Stemcell Global Research, Inc.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
March 31, 2000
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT................................. 1
BALANCE SHEET - ASSETS....................................... 2
BALANCE SHEET - LIABILITIES AND SHAREHOLDER'S EQUITY......... 3
STATEMENT OF OPERATIONS...................................... 4
STATEMENT OF CASH FLOWS...................................... 5
NOTES TO FINANCIAL STATEMENTS................................ 6
<PAGE>
James E. Slayton, CPA
2858 West Market Street
Suite C
Akron, Ohio 44333
1-330-864-3553
INDEPENDENT AUDITORS' REPORT
Board of Directors June 27, 2000
Stemcell Global Research, Inc. (The Company)
Las Vegas, Nevada 89102
I have reviewed the accompanying Balance Sheet of Stemcell Global
Research, Inc. (A Development Stage Company) as of March 31, 2000, and related
statements of income, retained earnings, and cash flows in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. All information included in
these financial statements is the representation of the management of Stemcell
Global Research, Inc.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that
should be made to the accompanying financial statements in order for them to be
in conformity with generally accepted accounting principles.
James E. Slayton, CPA
Ohio License ID# 04-1-15582
<PAGE>
Stemcell Global Research, Inc.
(A Development Stage Company)
BALANCE SHEET
AS AT
March 31, 2000
<TABLE>
<CAPTION>
ASSETS
<S> <C> <C>
ASSETS March 31, December 31,
2000 1999
CURRENT ASSETS
Cash 18,459.00 7,775.00
Money Market Account 60,455.00 15,374.00
----------------- -------------------
Total Current Assets 78,914.00 23,149.00
PROPERTY AND EQUIPMENT
Property and Equipment 0.00 0.00
----------------- -------------------
Total Property and Equipment 0.00 0.00
OTHER ASSETS
Other Assets 0.00 0.00
----------------- -------------------
Total Other Assets 0.00 0.00
----------------- -------------------
TOTAL ASSETS 78,914.00 $23,149.00
================= ===================
</TABLE>
See accompanying notes to financial statements
-2-
<PAGE>
Stemcell Global Research, Inc.
(A Development Stage Company)
BALANCE SHEET
AS AT
March 31, 2000
<TABLE>
<CAPTION>
LIABILITIES & EQUITY
<S> <C> <C>
March 31, December 31,
2000 1999
CURRENT LIABILITIES
Accounts Payable $0.00 $0.00
------------------ -------------------
Total Current Liabilities 0.00 0.00
OTHER LIABILITIES
Convertible Notes Payable 163,000.00 85,000.00
Accrued Interest Payable 5,848.00 2,458.00
------------------ -------------------
Total Other Liabilities 168,848.00 87,458.00
------------------ -------------------
Total Liabilities 168,848.00 87,458.00
EQUITY
Common Stock, $0.001 par value, authorized
20,000,000 shares; issued and outstanding
at March 31, 2000 1,924,350 common shares 1,924.00 1,924.00
Additional Paid in Capital 143,839.00 143,839.00
Retained Earnings (Deficit accumulated
during development stage) (235,697.00) (210,072.00)
Advances from shareholder 0 0.00
------------------ -------------------
Total Stockholders' Equity (89,934.00) (64,309.00)
------------------ -------------------
TOTAL LIABILITIES & OWNER'S EQUITY 78,914.00 $23,149.00
================== ===================
</TABLE>
See accompanying notes to financial statements
-3-
<PAGE>
Stemcell Global Research, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR PERIOD
March 31, 2000 (unaudited) and March 31, 1999 (unaudited)
<TABLE>
<S> <C> <C>
March 31, March 31,
2000 1999
REVENUE (Unaudited) (Unaudited)
Revenues 0.00 0.00
Interest Income 45.00 0.00
--------------- ----------------
Total Revenue 45.00 0.00
COSTS AND EXPENSES
Selling, General and Administrative 25,670.00 18,160.00
--------------- ----------------
Total Costs and Expenses 25,670.00 18,160.00
--------------- ----------------
Net Income or (Loss) before taxes (25,625.00) (18,160.00)
Income Tax Expense 0.00 0.00
=============== ================
Net Ordinary
Income or
(Loss) (25,625.00) (18,160.00)
Weighted average
number of common
shares outstanding 1,890,361 1,754,283
Basic Net Loss Per Share (0.01) (0.01)
</TABLE>
See accompanying notes to financial statements
-4-
<PAGE>
Stemcell Global Research, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR PERIOD ENDING
March 31, 2000
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
March 31, 2000 March 31, 1999
Net (loss) from operations ($25,625.00) (17,500.00)
Adjustments to reconcile net income to net cash
provided
Increase in interest payable 3,390.00 0.00
--------------- ---------------
Net Cash provided by
Operating Activities (22,235.00) (17,500.00)
CASH FLOWS FROM INVESTING
ACTIVITIES
--------------- ---------------
Net cash used by investing activities 0.00 0.00
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock 0.00 0.00
Cash received from convertible note payable 78,000.00 17,500.00
--------------- ---------------
Net cash provided by financing activities 78,000.00 17,500.00
Balance at beginning of period 23,149.00 0.00
Net increase (decrease) in cash 55,765.00 0.00
Balance as at end of period 78,914.00 0.00
</TABLE>
See accompanying notes to financial statements
-5-
<PAGE>
Stemcell Global Research, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 20, 1999 (Date of Inception) under the
laws of the State of Nevada, as Stemcell Global Research, Inc. (The Company) has
no operations and in accordance with SFAS #7, the Company is considered a
development stage company. The Company has 20,000,000 shares of $.001 par value
stock authorized.
On January 21, 1999, the Company issued 1,651,125 Shares of its $0.001 par
value common stock for cash of $1,651.13 and cancellation of a $7,500.00 loan
from a founding shareholder for corporate consulting costs.
On March 9, 1999, the Company completed a public offering that was exempt
from federal registration pursuant to Regulation D, Rule 504 of the Securities
Act of 1933 as amended, and exempt from state registration pursuant to various
state securities transaction exemptions. The Company sold 273,225 shares of
Common Stock at a price of $0.50 per share for a total amount raised of
$136,612.50. The Company received cash in the amount of $93,535.00, a note
receivable in the amount of $5,000.00 and exchange for services rendered in the
amount of $38,062.50.
On March 29, 2000 a convertible promissory note was signed with Atlantique
Capital Group, Inc. in the amount of $163,000.00 at a per annum rate of 12%.
There have been no other issuances of equity or Common Stock.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting policies and procedures have not been determined except as
follows:
1. The Company uses the accrual method of accounting.
2. The cost of organization was expensed when incurred.
3. Basic earnings per share is computed using the weighted average
number of shares of common stock outstanding. Diluted earnings per share were
not include as the inclusion of convertible notes would be anti-dilutive and all
contingencies for conversion have not occurred.
4. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
5. The cost of equipment is depreciated over the estimated useful life of
the equipment utilizing the straight line method of depreciation. There was no
depreciation during this operating period. There was no equipment purchased
through March 31, 2000.
-6-
<PAGE>
Stemcell Global Research, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES - CONTINUED
6. The Company experienced losses for its first operating period January
20, 1999 (Date of inception) to December 31, 1999. The Company will review its
need for a provision for federal income tax after each operating quarter and
each period for which a statement of operations is issued. The net operating
losses will begin to expire in the year 2014.
7. The Company has adopted December 31 as its fiscal year end.
8. The Company records its inventory at cost. There was no inventory
through March 31, 2000.
9. The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make estimates and
assumptions which affect the reported amounts of assets and liabilities as at
the date of the financial statements and revenues and expenses for the period
reported. Actual results may differ from these estimates.
10. The Company's Statement of Cash Flows is reported utilizing cash
(currency on hand and demand deposits) and cash equivalents (short-term, highly
liquid investments). The Company's Statement of Cash Flows is reported
utilizing the indirect method of reporting cash flows.
Schedule of noncash financing activities,
Loan cancelled in exchange for stock 7,500.00
Services received in exchange for common stock 45,562.00
Note receivable for common stoc 5,000.00
-----------
58,062.00
11. The Company will review its long-lived assets and certain identifiable
intangible assets for impairment at the end of each operating period reported.
The Company will report these assets at recoverable costs.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has not generated any revenues from its planned
principal operations through March 31, 2000. Without realization of additional
capital, it would be unlikely for the Company to continue as a going concern.
It is management's plan to secure additional capital through loans and or
private placements.
-7-
<PAGE>
Stemcell Global Research, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - RELATED PARTY TRANSACTION
Office services are provided without charge by a director. Such costs are
immaterial to the financial statements and, accordingly, have not been reflected
therein. The officers and directors of the Company are involved in other
business activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 6 - LONG TERM COMMITMENTS
The Company neither owns or leases any real or personal property.
NOTE 7-CONVERTIBLE NOTES PAYABLE
The Company has issued $163,000.00 in convertible notes payable at 12% per
annum. The notes have a ninety day term which may be automatically renewed by
the Company. The notes are convertible at the Holder's option at the price of
$.50 per share, the fair market value of the Company's 504 offering, with demand
registration rights and first right of refusal to sell these shares into the
Company's first secondary public offering. The notes are not with a related
party. The Company also agrees to issue an additional 50,000 shares to the
maker of the note, ninety days after the final advance of funds scheduled on
March 22, 2000. The conversion rate is based on the fair market value of the
Company's common stock at the time the notes were negotiated. The Company was
originally advanced $122,500.00 in 1999, of which they had repaid $42,000.00 by
December 31, 1999. The current balance of $163,000.00 reflects additional
advances made through March 31, 2000.
-8-
<PAGE>
James E. Slayton, CPA
2858 West Market Street
Suite C
Akron, Ohio 44333
To Whom It May Concern: June 27, 2000
The firm of James E. Slayton, Certified Public Accountant consents to the
inclusion of my report of March 31, 2000, on the Financial Statements of
Stemcell Global Research, Inc. in any filings that are necessary now or in the
near future to be filed with the U. S. Securities and Exchange Commission.
Professionally,
James E. Slayton, CPA
Ohio License ID # 04-1-15582
