Stemcell Global Research, Inc.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
June 30, 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
James E. Slayton, CPA
2858 West Market Street
Suite C
Akron, Ohio 44333
1-330-864-3553
INDEPENDENT AUDITORS' REPORT
Board of Directors July 31, 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 June 30, 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
Stemcell Global Research, Inc.
(A Development Stage Company)
BALANCE SHEET
AS AT
June 30, 2000
ASSETS
<TABLE>
<CAPTION>
ASSETS June 30 December 31
2000 1999
<S> <C> <C>
CURRENT ASSETS
Cash 25,187.00 7,775.00
Money Market Account 5,909.00 15,374.00
----------------- -------------------
Total Current Assets 31,096.00 23,149.00
PROPERTY AND EQUIPMENT
Property and Equipment 0.00 0.00
----------------- -------------------
Total Property and Equipment 0.00 0.00
OTHER ASSETS
Patent Rights 230,000.00 0.00
----------------- -------------------
Total Other Assets 230,000.00 0.00
----------------- -------------------
TOTAL ASSETS 261,096.00 $23,149.00
========= ==========
</TABLE>
See accompanying notes to financial statements
-2-
Stemcell Global Research, Inc.
(A Development Stage Company)
BALANCE SHEET
AS AT
June 30, 2000
LIABILITIES & EQUITY
<TABLE>
<CAPTION>
December
June 30, 2000 31, 1999
<S> <C> <C>
CURRENT LIABILITIES $0.00 $0.00
--------------------- -------------------
Total Current Liabilities 0.00 0.00
OTHER LIABILITIES
Convertible Notes Payable 389,445.00 85,000.00
Accrued Interest Payable 17,515.00 2,458.00
--------------------- -------------------
Total Other Liabilities 406,960.00 87,458.00
--------------------- -------------------
Total Liabilities 406,960.00 87,458.00
EQUITY
Common Stock, $0.001 par value, authorized 20,000,000 shares;
issued and outstanding at June 30, 2000 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) (291,627.00) (210,072.00)
--------------------- -------------------
Total Stockholders' Equity (145,864.00) (64,309.00)
--------------------- -------------------
TOTAL LIABILITIES & OWNER'S EQUITY 261,096.00 $23,149.00
===================== ===================
</TABLE>
See accompanying notes to financial statements
-3-
Stemcell Global Research, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS
FOR PERIOD
June 30, 2000 (unaudited) and June 30, 1999 (unaudited)
<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
REVENUE (Unaudited) (Unaudited)
<S> <C> <C>
Revenues 0.00 0.00
Interest Income 539.00 0.00
--------------- ----------------
Total Revenue 539.00 0.00
COSTS AND EXPENSES
Selling, General and Administrative 82,094.00 80,762.00
--------------- ----------------
Total Costs and Expenses 82,094.00 80,762.00
--------------- ----------------
Net Income or (Loss) before taxes (81,555.00) (80,762.00)
Income Tax Expense 0.00 0.00
=============== ================
Net Ordinary Income or (Loss) (81,555.00) (80,762.00)
Weighted average
number of common
shares outstanding 1,890,361 1,754,283
Basic Net Loss Per Share (0.04) (0.05)
</TABLE>
See accompanying notes to financial statements
-4-
Stemcell Global Research, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
FOR PERIOD ENDING
June 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES
<TABLE>
<CAPTION>
June 30, 2000 June 30, 1999
<S> <C> <C>
Net (loss) from operations ($81,555.00) (80,762.00)
Adjustments to reconcile net income to net cash
provided
Increase in interest payable 15,057.00 0.00
----------------- -------------------
Net Cash provided by Operating Activities (66,498.00) (80,762.00)
CASH FLOWS FROM INVESTING ACTIVITIES 230,000.00
Patent rights purchased ----------------- -------------------
Net cash used by investing activities (230,000.00) 0.00
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Capital Stock 0.00 100,831.00
Cash received from convertible note payable 334,445.00 17,500.00
Repayment on notes payable (30,000.00) (17,500.00)
----------------- -------------------
Net cash provided by financing activities 304,445.00 100,831.00
Balance at beginning of period 23,149.00 0.00
Net increase (decrease) in cash 7,947.00 20,069.00
Balance as at end of period 31,096.00 20,069.00
</TABLE>
See accompanying notes to financial statements
-5-
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%.
During the period, April 1, 2000 to June 30, 2000, additional convertible
promissory notes in the amount of $256,445.00 were issued at a per annum rate of
12%. These notes are convertible at one share for every $1.20 due the holder of
the note.
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 Company has adopted December 31 as its fiscal year end.
-6-
Stemcell Global Research, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES - CONTINUED
6. 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 June 30, 2000.
7. 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.
8. The Company records its inventory at cost. There was no inventory
through June 30, 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 stock 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 - LONG TERM COMMITMENTS
The Company neither owns or leases any real or personal property.
-7-
Stemcell Global Research, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - 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 June 30, 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.
NOTE 5 - 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 6 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
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. These 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 Company has issued an additional $256,445.00 in convertible notes
payable during the period April 1, 2000 through June 30, 2000. These notes have
a 12% per annum interest rate. The notes are not with a related party and may be
converted at the Holder's option at one share of common stock for every $1.20 of
liability.
NOTE 8- ACQUIRED TECHNOLOGY
The Company acquired rights Edge Sun Spots Technology to certain patents
which are pending. These rights will be amortized over 60 months commencing
July 1, 2000.
-8-
James E. Slayton, CPA
2858 West Market Street
Suite C
Akron, Ohio 44333
To Whom It May Concern: July 31, 2000
The firm of James E. Slayton, Certified Public Accountant consents to the
inclusion of my report of June 30, 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
