<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10SB12G/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
ISA INTERNATIONALE INC.
-----------------------
(Name of Small Business Issuer in its charter)
Delaware 41-1890229
- -------- ----------
(State of Incorporation) (I.R.S. Employer Identification No)
204 Central Ave., Suite 111, Faribault, Minnesota 55021
- ------------------------------------------------- -------
(Address of principal executive offices) (Zip Code)
Issuer's Telephone number - 1-(800)434-3198
Securities to be registered pursuant to Section 12(b) of the Act.
None
- ----
Securities to be registered pursuant to Section 12(g) of the Act.
Common Stock, $.0001 par value
------------------------------
(Title of Class)
<PAGE>
ISA INTERNATIONALE INC. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, 1999 September 30, 1998
--------------------------------------
(unaudited) (unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 19552 801390
Accounts Receivable:
Trade 392692
Other 1750
Prepaid Expense 9315
Notes Receivable 3036
--------------------------------------
Total Current Assets: 423309 804426
--------------------------------------
EQUIPMENT and IMPROVEMENTS, at cost:
Satellite & Transmission 313854
Office & Computers 133490
Vehicle 1500
Leasehold Improvements 23000
--------------------------------------
471844
Less, accumulated depreciation thereon -68186
--------------------------------------
403658
--------------------------------------
OTHER ASSETS:
Deposits 19678
Deferred Income Taxes 4000
--------------------------------------
TOTAL ASSETS: 850645 804426
======================================
LIABILITIES
CURRENT LIABILITIES:
Accounts Payable 431128
Accrued Liabilities 37476 25820
Deferred Income Taxes 4000
--------------------------------------
Total Current Liabilities: 472604 25820
--------------------------------------
DEFERRED RENT: 9529
--------------------------------------
EQUITY
STOCKHOLDERS' EQUITY:
Preferred Stock, Authorized 5,000,000 Shares, Par Value $.0001
None Outstanding 0 0
Common Stock, Authorized 30,000,000 Shares, Par Value $.0001
Issued and Outstanding, 14,382,215 Shares 1438 1407
Paid In Capital in Excess of Par Value 2566032 1240782
Accumulated (Losses) Earnings -2198958 -463583
--------------------------------------
Total Equity 368512 778606
--------------------------------------
TOTAL LIABILITIES & EQUITY $ 850645 804426
======================================
</TABLE>
See Notes to Financial Statements
<PAGE>
ISA INTERNATIONALE INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Nine Months Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
Cumulative
amounts
since
September 30, 1999 September 30, 1998 Inception
-------------------------------------------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
Net sales $ 2389139 0 2424252
Cost of products sold 1969683 0 1985838
-------------------------------------------------------
Gross Margin 419456 0 438414
-------------------------------------------------------
Operating expenses:
Selling and Marketing 392396 18910 441045
Engineering and Programming 683624 31305 865937
Warehousing and Shipping 104992 0 152638
General and Administrative 623225 343671 859311
Depreciation 68186 0 75801
Pre-operating costs 0 0 209085
-------------------------------------------------------
1872423 393886 2603817
-------------------------------------------------------
Income (loss) from operations -1452967 -393886 -2165403
Other income (expenses)
Interest Income 1217 18107 37634
Other Charges 0 0 -71189
-------------------------------------------------------
Net income (loss) before income tax provision (benefit) -1451750 -375779 -2198958
Income tax expense 0 0 0
-------------------------------------------------------
Net income (loss) -1451750 -375779 -2198958
Accumulated (Losses) Earnings, beginning of period -747208 -87804 0
-------------------------------------------------------
Accumulated (Losses) Earnings, end of period -2198958 -463583 -2198958
=======================================================
Basic Loss per common share -.10 -.03
=======================================================
Weighted average shares outstanding 14823115 13721150
=======================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
ISA INTERNATIONALE INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Three Months Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
September 30, 1999 September 30, 1998
--------------------------------------
(unaudited) (unaudited)
<S> <C> <C>
Net sales $ 1137674 0
Cost of products sold 914376 0
--------------------------------------
Gross Margin 223298 0
--------------------------------------
Operating expenses:
Selling and Marketing 287345 18910
Engineering and Programming 42337 31305
Warehousing and Shipping 19312 0
General and Administrative 47510 186717
Depreciation 28949 0
--------------------------------------
425453 236932
--------------------------------------
Income (loss) from operations -202155 -236932
Other income (expenses)
Interest Income 280 5811
--------------------------------------
Net income (loss) before income tax provision (benefit) -201875 -231121
Income tax expense 0 0
--------------------------------------
Net income (loss) -201875 -231121
Accumulated (Losses) Earnings, beginning of period -1997083 -232462
--------------------------------------
Accumulated (Losses) Earnings, end of period -2198958 -463583
======================================
Basic Loss per common share $ -.01 -.02
======================================
Weighted average shares outstanding 14823115 13721150
======================================
</TABLE>
See Notes to Financial Statements
<PAGE>
ISA INTERNATIONALE INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For The Nine Months Ended September 30, 1999
<TABLE>
<CAPTION>
Common Stock
--------------------
Par Paid-In Accumulated
Shares Value Capital Deficit Total
-------------------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
$ $ $ $
Balances, December 31, 1998: 13690135 1369 1395061 -747208 649222
Issuance of common stock
for cash & precious metals
on warrant conversions 2342080 234 1770806 1171040
Redemption of shares from
founders -1650000 -165 165 0
Net Loss -1451750 -1451750
------------------------------- ------- -----------
$ $ $ $
Balances September 30, 1999: 14382215 1438 2566032 -2198958 368512
==============================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
ISA INTERNATIONALE INC. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Nine Months Ended September 30, 1999 and 1998
<TABLE>
<CAPTION>
September 30, 1999 September 30, 1998
--------------------------------------
(unaudited) (unaudited)
<S> <C> <C>
Reconciliation of net income to net cash
provided by flows from operating activities:
Net loss $ -1451750 -375775
Adjustment to reconcile net loss to net cash flows
from operating activities
Depreciation and amortization 60551 0
Changes in assets & liabilities:
Stock issued for services 200400
Accounts receivable increase -386069 0
Prepaid expense increase -9315 0
Deposit decrease 95833 0
Accounts payable increase 392666 25561
Accrued liabilities decrease -2774 0
--------------------------------------
Net cash flows from operating activities -1300858 -149814
--------------------------------------
Cash flows from investing activities:
Acquisition of equipment and leasehold improvements -37230 0
--------------------------------------
Net cash flows from investing activities -37230 0
--------------------------------------
Cash flows from financing activities:
Proceeds from issuance of common stock from warrant conversions 1171040 0
Proceeds from issuance of common stock less notes receivable due 550140
--------------------------------------
Net cash flows from financing activities 1171040 550140
--------------------------------------
Net decrease in cash and cash equivalent -167048 400326
Cash and cash equivalent - beginning of period 186600 401064
--------------------------------------
Cash and cash equivalent - end of period $ 19552 801390
======================================
</TABLE>
See Notes to Financial Statements
<PAGE>
ISA INTERNATIONALE, INC. AND SUBSIDIARIES
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
1. CONSOLIDATION AND BASIS OF PRESENTATION
CONSOLIDATION
The accompanying consolidated unaudited financial statements of ISA
Internationale, Inc. and Subsidiaries included the accounts of ISA
Internationale Inc. and its wholly owned subsidiaries Internationale
Shopping Alliance, Inc., and International Strategic Assets, Inc. All
significant intercompany transactions and accounts have been eliminated
in consolidation.
BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions contained
in Regulation S-B. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three
and nine month periods ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1999. The unaudited financial statements should be read
in conjunction with the financial statements and notes thereto
included in the Company's audit report for the year ended December 31,
1998.
USE OF ESTIMATES
The preparation of the financial statements in conformity with the
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.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, cash in banks and money
market funds with maturities of three months or less.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost. Depreciation is computed over
the estimated useful lives of the assets using the straight-line method.
When assets are retired or otherwise disposed of, the cost and regulated
accumulated depreciation are removed from the accounts and any resulting
gain or loss is recognized. The cost of maintenance and repairs are
expensed as incurred and significant renewals and betterments are
capitalized.
The Company has idle assets in the amount of $443,164 at September 30,
1999 that relate to their television shopping operations. All shopping
operations have temporaliy ceased. The Company intends to commence
shopping operations again in the year 2000, subject to the obtainment
of sufficient additional working capital. Depreciation provisions
continue to be computed on these assets through September 30, 1999.
1
<PAGE>
NET SALES
Sales included both merchandise sales and commodity sales of gold related
products and coins. Merchandise sales are reduced by incentive discounts
and sales returns to arrive at net sales. Sales are recorded for credit
cards sales upon transaction authorization, and for check sales upon
receipt of customer payment, which does not vary significantly from the
time goods are shipped. The Company's sales policy allows merchandise to
be returned at the customer's discretion, generally up to 30 days.
Allowances for returned merchandise and other adjustments are provided
based upon past experience.
Commodity sales of gold coins and related products are recorded as a sale
upon the order and acceptance by the customer. The company proceeds to
purchase the gold products and then complete shipment upon full payment
by the customer.
INCOME TAXES
The Company follows FASB No. 109, "Accounting for Income Taxes", which
requires an asset and liability approach to financial accounting and
reporting for income taxes. Deferred income tax assets and liabilities
are computed for differences between the financial and tax bases of
assets and liabilities that will result in taxable or deductible amounts
in the future based on enacted tax laws and rates applicable to the
periods in which the differences are expected to affect taxable income.
Items with differences between financial and income tax bases include net
operating loss carryforwards and the treatment of start-up costs.
Valuation allowances are established when necessary to reduce deferred
income tax assets to the amount expected to be realized.
BASIC LOSS PER COMMON SHARE
Basic loss per common share is computed by dividing the net loss by the
weighted average number of common shares outstanding. Diluted and basic
loss per common share is the same amounts for each of the periods
presented. In loss periods, dilative common equivalent shares are
excluded, as the effect would be dilative.
4 PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at September 30, 1999:
<TABLE>
<S> <C>
Broadcast equipment $ 313,854
Furniture and fixtures 56,519
Computer and telephone equipment 78,471
Leasehold improvements 23,000
$ 471,844
</TABLE>
At September 30, 1999, $443,164 of the above property and equipment was
idle and not in operation due to television shopping operations being
ceased at the Company's facilities in Knoxville, TN. It is the opinion of
management that no material loss would occur to the Company if the
shopping operations did not commence in the future and the Company was to
sell the idle equipment and property. Depreciation provisions continue to
be computed on all of the equipment for the nine months through
September 30, 1999. Depreciation charged to operations was $ 60,571 in
1999.
2
<PAGE>
5. INCOME TAX
As of September 30, 1999, the Company had approximately $2,198,000 of net
operating loss carryforwards for federal and state income tax purposes
that are available to offset future taxable income throughout the year
2014. Certain restrictions caused by the change in ownership resulting
from sales of stock may limit annual utilization of the net loss
carryforwards.
6. LEASES
The Company leases office and production facilities in Knoxville, TN.,
under operating lease agreements with an entity owned by a shareholder,
which expires in September 2003, and calls for escalating rent payments
from $6,303 to $11,435 per month over the term of the agreement. This
lease provided for a five-year renewal term at the option of the Company,
with rent increases of five percent per year. Rent expense was $46,603
for the nine months ended September 30, 1999. The Company is not
currently operating their shopping operations in these facilities at
September 30, 1999 and is intending to sublet portions of the space to
prospective new tenants. Should the Company not sublet the leased space,
the resulting future losses would approximate the following amounts until
the lease expires or is mutually terminated.
Total future minimum lease payments are as follows:
<TABLE>
<S> <C>
1999 $ 18,939
2000 178,686
2001 126,021
2002 132,323
2003 102,919
</TABLE>
The Company also leases office space for its Gold products operations
under a lease that runs through 2004 with monthly rent payments in the
amount of $6,182 and rent increases in the amount of four per cent per
year. Rent expense was $37,816 for the nine months ended September 30,
1999.
Total future minimum lease payments are as follows:
<TABLE>
<S> <C>
1999 $ 18,546
2000 77,331
2001 82,661
2002 86,745
2003 91,714
</TABLE>
7. EQUITY
WARRANTS
Between October 1997 and September, 1999, the Company issued warrants
that are exercisable over 5 years, to purchase 6,513,000 shares of $.0001
par value common stock at $1.00 per share. These warrants were issued as
part of common stock transactions. In December 1998, 553,000 warrants
were canceled as part of common stock redemptions.
SHARES RESERVED FOR FUTURE ISSUANCE
At September 30, 1999, common stock was reserved for the following
purposes:
<TABLE>
<CAPTION>
<S> <C>
Exercise of stock warrants 5,960,000
</TABLE>
3
<PAGE>
8. Subsequent Events
In October and November, 1999, the Company has received $ 400,000 from a
current shareholder from a private placement 12 % convertible debenture
program. The Company is attempting to secure additional investments with
the convertible debenture offering.
8. Segment Information
<TABLE>
<CAPTION>
Three months Three months
Ended September 30, 1999 Ended September 30, 1998
Shopping Gold Products Shopping Gold Products
<S> <C> <C> <C> <C>
Segment profit (loss) $ (254,988) $ 53,113 $ (231,121)
Segment assets $ 365,453 $ 485,192 $ 804,426
<CAPTION>
Nine months Nine months
Ended September 30, 1999 Ended September 30, 1998
Shopping Gold Products Shopping Gold Products
<S> <C> <C> <C> <C>
Segment profit (loss) $ (1,515,521) $ 63,771 $ (375,779)
Segment assets $ 365,453 $ 485,192 $ 804,426
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Results of Operations
Quarter ended September 30, 1999 vs 1998:
Sales for the third quarter of 1999 were soley from the Company's subsidiary,
International Strategic Assets, Inc. There were no sales by the Company in the
third quarter of 1998. There were no sales in the third quarter of 1999 by the
Company's shopping subsidiary, Internationale Shopping Alliance, Inc., as all of
its operations ceased in the second quarter of 1999.
Cost of sales in the third quarter of 1999 relate principally to gold products
sales. Selling and marketing, warehousing and shipping and general and
administrative expenses are also principally from gold products. The Company's
loss from shopping for the third quarter of 1999 is $254,499, whereas the gold
products had a net income of $53,113. Additional expenses are continuing to be
incurred for the shopping division even though all operations have ceased at
September 30, 1999. It is the intent of management to commence shopping
operations if sufficient additional working capital can be obtained. General and
administrative expenses decreased in the third quarter ended September 30, 1999
because shopping division expenses decreased substiantially.
Nine months ended September 30, 1999 vs 1998:
Sales for the nine months ended September were soley from the Company's gold
products subsidiary except for $ 50,538 from the Company's shopping subsidiary.
As stated above, shopping operations have
4
<PAGE>
ceased until sufficient additional working capital can be obtained from new
investors or current shareholders.
Cost of sales for the nine months ended September 30, 1999 is also
substiantially from the gold products subsidiary. Engineering and programming
expense relates entirely to the shopping subsidiary. Warehousing and shipping,
general and administrative and depreciation also relate substiantially to the
shopping subsidiary. The Company's loss from the shopping subsidiary amounts to
$(1,515,521) whereas the gold products subsidiary reported net profit in the
amount of $ 63,771, respectfully, for the nine months ended September 30, 1999.
Liquidity and Capital Resources
At September 30, 1999, the Company had sufficient working capital to sustain
the gold products subsidiary operations. All future shopping operations well
depend upon the Company's successful obtainment of sufficient adequate
working to commence shopping operations in the future.
Part II. Other Information
- --------------------------
Item 6. Exhibits and Report on Form 8-K
Exhibits - None
Reports on Form 8-K - None
5
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant has caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, this 15 day of November, 1999.
ISA INTERNATIONALE INC.
By
------------------------------
Gerald J. Durand, President
and Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in their
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Gerald J. Durand
- ------------------------ President, CEO and Director November 15, 1999
Gerald J. Durand
/s/ Bernard L. Brodkorb
- ------------------------ Treasurer, Chief Financial Officer and Director November 15, 1999
Bernard L. Brodkorb
/s/ Ronald G. Wolfbauer
- ------------------------ Director November 15, 1999
Ronald G. Wolfbauer
</TABLE>
