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, 1997
Commission File number 1-7301
Renu-U 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, 1997 were
$27,851.
The aggregate market value of voting stock held by non-affiliates
(3,777,491shares) of the registrant, based upon the closing sales price of the
registrant's common stock as reported on the NASD Bulletin Board on July 3,
1998, was approximately $1,415,434.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of July 3, 1998: 9,961,241.
TABLE OF CONTENTS
PART I
Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 4
Item 4. Submission of Matters to a Vote of Security Holders . . . . 4
PART II
Item 5. Market for Company's Common Equity and Related Stockholder
Matters. . . . . . . . . . . . . . . . . . . .. . . . . . .4
Item 6. Plan of Operations. . . . . . . . . . . . . . . . . . . . . 5
Item 7. Financial Statements . . . . . . . . . . . . . . . . . . . 7
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . . . . . . . . 7
PART III
Item 9. Directors, Executive Officers, Promoters and Control Person;
Compliance with Section 16(a) of the Exchange Act . . . . . 8
Item 10. Executive Compensation . . . . . . . . . . . . . . . . . . 9
Item 11. Security Ownership of Certain Beneficial Owners and
Management. . . . . . . . . . . . . . . . . . . . . . . .. 9
Item 12. Certain Relationships and Related Transactions . . . . . .10
Item 13. Exhibits and Reports on Form 8-K . . . . . . . . . . . . .10
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . .11
ITEM 1. DESCRIPTION OF BUSINESS
The following narrative of this annual report contains some "forward l
ooking statements" which are based upon the plans, goals and objectives of the
Company and its management. Such statements are subject to various risks and
uncertainties. Numerous factors exist within the business world which may
prevent the successful attainment of such plans, goals and objectives.
Consequently, the reader should carefully consider the fact that such
risks, uncertainties, and unknown factors may cause actual results to vary
materially from the future results sought and/or discussed by the Company in
such forward-looking statements.
BUSINESS PLAN
The Company has completed a line of its own Bio-Resonance Therapy (BRT)
Devices which are used in treatment of a variety of physical ailments. The
Company is sells to the consumer market its hand-held BRT units and leases its
larger, or professional units, to hospitals, doctors, chiropractors and
physical therapists. Additionally, the Company will own and operate 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 venture has not been fully developed at this time. Further
development in the plan will occur as the Company prepares to opens a Center
in Salt Lake City, Utah which is expected in September of 1998.
CORPORATE HISTORY
The Registrant has experienced several changes in management, control,
capital structure and corporate name since its inception in 1971. 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. The transfer records of the Registrant indicate that
after a 1972 merger the Worldcom shares were traded in the over-the-counter
securities market with 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.
Subsequent to a shareholders meeting in 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 worked to bring the annual and
quarterly SEC filings current.
In 1996, the Company commenced work with Dr. Jean-Francois Hibbert, of
Harris, New York. Subsequently, the Company worked with Dr. Michael Wall, who
continues with the Company on its advisory board. 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 (hereafter "the
Centers"). The Centers will focus on providing physical and nutritional
consultation and treatment. The Company will also sell a line of hand-held
BRT units and lease commercial BRT units (see Plan of Operations).
ITEM 2. DESCRIPTION OF PROPERTY
The Registrant currently owns no properties. The Company currently
occupies approximately 1,000 square feet of office space for a monthly lease
of $500. The Company had maintained its first wellness center in Tarrytown, New
York but has since moved the center to Salt Lake City, Utah.
The New York center had a lease of $4,516 per month and was paid up to
March 1998 at which time the Company terminated the lease with a termination
agreement with the landlord at a cost of $36,000.
ITEM 3. LEGAL PROCEEDINGS
There are currently 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
There were no matters submitted to the shareholders during the fourth
quarter of 1997.
PART II
ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The trading symbol for the Company's common stock RNUI, and 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 (MD&A)
In early 1996, the Company commenced work with Dr. Jean-Francois Hibbert,
MD, and later Dr. Michael Wall, MD. This work has resulted in the Company
developing a new business opportunity in the field of pain management and
physical wellness utilizing the Company's Bio-Resonance Therapy ("BRT").
Consequently, the Company is working towards owning and operating pain
management and physical wellness centers (hereafter "the Centers"),lease
commercial BRT units, and sell hand-held BRT units domestically and
internationally.
An initial Center was located in New York in 1997, but was moved in May
1998 due to logistical difficulties in operating the center at a great distance
from the Company's headquarters in Salt Lake City, Utah. Management currently
intends to open a center in Utah starting in September 1998.
Each Center will occupy approximately 2500 sq. feet of space and be
equipped with the Company's Bio-Resonance Therapeutical devices. The Centers
will be staffed by approximately six employees under the direction of a medical
doctor. As the business develops, the Company intends to license and franchise
these Centers. Eventually, the Centers will offer clients a complete fitness
and wellness therapy package, including Bio Resonance Therapy, flexibility
training, and nutrition consultation. 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.
BRT theories were first developed in the far east in the 1970s and were
based on the theory of human energy fields. The Company and its consultants
have designed and improved the BRT devices (hereafter "Device") to be more
efficient and effective. The Device operates on both 110 volts and 220 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.
The Company has worked with the foreign manufacturer for the past
eighteen months to develop a hand-held BRT unit and have now commenced
production and marketing. 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. In may of 1998 the Company entered into an
exclusive product license agreement with Sureal International, Inc. Pursuant
to the Agreement, Sureal has the exclusive right for merchandising, marketing,
distribution, promotion and selling of hand held BRT units under the trade
name Sureal BRT or Sureal Bio-Resonance Therapy for as long as the minimum
unit purchases are met. The exclusivity excludes Thailand, Singapore,
Malaysia, Indonesia, Hong Kong, China and Taiwan as territories. The minimum
purchases are 3,000 units within six months of the agreement, 2,000 units for
the three month period after November 1, 1998, and then 3,000 units per month
thereafter. Sureal has already paid the Company a $5,000 good faith payment
towards the licensing fee of $250,000. The licensing fee is due upon the
earlier of nine months from the date of the agreement, or upon completion of
a public offering by Sureal. Management has been informed that Sureal expects
to have their offering complete by the end of October 1998.
As part of its business, the Company will sell the smaller units and
lease larger units to institutions like hospitals and fitness centers. The
Company currently has an order to lease approximately 50 commercial units,
with 12 units already delivered to customers.
The Registrant is currently conducting only limited business operations.
At December 31, 1997, the Registrant had current assets of $1,695 and current
liabilities of $162,192. The Company had total assets of $52,419 and total
liabilities of $283,192. During 1997, the Registrant began operations in
Tarrytown, New York under the direct of Dr. Jean-Francois Hibbert. The center
generated approximately $27,000 in treatment revenue while the overhead for
the New York center was estimated at $60,000 to $80,000.
During 1997, the Company generated a loss of ($156,278) compared to
($50,183) in the prior year. The increase is due primarily to the operation
of the New York Center and increased costs of travel, personnel, consulting
and professional fees for the planning and production of the hand held BRT
units.
The Company expended approximately $10,000 in new equipment for the New York
center (which will be transferred and used in the Salt Lake center) and
$25,000 towards the purchase of the proprietary molds used in the production
of the new BRT hand held devices. The Company has currently expended over
$40,000 towards the manufacture and delivery of inventory in 1998.
With the purchase and sale of the BRT inventory, the opening of its Salt
Lake City wellness center, and ongoing financial support by the principle
shareholder/directors, the Company is expected to meet its financial needs
through 1998. The Company negotiated $25,000 in short term debt into long
term debt and will renegotiate its $96,000 bond issuance for at least another
one year. Working capital loans from the principle shareholder are not
payable until the Company has sufficient capital for its operating needs. It
is estimated that sales of the hand held unit will exceed $240,000 for 1998
along with an expected receipt of up to $250,000 in licensing fees from Sureal
(see earlier discussion).
The Company is expecting to need another $80,000 for the purchase of
inventory , $20,000 for the purchase of additional fixed assets, and $25,000 in
further research and development and other capital needs for the next twelve
months.
The Company believes that during 1998 sufficient funds will be generated
from the sales of the BRT units, medical treatment revenue from the wellness
centers, and franchise fees from Sureal to pay not only the ongoing overhead of
the Company, but also to pay all past due accounts payable and retire all
current notes payable due within the next twelve months.
If any funds remain to pay any long term debt or accounts payable to
related parties, the Company will carefully evaluate the future operating and
capital needs before any such funds are expended. The Company does believe
that by reducing or eliminating all short term debt, other short term financing
will become available, if needed, to fund the seasonal and/or cyclical
financing needs of the Company beyond the next twelve months.
If the Registrant needs additional funding beyond managements' current
expectations in order to pay its obligations, file periodic reports and
continue its currently planned business of owning and operating pain management
centers, the Registrant will need to enter into an 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.
As a small business, shareholders of the Company must bare the risks
associated with ownership in a company in its early stages of development with
limited or no resources, undeveloped product markets and limited staffing and
facilities. Additionally, due to current market factors of "low price"
securities, often referred to as "penny stocks", shareholders of the Company
must bare the risk of owning securities with limited liquidity or no
liquidity at all.
ITEM 7. FINANCIAL STATEMENTS
The Registrant's audited balance sheets at December 31 1997, together with
the related audited statements of operations, changes in stockholders' equity
and cash flows for the years ended 1997 and 1996 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 1998 the Company appointed Crouch
Bierwolf and Chisholm as its independent auditors to replace the Company's
previous auditing firm Orton & Company. The appointment of Crouch Bierwolf and
Chisholm 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 76 President and Director 1983
Jean-Franscois Hibbert 39 Vice President and Dir. 1996
Jianmin Lu 45 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 Diplomats 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, 1997, the Company's President
and CEO received no salary or other compensation for his services. The
Company's vice president, Mr. Lu, did receive approximately $25,000
compensation for the year plus approximately $15,000 in advances toward travel
expenses and the purchase of the molds for inventory production during the
year. 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 July 3, 1998, 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 4,176,750 41.9
Jianmin Lu 1,000,000 10.0
Dr. Jean-Francois Hibbert 1,010,000 10.0
All Officers and Directors 6,186,750 62.1%
as a group (3 persons)
(1) Includes 3,776,750 held by the wife of Frank Nelson.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
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
4. Consent of Crouch, Bierwolf & Chisholm
5. Letter from Orton & Company
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, hereunto duly authorized.
Date: August 10, 1998
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
/s/ Frank Nelson President and Director August 10, 1998
Frank Nelson (Principal Executive Officer)
/s/ Jianmin Lu Secretary and Director August 10, 1998
Jianmin Lu (Principal Accounting Officer)
Vice President and Director August 10, 1998
Jean-Francois Hibbert
Independent Auditors' Report
To the Board of Directors and Stockholders of Renu-U International, Inc.
We have audited the accompanying balance sheet of Renu-U International, Inc. (a
development stage company) (a Delaware corporation) as of December 31, 1997
and the related statements of operations, stockholders' equity and cash flows
for the year then ended. 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. The financial statements of Renu-U
International, Inc. as of December 31, 1996 and for the period from January
1, 1983 (beginning of development stage) to December 31, 1996, were audited
by other auditors whose report dated May 6, 1997, expressed an unqualified
opinion on these statements.
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. as
of December 31, 1997 and the results of its operations and cash flows for the
year then ended.
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 little operating capital and has had only
startup 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.
Crouch, Bierwolf & Chisholm
Certified Public Accountants
Salt Lake City, Utah
July 16, 1998
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Balance Sheets
ASSETS
December 31, December 31,
1997 1996
Current Assets
Cash $ 1,695 $ 53,229
Fixed Assets
Office equipment (Note 1) (Note 3) 18,167 10,385
Other Assets
Medical equipment (Note 3) 7,207 7,207
Deposits (Notes 4 & 9) 25,350 350
$ 52,419 $ 71,171
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and
accrued expenses $ 78,656 $ 45,991
Accounts payable -
related party (Note 3) 58,236 -
Short term notes (Note 10) 25,300 -
162,192 45,991
Long term debt (Note 5) 121,000 96,000
Contingencies & Commitments (Notes 4 & 8) - -
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 9,961
Capital in excess of par 753,342 753,342
Treasury stock (3,675) -
Accumulated deficit during development
stage (990,401) (834,123)
(230,773) (70,820)
$ 52,419 $ 71,171
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Operations
For the
Period During
the Development
Stage from
January 1, 1983
Year ended Through
December 31, December 31,
1997 1996 1997
Revenue:
Sales & service $ 27,149 $ - $ 27,149
Interest income 702 1,512 4,533
Total Revenue 27,851 1,512 31,682
Selling, General &
Administrative Expenses 184,129 51,695 471,032
Net Loss $(156,278) $ (50,183) $ (439,350)
Net Loss Per Share (Note 1) $ (.02) $ (.00) $ (.05)
Average shares outstanding 9,961,241 9,961,241 8,134,910
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
Capital Retained
Common Stock In Excess Earnings
Shares Amount of Par (Deficit)
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 -
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
Capital Retained
Common Stock In Excess Earnings
Shares Amount of Par (Deficit)
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 -
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Stockholders' Equity (Continued)
Capital Retained
Common Stock In Excess Treasury Earnings
Shares Amount of Par Stock (Deficit)
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 ofthe
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)
Purchase of Treasury
Stock - - - (3,675) -
Net loss for the
year ended
December 31, 1997 - - - - (156,278)
Balance - December
31, 1997 9,961,241 $9,961 $753,342 $ (3,675) $(990,401)
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Statements of Cash Flows
For the
Period
During the
Development
Stage from
January 1,
1983 Through
December 31, December 31,
1997 1996 1997
Cash Flow Provided From Operations:
Net loss from operations $(156,278) $(50,183) $(439,350)
Items not requiring cash
flow during current period:
Amortization and Depreciation 2,995 516 3,586
Issuance of capital stock
for services - - 28,795
Bad debts - - 18,000
Decrease in notes receivable - - (3,000)
Increase (Decrease) in accounts
payable and other short term
obligations 116,201 7,691 162,192
Expenses paid by officer - 10,013 90,807
Net Cash Flow Used For Operations (37,082) (31,963) (138,970)
Cash Flow Provided From Financing Activities:
Issuance of notes payable 25,000 96,000 121,000
Issuance of capital stock
for cash - - 175,000
Net Cash Flow Provided
From Financing Activities 25,000 96,000 296,000
Cash Flow Used For Investing Activities:
Cash paid toward deposits
and other assets (25,000) (2,757) (27,757)
Cash invested in subsidiary - - (105,000)
Cash invested in treasury stock (3,675) - (3,675)
Cash paid toward fixed assets (10,777) (8,051) (18,903)
Net Cash Flow used for
investing activities (39,452) (10,808) (155,335)
Net Cash Flow (51,534) 53,229 1,695
Cash-Beginning of Period 53,229 - -
Cash-End of Period $ 1,695 $53,229 $ 1,695
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ 1,023 $- $ 4,956
Income Tax 1,200 - 1,200
Equipment contributed by
officer (Note 3) $ - $7,650 $ 7,650
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1997
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. The
Company has also completed a line of its own "Bio-Resonance Therapy" (BRT)
devices which are used in treatment of a variety of physical ailments. These
hand held units will be sold beginning in April 1998.
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, 1997 and
earlier years, accordingly, no deferred tax liabilities have been recognized
for all years.
The Company had cumulative net operating loss carryforwards of
approximately $440,000 at December 31, 1997 and $280,000 at December 31, 1996.
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 $150,000 at December 31, 1997 and $95,000 at December
31, 1996 have been offset by valuation reserves of the same amount. The net
change in deferred tax asset and offsetting valuation reserve amounted to
$55,000 for 1997 and $17,000 for 1996. The net operating losses begin to
expire in the year 1998.
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, 1997
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, 1997
and 1996:
1997 1996
Office & Computer Equipment $ 21,752 $ 10,976
Less: Accumulated Depreciation (3,585) (591)
Total Property and Equipment $ 18,167 $ 10,385
Depreciation expense is computed on the straight-line method over
the estimated useful lives of the assets (three to seven years). Depreciation
expense for the period ended December 31, 1997 and 1996 is $2,995 and $516
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 physical care and development. (See Note 1)
NOTE 3 - RELATED PARTY TRANSACTIONS
Frank Nelson, a major shareholder/officer, paid expenses of the
Company totaling $10,013 in 1996 in behalf of the Company. These expenses are
shown as a contribution to capital. During 1996, Mr. Nelson also contributed
$7,650 worth of office and medical equipment for future use in clinics that
will be opened in the coming years.
Mr. Nelson also rents space to the Company on a month to month basis
for $500 a month. ($300 a month prior to May 1, 1997).
In June 1996, Mr. Nelson provided $50,000 in long-term financing for
the Company (See Note 5).
During 1997, Mr. Nelson and his daughter provided another $54,130 in
working capital to help fund the company during its development stage. The
loans are non-interest bearing and are to be paid when the Company has
sufficient capital for its operating needs.
During 1997, Dr. Fancois Hibbert, a company director and officer
provided $4,105 in working capital loans for it's New York operation.
During 1997, Mr. Nelson and Mr. Jimmy Lu, officers of the
corporation, signed on as personal guarantors for several bank loans.
(See Notes 5 & 10).
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, 1997
NOTE 4 - LEASE COMMITMENT (Continued)
Future lease commitments:
1998 $ 3,696
1999 $ 2,156
NOTE 5 - LONG TERM DEBT
During 1996, 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. These notes are classified as
long term since the notes will be renegotiated in July 1998.
In 1997, Mr. Nelson helped secure a line of credit in the amount of
$25,000 that was used as an advance to purchase proprietary molds which will be
used to produce inventory being manufactured overseas (see Note 9). The line
of credit is similar to a credit card where interest only is paid monthly
with no minimum principle due.
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, 1997 and 1996 are as
follows:
December 31, 1997 December 31, 1996
Carrying Fair Carrying Fair
Amounts Values Amounts Values
Cash and cash equivalents $ 1,695 $ 1,695 $ - $ -
Long-term debt including
current maturities $ 121,000 $ 121,000 $96,000 $96,000
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.
RENU-U INTERNATIONAL, INC.
(A Development Stage Company)
Notes to Financial Statements
December 31, 1997
NOTE 8 - NEW YORK OPERATIONS-SUBSEQUENT EVENTS
In 1997, the Company opened a wellness treatment center in
Tarrytown, New York. A lease was signed for office space and another lease was
signed for personal property used in the treatments provided by the center.
Early in 1998, the center was closed. A buyout of the lease for the office
space was negotiated ($36,000)(See Note 10) and the personal property was
returned to the vendor. Currently, the Company is negotiating for a buyout
of the lease for equipment, although as of this audit date, such negotiations
are ongoing. Although the amount of loss could be upwards of $25,000 (the full
claim of the leasing company), the Company cannot estimate the amount of loss
at the current time.
NOTE 9 - DEPOSITS
In 1997, the Company advanced $25,000 towards the molds that will
produce the BRT devices (See Note 1) that are being manufactured overseas.
The devices were shipped in March 1998.
NOTE 10 - SHORT TERM NOTES
In 1997, Mr. Nelson and Jimmy Lu, two company officers, personally
guaranteed a note for $25,300 for use as Company working capital. The note was
due in March 1998 and was renegotiated at that time into a long term note
along with a line of credit that the Company had to secure the lease in New
York (See Note 8). The New York lease was canceled in March for a one time
fee of $36,000 in which the line of credit was activated and the fee paid.
The new note was negotiated as a four year obligation with monthly payments
of $2,029. Payments began in June 1998.
We hereby consent to the use of our audit report of Renu U International, Inc.
dated July 16, 1998 for the year ended December 31, 1997 in their Form 10K-SB
Annual Report dated August 10, 1998.
Salt Lake City, Utah
August 10, 1998
ORTON & COMPANY
August 10, 1998
Securities & Exchange Commission
Washington D.C.
Gentlemen:
We have been furnished with a copy of the response to Item 8 of the Form
10K-SB for the event that occurred on August 10, 1998 filed by our former
client, Renu U International, Inc.. We agree with the statements made in
response to that item insofar as they relate to our firm.
Sincerely,
/s/ Orton & Company
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