UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8K/A
AMENDMENT No. 1 to the Current Report
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
January 20, 2000
(Date of Report)
INNOVATIVE TECHNOLOGY SYSTEMS, INC.
(Name of Small Business issuer in its charter)
FLORIDA 0-25947 65-0386286
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
1119 7th Avenue, Vero Beach, FL 32960
(Address of principal executive offices)
(561) 562-7389
(Registrant's telephone number)
<PAGE>
ITEM 5. OTHER EVENTS
On January 12, 2000, the Registrant changed its name from
"Innovative Technology Systems, Inc. a Florida corporation to
"Stanfield Educational Alternatives, Inc., a Florida corporation.
The name change was recommended by the Board of Directors, and
approved by the Shareholders on January 10, 2000. A copy of the
Amendment to the Articles of Incorporation is incorporated into
this filing, and referred to as Exhibit (3)(i)(1).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements, relating to the Share
Exchange between the Registrant and Stanfield Educational
Alternatives, Inc.("Stanfield"), wherein the Registrant acquired
all of the outstanding shares of Stanfield are filed, herewith.
The statements are the financial statements of Stanfield, and are:
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
1. Audited Financial Statements of Stafield Educational
Alternatives, Inc. as of April 30, 1999, including:
A. Independent Auditors' Report
B. Balance Sheet
C. Statement of Operations
D. Statement of Stockholders' Equity
E. Statement of Cash Flows
F. Notes to Financial Statements.
2. Compiled Financial Statements for the period ending
December 31, 1999.
A. Report of Auditor
B. Balance Sheet
C. Statement of Operations
D. Statement of Stockholders' Equity Deficit
E. Statement of Cash Flows
F. Notes to Financial Statements
<PAGE> 2
Forward Looking Statements
This Report on Form 8-K may contain forward-looking statements.
When used in this report, the words "may," "will," "expect,"
"anticipate," "continue," "estimate," "project," "intend,"
"believe" and similar expressions, variations of these words or the
negative of those words are intended to identify forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934
regarding events, conditions and financial trends including,
without limitation, business conditions in the general economy, and
other risks or uncertainties detailed in other of the Company's
Securities and Exchange Commission filings. Such statements are
based on management's current expectations and are subject to
risks, uncertainties and assumptions. Should one or more of these
risks or uncertainties materialize, or should underlying
assumptions prove incorrect, the Company's actual plan of
operations, business strategy, operating results and financial
position could differ materially from those expressed in, or
implied by, such forward-looking statements.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned hereunto duly authorized.
/s/Lawrence Stanfield
Lawrence Stanfield, President
Dated: January 20, 2000
<PAGE> 3
EXHIBIT INDEX
Exhibit No. Description
3(i)(1) Articles of Amendment to the Articles of
Incorporation
23 Consent of Independent Certified Public
Accountant
<PAGE> 4
Financial Statements
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
APRIL 30, 1999
<PAGE> F-1
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
Financial Statements
April 30, 1999
(With Independent Auditors' Report Thereon)
<PAGE> F-2
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
Table of Contents
Independent Auditors' Report ................................. 1
Financial Statements
Balance Sheet ........................................... 2
Statement of Operations ................................. 3
Statement of Stockholders' Equity ....................... 4
Statement of Cash Flows ................................. 5
Notes to Financial Statements ................................ 6
<PAGE> F-3
Independent Auditors' Report
The Stockholders and Board of Directors
Stanfield Educational Alternatives, Inc.:
We have audited the accompanying balance sheet of Stanfield
Educational Alternatives, Inc. (a development stage company) as o
of April 30, 1999 and the related statement of operations,
stockholders' equity and cash flows for the period March 23, 1999
(inception) to April 30, 1999. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our
audit provides 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 Stanfield Educational Alternatives, Inc. as of April 30, 1999
and the results of its operations and its cash flows for the
period March 23, 1999 (inception) to April 30, 1999 in conformity
with generally accepted accounting principles.
1
<PAGE> F-4
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
Assets 04/30
------ ----------
Current assets:
Cash $ 19,467
----------
Total current assets 19,467
Property and equipment, net 7,780
----------
27,247
==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable & accrued expenses 3,040
----------
Total current liabilities 3,040
Stockholders' equity:
Common stock 78
Additional paid-in capital 68,424
Accumulated deficit (44,295)
----------
Total stockholders' equity 24,207
----------
$ 27,247
==========
See accompanying notes to financial statements
2
<PAGE> F-5
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
April 30, 1999
--------------
Operating expenses $ 44,129
Other expenses:
Interest expense 166
-----------
Total expense 44,295
-----------
Loss from operations before income taxes 44,295
Income taxes 0.00
-----------
Net loss $ 44,295
===========
See accompanying notes to financial statements
3
<PAGE> F-6
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
<TABLE>
<CAPTION>
Additional Total
Common stock paid-in Retained stockholders'
Shares Amount capital earnings equity
------ ------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C>
Balances, at March 23, 1999 0.00 $ 0.00 0.00 0.00 0.00
Issuance of stock 780,000 78 68,424 0.00 68,502
Net loss 0.00 0.00 0.00 (44,295) (44,295)
------- ------- ------- ------- -------
Balances, at September 30, 1998 780,000 $ 78 68,424 (44,295) 24,207
======= ======= ======= ======= =======
</TABLE>
See accompanying notes to financial statements
4
<PAGE> F-7
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
04/30
----------
Cash flows from operating activities:
Net loss $ (44,295)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation 40
Cash provided by changes in:
Accounts payable and accrued expenses 3,040
----------
Net cash used by operating activities (41,215)
Cash flows from investing activities:
Acquisitions of property and equipment (7,820)
Cash flows from financing activities:
Proceeds from the issuance of capital stock 68,502
----------
Net increase in cash and cash equivalents 19,467
Cash and cash equivalents - beginning of period 0.00
----------
Cash and cash equivalents - end of period $ 19,467
==========
Supplemental disclosure of cash flow information:
Cash paid for interest $ 166
==========
See accompanying notes to financial statements
5
<PAGE> F-8
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
Notes to Fianncial Statements
Summary of Significant Business and Accounting Policies
Organization
Stanfield Educational Alternatives, Inc. (the Company) was
incorporated March 23, 1999 in the state of Florida. The
Company intends to act as the marketing arm for educational
programs, instructional materials and educational supplemental
materials developed by the National Children's Reading
Foundation, Inc. The organization will provide academic
tutorial services, computerized national test preparation
services, home school management and tutorial services and
teacher inservice training programs.
Property and Equipment
Property and equipment are stated at cost. Depreciation for
financial statement purposes is computed using the straight-
line method over the estimated useful lives of the individual
assets, which range from 3 to 5 years.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an
original maturity of three months or less to be cash
equivalents.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Income Taxes
The Company uses the asset and liability method of accounting
for income taxes. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statements carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets
and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the
enactment date.
6
<PAGE> F-9
Leases
The Company leases office and storage space under various
noncancellable operating leases with original lease term of one
year. The leases general provide for renewal provisions following
the initial one year term. Aggregate minimum lease expense will
approximate $16,000 through April 2000.
Property and Equipment
At April 30, 1999 property and equipment consist of the following:
Computer Equipment $ 4,915
Software 2,905
---------
$ 7,820
Less accumulated depreciation 40
---------
$ 7,780
=========
Capital Stock
The Company is authorized to issue 100,000,000 shares of common
stock with a par value of $.0001 per share and 20,000,000 shares of
preferred stock with a par value of $.0001 per share. At April
30, 1999 the Company had issued 780,000 shares of common stock. No
shares of preferred stock have been issues as of April 30, 1999.
Income Tax
The tax effect of temporary differences that give use to a deferred
tax asset as of April 30, 1999 are as follows:
Deferred tax asset:
Net operating loss carryforward $ 6,600
Valuation allowance (6,600)
---------
Total deferred tax asset $ -
---------
Management has established a valuation allowance equal to the
amount of the deferred tax assets due to the uncertainty of the
Company's realization of this benefit.
7
<PAGE> F-10
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
Compiled Financial Statements
December 31, 1999
<PAGE> F-11
Board of Directors
Stanfield Educational Alternatives, Inc.
1025 S. Semoran Blvd., Suite 1093
Winter Park, FL 32792
I have compiled the accompanying balance sheet of Stanfield
Educational Alternatives, Inc. (a development stage company) as of
December 31, 1999, and the related statements of operations and
cash flows for the period March 23, 1999 (inception) to December
31, 1999, in accordance with standards established by the American
Institute of Certified Public Accountants.
A compilation is limited to presenting in the form of
financial statements information that is the representation of
management. I have not audited or reviewed the accompanying
financial statements and, accordingly, do not express an opinion or
any other assurance on them.
I am not independent with respect to Stanfield Educational
Alternatives, Inc.
Michael J. Merrill, CPA
January 12, 2000
<PAGE> F-12
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
Balance Sheet
December 31, 1999
Assets:
- -------
Current Assets:
Cash $ 4,692
Prepaid Expenses 24,878
----------
Total Current Assets $ 29,570
Property and Equipment (net) 83,893
Other Assets (net) 400,763
----------
$ 514,226
----------
Liabilities and Stockholders' Equity Deficit:
- ---------------------------------------------
Current Liabilities:
Accrued Liabilities $ 49,789
Short-term Notes Payable 697,477
-----------
Total Current Liabilities $ 747,266
Stockholders' Equity Deficit:
Common Stock $ 657
Additional Paid-in-capital 242,277
Distributions to Shareholders (3,107)
Deficit Accumulated During Development Period (472,867)
-----------
Total Stockholders' Equity (233,040)
----------
$ 514,226
----------
See accountant's compilation report and accompanying notes to the
financial statements.
<PAGE> F-13
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
Statement of Operations
For the Period March 23, 1999 (inception) to December 31, 1999
Operating Expenses:
Acquisition Expense $ 250,000
Depreciation Expense 1,078
Marketing Expense 667
Office Expense 42,434
Personnel Expenses 131,822
Professional Services 35,365
Travel and Entertainment 10,911
---------
Total Operating Expense $ 472,277
Other Expenses:
Interest Expenses 590
---------
Loss Before Income Taxes $ 472,867
Income Taxes 0
---------
Net Loss $ 472,867
---------
See accountant's compilation report and accompanying notes to the
financial statements.
<PAGE> F-14
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
Statement of Stockholder's Equity Deficit
For the Period March 23, 1999 (inception) to December 31, 1999
<TABLE>
<CAPTION>
Total
Common Stock Retained stockholders'
Shares Amount AIPC earnings equity
--------- -------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C>
Balances, at March 23, 1999 - $ - $ - $ - $ -
Issuance of Stock 6,574,400 657 242,277 - 242,934
Distributions (3,107) (3,107)
Net Loss - - - ( 472,866) (472,866)
_________ ________ __________ _________ __________
Balances, at December 31, 1999 6,574,400 $ 657 $ 242,277 $(475,973) $ (233,040)
--------- -------- ---------- --------- ----------
</TABLE>
See accountant's compilation report and accompanying notes to the
financial statements.
<PAGE> F-15
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
Statement of Cash Flows
For the Period March 23, 1999 (inception) to December 31, 1999
Cash Flows From Operating Activities:
Net Loss $ (472,867)
Adjustments to Reconcile Net Loss
to Net Cash Used
In Operating Activities:
Depreciation Expense $ 1,078
Prepaid Expenses (24,878)
Increase in Accrued Liabilities 49,789 25,989
--------- ----------
Net Cash Used by Operating Activities $ (446,878)
Cash Flows from Investing Activities:
Purchases in Property and Equipment $ (84,971)
Purchases of Intellectual Properties (400,763)
---------
Net Cash Used by Investing Activities (485,734)
Cash Flows from Financing Activities:
Proceeds from Short-term Borrowing $ 697,477
Proceeds from Issuance of Capital Stock 242,934
Distributions to Shareholders (3,107)
---------
Net Cash Provided by Financing
Activities 937,304
--------
Net Increase in Cash and Cash Equivalents $ 4,692
Cash and cash Equivalents - Beginning of Period 0
--------
Cash and Cash Equivalents - End of Period $ 4,692
--------
Supplemental Disclosure of Cash Flow Information:
Cash Paid for Interest $ 590
--------
See accountant's compilation report and accompanying notes to the
financial statements.
<PAGE> F-16
STANFIELD EDUCATIONAL ALTERNATIVES, INC.
(A Development Stage Company)
Notes to Financial Statements
For the Period March 23, 1999 (inception) to December 31, 1999
(1) Summary of Significant Business and Accounting Policies:
(a) Organization
Stanfield Educational Alternatives, Inc. (the Company) is a
unique, progressive educational corporation and franchisor
of the Stanfield Ed-vancement centers, a network that
provides a comprehensive range of educational and tutorial
services to individuals of all ages. The Company also
develops and publishes a variety of specialized educational
programs including a computer global internet educational
campus in various languages. The Company's research and
development division develops a variety of educational
programs for children of all ages for both video and
television production.
The Company was incorporated March 23, 1999 in the State of
Florida. On December 16, 1999, the Company purchased
Innovative Technologies via a reverse merger. The purchase
price for Innovative Technologies was 405,000 shares (at
$.001 par value) of the Company's stock and a note in the
amount of $250,000 which is payable no later than June 16,
2000. The Company accounted for the purchase by expensing
the $250,000 this year as acquisition costs and crediting
common stock for $405 and reducing additional-paid-in-capital
by $405.
(b) Property and Equipment
Property and equipment are stated at cost. Depreciation for
financial statement purposes is computed using the straight-
line method over the estimated useful lives of the individual
assets, which range from 3 to 5 years.
(c) Cash and Cash Equivalents
The Company considers all highly liquid investments with an
original maturity of three months or less to be cash
equivalents.
(d) Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could
differ from those estimates.
<PAGE> F-17
(e) Income Taxes
The Company uses the asset and liability method of accounting
for income taxes. Under the asset and liability method,
deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between
the financial statements carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the
period that includes the enactment date.
(2) Leases:
The Company leases office and storage space under various non-
cancelable operating leases with the original lease term of one
year. The lease payments total $1,949 per month and total lease
payments from March 23, 1999 to December 31, 1999 totaled
$13,967. The leases general provide for renewal provisions
following the initial one-year term.
(3) Property and Equipment:
At December 31, 1999 property and equipment consist of the
following:
Computer Software $ 2,906
Equipment 11,798
Internet Site 32,000
Furniture & Fixtures 13,413
Computer Equipment 24,854
-----------
$ 84,971
Less Accumulated Depreciation 1,078
-----------
$ 83,893
-----------
(4) Other Assets:
At December 31, 1999 other assets consist of the following:
Writer's Consent $ 1,655
Literary Properties 15,000
Intellectual Properties 384,108
------------
$ 400,763
Less Accumulated Amortization 0
------------
$ 400,763
------------
These assets were purchased from the National Children's Reading
Foundation on December 30, 1999. The purchase price was
determined by using the average of (1) a gross revenue multiple,
(2) an EBITDA multiple, (3) a discounted cash flow technique and
(4) a residual value. The National Children's Reading
Foundation is a not-for-profit company whose shares are held by
Lawrence Stanfield, who is a substantial shareholder of
Stanfield educational Alternatives, Inc. These assets will be
amortized utilizing the straight-line method over a five-year
life.
<PAGE> F-18
(5) Liabilities:
At December 31, 1999 short-term borrowing consist of the
following:
Interest free note due to the National
Children's Reading Foundation on
January 31, 2000. $ 434,203
Interest free note due to John Bylsma on
June 16, 2000. 250,000
Note due to Chris Hyde on demand bearing a
10% annual interest rate. 10,000
Equipment loan payable in monthly
installments of $334 at a 18% annual rate.
These loans will be extinguished in June
2000 and are secured by four computers. 3,274
---------
$ 697,477
---------
(5) Capital Stock
The Company is authorized to issue 100,000,000 shares of common
stock with a par value of $.001 per share and 20,000,000 of
preferred stock with a par value of $.001 per share. At
December 31, 1999 the Company has issued 6,574,400 shares of
common stock. No shares of preferred stock have been issued as
of December 31, 1999.
(6) Income Tax
The tax effect of temporary differences that give use to a
deferred tax asset as of December 31, 1999 are as follows:
Deferred Tax Asset:
Net Operating Loss Carryforward $ 472,866
Valuation Allowance (472,866)
-----------
Total Deferred Tax Asset $ 0
-----------
Management has established a valuation allowance equal to the
amount of the deferred tax assets due to the uncertainty of the
Company's realization of this benefit.
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION OF
INNOVATIVE TECHNOLOGY SYSTEMS, INC.
On January 7,1999, the Board of Directors of Innovative
Technology Systems, Inc. passed a resolution, wherein it
recommended to the Shareholders of the Corporation that Article
I of the Articles of Incorporation be amended, and thereafter the
Shareholders, on January 7, 2000, approved said Amen~ent. The
corporation is filing these articles of amendment to articles of
incorporation pursuant to F .S. 607.1006.
1. The name of the corporation is INNOV A TIVE TECHNOLOGY
SYSTEMS, INC.
2. Article I of the articles of incorporation of INNOVATIVE
TECHNOLOGY SYSTEMS, INC. was amended as follows:
ARTICLE 1.
Name
The name of this corporation is: STANFIELD EDUCATIONAL
ALTERNATIVES, INC.
3. The foregoing amendment to articles of incorporation was
duly adopted by the SHAREHOLDERS on January 7, 2000 and the
number of votes cast for the amendment was sufficient for
approval.
In witness whereof, the undersigned Chairman of this corporation
has executed these articles of amendment on January 10, 2000
Innovative Technology Systems, Inc. Larry leld
Prepared By:
L. Van Stillman, Esq.
1177 George Bush Blvd. Delray Beach, FL 33483 (561)330-9903
Fla. Bar Number: 165520
<PAGE>
STATE OF FLORIDA
DEPARTMENT OF STATE
I certify the attached is a true and correct copy of the Articles
of Amendment, filed on January 12, 2000, to Articles of
Incorporation for INNOVATIVE TECHNOLOGY SYSTEMS, INC., which
changed its name to STANFIELD EDUCATIONAL ALTERNATIVES, INC., a
Florida corporation, as shown by the records of this office.
I further certify the document was electronically received under
fax audit number H00000001372. This certificate is issued in
accordance with section 15.16, Florida Statutes, and
authenticated by the code noted below.
The document number of this corporation is P92000004064.
Given under my hand and the
Great Seal of the State of Florida,
at Tallahassee, the Capital, this the
Thirteenth day of January, 2000
Authentication Code: 800A00001869-011300-P92000004064-1/1
GREAT SEAL OF THE STATE OF FLORIDA
IN GOD WE TRUST /s/Katherine Harris
Katherine Harris
Secretary of State
CR2E022 (I-99)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We have previously issued our report, accompanying the
financial statement, incorporated herein by reference of the
Registrant. Our report covered the balance sheet of Stanfield
Educational Alternatives, Inc. as of April 30, 1999 and the
related statement of operations, stockholders' equity and cash
flows for the period March 23, 1999 (inception) to April 30,
1999, in conformity with generally accepted accounting
principals. We hereby consent to the incorporation by
reference of said report in the Current Report of the Company
on Form 8-KA being filed with the Securities and Exchange
Commission by the Registrant.
TEDDER, JAMES, WORDEN & ASSOCIATES, P.A.
Orlando, Florida
January 20, 1999
