SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
Commission File number 1-7301
Renu-U International, Inc. (formerly Zhou Lin International, Inc.)
(Exact name of Registrant as Specified in its Charter)
Delaware 75-1329265
(State or other jurisdiction of I.R.S. Employer Identification
incorporation or organization) Number
3789 South 500 West, Salt Lake City, Utah 84115
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (801) 262-5052
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, $.001
PAR VALUE
Check whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [__]
The issuer's revenues for the fiscal year ended December 31, 1996 were
$1,512.00.
The aggregate market value of voting stock held by non-affiliates
(3,644,491 shares) of the registrant, based upon the closing sales price of the
registrant's common stock as reported on the NASD Bulletin Board on May 19,
1997, was approximately $1,366,684.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of May 19, 1997: 9,961,241.
TABLE OF CONTENTS
PART I
Item 1. Business............................................................3
Item 2. Properties..........................................................8
Item 3. Legal Proceedings...................................................8
Item 4. Submission of Matters to a Vote of Security Holders.................8
PART II
Item 5. Market for Company's Common Equity and Related Stockholder Matters..9
Item 6. Plan of Operations..................................................9
Item 7. Financial Statements ..............................................10
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................................10
PART III
Item 9. Directors, Executive Officers, Promoters and Control Person;
Compliance with Section 16(a) of the Exchange Act..................10
Item 10. Executive Compensation............................................12
Item 11. Security Ownership of Certain Beneficial Owners and Management....12
Item 12. Certain Relationships and Related Transactions....................12
Item 13. Exhibits and Reports on Form 8-K..................................13
FINANCIAL STATEMENTS........................................................15
ITEM 1. BUSINESS
BUSINESS PLAN
The Company is currently preparing to enter the business of owning and
operating pain management and physical wellness centers (hereafter "the
Centers"). The Centers will focus on providing physical and nutritional
consultation and treatment through, in large part, Bio-Resonance Therapy
Devices. The business plan for this new venture has not been fully developed
at this time. Further development in the plan will occur after the Company
opens its first Center, which is expected in June of 1997.
CORPORATE HISTORY
The Registrant has experienced several changes in management and control
since its inception in 1971. During such transitions, some of the corporate
records have been lost or misplaced and the Registrant does not have complete
records with regard to its historical activities. The following chronology is
derived from corporate records in the possession of current management and from
historical financial statements and periodic reports filed with the Commission.
Such chronology is accurate to the best knowledge of current management who has
been associated with the Registrant since 1986.
Renu-U International, Inc. (the "Registrant" or "the Company") was
incorporated under the laws of the State of Delaware on June 14, 1971 under the
name of Worldcom, Inc. On February 8, 1972, after approval of the stockholders
of both corporations, Worldcom, Inc. ("Worldcom") effected a statutory merger
with Strategic Metals Research, Inc. ("Strategic"), a publicly-held Utah
corporation. Under the terms of the merger, Registrant issued 300,000 of its
common shares in exchange for all 4,825,800 of the Strategic shares then
outstanding (excluding fractional shares) on an exchange ratio of one Worldcom
share for each 16,086 Strategic shares. Worldcom was specified as the survivor.
The agreement of merger was filed in Delaware and Utah on or about February 8,
1972. Strategic was effectively merged into Worldcom and its existence as a
separate Utah corporation was terminated. The transfer records of the
Registrant indicate that after the 1972 merger, Worldcom shares were traded in
the over-the-counter securities market then having approximately 3,596
stockholders.
The registrant filed a Form 10 registration statement with the Securities
and Exchange Commission in May of 1972 and filed annual reports until April
1976. Registrant discontinued its operations after 1976 and was inactive from
approximately 1976 until June 1988. On August 6, 1982, Registrant's records
indicate that its Articles of Incorporation were amended changing its name from
Worldcom, Inc., to Charter West Corporation ("Charter") and increasing the
authorized shares of common stock from 5,000,000 shares of $.10 par value per
share to 50,000,000 shares of $.001 par value per share.
A special meeting of the stockholders was held on June 22, 1983, to present
to stockholders a proposal offered by the officers of Selinger Pharmaceuticals,
Inc. ("Selinger"), a privately held Illinois corporation, to effect a plan and
agreement of business reorganization as between Selinger and Charter. The form
of the reorganization as presented in the notice of meeting was a statutory
merger between the two companies contemplating a merger of Selinger into Charter
with Charter as the survivor, with a change of Registrant's name to Selinger
Pharmaceuticals, Inc., and the issuance of 1,058,000 new shares (20% of the
total outstanding post-merger shares) to existing stockholders of Charter in
exchange form their 1,058,000 Charter shares; and the issuance of 4,232,000 new
shares (80% of the total past merger shares) to the stockholders of Selinger.
At the special meeting of June 22, 1983, the form of the proposed
reorganization was changed (with no change in the total or percentages of shares
to be issued), and Charter agreed to acquire all of the assets, and assume all
of the liabilities of Selinger. In addition, the shareholders approved the
change of name of the Registrant from _Charter West Corporation_ to "Selinger
Pharmaceuticals, Inc." and the capitalization 50,00,000 common shares with a par
value of one mil ($.001).
On June 23, 1983, the Plan and Agreement of Reorganization (the "Plan") was
executed by the respective corporations. The Amendments to the Articles of
Incorporation of the Registrant was executed and filed with the Secretary of
State of Delaware January 20, 1984.
Subsequent to the shareholders meeting of June 22, 1983, it was discovered
by Registrant's newly elected officers and directors that he Registrant was a
reporting company under Section 12(g) of the Securities Exchange Act of 1934 and
that no reports had been filed since 1975. Registrant's management then
commenced an audit of the Registrant, and on November 12, 1984, the Directors
adopted a resolution approving a Rescission Agreement to rescind the plan and to
accept the return of the 4,232,000 shares issued to the stockholders of
Selinger, as described above, subject to ratification by the shareholders of
Registrant at a future shareholders' meeting to be held subsequent to the
completion of the audit of Registrant's financial statements for the year ended
December 31, 1984, and the filing of the corresponding Form 10-K.
An annual meeting of the shareholders was held on June 21, 1985, pursuant
to call and notice. However, the call and notice excluded those former
shareholders of Selinger Pharmaceuticals, Inc., (Illinois) who received shares
of Registrant in the above reorganization with Selinger (Illinois). At the
shareholders meeting on June 21, 1985, the shareholders (excluding those holding
shares received in the reorganization with Selinger (Illinois)) approved and
ratified the rescission of that Plan and Agreement of Reorganization dated June
23, 1983, whereby the Registrant would acquire all of the assets of Selinger
Pharmaceuticals, Inc., an Illinois corporation, in consideration for the
issuance by Registrant of 4,232,000 of its theretofore authorized but unissued
common stock. Said Shareholders ratified the rescission by casting 619,250
affirmative votes, with 187 negative votes cast with respect thereto.
Management of the Registrant was subsequently informed by legal counsel
that despite the Rescission Agreement executed between Registrant and Selinger
Pharmaceuticals, Inc. (Illinois) and the subsequent ratification by the
shareholders of the Registrant (excluding those shareholders of Selinger
Pharmaceuticals, Inc. (Illinois) who obtained shares of the Registrant through
the reorganization of June 23, 1983), the shares of the Registrant would be
treated as issued and outstanding until such time as the shares had been
physically returned and canceled or an indemnification letter, in a form
satisfactory to counsel had been submitted by said shareholder representing
return of said shares for cancellation.
Management of the Registrant has attempted to retrieve the stock
certificates representing the 4,232,000 shares issued to the shareholders of
Selinger (Illinois) or to obtain an indemnification letter for such
certificates. By December 31, 1988, management had canceled 3,288,909 of such
shares.
Management reached an agreement with Donald Mayer on or about May 28, 1986
that 121,147 shares issued to him or his nominees pursuant to said
reorganization will be retained by him for past services to the Registrant
unrelated to the reorganization and will not be canceled.
At a Special Meeting of the Directors held on October 9, 1985, the
Directors agreed to acquire all of the shares of Selinger Development, Inc., a
Utah corporation, from Dr. Eric Brown. The Registrant agreed to issue 500,000
shares of its common stock in return for 1,000 shares of Selinger Development,
Inc. which represented all of the issued and outstanding shares of such company.
Following said Resolution, an Agreement and Plan of Reorganization was
executed by the parties in October 1985, to effect the transaction. On or about
May 28, 1986, by Agreement of the Registrant and Dr. Eric Brown, the Agreement
of Reorganization entered into in October 1985, by the Registrant to acquire all
of the stock of Selinger Development, Inc., a Utah corporation, consisting of
1,000 shares in exchange for 500,000 shares of the Registrant was rescinded and
the 1,000 shares of Selinger Development were returned to Dr. Brown. Dr. Brown
subsequently returned the 500,000 shares of common stock of the Registrant,
which shares were canceled.
During 1987 the Registrant did not engage in any operations other than to
seek suitable business ventures to acquire or opportunities in which the
Registrant can participate. During February and March of 1987 the Registrant
raised $30,000 in a private placement of 120,000 shares of its common stock.
The proceeds of the private placement were used for the purposes of searching
for a business opportunity, and to bring the Company into state and federal
regulatory compliance through financial audits and filings with the Securities
and Exchange Commission.
On June 7, 1988 the Registrant entered into an Agreement and Plan of
Reorganization whereby the Registrant acquired all of the shares of UroMedic
Incorporated, a Delaware Corporation, in exchange for 5,676,750 shares of the
Registrant. At a special meeting of the Registrant's shareholders, the
shareholders elected new directors, approved the acquisition and a name change
from Selinger Pharmaceutical, Inc. to ProMedica, Inc. As a result of the
acquisition, to the Registrant became the parent company for UroMedic. Through
mid 1989 the Registrant did not have any operations aside from those of Uromedic
which operates a clinic for the diagnosis and treatment of male sexual
dysfunction.
In October of 1989 the Registrant entered into a Rescission Agreement,
effective January 1, 1989, rescinding the acquisition of Uromedic. Pursuant to
the Agreement, Dr. John Hunter canceled 5,776,750 shares issued pursuant to the
1988 acquisition. Simultaneous with the Rescission, Frank Nelson was appointed
President and remained the Company's sole officer and director. Subsequently,
the Board authorized issuance of 5,776,750 shares to Frank Nelson for
cancellation of an officer loan.
In 1993 the Company issued 30,360,183 to 26 residents of Taiwan. These
shares were issued with the understanding that the Company would receive
$4,635,000. These subscription funds, however, were never received by the
company. Pursuant to the transaction, George Yang was appointed president and
director of the Registrant. Due to the non-receipt of subscription funds, Mr.
Yang returned 23 of the 26 certificates that were issued. The remaining 3
certificates were canceled from the books and records of the Registrant. On
February 3, 1994, at a special meeting of the Registrant's board of directors,
Mr. Yang was removed from his position as an officer and director and Frank
Nelson was appointed as President.
As reported on Form 8-K on September 23, 1994, in June 1994 the Company
entered into an Acquisition Agreement and Plan of Reorganization with Beijing
Zhou Lin Bio-Frequency Spectrum Corporation (hereafter "Zhou Lin"). Pursuant to
the Agreement, the Company acquired all of the equity of Zhou Lin, which is a
corporation organized in 1991 in the People's Republic of China and engaged in
the business of research, development, manufacturing and marketing of bio-
frequency spectrum physiotherapy products. A total of 40 million shares were
issued for the acquisition. In November of 1994 the Company held a Special
Meeting of the Shareholders wherein they elected new directors and authorized a
change in the name of the Company to Zhou Lin International, Inc.
In February 1995 a dispute developed between the Company and Zhou Lin
management, which was disclosed in the Company's report on Form 8K dated March
6, 1995. The dispute resulted in both parties agreeing that the acquisition has
been rescinded, and the newly elected directors renouncing their elections and
appointments. Additionally, the 40 million shares issued in the acquisition
have been returned and canceled. Frank Nelson and Jianmin Lu remained in their
positions as directors, Mr. Nelson being appointed President and Mr. Lu
appointed as Secretary/Treasurer.
In 1996, the Company commenced work with Dr. Jean-Francois Hibbert, of
Harris, New York. This work has resulted in the Company developing a new
business opportunity in the field of physical care and development.
Consequently, the Company is working towards owning and operating pain
management and physical wellness centers (hereafter "the Centers"). The Centers
will focus on providing physical and nutritional consultation and treatment (see
Plan of Operations).
ITEM 2. PROPERTIES
The Registrant currently owns no properties. The Company currently
occupies approximately 1,000 square feet of office space for a monthly lease of
$500.
ITEM 3. LEGAL PROCEEDINGS
There are no legal proceedings pending or threatened against Registrant to
the knowledge of its officers.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special Meeting of Stockholders was held on December 20, 1996 for
shareholders of record at November 15, 1996. At the meeting, a majority of the
shareholders voted in favor of the following:
1. To change the name of the Company from Zhou Lin International, Inc. to
Renu-U International, Inc.
2. To the creation of three classes of preferred stock, with the terms to
be set by the Board of Directors.
3. To authorize a reverse split, up to 1 for 30 basis, at the discretion
of the Board of Directors.
4. To elect directors to hold office for one year.
5. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Subsequent to the end of the fiscal year, the trading symbol was changed
from ZLII to RNUI, is currently quoted at a $.375 offer. Though the Company has
been unable to obtain historical quotation information for the Company's stock,
it is management's recollection that the stock has been quoted at 1/8 bid for
approximately two years. There has only been a limited public trading market for
such stock for the preceding several years. As of such date, there were
9,961,241 shares of Common Stock outstanding held by 3,703 holders of record,
including broker-dealers and clearing corporations holding shares on behalf of
their customers. No dividends have been declared by the Registrant during the
seven most recent fiscal years. The Registrant has no intention of paying cash
dividends in the near future.
ITEM 6. PLAN OF OPERATIONS
In early 1996, the Company commenced work with Dr. Jean-Francois Hibbert.
This work has resulted in the Company developing a new business opportunity in
the field of pain management and physical wellness utilizing Bio-Resonance
Therapy (_BRT_). Consequently, the Company is working towards owning and
operating pain management and physical wellness centers (hereafter "the
Centers") domestically and internationally.
The business operation of the Company will be developed in two phases.
Phase I includes the establishment of several of the treatment Centers. An
initial Center will be located in New York for emphasis on the treatment of pain
and sports medicine, with current intent to open subsequent Centers in Utah.
Each Center will occupy approximately 2500 sq. feet of space and will be staffed
by approximately six employees under the direction of a medical doctor. As the
business develops, in Phase II the Company intends to license and franchise
these Centers. The Center is scheduled to open in Tarrytown, New York in early
June of 1997. The New York Center will be managed by Dr. Hibbert and will offer
clients a complete fitness and wellness therapy package, including Bio Resonance
Therapy, flexibility training, and nutrition consultation.
Each Center will be equipped with Bio-Resonance Therapeutical devices. BRT
devices were first developed in the far east in the 1970s. The Company and its
consultants have modified the BRT device design (hereafter "Device") for use in
the United States. The Device operates on 110 volts to generate an evenly
heated pattern of energy field. The designers believe this field duplicates the
natural energy field generated by the human body and, therefore, assists the
human body to minimize or reduce pain and self heal. A BRT would be categorized
under FDA guidelines as a non-invasive medical device. Some of the components
for these Devices will be imported and then assembled in the United States
exclusively for the Company. Management does not anticipate any difficulty in
obtaining the necessary devices for the Centers. The Centers will primarily
compete with medical facilities that focus on pain management and therapy. The
Centers will be unique, however, in that they will provide BRT using the
equipment designed by the Company.
The Company is currently working with the manufacturer to develop a hand-
held BRT unit. This smaller unit will operate under the same principals as the
device installed in the Centers, but at significantly lower capacity. These
smaller devices will be marketed through a variety of marketing channels for
home use.
The Registrant is currently conducting only limited business operations.
At December 31, 1996, the Registrant had current assets of $53,229 and current
liabilities of $45,991. The Company had total assets of $71,171 and total
liabilities of $141,991. The increase in assets is due to a private placement
of debentures in July of 1996. The liabilities consist of accounts payable for
services provided to the Registrant for legal, accounting and stock transfer
services. At December 31, 1995, the Registrant had no assets and $38,300 in
total liabilities. The increase in liabilities primarily resulted from the
private sale of debentures in July of 1996.
In the summer of 1996, the Company privately raised $96,000 through the
sale of debentures which are convertible into the Company's common stock at 75%
of the average bid price for the ten trading days prior to conversion. The
Registrant will need additional funding in order to pay its obligations, file
periodic reports and continue its currently planned business of owning and
operating pain management centers. The Registrant has not entered into any
agreement for the provisions of such additional funding and no assurances can be
given that such funding will be available to the Registrant on terms acceptable
to it or at all.
ITEM 7. FINANCIAL STATEMENTS
The Registrant's audited balance sheets at December 31 1996, together with
the related audited statements of operations, changes in stockholders' equity
and cash flows for the years ended 1996 and 1995, are included herein.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND
FINANCIAL DISCLOSURE
There are no and have not been any disagreements between the Registrant and
any of the accountants on any matter of accounting principles or practices or
financial statement disclosure. In 1996 the Company appointed Orton & Company
as its independent auditors. Kevin Orton, owner and managing auditor of Orton &
Company was formerly a partner with the Company's previous auditing firm Jones,
Jensen, Orton & Company. The appointment of Orton & Company was not the result
of any dispute with the prior firm.
[This space intentionally left blank]
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
EXECUTIVE OFFICERS AND DIRECTORS
The Executive Officers and Directors of the Company at the date of this
filing are as follows:
Year First
Name Age Position Elected/Appointed
Frank A. Nelson 75 President and Director 1983
Jean-Franscois Hibber 39 Vice President and Dir. 1996
Jianmin Lu 44 Vice President, 1993
Secretary, Treasurer
and Director
The term of office of each director is one year and until his successor is
elected at the Registrant's annual shareholders' meeting and is qualified,
subject to removal by the shareholders. The term of office for each officer is
one year and until his successor is elected at the annual meeting of the Board
of Directors and is qualified, subject to removal of the Board of Directors.
FRANK A. NELSON, was first nominated as a director of the Company in 1983
and has served in various positions as President or Vice President since that
time. Mr. Nelson attended the University of Utah for approximately four years,
and then entered the military where he is was an infantry company commander
during WWII, following which he entered the business of banking for the next
forty years. Mr. Nelson is a former president of the Utah Bankers Association,
and has been President of the Bank of St. George, St. George, Utah and Murray
State Bank, Murray, Utah, and United Bank, also of Murray, Utah. Mr. Nelson is
also former president Greenwich Pharmaceutical, Newport Pharmaceuticals, Inc.,
Natural Pharmaceuticals International, Inc., and Emdeko International, Inc.
JIANMIN LU, was first appointed secretary, treasurer and a director in
April 1993. Mr. Lu, a Chinese citizen, was born and raised in China and has
lived in the United States since 1987. From 1991 to present, Mr. Lu has been
self employed as a business consultant in international business and has
provided consulting services to several companies, including Natural
Pharmaceuticals International, Inc. and Sunrider International, Inc. From 1990
to 1991, he was an international consultant to C.I. Consulting , an affiliated
company of Cannon Industries. Mr. Lu graduated from the University of Utah in
1989 with a Master in Business Administration. Prior to attending the
University of Utah, Mr. Lu resided in Fuzhou, China where he was engaged in the
private practice of law. Mr. Lu has also received the equivalent of a B.S.
degree in metallurgical engineering from Shanghai University of Technologies in
1977.
DR. JEAN-FRANCOIS HIBBERT, was appointed Vice President in 1996. Dr.
Hibbert received his B.A. degree from Brown University in 1979 and his M.D. from
the University of Massachusetts in 1983. He interned at the Bridgeport Hospital
in Bridgeport Connecticut and completed his residency at the Yale School of
Medicine/Medical Center in New Haven, Connecticut in 1986. He is certified as
an emergency physician by the Diplomate Board of Certification in Emergency
Medicine. Since 1988 Dr. Hibbert has served in the Community General Hospital
in Harris, New York and is now the Assistant Director of Emergency Services.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of Forms 3 and 4, and amendments thereto,
furnished to the Registrant under Rule 16a-3(d) during its most recent fiscal
year and Forms 5, and amendments thereto, furnished to the Registrant with
respect to its most recent fiscal year, there have been no failure to file
reports on a timely basis as required by Section 16(a) during the fiscal year
ended December 31, 1996, or since that time, except for the failure to file
annual reports on Form 5. There have, however, been no changes in stock
ownership of such persons required to file during those periods.
ITEM 10. EXECUTIVE COMPENSATION
During the fiscal year ended December 31, 1996, the Company's President and
CEO received no salary or other compensation for his services. The Company's
vice president, Mr. Lu, did receive $11,000 in advances toward travel expenses
during the year, of which approximately $12,700 has been expended. There have
been no transactions between the Registrant and any individual named in Item 9,
except as set forth in this Item 10.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following is a list of security ownership of management and beneficial
owners who owned or possessed voting control exceeding 5% of the Registrant's
outstanding Shares at December 31, 1997, at which time the Company had 9,961,241
common shares outstanding.
Title Name Amount Percent
of Class and Address of Ownership of Class
Common Frank Nelson1 6,176,750 62.0
Jianmin Lu 0 0.0
Dr. Jean-Francois Hibbert 10,000 .1
All Officers and Directors 6,186,750 62.1%
as a group (3 persons)
(1) Includes 5,776,750 held by the wife of Frank Nelson.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 13. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON
FORM 8-K
Page
1. Documents filed with this report: No.
The following financial statements are included immediately following
this report.
Certified Public Accountant's Audit Report 15
Balance Sheets 16
Statements of Operations 17
Statements of Changes in Stockholders' Equity 18
Statements of Cash Flows 20
Notes to Financial Statements 21
2. Reports on Form 8-K
None
3. Exhibit Index
SIGNATURES
Pursuant to the requirements of Section 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: May 18, 1997
RENU-U INTERNATIONAL, INC.
Frank Nelson, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Name Title Date
President and Director May 18, 1997
Frank Nelson (Principal Executive Officer)
Secretary and Director May 18, 1997
Jianmin Lu (Principal Accounting Officer)
Vice President and Director May 18, 1997
Jean Francois Hibbert
Independent Auditors' Report
To the Board of Directors and Stockholders of Renu-U International, Inc.
(formerly Zhou Lin International, Inc.)
We have audited the accompanying balance sheets of Renu-U International, Inc.
(formerly Zhou Lin International, Inc.) (a development stage company) as of
December 31, 1996 and the related statements of operations, stockholders' equity
and cash flows for the years ending December 31, 1996 and 1995 and for the
period January 1, 1983 (beginning of development stage) through December 31,
1996. 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 financial statements referred to above present fairly, in
all material respects, the financial position of Renu-U International, Inc.
(formerly Zhou Lin International, Inc.) as of December 31, 1996 and the results
of its operations and cash flows for the years ended December 31, 1996 and 1995
and for the period January 1, 1983 (beginning of development stage) through
December 31, 1996, 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 2 to the
financial statements, the Company has no operating capital and has had no
operations. These factors raise substantial doubt about its ability to continue
as a going concern. Management's plans in regard to these matters are also
described in the Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Orton & Company
Certified Public Accountants
Salt Lake City, Utah
May 6, 1997
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Balance Sheet
ASSETS
December 31,
1996
<TABLE>
<CAPTION>
<S> <C>
Current Assets
Cash $ 53,229
Fixed Assets
Office equipment (Note 1) (Note 3) (net) 10,385
Other Assets
Medical equipment (Note 3) 7,207
Deposits (Note 4) 350
$ 71,171
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 45,991
Long term debt (Note 5) 96,000
Stockholders' Equity
Preferred stock, $.10 par value 1,000,000 shares
authorized, no shares issued or outstanding -
Common stock $.001 par value, 100,000,000 shares
authorized, 9,961,241 shares issued and outstanding 9,961
Capital in excess of par 753,342
Retained (deficit) (834,123)
(70,820)
$ 71,171
</TABLE>
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
For the
Period During
the Development
Stage from
January 1, 1983
Through
December 31, December 31,
1996 1995 1996
<S> <C>
Revenue:
Interest income $ 1,512 $ - $ 3,831
Expenses:
Amortization and depreciation 516 - 591
Bad debts - - 18,000
Consulting and professional fees 25,425 14,525 188,688
Miscellaneous - - 2,351
Office and administrative 6,849 8,400 50,374
Taxes 300 - 420
Interest 5,760 611 10,571
Travel and entertainment 10,155 - 13,218
Lease 2,690 - 2,690
Total Expenses 51,695 23,536 286,903
Net Loss $ (50,183) $ (23,536) $ (283,072)
Net Loss Per Share (Note 1) $ (.00) $ (.00) $ (.04)
Average shares outstanding 9,961,241 9,961,241 8,004,457
</TABLE>
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Statement of Stockholders' Equity
<TABLE>
<CAPTION>
Capital Retained
Common Stock In Excess Earnings
Shares Amount Par (Deficit)
<S> <C>
Balance-January 1, 1983 1,058,680 $ 1,059 $ 549,992 $ (551,051)
Issuance of common stock to
acquire 100% of Selinger
Pharmaceuticals, Inc., June,
1983 at $.03 per share 4,234,720 4,235 8,265 -
Net loss for the year ended
December 31, 1983 - - - (12,500)
Balance-December 31, 1983 5,293,400 5,294 558,257 (563,551)
Net Income for the year ended
December 31, 1984 - - - -
Balance-December 31, 1984 5,293,400 5,294 558,257 (563,551)
Issuance of common stock
to acquire 100% of
outstanding common stock of
Selinger Development, Inc.,
October 1985 500,000 500 (500) -
Net Loss for the year ended
December 31, 1985 - - - (19,365)
Balance-December 31, 1985 5,793,400 5,794 557,757 (582,916)
Rescission of acquisition
of Selinger Development,
Inc., May, 1986 - - - -
Cancellation of common stock
in connection with recision
of acquisition of Selinger
Development Inc. (500,000) (500) 500 -
Cancellation of common stock
in connection with recision
of acquisition of Selinger
Pharmaceuticals, Inc. (2,694,562) (2,695) 2,695 -
Issuance of common stock
in private placement at
$.25 per share, October
1986 160,000 160 39,840 -
Net Loss for the year ended
December 31, 1986 - - - (38,552)
Balance-December 31, 1986 2,758,838 2,759 600,792 (621,468)
Issuance of common stock
in private placement at
$.25 per share, February-
March, 1987 120,000 120 29,880 -
Cancellation of common stock
in connection with recision
of acquisition of Selinger
Pharmaceuticals, Inc. (594,347) (594) 594 -
Net loss for the year ended
December 31, 1987 - - - (19,124)
Balance-December 31, 1987 2,284,491 2,285 631,266 (640,592)
Issuance of common stock
for services rendered by
Officers of the Corporation;
May, 1988 at $.02 per share 500,000 500 9,500 -
Issuance of common stock in
private placement at $.25
per share 360,000 360 89,640 -
Cancellation of $90,000 note
to Uromedic - - (90,000) -
Net Loss for the year ending
December 31, 1988 - - - (30,002)
Balance-December 31, 1988 3,144,491 3,145 640,406 (670,594)
Contribution from officer,
January 1, 1989 - - 17,072 -
Issuance of common stock to
officer for payment of
corporate liability
January 1, 1989 at $.003
per share 5,776,750 5,776 9,763 -
Issuance of common stock
for cash at $.01 per
share to officers of the
Corporation, May 1989 500,000 500 4,500 -
Issuance of common stock
for cash at $.02 per share
to officers of the
Corporation, September 1989 500,000 500 9,500 -
Net Loss for the year ended
December 31, 1989 - - - (39,455)
Balance-December 31, 1989 9,921,241 9,921 681,241 (710,049)
Net loss for the year ended
December 31, 1990 - - - (1,803)
Balance-December 31, 1990 9,921,241 9,921 681,241 (711,852)
Net loss for the year ended
December 31, 1991 - - - (1,599)
Balance-December 31, 1991 9,921,241 9,921 681,241 (713,451)
Expenses paid by officers
of the Corporation - - 7,179 -
Net loss for the year ended
December 31, 1992 - - - (2,001)
Balance-December 31, 1992 9,921,241 9,921 688,420 (715,452)
Expenses paid by officers
of the Corporation - - 13,132 -
Net loss for the year ended
December 31, 1993 - - - (5,075)
Balance-December 31, 1993 9,921,241 9,921 701,552 (720,527)
Expenses paid by officers of
the Corporation (Note 4) - - 17,971 -
Issuance of Common Stock for
services performed to
corporation at $.16 per share 40,000 40 6,255 -
Net Loss for the year ended
December 31, 1994 - - - (39,877)
Balance - December 31, 1994 9,961,241 9,961 725,778 (760,404)
Expenses paid by officers of
the Corporation (Note 4) - - 9,901 -
Net Loss for the year ended
December 31, 1995 - - - (23,536)
Balance - December 31, 1995 9,961,241 9,961 735,679 (783,940)
Expenses paid by officers of
the corporation (Note 3) - - 10,013 -
Equipment paid for and
contributed by officers of
the corporation (Note 3) - - 7,650 -
Net loss for the year ended
December 31, 1996 - - - (50,183)
Balance - December 31, 1996 9,961,241 $ 9,961 $ 753,342 $ (834,123)
</TABLE>
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
For the
Period
During the
Development
Stage from
January 1,
1983 Through
December 31, December 31,
1996 1995 1996
<S> <C>
Cash Flow Provided From
Operations:
Net loss from operations $ (50,183) $ (23,536) $(281,397)
Items not requiring cash flow
during current period:
Amortization and Depreciation 516 - 591
Issuance of capital stock for
services - - 28,795
Bad debts - - 18,000
Decrease in notes receivable - - (3,000)
Increase (Decrease) in accounts
payable 7,691 13,635 44,316
Expenses paid by officer 10,013 - 90,807
Net Cash Flow Used For
Operations (31,963) - (101,888)
Cash Flow Provided From
Financing Activities:
Issuance of notes payable 96,000 - 96,000
Issuance of capital stock
for cash - - 175,000
Net Cash Flow Provided From
Financing Activities 96,000 - 271,000
Cash Flow Used For Investing
Activities:
Cash paid toward deposits and
other assets (2,757) - (2,757)
Cash invested in subsidiary - - (105,000)
Cash paid toward fixed assets (8,051) - (8,126)
Net Cash Flow used for
investing activities (10,808) - (115,883)
Net Cash Flow 53,229 - 53,229
Cash-Beginning of Period - - -
Cash-End of Period $ 53,229 $ - $ 53,229
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ - $ - $ 3,933
Income Tax - - -
Equipment contributed by
officer (Note 3) $ 7,650 $ - $ 7,650
</TABLE>
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The Company was incorporated under the laws of the State of Delaware
on June 14, 1971. The Company was involved in various activities over
the years, none of which proved successful. During the year 1983, the
Company discontinued all operations and has had no significant
revenues from any activity since that time and is classified as a
development stage company per SFAS #7.
In 1996, the Company commenced work with Dr. Jean-Francoi Hibbert, of
Harris, New York. This work resulted in the Company developing a new
business opportunity in the field of physical care and development.
Consequently, the Company is working towards owning and operating pain
management and physical wellness centers. The Centers will focus on
providing physical and nutritional consultation and treatment.
b. Income Taxes
The Company adopted Statement of Financial Accounting Standards No.
109 _Accounting for Income Taxes_ in the fiscal year ended December
31, 1996 and has applied the provisions of the statement on a
retroactive basis to the previous fiscal year which resulted in no
significant adjustment.
Statement of Financial Accounting Standards No. 109 "Accounting for
Income Taxes" requires an asset and liability approach for financial
accounting and reporting for income tax purposes. This statement
recognizes (a) the amount of taxes payable or refundable for the
current year and (b) deferred tax liabilities and assets for future
tax consequences of events that have been recognized in the financial
statements or tax returns.
Deferred income taxes result from temporary differences in the
recognition of accounting transactions for tax and financial reporting
purposes. There were no temporary differences at December 31, 1996
and earlier years, accordingly, no deferred tax liabilities have been
recognized for all years.
The Company had cumulative net operating loss carryforwards of
approximately $280,000 at December 31, 1996 and $230,000 at December
31, 1995. No effect has been shown in the financial statements for
the net operating loss carryforwards as the likelihood of future tax
benefit from such net operating loss carryforwards is not presently
determinable. Accordingly, the potential tax benefits of the net
operating loss carryforward estimated based upon current tax rates of
$95,000 at December 31, 1996 and $78,000 at December 31, 1995 have
been offset by valuation reserves of the same amount. The net change
in deferred tax asset and offsetting valuation reserve amounted to
$17,000 for 1996 and $8,100 for 1995. The net operating losses begin
to expire in the year 1997.
c. Loss Per Share
The computation of loss per share of common stock is based on the
weighted average number of shares outstanding during the period.
d. Cash and Cash Equivalent
For the purposes of the statement of cash flows, the Company considers
all highly liquid debt instruments with maturity of three months or
less to be cash equivalents.
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
e. Property and Equipment
Property is recorded at cost or estimated fair value at the time of
acquisition (purchase or donation by officer/director).
Property and Equipment consist of the following at December 31, 1996
and 1995:
<TABLE>
<CAPTION>
1996 1995
<S> <C>
Office Equipment $ 10,976 $ 75
Less: Accumulated Depreciation (591) (75)
Total Property and Equipment $ 10,385 $ -
</TABLE>
Depreciation expense is computed on the straight-line method over the
estimated useful lives of the assets (five to seven years).
Depreciation expense for the period ended December 31, 1996 and 1995
is $516 and $0 respectively.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using 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. Currently, the Company does not
have significant cash or other material assets, nor does it have an
established source of revenues sufficient to cover its operating costs
and to allow it to continue as a going concern. It is the intent of
the Company to develop its business in the field of total wellness and
fitness development. (See Note 1)
NOTE 3 - RELATED PARTY TRANSACTIONS
Frank Nelson, a major shareholder/officer, paid expenses of the
Company totaling $10,013 and $9,901 in 1996 and 1995, respectively in
behalf of the Company. These expenses are shown as a contribution to
capital. During the year, Mr. Nelson also contributed $7,650 worth of
office and medical equipment for future use in wellness centers that
will be opened in the coming years.
Mr. Nelson also rents space to the Company on a month to month basis
for $300 a month. ($500 a month beginning May 1, 1997).
In June 1996, Mr. Nelson provided $50,000 in long-term financing for
the Company (See Note 5).
NOTE 4 - LEASE COMMITMENT
The Company (in the name of Mr. Nelson) leased an automobile for
company use. The lease terms are as follows.
Payments $308 per month
Length 36 months
Deposit $350
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1996
NOTE 4 - LEASE COMMITMENT (Continued)
Future lease commitments:
1997 $ 3,696
1998 $ 3,696
1999 $ 2,156
NOTE 5 - LONG TERM DEBT
During the year, the Company borrowed $96,000 from 3 private
individuals ($50,000 from Frank Nelson) to provide financing for the
Company operations. The notes are dated July 1, 1996 with a maturity
date of June 30, 1998, stated interest rate of 12%, unsecured. The
notes are convertible into common stock at 75% of a ten day average
trading bid price.
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The following of the estimated fair value of financial instruments is
made in accordance with the requirements of SFAS No. 107, _Disclosure
about Fair Value of Financial Instruments_. The carrying amounts and
fair value of the Company's financial instruments at December 31, 1996
and 1995 are as follows:
<TABLE>
<CAPTION>
December 31, 1996
Carrying Fair
Amounts Values
<S> <C>
Cash and cash equivalents $ - $ -
Long-term debt including
current maturities $ 96,000 $ 96,000
</TABLE>
The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments.
Cash and Cash Equivalents
The carrying amounts reported on the balance sheet for cash and cash
equivalents approximate their fair value.
Long-term Debt
The fair values of long-term debt are estimated using discounted cash
flow analyses based on the Company's incremental borrowing rate as the
discount rate.
NOTE 7 - USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the
date of the financial statements and revenues and expenses during the
reporting period. In these financial statements, assets, liabilities
and earnings involve extensive reliance on management's estimates.
Actual results could differ from those estimates.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 53,229
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 53,229
<PP&E> 10,385
<DEPRECIATION> 591
<TOTAL-ASSETS> 71,171
<CURRENT-LIABILITIES> 45,991
<BONDS> 0
0
0
<COMMON> 763,303
<OTHER-SE> (834,123)
<TOTAL-LIABILITY-AND-EQUITY> 71,171
<SALES> 1,512
<TOTAL-REVENUES> 1,512
<CGS> 0
<TOTAL-COSTS> 51,695
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,760
<INCOME-PRETAX> (50,183)
<INCOME-TAX> 0
<INCOME-CONTINUING> (50,183)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (50,183)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
