inspiration behind Sirius is Ross
Belyea, who developed the original concept and script and was a founder of
Sirius in 1998. The Company has already signed an exclusive worldwide
distribution agreement (the agreement includes all territories except Canada)
with Bruder Releasing Inc. of Santa Monica, California. Upon completion of the
first episode, the Company, through its distributor, intends to market and
pre-sell the entire 13 episode series. Currently, the potential customers for
the show include the major American television networks (Disney, Fox, NBC and
CBS) as well as foreign broadcasters in Europe and Asia. Generally, series are
sold on a geographic basis with the United States market representing the
greatest financial opportunity.
The only intellectual property owned by the Company is the script to the first
episode developed by Mr. Belyea which was acquired by Sirius in 1998. The
transfer of the right to the first script also provides Mr. Belyea the right of
first refusal to produce, write and direct and manage the preproduction,
production and post-production of any and all existing or planned productions
with respect to any work based on The Elf King series or a Brother's Grimm
anthology by the Company.
Competitive Business Conditions
The animation and film business is highly competitive. The marketplace is
composed of several large studios including Disney, Pixar, Dreamworks, and
Cinar, as well as smaller independent studios similar to Sirius. Given the
relative size of Sirius to the major players, the Company is a minor player that
is limited in its ability to recruit and retain staff. Currently the demand for
animators exceeds supply and there is good mobility of workers. Many of the
Company's competitors have greater name recognition and resources than does the
Company. There are no assurances that the Company will be able to successfully
compete or that the projects will be viable. Additionally, the Company is
disadvantaged by the fact that it only has one property under development.
Should the first episode of The Elf King be difficult to sell, it is unlikely
the Company will be able to find additional funding to continue operations.
Finally, given the rapid technological advances in computer animation and the
long lead times to completion of a project, Sirius faces the risk that by the
<PAGE>
Page 3
time The Elf King series is ready for pre-sale its animation will be viewed as
obsolete.
Government Approval
Currently, Sirius' products are not subject to any government approval or
regulation except for the classification of its films regarding their
suitability for viewing by different age groups. Management expects that The
Elf King series will be classified as being suitable for viewing by all ages.
Effects of Existing or Probable Government Regulations
There are no existing or probable government regulations that materially affect
Sirius' business. Currently, however, there are government grants and taxation
considerations that favour cinematic productions that are classified as
Canadian. Currently, due to Sirius' ownership by an American company, Sirius
does not qualify for such grants or preferential tax treatment.
Research and Development Activities
Since its inception in 1998, Sirius has expended no resources on research and
development.
Item 2. Management's Discussion and Analysis or Plan of Operation
The following sets out the Company's plans for the year 2000:
- Market the completed first episode of The Elf King series and secure
additional financing for the completion of the remaining 12 episodes by
Sirius;
- Close the acquisition of RedCell as contemplated by the February 7, 2000
agreement; and
- The Company has no plans for either Minex S.A. or Moxy.
The Company expects to use episode one of The Elf King series to generate
sufficient advances in order to allow the financing of the completion of the
other 12 episodes without the use of outside financing sources. Given the
Company's current financial situation, without significant revenues in the near
future, the Company will only be able to satisfy its cash requirements for the
next three months. After such time, the Company will have to raise substantial
additional funds through either debt or equity financing in order to continue
operation over the next twelve months. At the current time, management does not
know of any probable sources of this funding. The Company's cash requirements
will increase substantially when its acquisition of RedCell is complete.
The Company does not expect to have any significant purchases or sales of plant
and/or equipment in the next twelve months. The Company does not intend to
expend any resources on research and development during the next twelve months.
The Company does however anticipate hiring of an additional 5 to 10 new
employees when the acquisition of RedCell closes.
<PAGE>
Page 4
Item 3. Description of Property
Business Offices
The Company's principal business office is located at 1255 West Pender Street,
Vancouver, British Columbia. Pursuant to an annual lease entered into on
December 15, 1999, the Company leases approximately 3,700 square feet of office
space at a cost of approximately $9,000 ($13,300 Canadian dollars) per month.
The lease is cancelable by the lessor upon receipt of three months written
notice. The space is used by the corporate management and for computer
animation.
Interests In Real Estate
On July 4, 1997, the Company completed the purchase of a concession permit for
the exploitation, complementary exploration, and development of hydrocarbons on
lands known as Mina del Carmen, Territorio del Chubut, Colonia Escalante,
Distrito Minera De Comodoro Rivadavia, Catco Exp. 0 - 1828 - 21, Superficie 1998
has., located in the Gulf of San Jorge, Province of Chubut, ArgentinaThe lands
consist of 4 separate oil and gas concessions totalling 100 sq. km. and are
known as Mina Maria Ines, Mina Catalina, Mina Carmen Dos, and Mina Marcelina.
The purchase price was $100,000 with $50,000 due and payable on December 31,
1999. A second payment of $50,000 was due and payable on December 31, 1998. At
December 31, 1998, the Company determined that the concessions were of limited
potential and have included in operations a write-off of $75,000. During 1999,
the Company received $25,000 for the sale of these concessions.
On September 15, 1997, the Company purchased of a concession permit for the
exploitation, complementary exploration, and development of hydrocarbons on
lands known as Canadon Pilar, Pico Salamanca and Mina Satamanca, all located in
the Gulf of San Jorge, Province of Chubut, Argentina. The purchase price was
$608,000, consisting of cash in the amount of $400,000 and the issuance of
260,000 shares of the Company's common stock at $0.80 per share, or $208,000.
By the terms of the contract, $100,000 was due and payable on December 31, 1999.
Another payment of $100,000 was due on December 31, 1998. During 1998, the
Company determined that the concessions were of limited potential and have
included in operations a write-off of $339,267. During 1998, the Company
received $150,000 for the partial sale of the concessions. During 1999 the
Company received $200,000 for the sale of these concessions.
At the current time, the Company has no other investments or interests in real
estate, real estate mortgages, securities of or interests in persons primarily
engaged in real estate activities.
Intellectual Property
Pursuant to an agreement dated August 30, 1998 between A. Ross Belyea and Sirius
Animation Inc., the Company owns all the rights in regard to the exploitation
and ownership to the screenplay titled "The Elves & The Shoemaker", the first in
a multiple episode three dimensional animated television program. The
screenplay was transferred to the Sirius Animation Inc. at Mr. Belyea's
historical cost of zero.
The Company has no other interests in property except as disclosed as above.
<PAGE>
Page 5
Item 4. Security Ownership of Certain Beneficial Owners and Management
As of July 17, 2000, the were no shareholders known to the Company to be the
beneficial owner of more than five percent of any class of the Company's shares.
Security Ownership of Management
The following table sets forth certain information with respect to the
beneficial ownership of each officer and director, and of all directors and
executive officers as a group as of November 17, 2000.
Name and Total Amount
Address of of Beneficial Common Stock Percent
Beneficial Ownership Stock Options of Class1
Owner
--------------------------------------------------------------------------------
Clifford Wilkins 0 0 0 *
10 Kestral Close
Ewshot, Farnham
Surrey, UK
John Lagadin 50,000 50,000 0 *
Suite 750,
715-5th Avenue SW,
Calgary, AB
Canada
Richard Smith 0 0 0 *
Henville Building
Main Street,
Charlestown,
Nevis,
West Indies
Maurice Minivielle 0 0 0 *
59 Edcath Road NW,
Calgary, AB
Canada
Rod Reum 7,000 7,000 0 *
P.O. Box 10
140 Arlayne Road
Kaleden, BC
Canada
All officers and directors (as a group of five persons) *
Notes:
1 As of July 17, 2000 there were 16,857,567 common shares of the Company's
stock issued and outstanding.
* Indicates less than 1% Ownership.
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Page 6
Item 5. Directors, Executive Officers, Promoters and Control Persons
The following table identifies the Company's directors and executive officers
and certain other key employees as of July 17, 2000. Directors are elected at
the Company's annual meeting of stockholders and hold office until their
successors are elected and qualified. The Company's officers are appointed
annually by the Board of Directors and serve at the pleasure of the Board. The
date of the Company's 1999 Annual General Meeting of Stockholders has not yet
been set.
Name Position Held Term as Director Expires
---- ------------- ------------------------
Clifford Wilkins Chairman 2000
Richard Smith President/Director 2000
John Lagadin Director 2000
Maurice Minvielle Executive Vice-President 2000
Rod Reum Chief Financial Officer
A. Ross Belyea Key Employee/President - Sirius Animation
Clifford Wilkins has been Chairman of the Company's Board of Directors since
February 8, 2000. Mr. Wilkins, a British citizen, has over 35 years' experience
in commercial and international banking. Since 1996, Mr. Wilkins has been the
Managing Director of the First Nevisian Group, of the West Indies.
Richard Smith has been a Director of the Company since February 10, 2000 and
President and Secretary since October 2, 2000. Mr. Smith, a British citizen, is
a member of the Securities Institute of London, England and a member of the
London Stock Exchange since 1976. Since 1995, Mr. Smith has been a partner of
First Nevisian Stockbrokers Ltd., a full-service brokerage firm based in the
West Indies.
John Lagadin has been a Director of the Company since February 10, 2000. Mr.
Lagadin has over 30 years' experience in the oil industry. From 1986 to 1996,
Mr. Lagadin was the President and CEO of Direct Energy Marketing Limited, the
largest independent marketer of natural gas in Canada. Since 1996, Mr. Lagadin
has been an independent businessman providing consulting services to the oil
sector in Canada and the United States through his company GeoScope Exploration
Technologies, Inc. Mr. Lagadin is the President and Director of GeoScope
Exploration Technologies, Inc.
Maurice Minvielle has been the Executive Vice-President of the Company since
March 27, 2000. From 1996 to 1999 Mr. Minvielle was a Finance Team Leader for
Schlumberger Ltd. based in Paris, France. From 1995 to 1996, Mr. Minvielle was
the Vice-President of Finance for Intera Information Technologies Ltd. of
Lakewood, Colorado. Mr. Minvielle is a Chartered Accountant and holds a
Bachelor of Science degree in economics and a Master of Business Administration
degree from the University of Western Ontario.
Rod Reum has been the Chief Financial Officer of the Company since June 1, 2000.
For the past five years, Mr. Reum has been the co-owner and CEO of Reum
Contracting Ltd., a heavy equipment contractor specializing in subdivision
development, road construction and pipeline installation. Mr. Reum is also the
<PAGE>
Page 7
President of Belt Rebuilders Inc., the only Canadian-based rebuilder of heavy
industrial conveyor belting used in the mining, aggregate and forest industries.
Mr. Reum has a Bachelor of Commerce degree from the University of Alberta and is
a Certified General Accountant.
Ross Belyea has been the President of Sirius Animation since February 10, 2000.
Mr. Belyea is a founder of Sirius Animation and the creator of "The Elf King"
animated series. Prior to starting Sirius Animation in 1998, Mr. Belyea worked
as an animator and special effects supervisor on a number of projects for
Vancouver-based Motion Works. Mr. Belyea is a graduate of the British Columbia
Institute of Technology with a double diploma in Administrative Management and
Computer Systems Management. In addition, in 1995, Mr. Belyea finished Advanced
Animation Level III, the highest level of Alias software training.
Mr. Minvielle, Mr. Reum and Mr. Belyea all work for the Company on a fulltime
basis. All other directors and officers of the Company work on a part-time,
advisory basis for the Company and are not compensated for their work.
Family Relationships
There are no family relationships among directors, executive officers, or
persons nominated or chosen by the Company to become directors or executive
officers.
Involvement in Certain Legal Proceedings
None of the officers, directors or key employees has been involved in any legal
proceedings during the past five years that are material to an evaluation of the
ability or integrity of any director, officer or key employee of the Company.
Item 6. Executive Compensation
The following table sets forth compensation paid or accrued by the Company for
fiscal 1999 and for the period to the end of fiscal 2000, to the Company's Chief
Executive Officer and shows compensation paid to all other officers of the
Company. No Directors of the Company receive compensation for their services.
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Page 8
Summary Compensation Table
--------------------------------------------------------------------------------
Annual Compensation
--------------------------------------------------------------------------------
Name and Other Annual LTIP
Principal Fiscal Year Annual Salary Bonus Compensation Payouts
Position Ended ($) ($) ($) ($)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Kevan Garner1 12/31/00 0 0 0 0
--------------------------------------------------------------------------------
President 12/31/99 0 0 0 0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Carson Walker2
--------------------------------------------------------------------------------
Secretary/
Treasurer 12/31/00 0 0 0 0
--------------------------------------------------------------------------------
12/31/99 0 0 0 0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Byron Loewen3 12/31/00 0 0 0 0
--------------------------------------------------------------------------------
CEO/Secretary
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Maurice
Minvielle4 12/31/00 100,000 0 0 0
--------------------------------------------------------------------------------
Executive Vice-
President
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Rod Reum5 12/31/00 68,000 0 0 0
--------------------------------------------------------------------------------
Chief Financial
Officer
--------------------------------------------------------------------------------
Notes:
1 Kevan Garner served as the Company's President from June 9, 1997 to
February 8, 2000.
2 Carson Walker served as the Company's Secretary and Treasurer from November
27, 1998 to February 8, 2000.
3 Byron Loewen served as the Company's Secretary from February 10, 2000 to
October 2, 2000 and the Company's CEO from May 27, 2000 to October 2, 2000.
Mr. Loewen received no compensation from the Company for his services.
4 Maurice Minvielle has served as the Company's Executive Vice-President
since March 27, 2000. Mr. Minvielle receives annual salary of $100,000.
5 Rod Reum has served as the Company's Chief Financial Officer since June 1,
2000. Mr. Reum receives annual salary of approximately $68,000 ($100,000
Canadian dollars).
6 Richard Smith has served as the Company's President and Secretary since
October 2, 2000. Mr. Smith receives no compensation from the Company for his
services.
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Page 9
Options Outstanding
The Company has had three stock option plans that provide for the granting of
stock options to officers and key employees. No shares have been exercised
under any of the plans. All three Stock Option Plans expired on December 31,
1999.
Item 7. Certain Relationships and Related Transactions
On February 7, 2000 the Company entered into an agreement to acquire 100% of the
outstanding shares of a private company, RedCell Canada Inc. from RedCell Canada
Inc.'s four corporate shareholders. Under the terms of the agreement, the
Company agreed to issue common shares in the stock of the Company in the amount
of 30,000 common shares of the Company for every one percent of the shares held
in RedCell Canada Inc. Additionally, the Company agreed to purchase all
outstanding shareholder loans of RedCell Canada Inc. by the issuance of warrants
for the purchase of the Company's common stock having an exercise price of
$4.50. As of July 17, 2000, the purchase of RedCell Canada Inc. has not closed
as it was a term of the agreement that the Company would be a fully reporting
issuer.
One of the Company's directors, Mr. John Lagadin, and one of the Company's
officer's, Mr. Rod Reum, have a direct interest in the RedCell purchase due to
their shareholdings in two of RedCell Canada Inc.'s corporate shareholders.
Pursuant to the terms of the February 7, 2000 agreement, Mr. Reum will directly
or indirectly receive 63,750 shares of the Company. Mr. Lagadin will receive
111,989 shares of the Company.
On March 31, 2000, the Company entered into a loan agreement with First Nevisian
Holdings Ltd. ("First Nevisian") a venture capital firm. The loan provides up
to $3,000,000 of financing to the Company for ongoing operations. As additional
compensation for the loan, the Company issued a convertible debenture to First
Nevisian Holdings Ltd. whereby First Nevisian Holdings Ltd. may, at its sole
option, elect to convert any or all amount of principal and interest outstanding
on the loan for common shares of the Company at a conversion price of $2.00 up
until March 31, 2003. Mr. Clifford Wilkins, the Company's Chairman, is also the
Managing Director of the First Nevisian Group, a related party to First Nevisian
Holdings Ltd.
There are no other relationships with any person under consideration for
nomination as a director or appointment as an executive officer of the Company.
Item 8. Description of Securities.
The Company's articles of incorporation currently provide that the Company is
authorized to issue 50,000,000 shares of common stock with a par value of $0.001
per share and 1,000,000 preferred stock with a par value of $0.10 per share. As
of July 17, 2000, 16,857,567 common shares were outstanding. As of July 17,
2000, no preferred shares were outstanding.
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Page 10
Common Stock
Each holder of record of the Company's common stock is entitled to one vote per
share in the election of the Company's directors and all other matters submitted
to the Company's stockholders for a vote. Holders of the Company's common stock
are also entitled to share ratably in all dividends when, as, and if declared by
the Company's Board of Directors from funds legally available therefore, and to
share ratably in all assets available for distribution to the Company's
stockholders upon liquidation or dissolution, subject in both cases to any
preference that may be applicable to any outstanding preferred stock. There are
no preemptive rights to subscribe to any of the Company's securities, and no
conversion rights or sinking fund pro-visions applicable to the common stock.
Neither the Company's articles of incorporation nor its bylaws provide for
cumulative voting. Accordingly, persons who own or control a majority of the
shares outstanding may elect all of the Company's directors, and persons owning
less than a majority could be foreclosed from electing any.
Preferred Stock
On December 4, 1997, the Company amended its articles of incorporation to
increase its authorized capital by 1,000,000 preferred shares at a par value of
$0.10 per share. As of July 17, 2000, the Company has issued no preferred
shares. The articles and bylaws of the Company do not establish any special
restrictions or rights of the preference shares.
Debt Securities
On March 31, 2000, the Company entered into a loan agreement with First Nevisian
Holdings Ltd. a venture capital firm. Under the terms of the loan agreement,
First Nevisian Holdings Ltd. undertakes to advance up to $3,000,000 with
interest accruing annually at a rate of 10% and payable quarterly. As
additional consideration for the loan, the Company has issued a convertible
debenture allowing First Nevisian Holdings Ltd. to convert the outstanding
principal and interest into common shares of the capital stock of the Company at
a conversion price of $2.00 per share. Under the terms of the convertible
debenture, First Nevisian Holdings Ltd. may convert, at its sole option, any or
all of the principal and interest outstanding on the loan up until March 31,
2003.
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Page 11
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters
Market Information
Currently, the Company's shares are quoted on the National Quotation Bureau,
Inc.'s "Pink Sheets" under the symbol of "REDME". Formerly, the Company's
shares were quoted on the NASD OTC Bulletin Board under the symbol "REDM". After
meeting its reporting requirements under the Exchange Act of 1934, the Company
once again intends to have its shares quoted on the OTC Bulletin Board.
IPO Capital Corp. of Vancouver, British Columbia provided the following price
information.
High and Low Sales (Bid) Prices for each quarter within
the last two fiscal years.*1
HIGH LOW
(Price per Share $) (Price per Share $)
March 1998 84 3/8 15 5/9
June 1998 50 18 3/4
September 1998 37 8
December 1998 13 1/2
March 1999 2 1/4
June 1999 4 3/4 1
September 1999 1 13/16 17/32
December 1999 1 7/16 5/16
March 2000 26/32 5/32
June 2000 0.48 0.18
* The quotations reflect inter-dealer prices, without mark-up, mark-down or
commission and may not represent actual transactions.
1 Prices reflect reverse stock split (100:1) that occurred on January 25,
1999.
Holders
The number of record holders of the Company's common stock as of July 17, 2000
is 114.
Dividends
The Company has never paid cash dividends on its common stock and does not
intend to do so in the foreseeable future. The Company currently intends to
retain any earnings for the operation and development of its business.
Transfer Agent
The Company's transfer agent is Holladay Stock Transfer, Inc. 2939 North 67th
Place, Unit C, Scottsdale, Arizona 85251, U.S.A.
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Page 12
Item 2. Legal Proceedings
As of November 17, 2000, the Company is not a party to any pending legal
proceedings.
Item 3. Changes in and Disagreements with Accountants
From inception to November 17, 2000, the Company's Auditors were Clancy and Co.,
P.L.L.C. of 2601 E. Thomas Rd., Ste. 110, Phoenix, Arizona 85016. Such firm's
audited financial statements for the period from inception to December 31, 1999,
did not contain any adverse opinion or disclaimer, nor were there any
disagreements between them and the management of the Company.
Item 4. Recent Sales of Unregistered Securities
From inception through November 17, 2000, the Company has issued and/or sold the
following unregistered securities. Such transactions were exempt from
registration by virtue of Rule 504 of Regulation D promulgated under the
Securities Act of 1933. Such transactions were also exempt from registration by
virtue of the fact that they did not involve a public offering of securities
and/or occurred outside of the United States.
Note that the Company effected a reverse stock split of 100:1 on January 25,
1999. Under column "Number of Shares" numbers in brackets indicates the current
equivalent number of shares.
==================================================================
Number of Shares Date of Issue Price Per Share
==================================================================
3,000,000 December 1, 1996 Issued for Services
(30,000) at $.001 per share
------------------------------------------------------------------
200,000 December 31, 1996 Issued for Cash at
(2,000) $0.25
------------------------------------------------------------------
6,600,000 May 1997 Issued for Services
(66,000) at $0.05 per share
------------------------------------------------------------------
800,000 August 1997 Issued for Cash at
(8,000) $0.40 per share
------------------------------------------------------------------
550,000 August 1997 Issued for Cash at
(5,500) $0.60 per share
------------------------------------------------------------------
260,000 September 19, 1997 Issued for Services
(2,600) at $0.80 per share
------------------------------------------------------------------
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Page 13
------------------------------------------------------------------
175,000 May 12, 1998 Issued for Services
(1,750) at $0.20 per share
------------------------------------------------------------------
1,395,000 May 12, 1998 Issued to convert
(13,950) debt to equity at
$0.20 per share
------------------------------------------------------------------
70,000 August 19, 1998 Issued for Services
(700) at $0.50 per share
------------------------------------------------------------------
493,125 August 24, 1998 Issued to convert
(4,931) debt to equity at
$0.20 per share
------------------------------------------------------------------
125,000 January 25, 1999 Issued as deposit on
contract at $1.00
per share
------------------------------------------------------------------
5,000,000 February 17, 1999 Issued for Cash at
$0.01 per share
------------------------------------------------------------------
250,000 April 7, 1999 Issued for Cash at
$0.01 per share
------------------------------------------------------------------
5,250,000 April 7, 1999 Issued pursuant to
the conversion of
warrants exercisable
at $0.02 per share
------------------------------------------------------------------
113,000 April 19, 1999 Issued for Services
at $1.00 per share
------------------------------------------------------------------
300,000 April 19, 1999 Issued for Services
at $1.00 per share
------------------------------------------------------------------
5,000 May 10, 1999 Issued for Services
at $3.00 per share
------------------------------------------------------------------
21,000 June 14, 1999 Issued for Services
at $1.00 per share
------------------------------------------------------------------
50,000 June 28, 1999 Issued for Services
at $0.67 per share
------------------------------------------------------------------
186,088 July 1, 1999 Issued in exchange
for acquisition of
Sirius Animation Inc.
------------------------------------------------------------------
2,197,045 November 22, 1999 Issued and placed
in trust in regard
to agreement to
acquire RedCell
Canada Inc.
------------------------------------------------------------------
3,250,000 November 30, 1999 Issued as collateral
on contract with
Galaxy Motor Sports
at $1.00 per share
------------------------------------------------------------------
<PAGE>
Page 14
Item 5. Indemnification of Directors and Officers
Section 607.0850 of the Florida Business Corporation Act allows the Company to
indemnify any person who was or is a party to any proceeding (other than an
action by, or in the right of, the corporation), by reason of the fact that he
or she is or was a director, officer, employee or agent of the corporation or is
or was serving at the request of the corporation as director, officer, employee,
or agent of another corporation, partnership, joint venture, trust or other
enterprise against liability incurred in connection with such proceeding,
including any appeal thereof, if he or she acted in good faith and in a manner
he or she reasonably believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
The Company's bylaws require that the Company indemnify every person who is or
was a director or officer of the Corporation to fullest extent permitted or
authorized by current or future legislation or judicial or administrative
decision against all fines, liabilities, costs and expenses, including
attorneys' fees, arising out of his or her status as a director, officer, agent,
employee or representative of the Company.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers, and controlling persons of the Company
pursuant to the foregoing pro-visions or otherwise, the Company has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in such act, and is
therefore unenforceable.
Finally, the Company's bylaws authorizes the Company to maintain insurance, at
its expense, to protect itself and all officers and directors against fines,
liabilities, costs and expenses, whether or not the Company would have the legal
power to indemnify them directly against such liability. As of July 17, 2000,
the Company maintained no such insurance coverage.
<PAGE>
Page 15
PART F/S
The following financial statements are filed with this Form 10-SB: Page No.
--------
Accountant's Report 16
Consolidated Financial Statements of Redmond Capital Corp. and Subsidiaries 17
Consolidated Balance Sheet as of December 31, 1999 and December 31, 1998 17
Consolidated Statements of Operations for the Years Ended December 31,
1999, 1998 and the Period From Inception (September 12, 1996) to
December 31, 1999 18
Consolidated Statement of Stockholders' Equity for the Period From
Inception (September 12, 1996) to December 31, 1999 19
Consolidated Statement of Cash Flows for the Years Ended December 31,
1999 and 1998, and for the Period From Inception (September 12, 1996)
to December 31, 1999 26
Notes to the Consolidated Financial Statements 28
<PAGE>
Page 16
INDEPENDENT AUDITORS' REPORT
Board of Directors
Redmond Capital Corp.
Vancouver, B.C. V6E 2V1
We have audited the accompanying consolidated balance sheet of Redmond Capital
Corp. (formerly Minex Minerals, Inc.) (A Development Stage Company), (the
Company), as of December 31, 1999 and 1998, and the related and the related
consolidated statement of operations, changes in stockholders' equity, and cash
flows for the years then ended, and for the period from inception (September 12,
1996) 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 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of the
Company at December 31, 1999 and 1998, and the results of their consolidated
operations and their consolidated cash flows for the periods indicated, 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 1 to the
financial statements, The Company is a development stage company as defined in
Financial Accounting Standards Board Statement No. 7. The Company has incurred
significant net losses in recent years. The Company is devoting substantially
all of its present efforts in establishing a new business and planned principal
operations have not commenced. These factors raise substantial doubt about its
ability to continue as a going concern. These financial statements do not
include any adjustments that might result form the outcome of this uncertainty.
By: /s/ Clancy and Co., P.L.L.C.
Phoenix, Arizona
April 25, 2000
<PAGE>
Page 17
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 and 1998
ASSETS 1999 1998
---- ----
Current Assets
Cash $ 0 $ 3,647
Inventories (Note 3) 255,627 0
Due From Related Parties (Note 6) 0 128,265
--------------------------
Total Current Assets 255,627 131,912
Property and Equipment, Net (Note 4) 115,666 9,337
Other Assets
Investments - Oil and Gas Properties (Note 6) 0 163,733
--------------------------
Total Assets $ 371,293 $ 304,982
==========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Checks Issued in Excess of Cash $ 829 $ 0
Accounts Payable (Note 5) 263,610 150,000
Capital Lease Obligation, Current Portion (Note 7) 23,924 0
Due to Related Parties (Note 6) 414,939 0
--------------------------
Total Current Liabilities 703,302 150,000
Long-Term Liabilities
Capital Lease Obligation, Noncurrent Portion
(Note 7) 53,639 0
--------------------------
Total Liabilities 756,941 150,000
Stockholders' Equity
Common Stock: $0.001 Par Value, 50,000,000
Authorized, and Outstanding, 11,410,512 and
135,434, respectively 11,411 136
Additional Paid In Capital 2,690,174 1,688,489
Loss Accumulated During The Development Stage (3,025,111) (1,533,643)
--------------------------
Total Stockholders' Equity (A Deficit) (385,648) 154,982
--------------------------
Total Liabilities and Stockholders' Equity $ 371,293 $ 304,982
==========================
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 18
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE PERIOD
FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
Inception
(September
Year Ended Year Ended 12, 1996) To
December 31, December 31, December 31,
1999 1998 1999
---- ---- ----
Revenues $ 0 $ 0 $ 0
Expenses
General and Administrative (1,180,594) (489,064) (2,347,174)
---------- ---------- ----------
Operating Loss (1,180,594) (489,064) (2,347,174)
Other Income (Expense)
Interest Income 0 0 2,204
Write-Off Goodwill of
Subsidiary Acquired (185,874) 0 (185,874)
Write-Down of Mining Claims
(Note 5) 0 (369,267) (369,267)
Write-Off of Deposit on
Contract (Note 4) (125,000) 0 (125,000)
---------- ---------- ----------
Total Other Income (Expense) (310,874) (369,267) (677,937)
---------- ---------- ----------
Net Loss Available to
Common Stockholders $(1,491,468) $ (858,331) $(3,025,111)
========== ========== ==========
Basic Loss Per Common Share $ (0.17) $ (6.87) $ (0.34)
========== ========== ==========
Basic Weighted Average Common
Shares Outstanding 8,980,895 124,994 8,980,895
========== ========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 19
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Loss
Accumulated Accumulated
Preferred Preferred Common Common Additional During the Other
Stock Stock Stock Stock Paid In Development Comprehensive
Shares Amount Shares Amount Capital Stage Income/(Loss) Total
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock For Services
Rendered as of December
1, 1996 30,000 $ 30 $ 2,970 $ $ 3,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock For Cash
Through December
31, 1996 2,000 2 49,998 50,000
----------------------------------------------------------------------------------------------------------------------------------
Loss From Inception
(September 12, 1996)
Through December 31,
1996 (2,985) (2,985)
----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31,
1996 0 0 32,000 32 52,968 (2,985) 0 50,015
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Services
Per Offering Memorandum
Dated April 19,
1997, at $0.05 Per Share 66,000 66 329,934 330,000
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 20
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Loss
Accumulated Accumulated
Preferred Preferred Common Common Additional During the Other
Stock Stock Stock Stock Paid In Development Comprehensive
Shares Amount Shares Amount Capital Stage Income/(Loss) Total
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock for Services
Per Offering Memorandum
Dated August 19,
1997, at $0.40 Per Share 8,000 8 319,992 320,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Services
Per Offering Memorandum
Dated August 28,
1997, at $0.60 Per Share 5,500 6 329,994 330,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common Stock
in Exchange for Partial
Payment of Oil and Gas
Properties on September
19, 1997 2,500 2 199,998 200,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common Stock
for Services Rendered as
Finder's Fee For Oil and
Gas Properties on September
19, 1997 100 0 8,000 8,000
----------------------------------------------------------------------------------------------------------------------------------
Fractional Shares
----------------------------------------------------------------------------------------------------------------------------------
Loss, Year Ended December
31, 1997 (672,327) (672,327)
----------------------------------------------------------------------------------------------------------------------------------
Balance, December 31,
1997 0 0 114,100 114 1,240,886 (675,312) 0 565,688
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 21
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Loss
Accumulated Accumulated
Preferred Preferred Common Common Additional During the Other
Stock Stock Stock Stock Paid In Development Comprehensive
Shares Amount Shares Amount Capital Stage Income/(Loss) Total
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Issuance of Common
Stock for Services
Rendered at $0.20
Per Share, May 12,
1998 1,750 2 34,998 35,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Services
Per Offering Memorandum,
at $0.05 Per
Share, May 12, 1998 8,120 8 162,392 162,400
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Services
Per Offering Memorandum,
at $0.05 Per
Share, May 12, 1998 5,830 6 116,594 116,600
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Services
Rendered at $0.50
Per Share, August 19,
1998 700 1 34,999 35,000
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 22
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Loss
Accumulated Accumulated
Preferred Preferred Common Common Additional During the Other
Stock Stock Stock Stock Paid In Development Comprehensive
Shares Amount Shares Amount Capital Stage Income/(Loss) Total
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock for Services
Per Offering Memorandum,
at $0.05 Per
Share, August 24, 1998 4,931 5 98,620 98,625
----------------------------------------------------------------------------------------------------------------------------------
Fractional Shares 3
----------------------------------------------------------------------------------------------------------------------------------
Loss, Year Ended
December 31, 1998 (858,331) (858,331)
----------------------------------------------------------------------------------------------------------------------------------
Balance, December
31, 1998 0 0 135,434 136 1,688,489 (1,533,643) 0 154,982
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock as Deposit on
Contract at $1.00
Per Share, January 25,
1999 125,000 125 124,875 125,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock Under Private
Placement Memorandum for
Cash at $0.01
Per Share, February
17, 1999 5,000,000 5,000 45,000 50,000
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 23
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Loss
Accumulated Accumulated
Preferred Preferred Common Common Additional During the Other
Stock Stock Stock Stock Paid In Development Comprehensive
Shares Amount Shares Amount Capital Stage Income/(Loss) Total
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Issuance of Common
Stock for Services
Rendered Under Private
Placement Memorandum at
$0.01 Per Share, April
7, 1999 250,000 250 2,250 2,500
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Conversion
of Warrants for Services
Rendered Under Private
Placement Memorandum at
$0.02 Per Share, April
7, 1999 5,250,000 5,250 99,750 105,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Services
Rendered at $1.00 Per
Share, April 19,
1999 388,000 388 387,612 388,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Services
Rendered at $1.00 Per
Share, May 10, 1999 5,000 5 14,995 15,000
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 24
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
Loss
Accumulated Accumulated
Preferred Preferred Common Common Additional During the Other
Stock Stock Stock Stock Paid In Development Comprehensive
Shares Amount Shares Amount Capital Stage Income/(Loss) Total
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock for Services
Rendered at $1.00
Per Share, June
14, 1999 21,000 21 20,979 21,000
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock for Services
Rendered, at $0.67
Per Share, June 18,
1999 50,000 50 33,450 33,500
----------------------------------------------------------------------------------------------------------------------------------
Issuance of Common
Stock in Exchange for
100% Acquisition of
Subsidiary, July 1,
1999 186,088 186 272,774 272,960
----------------------------------------------------------------------------------------------------------------------------------
Other Comprehensive
Income (Loss):
Translation Adjustments (62,122) (62,122)
----------------------------------------------------------------------------------------------------------------------------------
Loss, Year Ended
December 31, 1999 (1,491,468) (1,491,468)
----------------------------------------------------------------------------------------------------------------------------------
Balance, December
31, 1999 0 $ 0 11,410,522 $ 11,411 $2,690,174 $(3,025,111) $ (62,122) $(385,648)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 25
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE
PERIOD FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
Inception
(September
Year Ended Year Ended 12, 1996) To
December 31, December 31, December 31,
1999 1998 1999
---- ---- ----
Cash Flows From Operating
Activities
Net Loss $(1,491,468) $ (858,331) $(3,025,111)
Common Stock Issued for
Services 565,000 164,865 1,062,865
Common Stock Issued for
100% Acquisition of
Subsidiary 272,960 0 272,960
Depreciation and
Amortization 16,158 2,352 20,481
Write-Off of Deposit
on Contract 125,000 0 125,000
Write-Down of Oil
and Gas Properties 0 369,267 369,267
Translation Adjustments (62,122) 0 (62,122)
Adjustments to Reconcile
Net Loss to Net Cash
Provided By (Used In)
Operating
Activities
Changes in Assets and
Liabilities
(Increase) Decrease in
Inventories (255,627) 0 (255,627)
Increase (Decrease) in
Accounts Payable 113,610 0 113,610
----------------------------------------------
Total Adjustments 774,979 536,484 1,646,435
----------------------------------------------
Net Cash Provided By (Used
In) Operating Activities (716,489) (321,847) (1,378,677)
Cash Flows From Investing
Activities
Acquisition of Property
and Equipment (40,713) (3,801) (54,373)
Proceeds From the Sale
of Oil and Gas Properties 163,733 175,000 338,733
Purchase of Oil and Gas
Properties 0 0 (350,000)
Net Cash Flows Provided By
(Used In) Investing
Activities 123,020 171,199 (65,640)
Cash Flows From Financing
Activities
Checks Issued in Excess
of Cash 829 (200) 829
Principle Payments On
Capital Lease
Obligations (4,212) 0 (4,212)
Proceeds From Sale of
Common Stock 50,000 36,202 786,202
Net Advances From (To)
Related Parties 543,205 118,293 661,498
----------------------------------------------
Net Cash Provided By
Financing Activities 589,822 154,295 1,444,317
----------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 26
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE
PERIOD FROM INCEPTION (SEPTEMBER 12, 1996) TO DECEMBER 31, 1999
Inception
(September
Year Ended Year Ended 12, 1996) To
December 31, December 31, December 31,
1999 1998 1999
---- ---- ----
Increase (Decrease) in
Cash and Cash Equivalents (3,647) 3,647 0
Cash and Cash Equivalents,
Beginning of Year 3,647 0 0
----------------------------------------------
Cash and Cash Equivalents,
End of Year $ 0 $ 3,647 $ 0
==============================================
Supplemental Information
Cash paid for:
Interest $ 331 $ 0 $ 331
==============================================
Income Taxes $ 0 $ 3,647 $ 0
==============================================
Noncash Supplemental
Information
Issuance of Common Stock
For Services Rendered $ 565,000 $ 164,865 $ 1,062,865
==============================================
Issuance of Common Stock
For Conversion of Debt $ 0 $ 246,558 $ 246,558
==============================================
Issuance of Common Stock in
Exchange for Partial Payment
on Oil and Gas Properties
(Services Rendered) $ 0 $ 0 $ 208,000
==============================================
Issuance of Common Stock in
Exchange for Partial Payment
on Oil and Gas Properties
(Accounts Payable) $ 0 $ 0 $ 150,000
==============================================
Issuance of Common Stock as
a Deposit on Contract $ 125,000 $ 0 $ 125,000
==============================================
Write Down of Oil and Gas
Properties $ 0 $ 369,267 $ 369,267
==============================================
Write Off of Deposit on
Contract $ 125,000 $ 0 $ 125,000
==============================================
Assets Acquired Under Capital
Lease Obligations $ 81,775 $ 0 $ 81,775
==============================================
Common Stock Issued for 100%
Acquisition of Subsidiary $ 272,960 $ 0 $ 272,960
==============================================
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 27
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION
------------
Redmond Capital Corp. (formerly Minex Minerals, Inc.) (the Company) was
incorporated under the laws of the State of Florida on September 12, 1996, with
an authorized capital of 50,000,000 shares of common stock with a par value of
$0.001 per share. On December 4, 1997, the Company amended its articles of
incorporation to increase its authorized capital by 1,000,000 preferred shares
at a par value of $0.10 per share. On January 25, 1999, the Board of Directors
approved a reverse split of 100:1. On February 3, 1999, the Company amended its
articles of incorporation to change its name to Redmond Capital Corp. All per
share and per share information have been adjusted retroactively to reflect
stock splits and changes in par value.
On December 1, 1996, the Company issued 3,000,000 (30,000 current equivalent)
shares of common stock for services rendered at $0.001, or $3,000.
On December 31, 1996, the Company completed an Offering Memorandum for 200,000
(2,000 current equivalent) shares of common stock for cash at $0.25 per share,
or 50,000.
During May 1997, the Company completed an Offering Memorandum for 6,600,000
(66,000 current equivalent) shares of common stock for services at $0.05 per
share, or $330,000.
During August 1997, the Company completed an Offering Memorandum for 800,000
(8,000 current equivalent) shares of common stock for cash at $0.40 per share,
or $320,000.
During August 1997, the Company completed an Offering Memorandum for 550,000
(5,500 current equivalent) shares of common stock for cash at $0.60 per share,
or $330,000.
On September 19, 1997, the Company issued 260,000 (2,600 current equivalent)
shares of common stock for services at $0.80 per share, or $208,000.
On May 12, 1998, the Company issued 175,000 (1,750 current equivalent) shares
of common stock for services at $0.20 per share, or $35,000.
On May 12, 1998, the Company completed an Offering Memorandum for 1,395,000
(13,950 current equivalent) shares of common stock for the conversion of debt to
equity at $0.20 per share, or $279,000.
On August 19, 1998, the Company issued 70,000 (700 current equivalent) shares of
common stock for services at $0.50 per share, or $35,000.
<PAGE>
Page 28
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION (CONTINUED)
------------------------
On August 24, 1998, the Company completed an Offering Memorandum for 493,125
(4,931 current equivalent) shares of common stock for the conversion of debt to
equity at $0.20 per share, or $98,625.
At December 31, 1998, fractional shares of three (3) resulted from the rollback
of 100:1.
On January 25, 1999, the Company issued 125,000 shares of common stock as a
deposit on a contract for $1.00 per share, or $125,000. The contract has been
canceled and it is uncertain at this time if the shares will be returned.
On February 17, 1999, the Company, through a Private Placement Memorandum,
issued 5,000,000 shares of common stock for cash at $0.01 per share, or $50,000.
On April 7, 1999, the Company completed an Private Placement Memorandum and
issued 250,000 shares of common stock for services at $0.01 per share, or
$2,500, and converted 5,250,000 warrants to common stock at $.02 per share, or
$105,000.
On April 19, 1999, the Company issued 113,000 shares of common stock for
services at $1.00 per share, or $113,000.
On April 19, 1999, the Company issued 300,000 shares of common stock for
services at $1.00 per share, or $300,000.
On May 10, 1999, the Company issued 5,000 shares of common stock for services at
$3.00 per share, or $15,000.
On June 14, 1999, the Company issued 21,000 shares of common stock for services
at $1.00 per share, or $21,000.
On June 28, 1999, the Company issued 50,000 shares of common stock for services
at $0.67 per share, or $33,500.
On July 1, 1999, the Company issued 186,088 shares of common stock in exchange
for 100% of the outstanding common stock and certain shareholder loans of Sirius
Animation, Inc. The purchase price was $272,960 ($400,000 Canadian dollars) and
was paid by the issuance of restricted stock. This company is retained as a
subsidiary.
Presently, the Company is an acquisition-seeking company. Until the middle of
1999, the Company's primary focus was on the exploration and development of oil
and gas properties. During 1999, the Company abandoned that effort and acquired
Sirius Animation, Inc., a company that creates and produces an animated
television series called "The Elf King."
The Company is a development stage company, as defined in the Financial
Accounting Standards Board No. 7. The Company is devoting substantially all of
its present efforts in securing and establishing a new business, and planned
principal operations have not commenced. These factors raise substantial doubt
about its ability to continue as a going concern.
<PAGE>
Page 29
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
The financial statements have been prepared on the basis of accounting
principles applicable to a going concern. Accordingly, they do not purport to
give effect to adjustments, if any, that may be necessary should the Company be
unable to continue as a going concern. The continuation of the Company as a
going concern is dependent upon the Company's ability to establish itself as a
profitable business. The Company's ability to achieve these objectives cannot
be determined at this time. It is the Company's belief that it will continue to
incur losses for the next 12 months, and as a result, will require additional
funds. The additional funding will be accomplished by seeking funds from private
or public equity investments to meet such needs. There are no guarantees the
Company will be successful in obtaining these funds.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
-------------------------------
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with a maturity of
three months or less when acquired to be cash and cash equivalents.
Concentration of Credit Risk
The Company maintains U.S. Dollar cash balances in Canadian banks, that are not
insured.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries Minex, S.A. and Sirius Animation, Inc.
(Sirius). Intercompany transactions have been eliminated in consolidation.
Purchase Method
Investments in companies have been included in the financial report using the
purchase method of accounting on the basis of the fair value of the acquired
assets less liabilities assumed. The Company retains the acquired companies as
subsidiaries.
Property and Equipment
Property and equipment, stated at cost, is depreciated under the straight-line
method over their estimated useful lives, ranging from three to seven years.
Inventories
Inventories consist of theatrical and television product (which include direct
production costs, production overhead, and certain exploitation costs) and are
stated at the lower of amortized cost or net realizable value. Inventories are
amortized on an individual product basis based on the proportion that current
gross revenues bear to the estimated remaining total lifetime revenues.
Estimates of total lifetime revenues and expenses are periodically reviewed.
The costs of feature and television films are classified as current assets to
the extent such costs are expected to be recovered through their respective
primary markets, with the remainder classified as noncurrent.
<PAGE>
Page 30
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Revenue Recognition
Revenue from the distribution of the animated television series is recognized
when the license period begins, the film is accepted by the licensee, and the
film is available for its first showing or telecast.
Cost Recognition
Selling, general, and administrative costs are expensed as incurred. Research
and development expenses are expensed as incurred.
Advertising Costs
Advertising costs are expensed as incurred.
Use of Estimates
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. Actual results may differ from these estimates.
Income Taxes
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes."
Under SFAS No. 109, deferred tax liabilities and assets are determined based on
the difference between the financial statement and tax bases of assets and
liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse.
Per Share of Common Stock
Effective January 1, 1997, basic earnings or loss per share has been computed
based on the weighted average number of common shares outstanding. All earnings
or loss per share amounts in the financial statements are basic earnings or loss
per share, as defined by SFAS No. 128, "Earnings Per Share." Diluted earnings
or loss per share does not differ materially from basic earnings or loss per
share for all periods presented. Diluted weighted average shares outstanding
exclude the potential common shares from warrants and stock options because to
do so would have been antidilutive. All per share and per share information are
adjusted retroactively to reflect stock splits and changes in par value.
Stock-Based Compensation
The Company accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees." Compensation cost for stock options, if any, is
measured as the excess of the quoted market price of the Company's stock at the
date of grant over the amount an employee must pay to acquire the stock. SFAS
No. 123, "Accounting for Stock-Based Compensation," established accounting and
disclosure requirements using a fair-value-based method of accounting for
stock-based employee compensation plans. The Company has elected to remain on
its current method of accounting as described above, and has adopted the
disclosure requirements of SFAS No. 123, effective January 1,
1997.
Capital Structure
The Company has implemented SFAS No. 129, "Disclosure of Information about
Capital Structure," effective January 1, 1998, which established standards for
disclosing information about an entity's capital structure. The implementation
of SFAS No. 129 had no effect on the Company's financial statements.
<PAGE>
Page 31
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Comprehensive Income
The Company has implemented SFAS No. 130, "Reporting Comprehensive Income,"
effective January 1, 1998, which requires companies to classify items of other
comprehensive income by their nature in a financial statement and display the
accumulated balance of other comprehensive income separately from retained
earnings and additional paid in capital in the equity section of a statement of
financial position. Accumulated Other Comprehensive Income (Loss) for 1999
represents foreign currency translation items associated with the Company's
Canadian subsidiary operations, Sirius. The implementation of SFAS No. 130 had
no effect on the Company's 1998 financial statements.
Business Segment Information
The Company implemented SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," effective January 1, 1998. At December 31,
1999, the Company is being managed as two operating segments, the animated
television series company, (Sirius) and corporate headquarters. During 1999,
Sirius had not generated any revenues and management did not allocate any of its
corporate, selling, administrative or overhead expenses to Sirius.
Foreign Operations
The assets and liabilities of the Company's foreign operations are generally
translated into U.S. dollars at current exchange rates, and revenues and
expenses are translated at average exchange rates for the year. Resulting
translation adjustments are reflected as a separate component of stockholders'
equity.
Transaction gains and losses that arise from exchange rate fluctuations on
transactions denominated in a currency other than the functional currency,
except those transactions which operate as a hedge of an identifiable foreign
currency commitment or as a hedge of an foreign currency investment position,
are included in the results of operations as
incurred.
Start-Up Costs
Effective January 1, 1999, the Company also adopted the provisions of the
American Institute of Certified Public Accountants' Statement of Position (SOP)
98-5, "Reporting on the Costs of Start-Up Activities." SOP 98-5 provides
guidance on the financial reporting of start-up and organization costs and
requires such costs to be expensed as incurred. This new requirement did not
have a significant effect on the financial statements for 1999.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current
year presentation.
Pending Accounting Pronouncements
It is anticipated that current pending accounting pronouncements will not have
an adverse impact on the financial statements of the Company.
<PAGE>
Page 32
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 3 - INVENTORIES
-----------
Inventories consists of the following at December 31, 1999:
Direct Production Costs $ 211,068
Production Overhead 42,567
Exploitation Costs 1,992
Total $ 255,627
NOTE 4 - PROPERTY AND EQUIPMENT
----------------------
Property and equipment consisted of the following at December 31:
1999 1998
---- ----
Equipment $ 130,596 $ 13,660
Leasehold Improvements 5,551 0
Total 136,147 13,660
Accumulated Depreciation (20,481) (4,324)
Net Book Value $ 115,666 $ 9,336
Depreciation and amortization expense charged to operations during 1999 and 1998
was $2,733 and $2,352, respectively. Depreciation and amortization expense
included in inventories for 1999 is $13,425.
NOTE 5 - INVESTMENT - OIL AND GAS PROPERTIES
-----------------------------------
On July 4, 1997, the Company completed the purchase of a certain Concession
Permit for the exploitation, complementary exploration, and development of
Hydrocarbons properties known as Mina del Carmen, Territorio del Chubut, Colonia
Escalante, Distrito Minera De Comodoro Rivadavia, Catco Exp. 0 - 1828 - 21,
Superficie 1998 has., consisting of 4 separate oil and gas concessions totaling
100 sq. km., known as Mina Maria Ines, Mina Catalina, Mina Carmen Dos, and Mina
Marcelina. All the properties are located in the Gulf of San Jorge, Province of
Chubut, Argentina. The purchase price was $100,000, of which $50,000 was due
and payable at December 31, 1999 and 1998. At December 31, 1998, the Company
determined that the concessions were of limited potential and have included in
operations a write-off of $75,000. During 1999, the Company received $25,000
for the sale of these concessions.
On September 15, 1997, the Company through its wholly owned subsidiary, Minex,
S.A., completed the purchase of a certain Concession Permit for the
exploitation, complementary exploration, and development of Hydrocarbons
properties known as Canadon Pilar, Pico Salamanca amd Mina Satamanca, all
located in the Gulf of San Jorge, Province of Chubut, Argentina. The purchase
price was $608,000, that included the payment of cash of $400,000 and the
issuance of 260,000 shares of the Company's common stock at $0.80 per share, or
<PAGE>
Page 33
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
$208,000. Under the contract, $100,000 was due and payable at December 31, 1999
and 1998. During 1998, the Company determined that the concessions were of
limited potential and have included in operations a write-off of $339,267.
During 1998, the Company received $150,000 for the partial sale of the
concessions and during 1999, the Company received $200,000, less certain
expenses incurred by the purchaser such as legal fees and exploration studies of
$36,267, or $163,733, for the sale of these concessions.
NOTE 6 - DUE TO/FROM RELATED PARTIES
---------------------------
From time to time, certain related parties advanced funds to the Company to help
finance working capital operations. At December 31, 1999, $414,939 was advanced
to the Company. At December 31, 1998, $128,265 was due to the Company. The
funds are unsecured, noninterest bearing, and due on demand. There is no
guarantee additional funds will be available to fund future operations.
NOTE 7 - CAPITAL LEASE OBLIGATIONS
-------------------------
The Company leases certain equipment under capital lease at the rate of
approximately $2,300 per month ($3,336.56 Canadian plus applicable taxes), and
due in thirty-six (36) monthly instalments. Included in property and equipment
are amounts due under capital lease obligation totalling $81,775, and are
amortized over the life of the lease. Lease expense charged to operations for
1999 was $4,213.
Total Minimum Lease Payments $ 83,788
Less Amount Representing Interest (6,225)
-------
Present Value of Minimum Lease Payments 77,563
Current Portion 23,924
Long-Term Capital Lease Obligations $ 53,639
=======
Future minimum lease payments due under capital lease at December 31 are as
follows:
2000 $ 23,924
2001 $ 25,147
2002 $ 28,492
NOTE 8 - DEPOSIT ON CONTRACT
-------------------
On January 25, 1999, the Company issued 125,000 shares of common stock at $1.00
per share, or $125,000, as a deposit on a contract. The contract has been
canceled and it is uncertain at this time if the shares will be returned.
Included in operations for the year ended December 31, 1999, is a write-off of
$125,000.
NOTE 9 - INCOME TAXES
------------
There is no current or deferred tax expense for the years ended December 31,
1999 and 1998, due to the Company's loss position. The benefits of time
differences have not been previously recorded. The deferred tax consequences of
temporary differences in reporting items for financial statement and income tax
purposes are recognized, as appropriate. Realization of the future tax benefits
related to the deferred tax assets is dependent on many factors, including the
<PAGE>
Page 34
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Company's ability to generate taxable income within the net operating loss
carryforward period. Management has considered these factors in reaching its
conclusion as to the valuation allowance for financial reporting purposes. The
income tax effect of temporary differences comprising the deferred tax assets
and deferred tax liabilities on the accompanying consolidated balance sheet is a
result of the following:
Deferred Taxes 1999 1998
---- ----
Net Operating Loss Carryforwards $ 1,080,532 $ 536,775
Inventories 255,627 0
Valuation Allowance (1,336,159) (536,775)
---------- ----------
Net Deferred Tax Assets $ 0 $ 0
========== ==========
The Company has available net operating loss carryforwards of approximately
$3,000,000 for tax purposes to offset future taxable income, which expire
principally in the year 2013.
Pursuant to the Tax Reform Act of 1986, annual utilization of the Company's net
operating loss carryforwards may be limited if a cumulative change in ownership
of more than 50% is deemed to occur within any three-year period.
NOTE 10 - STOCK OPTION PLAN
-----------------
The Company has three stock option plans that provide for the granting of stock
options to officers and key employees. The objectives of these plans include
attracting and retaining the best personnel, provide for additional performance
incentives, and promoting the success of the Company by providing employees the
opportunity to acquire common stock. Options outstanding under the Company's
three stock option plans have been granted at prices which are either equal to
or above the market value of the stock on the date of the grant and expire at
various dates after the grant date.
The status of the Company's three stock option plans is summarized below as of
December 31:
1997 Stock Option Plan 200,000 options granted at $0.55 per share.
1998 Stock Option Plan 500,000 shares reserved for issuance.
1999 Stock Option Plan 500,000 shares reserved for issuance.
No shares have been exercised under the 1997 plan. All three Stock Option Plans
expired on December 31, 1999.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
-----------------------------
Operating Lease - The Company has entered into an operating lease commencing on
---------------
December 15, 1999, on an annual basis, cancellable by the lessor upon receipt of
three months written notice. The premises consist of approximately 3,700 square
feet of office space at approximately $9,000 per month. Future annual rentals
for the year ended December 31, 2000, are $108,000.
Capital Lease - On November 3, 1999, the Company entered into a capital lease
-------------
with SGI Solutions Finance to lease certain equipment as described in the lease
schedule for approximately $2,300 per month ($3,336.56 Canadian Dollars plus
<PAGE>
Page 35
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
applicable taxes), for thirty-six months, at a discount rate of 5%, commencing
on November 1, 1999. Certain renewal provisions apply.
Lawsuit - The Company is a party to a lawsuit file in the Supreme Court of
-------
British Columbia, Vancouver, British Columbia, dated December 5, 1999, between
Northwest Petroleum, Inc. versus Kevan Garner, Michelle Garner, Jack Purdy, Kern
County Oil & Gas Inc. and Redmond Capital Corporation, individually and
collectively carrying on business as "Indigo Communications," and Kern County
Oil and Gas and Redmond Capital Corp. The plaintiff is seeking $70,000. The
Company filed a Statement of Defence on January 5, 2000, in the Supreme Court of
British Columbia, Vancouver, British Columbia, deny any allegations. The
Company does not believe it will be liable for any damages and it intends to
vigorously defend itself. No provision for loss has been made in the financial
statements.
Contract- On November 17, 1999, the Company entered into an agreement with
--------
Galaxy Motorsports, L.L.C., (GMS) and automobile racing tearm, for a term of one
year, effective January 1, 2000 to December 31, 2000. GMS agrees to provide
certain sponsorship services for the year 2000 Winston Cup Nascar season. The
Company agrees to pay $3,500,000 pursuant to the following payment terms: Upon
signing, $250,000; February 1, 2000, $458,000; March 1, 2000, $542,000; April 1,
2000, $750,000; June 1, 2000, $750,000; and August 1, 2000, $750,000. As
collateral for the payments, the Company has placed 3,250,000 shares of common
stock in trust. Upon default by the Company of any payment, GMS has the right
to receive an amount of stock equal to the payment amount due. However, GMS has
the right to not receive the stock and terminate the agreement. As of the date
of issuance of these financial statements, the Company has paid $1,408,000. No
shares of common stock have been issued.
On April 20, 2000, the agreement was modified to revise the payment plan as
follows: May 1, 2000, $100,000; June 1, 2000, $100,000; July 1, 2000, $475,000;
August 1, 2000, $475,000; September 1, 2000, $475,000, and October 1, 2000,
$467,000.
NOTE 12 - SEGMENT INFORMATION
-------------------
The Company currently operates in one segment, that being the creation and
production of an animated television series through its wholly owned subsidiary,
Sirius Animation, Inc. (Sirius). Management evaluates the performance of its
segments and allocates resources to them primarily based on pretax income along
with cash flows and overall economic returns. The accounting policies of the
segments are substantially the same as those described in the summary of
significant accounting policies, as discussed in Note 2.
Certain items are maintained at the Company's corporate level and are not
allocated to the segments. They primarily include most of the Company's debt
and cash and cash equivalents and related net interest expense and corporate
headquarters costs.
Sirius Corporate Total
Revenues $ 0 $ 0 $ 0
Operating Loss 0 1,504,894 1,567,016
<PAGE>
Page 36
REDMOND CAPITAL CORP.
(formerly Minex Minerals, Inc.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
Total Assets 364,689 6,604 371,293
Capital Expenditures 122,487 13,660 136,147
Depreciation/Amortization 13,426 2,732 16,158
Revenues $ 0 $ 0 $ 0
Operating Loss 0 0 0
Total Assets 0 304,982 304,982
Capital Expenditures 0 13,660 13,660
Depreciation/Amortization 0 2,352 2,352
From 1997 through the middle of 1999, the Company had only one line of business,
that being the exploration and development of oil and gas properties. All
corporate, selling, administrative, or overhead expenses are included in
corporate for 1999 and 1998.
At December 31, 1999, Sirius had not generated any revenues and management did
not allocate any corporate, selling, administrative, or overhead expenses to
Sirius.
NOTE 13 - SUBSEQUENT EVENTS
-----------------
On February 7, 2000, the Company entered into an agreement with First Nevisian
Holdings, Ltd., (Nevis) a venture capital company, who has agreed to invest
$3,000,000 for working capital needs. The Company and Nevis have offered to
acquire from the shareholders of Redcell Canada, Inc. (Redcell) all of the
issued shares of and all of the shareholder loans owed by Redcell in exchange
for the issuance by the Company of Rule 144 shares in the authorized capital of
the Company. The Company agrees to issue 30,000 shares for each one percent of
shares held in Redcell, for a total of 3,000,000 shares of common stock. Total
advances from Nevis are $2,184,289 as of the date of these financial statements.
The Company also agrees to recognize and to purchase the aggregate of all loans
and interest to the Closing date, guarantees, accounts due, and all other
financial claims committed by Redcell. Payment will be made in the form of
warrants in the stock of the Company having an exercise price of $4.50. This
amount is considerably less than the balances due and is in full settlement of
all claims. The closing has not occurred as of the date of issuance of these
financial statements. However, as of February 1, 2000, the total amount due the
stockholders of Redcell was $4,153,954, or 923,101 warrants. As of the date of
issuance of these financial statements, the Company has placed 2,197,045 shares
of common stock in trust for the issuance to Redcell.
<PAGE>
Page 37
REDMOND CAPITAL CORP.
AND
SUBSIDIARIES
INTERIM UNAUDITED FINANCIAL STATEMENTS
SECOND QUARTER
JUNE 30, 2000
(UNAUDITED - PREPARED BY MANAGEMENT)
<PAGE>
Page 38
MANAGEMENT DISCLOSURE ON
------------------------
INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
---------------------------------------------------
FOR THE SIX MONTHS ENDED
------------------------
JUNE 30, 2000
-------------
The accompanying interim unaudited consolidated balance sheets of Redmond
Capital Corp. (the "Company") and its subsidiaries at June 30, 2000 and the
interim unaudited consolidated statements of operations and the interim
unaudited consolidated statements of cash flows for six months ended June 30,
2000 and the interim unaudited statement of changes in stockholders' equity for
the period from September 12, 1996 (date of inception) to June 30, 2000, and the
interim unaudited comparative statements thereto, have been prepared by the
Company's management and they do not include all information and notes to the
interim unaudited financial statements necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders'
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
Operating results for the second quarter ended June 30, 2000 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2000.
/s/ Clifford Wilkins
Chairman September 20, 2000
<PAGE>
Page 39
Redmond Capital Corp.
Interim Unaudited Consolidated Balance Sheet
As At June 30, 2000 and December 31, 1999
(Unaudited - Prepared by Management)
2000 1999
Unaudited Audited
ASSETS
CURRENT ASSETS
Cash $ 45,380 -
Accounts receivable 40,923 -
Inventories (Note 2) 586,372 255,627
------------ ---------
672,675 255,627
============ =========
Property and Equipment, Net (Note 3) 234,338 115,666
Other Assets
Due From Related Parties (Note 4) 3,546,727 -
------------ ---------
$ 4,453,740 371,293
============ =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Checks Issued in Excess of Cash $ - 829
Accounts Payable 242,254 263,610
Capital Lease Obligation, Current Portion 23,423 23,924
Due to Related Parties (Note 4) - 414,939
------------ ---------
265,677 703,302
------------ ---------
Long-Term Liabilities
Capital Lease Obligation, Long Term Portion 38,123 53,639
Notes Payable (Note 6) 4,241,805 -
------------ ---------
4,279,928 53,639
------------ ---------
STOCKHOLDERS' EQUITY
Common stock: $0.01 Par Value, 50,000,000 Authorized;
Issued and Outstanding, 11,410,512 11,411 11,411
Additional Paid in Capital 3,127,614 2,690,174
Loss Accumulated During The Development Stage (3,278,272)(3,025,111)
Accumulated Other Comprehensive Gain (Loss) 47,382 (62,122)
------------ ---------
(91,865) (385,648)
------------ ---------
$ 4,453,740 371,293
============ =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
Page 40
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Operations
For the Periods Ended June 30, 2000 and June 30, 1999 and
For the Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Three Months Three Months Six Months Six Months Inception
Ended June Ended June Ended June Ended June (September
30, 2000 30, 1999 30, 2000 30, 1999 12, 1996 to
June 30, 2000
<S> <C> <C> <C> <C> <C>
Revenues $ - $ - $ - $ - $ -
------------ ------------ ------------ ------------ ------------
Expenses
General and
Administrative 232,290 145,411 377,719 1,097,201 2,724,893
Operating Loss (232,290) (145,411) (377,719) (1,097,201) (2,724,893)
------------ ------------ ------------ ------------ ------------
Other Income (Expense)
Interest Income - - - - 2,204
Write-Off Goodwill of
Subsidiary Acquired - - - - (185,874)
Write-Off of Deposit
on Contract - - - (125,000) (369,267)
Write-Down of Mining
Claims - - - - (125,000)
Total Other Income
(Expense) - - - (125,000) (677,937)
------------ ------------ ------------ ------------ ------------
Net Loss Available to
Common Stockholders (232,290) (145,511) (377,719) (1,222,201) (3,402,830)
============ ============ ============ ============ ============
Basic Loss Per
Common Shares $ (0.02) $ (0.02) $ (0.03) $ (0.17) $ (0.30)
============ ============ ============ ============ ============
Basic Weighted Average
Common Shares
Outstanding 11,410,522 7,304,985 11,410,522 7,304,985 11,410,522
============ ============ ============ ============ ============
</TABLE>
<PAGE>
Page 41
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Stockholders' Equity
For the Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Loss
Accumulated Accumulated
Common Additional During the Other
Common Stock Paid In Development Comprehensive
Stock Shares Amount Capital Stage Income/(Loss) Total
<S> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock for Services
Rendered as of
December 1, 1996 30,000 $ 30 $ 2,970 $ - $ - $ 3,000
Issuance of Common
Stock for Cash
Through December
31, 1996 2,000 $ 2 $ 49,998 - - 50,000
Loss From Inception
(September 12,
1996) Through
December 31, 1996 - - - (2,985) - (2,985)
Balance, December
31, 1996 32,000 32 52,968 (2,985) - 50,015
Issuance of Common
Stock For Services
Per Offering
Memorandum Dated
August 19, 1997, at
$0.05 Per Share 66,000 66 329,934 - - 330,000
</TABLE>
<PAGE>
Page 42
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Stockholders' Equity
For the Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Loss
Accumulated Accumulated
Common Additional During the Other
Common Stock Paid In Development Comprehensive
Stock Shares Amount Capital Stage Income/(Loss) Total
<S> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock For Cash Per
Offering Memorandum
Dated August 19,
1997, at $0.40 Per
Share 8,000 $ 8 $ 319,992 $ - $ - $ 320,000
Issuance of Common
Stock For Cash Per
Offering Memorandum
Dated August 28,
1997, at $0.60 Per
Share 5,500 6 329,994 - - 330,000
Issuance of Common
Stock in Exchange
for Partial Payment
of Oil and Gas
Properties on
September 19, 1997 2,500 2 199,998 - - 200,000
Issuance of Common
Stock For Services
Rendered as Finder's
Fee for Oil and Gas
Properties on
September 19, 1997 100 - 8,000 - - 8,000
Loss, Year Ended
December 31, 1997 - - - (672,327) - (672,327)
Balance, Year
Ended December
31, 1997 114,100 114 1,240,886 (675,312) - 565,688
Issuance of Common
Stock for Services
Rendered at $0.20
Per Share, May 12,
1998 1,750 2 34,998 - - 35,000
</TABLE>
<PAGE>
Page 43
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Stockholders' Equity
For the Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Loss
Accumulated Accumulated
Common Additional During the Other
Common Stock Paid In Development Comprehensive
Stock Shares Amount Capital Stage Income/(Loss) Total
<S> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock for Services
Rendered Per
Offering Memorandum,
at $0.05 Per Share
May 12, 1998 8,120 $ 8 $ 162,392 $ - $ - $ 162,400
Issuance of Common
Stock for Services
Rendered Per
Offering Memorandum,
at $0.05 Per Share
May 12, 1998 5,830 6 116,594 - - 116,600
Issuance of Common
Stock for Services
Rendered at $0.50
Per Share, August
19, 1998 700 1 34,999 - - 35,000
Issuance of Common
Stock for Services
Rendered Per
Offering Memorandum,
at $0.05 Per Share,
August 24, 1998 4,931 5 98,620 - - 98,625
Fractional Shares 3 - - - - -
Loss, Year Ended
December 31, 1998 - - - (858,331) - (858,331)
Balance, December
31, 1998 135,434 136 1,688,489 (1,533,643) - 154,982
</TABLE>
<PAGE>
Page 44
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Stockholders' Equity
For the Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Loss
Accumulated Accumulated
Common Additional During the Other
Common Stock Paid In Development Comprehensive
Stock Shares Amount Capital Stage Income/(Loss) Total
<S> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock as Deposit
on Contract at $1.00
Per Share, January 25,
1999 125,000 $ 125 $ 124,875 $ - $ - $ 125,000
Issuance of Common
Stock Under Private
Placement Memorandum
for Cash at $0.01
Per Share, February
17, 1999 5,000,000 5,000 45,000 - - 50,000
Issuance of Common
Stock for Services
Rendered Under Private
Placement Memorandum
at $0.01 Per Share,
April 7, 1999 250,000 250 2,250 - - 2,500
Issuance of Common
Stock for Conversion
of Warrants for
Services Rendered
under Private
Placement Memorandum
at $0.02 Per Share,
Issuance of Common
Stock for Services
Rendered at $1.00
Per Share, April
19, 1999 388,000 388 387,612 - - 388,000
</TABLE>
<PAGE>
Page 45
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Stockholders' Equity
For the Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Loss
Accumulated Accumulated
Common Additional During the Other
Common Stock Paid In Development Comprehensive
Stock Shares Amount Capital Stage Income/(Loss) Total
<S> <C> <C> <C> <C> <C> <C>
Issuance of Common
Stock for Services
Rendered at $1.00
Per Share, May 10,
1999 5,000 $ 5 $ 14,995 $ - $ - $ 15,000
Issuance of Common
Stock for Services
Rendered at $1.00
Per Share, June 19,
1999 21,000 21 20,979 - - 21,000
Issuance of Common
Stock for Services
Rendered at $0.67
Per Share, June 28,
1999 50,000 50 33,450 - - 33,500
Issuance of Common
Stock in Exchange
for 100% Acquisition
of Subsidiary,
July 1, 1999 186,088 186 272,774 - - 272,960
Other Comprehensive
Income (Loss):
Translation
Adjustments - - - - (62,122) (62,122)
Loss, Year Ended
December 31, 1999 - - - (1,491,468) - (1,491,468)
Balance, December
31, 1999 11,410,522 11,411 2,690,174 (3,025,111) (62,122) (385,648)
</TABLE>
<PAGE>
Page 46
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Stockholders' Equity
For the Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Loss
Accumulated Accumulated
Common Additional During the Other
Common Stock Paid In Development Comprehensive
Stock Shares Amount Capital Stage Income/(Loss) Total
<S> <C> <C> <C> <C> <C> <C>
Contribution to
Capital - Related
Parties - $ - $ 437,440 $ - $ - $ -
Other Comprehensive
Income (Loss):
Translation
Adjustments - - - - - -
Loss, Period Ended
June 30, 2000 - - - (377,719) - (377,719)
Balance, June 30,
2000 11,410,522 11,411 3,127,614 (3,402,830) (62,122) (763,367)
</TABLE>
<PAGE>
Page 47
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Cashflows
For the Six Months Ended June 30, 2000 and June 30, 1999
For The Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
Six Months Six Months Inception
Ended June Ended June (September
30, 2000 30, 1999 12, 1996) to
June 30,
2000
Cash Flows From Operating Activities
Net Loss $ (377,719) $(1,222,201) $(3,402,830)
Common Stock Issued for Services - 565,000 1,062,865
Common Stock Issued for 100%
Acquisition of Subsidiary - - 272,960
Depreciation and Amortization - - 20,481
Write-Off of Deposit on Contract - 125,000 125,000
Translation Adjustments 109,504 - 47,382
Write Down of Oil and Gas Properties - - 369,267
Adjustments to Reconcile Net Loss
to Net Cash Provide By (Used In)
Operating Activities
Changes in Assets and Liabilities
Increase (Decrease) in Accounts
Receivable 40,923 14,888 40,923
(Increase) Decrease in Inventories (330,745) - (586,372)
(Increase) Decrease in Accounts
Payable 21,356 (149,489) 134,966
Net Cash Provided By (Used In)
Operating Activities (536,681) (666,802) (1,915,358)
Cash Flows From Investing
Activities
Acquisition of Property and Equipment (118,672) (17,344) (173,045)
Proceeds From the Sale of Oil and
Gas Properties - 163,733 338,733
Purchase of Oil and Gas Properties - - (350,000)
Net Cash Provided By (Used In)
Investing Activities (118,672) 146,389 (184,312)
<PAGE>
Page 48
Redmond Capital Corp.
Interim Unaudited Consolidated Statement of Cashflows
For the Six Months Ended June 30, 2000 and June 30, 1999
For The Period From Inception (September 12, 1996) to June 30, 2000
(Unaudited - Prepared by Management)
Six Months Six Months Inception
Ended June Ended June (September
30, 2000 30, 1999 12, 1996) to
June 30,
2000
Cash Flows From Operating Activities
Checks Issued In Excess of Cash (829) - -
Principal Payments On Capital Lease
Obligations (16,017) - (20,229)
Proceeds From Sale of Common Stock - 50,000 786,202
Net Advances From (To) Related
Parties (3,524,226) 478,279 (3,075,500)
Increase (Decrease) in Notes
Payable 4,241,805 - 4,454,577
Net Cash Provided By (Used In)
Financing Activities 700,733 528,279 2,145,050
Increase (Decrease) in Cash
and Cash Equivalents 45,380 7,866 45,380
Cash and Cash Equivalents,
Beginning of Year - 3,647 -
Cash and Cash Equivalents,
End of Year $ 45,380 $ 11,513 $ 45,380
Supplemental Information
Cash Paid for:
Interest $ - $ 331 $ 331
Income Taxes $ - $ - $ -
Noncash Supplemental Information:
Issuance of Common Stock for
Services Rendered $ - $ 565,000 $1,062,865
Issuance of Common Stock for
Conversion of Debt $ - $ - $ 246,558
Issuance of Common Stock in
Exchange for Partial Payment
on Oil and Gas Properties
(Services Rendered) $ - $ - $ 208,000
Issuance of Common Stock in
Exchange for Partial Payment
on Oil and Gas Properties
(Accounts Payable) $ - $ - $ 150,000
Issuance of Common Stock as a
Deposit on Contract $ - $ 125,000 $ 125,000
Write Down of Oil and Gas
Properties $ - $ - $ 369,267
Write Off of Deposit on Contract $ - $ 125,000 $ 125,000
Assets Acquired Under Capital
Lease Obligations $ - $ 81,775 $ 81,775
Common Stock Issued For 100%
Acquisition of Subsidiary $ - $ 272,960 $ 272,960
Contribution to Capital -
Related Parties $ 437,440 $ - $ 437,440
<PAGE>
Page 49
NOTE 1 - STATEMENT OF INFORMATION FURNISHED
----------------------------------
The accompanying unaudited consolidated financial statements of Redmond Capital
Corp. as of and for the six months ended June 30, 2000 and June 30, 1999 have
been prepared in accordance with the rules and regulations of the Securities and
Exchange Commission and do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements.
In the opinion of management, all adjustments considered necessary for a fair
presentation of the results of the interim period have been included. Operating
results for any interim period are not necessarily indicative of the results
that may be expected for the entire fiscal year. These statements should be read
in conjunction with the financial statements and notes thereto for the year
ended December 31, 1999 included in the Company's report in Form 10-SB as filed
with the Securities and Exchange Commission
NOTE 2 - INVENTORIES
-----------
Inventories consists of the following at June 30, 2000:
Direct Production Costs $ 528,835
Production Overhead 55,545
Exploitation Costs 1,992
----------
Total $ 586,372
==========
NOTE 3 - PROPERTY AND EQUIPMENT
----------------------
Property and equipment consisted of the following at June 30:
2000
----
Equipment $ 130,596
Leasehold Improvements 5,551
----------
Total 136,147
Accumulated Depreciation (20,481)
----------
Net Book Value $ 115,666
==========
NOTE 4 - DUE TO/FROM RELATED PARTIES
---------------------------
From time to time, certain related parties advanced funds to the Company to help
finance working capital operations. During the 2000 the related parties have
contributed $437,440 to Additional Paid Up Capital.
<PAGE>
Page 50
NOTE 5 - SEGMENT INFORMATION
-------------------
The Company currently operates in one segment, that being the creation and
production of an animated television series through its wholly owned subsidiary,
Sirius Animation, Inc. (Sirius) Management evaluates the performance of its
segments and allocates resources to them primarily based on pretax income along
with cash flows and overall economic returns.
Certain items are maintained at the Company's corporate level and are not
allocated to the segments. They primarily include most of the Company's debt
and cash and cash equivalents and related net interest expense and corporate
headquarters costs. Intersegment revenues and expenses are eliminated.
Sirius Corporate Total
------ --------- -----
Revenues $ 0 $ 0 $ 0
Operating Loss 0 1,504,894 1,567,016
Total Assets 583,585 3,870,155 4,453,740
Capital Expenditures 215,287 39,532 254,819
Depreciation/Amortization 13,426 2,732 16,158
NOTE 6 - SUBSEQUENT EVENTS
-----------------
In December 1999 the Company was named as a defendant in a law suit initiated by
Northwest Petroleum, Inc. As the Company believed that there was no basis for
its inclusion in the law suit, no amount in relationship to the claim was
accrued in Company's audited financials for the year ended December 31, 1999.
The lawsuit was, however, discussed in the Notes to the audited financial
statements. In September 2000, the Company was released from the law suit and
no monies were paid to the claimant by the Company.
<PAGE>
Page 51
PART III
Item 1. Index of Exhibits
Exhibit No. Page No.
3 Articles of Incorporation, as amended, of the Company
4 Bylaws of the Company
4 Specimen Certificate of Common Stock
10 Material Contracts not made in the ordinary course of business:
10a Share Purchase Agreement dated July 1, 1999 between Registrant
and Douglas R. Walls, A. Ross Belyea, Jason Gray, Joan MacKenzie,
Edward Magee, and Stan Semrau
10b Profit Sharing Agreement between Registrant, Douglas R. Walls,
A. Ross Belyea, Jason Gray, Joan MacKenzie, and Sirius
10c Loan Agreement between Registrant, Sirius, Douglas R. Walls, A.
Ross Belyea, Jason Gray and Joan MacKenzie
10d Loan Agreement dated March 31, 2000 between Registrant and First
Nevisian Holdings Ltd.
10e Convertible Debenture issued by the Registrant to First Nevisian
Holdings Ltd.
10f Transfer of Rights to Screenplay from Ross Belyea to Sirius
Animation Inc.
10g Worldwide Distribution Agreement between Sirius Animation Inc. and
Bruder Releasing Inc.
21 Current Subsidiaries of the Registrant
23 Consent of Clancy and Co., P.L.L.C. Certified Public Accountants
27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
REDMOND CAPITAL CORP.
----------------------------------
(Registrant)
Date: November 17, 2000 By: /s/ CLIFFORD WILKINS
----------------------------------
Clifford Wilkins, Chairman
<PAGE>
