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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission File Number 0-27373
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ISA INTERNATIONALE INC.
(Exact name of registrant as specified in its charter)
DELEWARE 41-1925647
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1601 EAST HIGHWAY 13, SUITE 100 55337
BURNSVILLE, MINNESOTA (Zip Code)
(Address of principal
executive offices)
(612) 736-0619
(Registrant's telephone number, including area code)
---------------------------------------------------
Indicate by check mark 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 such 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
---- -----
-------------------------------------------
On November 14, 2000, there were 17,923,881 shares of the Registrant's common
stock, par value $.0001 per share, outstanding.
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ISA INTERNATIONALE, INC.
FORM 10-QSB
SEPTEMBER 30, 2000
TABLE OF CONTENTS
PART 1, FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE NUMBER
<S> <C>
ITEM 1. FINANCIAL STATEMENTS
Balance Sheets as of September 30, 2000 and December 31, 1999 3
Statements of Operations for the Three Months Ended September 30, 2000
And 1999 and the Nine Months Ended September 30, 2000 and 1999 4
Statements of Cash Flows for the Nine Months Ended September 30, 2000
And 1999 5
Notes to Financial Statements 6-7
ITEM 2. MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS. 8-11
PART 2. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 14
INDEX TO EXHIBITS
</TABLE>
2
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ISA INTERNATIONALE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
September 30, 2000 December 31, 1999
------------------ -----------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .............................. $ 4,730 $ 260,807
Other current assets ................................... -- 286,000
----------- -----------
Total current assets ................................. 4,730 546,807
Fixed assets:
Property, plant and equipment, net of depreciation ..... 236,971 279,410
Deposits ................................................. 9,408 90,423
Noncurrent assets of discontinued operations ............. -- 45,421
=========== ===========
TOTAL ASSETS ......................................... $ 251,109 $ 962,061
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable ....................................... $ 670,890 $ 147,913
Convertible debentures payable ......................... 1,591,640 986,000
Interest payable ....................................... 164,239 --
Other current liabilities .............................. 9,088 41,725
Net current liabilities of discontinued operations ..... -- 159,952
----------- -----------
Total Current Liabilities ............................ 2,435,857 1,335,590
Deferred lease costs ..................................... 39,094 77,077
Security deposits ........................................ 14,908 14,908
----------- -----------
Total liabilities .................................... 2,489,859 1,427,575
Shareholders' Equity (Deficit)
Common stock ........................................... 1,502 1,438
$.0001 par value. Authorized 30,000,000 shares; issued
and outstanding 15,023,881 and 14,382,215 shares at
September 30, 2000 and December 31, 1999, respectively
Additional paid in capital ............................. 3,058,368 2,566,032
Accumulated deficit .................................... (5,298,620) (3,032,984)
----------- -----------
Total shareholders' deficit .......................... (2,238,750) (465,514)
=========== ===========
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY .............. $ 251,109 $ 962,061
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements
3
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ISA INTERNATIONALE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
THREE MONTHS ENDING NINE MONTHS ENDING
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales ......................................... $ -- $ -- $ -- $ 63,806
Cost of goods sold ................................ -- -- -- (48,046)
------------ ------------ ------------ ------------
Gross profit .................................... -- -- -- 15,760
Operating Expenses
Selling and marketing ........................... -- -- -- 73,974
Engineering and programming .................... -- 41,977 122,699 683,264
Warehousing and shipping ........................ -- 60,629 -- 104,992
General and administrative ...................... 795,376 228,777 2,422,255 666,621
Depreciation .................................... 13,184 28,954 39,552 67,418
------------ ------------ ------------ ------------
Operating loss ................................ (808,560) (360,337) (2,584,506) (1,580,509)
Interest expense, net ........................... (55,622) 280 (128,788) 1,217
Other income, net ............................... 14,653 -- 56,104 --
------------ ------------ ------------ ------------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (849,529) (360,057) (2,657,190) (1,579,292)
Income taxes .................................... -- -- -- --
LOSS FROM CONTINUING OPERATIONS ................... (849,529) (360,057) (2,657,190) (1,579,292)
Discontinued Operations:
Operating income, net of taxes .................. -- -- 9,405 63,771
Net income, after taxes on disposition .......... -- -- 382,149 --
------------ ------------ ------------ ------------
Earnings from discontinued operations ............. -- -- 391,554 63,771
------------ ------------ ------------ ------------
NET LOSS .......................................... $ (849,529) $ (360,057) $ (2,265,636) $ (1,515,521)
============ ============ ============ ============
Net income (loss) per share-basic and diluted
Continuing operations ........................... $ (0.06) $ (0.03) $ (0.18) $ (0.11)
Discontinued operations ......................... -- -- 0.03 0.00
Net loss ........................................ $ (0.06) $ (0.03) $ (0.15) $ (0.11)
============ ============ ============ ============
Average shares of common stock outstanding,
basic and diluted ............................... 14,703,048 14,382,215 14,703,048 14,382,215
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements
4
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ISA INTERNATIONALE, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
NINE MONTHS ENDED NINE MONTHS ENDED
September 30, 2000 September 30, 1999
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Loss from continuing operations ........................ $(2,657,190.00) $(1,579,292)
Adjustments to reconcile loss from
continuing operations to cash
used in operations:
Non-cash compensation related to stock option issuance 338,450 --
Depreciation and amortization ........................ 39,552 67,418
Amortization of deferred lease costs ................. (37,983) --
Changes in operating assets and liabilities
Other current assets ................................. 286,000 --
Deposits ............................................. 90,000 89,518
Accounts payable ..................................... 522,977 89,270
Interest payable ..................................... 164,239 --
Other current liabilities ............................ (32,637) 7,510
-------------- -----------
Cash used in continuing operations ....................... (1,286,592) (1,325,576)
Cash provided by discontinued operations ................. 270,291 11,611
-------------- -----------
Cash used in all operations .......................... (1,016,301) (1,313,965)
-------------- -----------
CASH FLOWS FROM INVESTING ACITIVITIES
Capital expenditures ................................... 2,705 (51,794)
Proceeds from equipment sales .......................... 2,888 --
Discontinued operations ................................ 1,891 14,556
-------------- -----------
Cash used in investing activities .................... 7,484 (37,238)
-------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of convertible debentures ....... 605,640 --
Proceeds from issuance of common stock ................. 147,100 --
Proceeds from issuance of common stock warrants ........ -- 1,171,040
-------------- -----------
Cash provided by financing activities ................ 752,740 1,171,040
-------------- -----------
Net decrease in cash and cash equivalents ................ (256,077) (180,163)
Cash and cash equivalents at beginning of period ......... 260,807 186,600
-------------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............... $ 4,730 $ 6,437
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements
5
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ISA INTERNATIONALE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
In the Company's opinion, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting
of only normal recurring adjustments, except as noted elsewhere in the
notes to the condensed consolidated financial statements) necessary to
present fairly its financial position as of September 30, 2000, and the
results of its operations and cash flows for the nine months ended
September30, 2000 and 1999. These statements are condensed and,
therefore, do not include all of the information and footnotes required
by accounting principles generally accepted in the United States of
America for complete financial statements. The statements should be
read in conjunction with the consolidated financial statements and
footnotes included in the Company's Annual Report on Form 10KSB for the
year ended December 31, 1999. The results of operations for the nine
months ended September 30, 2000, are not necessarily indicative of the
results to be expected for the full year.
The financial statements of the Company at September 30, 2000 have not
been reviewed either in part or in whole by the Company's
independent auditors. In accordance with Regulation S-B, Rule 310(b),
of the Securities and Exchange Commission, the lack of a review by
the Company's independent auditors is a material matter that must be
accordingly disclosed in these financial statements as of September
20, 2000. In the Company's opinion, the accompanying unaudited
condensed financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis and are a fair and reasonable presentation of the Company's
financial position as of September 30, 2000 and the results of its
operations for the nine months ended September 30, 2000.
2. NATURE OF BUSINESS
ISA Internationale Inc.'s (the Company) strategy is to develop,
produce, and broadcast home shopping programming nationally and
internationally via satellite, cable, and the internet. During 1999,
the Company commenced operations as a precious metal bullion and coin
distributor. At September 30, 2000, the Company has discontinued these
operations and have reported these operations within these financial
statements as discontinued operations.
In 2000, the Company changed the name of its wholly owned subsidiary
from Internationale Shopping Alliance Incorporated to
ShoptropolisTV.com.
3. NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards (SFAS) No. 133, ACCOUNTING
FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, (as amended by SFAS
No. 137 with respect to effective date and SFAS No. 138 with respect to
certain hedging activities) will be effective for the Company in
January, 2001. SFAS 133 requires all derivatives to be recognized as
assets and liabilities on the balance sheet and measured at fair value
on a mark to market basis. The impact of adoption on the Company's
financial statements has not yet been determined.
In December 1999, the Securities and Exchange Commission (SEC) issued
Staff Accounting Bulletin (SAB) No. 101 which provides the staff's
views in applying accounting principles generally accepted in the
United States of America to selected revenue recognition issues. As
amended, SAB 101 is now effective no later than the fourth fiscal
quarter of all fiscal years beginning after December 15, 1999. The
Company will be required to adopt the guidance of this bulletin no
later than the fourth quarter of 2000. The impact of adoption on the
Company's financial statements has not yet been determined.
4. DISCONTINUED OPERATIONS
On May 19, 2000, the Company completed a plan to dispose of its wholly
owned subsidiary, International Strategic Assets, Inc. (the Subsidiary)
through a sale to an individual who is an officer and director of the
Company. The sale price was $175,000 and the assumption of all debt
related to the operation of the Subsidiary as well as loans made to the
Subsidiary. A gain of $382,149 was realized during the quarter ending
June 30, 2000. All related assets of the discontinued operations have
been separately reflected in these consolidated financial statements.
5. LIQUIDITY AND GOING CONCERN MATTERS
The Company has incurred losses since its inception and, as a result,
has an accumulated deficit of $5,298,620 at September 30, 2000. The
Company's ability to continue as a going concern
6
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depends upon successfully obtaining sufficient financing to maintain
adequate liquidity and provide for capital expansion until such time as
operations produce positive cash flow. The accompanying consolidated
financial statements have been prepared on a going concern basis which
assumes continuity of operations and realization of assets and
liabilities in the ordinary course of business. The consolidated
financial statements do not include any adjustments that might result
if the Company was forced to discontinue its operations.
The Company is currently being managed by one (1) remaining officer. In
addition, the Company has suspended its development activities pending
the resolution of its financial problems, which included the resolution
of the default conditions that currently exist in the lease for its
warehouse and office facilities and the payment of both interest and
principal and interest due on convertible notes payable issued through
September 30, 2000. The Company plans to obtain additional equity
financing through the issuance of additional shares of common stock.
There can be no assurance that such financing will be consummated.
The Company was in default under the terms of the lease for its office
and warehouse facility located in Eagan, Minnesota as the Company has
not been able to make the monthly lease payment of $36,000 for the
months of July through and including November, 2000. The Company is
attempting to resolve this lease with its landlord. No provision has
been made in these financial statements for any additional costs that
may be incurred in the Company's attempt to resolve this problem,
including but not limited to the liability that has now occurred for
the payment of the full lease due under its related term.
The Company has forfeited security lease deposits in the amount of
$171,015 as of September 30, 2000. The forfeited deposits are
reflected in these financial statements as additional rent expense,
in addition to the normal monthly rent payments that have not been
paid by the Company.
The Company is also in default under the terms of the convertible notes
payable in the full amount as the interest payments due therein have
not been paid in any amount at September 30, 2000. Furthermore, there
is no ability on the part of the Company to pay the interest in the
future unless and until the Company can commence discussions with the
note holders and successfully resolve, under terms satisfactory to the
Company and the note holders, a resolution of the current default.
In November, the Company commenced a financing arrangement wherein
additional capital in the amount of $50,000 was obtained in exchange
for 5,000,000 preferred convertible shares (3 1/2 for 1) and 2,900,000
common shares, for $30,000 and $20,000 in 12% secured convertible notes
payable. Additional financing is contemplated for the Company, but such
financing is not guaranteed and is contingent upon pending successful
resolution of the Company's problems with various creditors. There
is no assurance that the Company will be able to obtain any additional
capital.
7
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
FORWARD LOOKING STATEMENTS
The information herein contains certain forward looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities and Exchange Act of 1934, as amended, which are
intended to be covered by the safe harbors created thereby. Investors are
cautioned that such forward looking statements involve risks and uncertainties,
including, without limitation, the Company's need to obtain significant
additional working capital in order to pursue its business strategy, risks
associated with developing a new business, a history of operating losses,
unanticipated changes in costs of doing business and obtaining merchandise,
changes in governmental regulations, increases in labor costs and employee
benefits, competition and pricing, need for market acceptance of a new business
concept, and general economic and market conditions, as well as other factors
set forth in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1999. Such risks and uncertainties may cause the Company's actual
results, levels of activity, performance or achievements to be materially
different from those future results, levels of activity, performance or
achievements expressed or implied by such forward-looking statements. Although
the Company believes that the assumptions and expectations reflected in these
forward looking statements are reasonable, any of the assumptions and
expectations could prove inaccurate or may not be achieved, and accordingly
there can be no assurance the forward looking statements included in this Form
10-QSB will prove to be accurate. In view of the significant uncertainties
inherent in these forward looking statements, their inclusion herein should not
be regarded as any representation by the Company or any other person that the
objectives, plans, and projected business results of the Company will be
achieved.
Generally, such forward looking statements can be identified by
terminology such as "may," "anticipate," "expect," "will," "believes,"
"intends," "estimates," "plans," or other comparable terminology.
OVERVIEW
The Company was incorporated in Delaware in 1989 under a former name,
and was inactive at the time of its May 1998 reorganization through a merger
with ShoptropolisTV.com, Inc., which is now a wholly-owned subsidiary of the
Company. In connection with the merger, the former shareholders of this
subsidiary acquired 89% of the outstanding common stock of the Company through a
stock exchange in which the Company issued 11,772,600 shares of its common stock
in exchange for all of the outstanding common stock of ShoptropolisTV.com, Inc.
The merger was effected as a reverse merger for financial statement and
operational purposes, and accordingly, the Company regards its inception as
being the incorporation of ShoptropolisTV.com, Inc. on October 7, 1997.
Through its wholly-owned subsidiary, ShoptropolisTV.com, Inc. (f/k/a
Internationale Shopping Alliance Inc.) ("STV"), ISA Internationale Inc. (the
"Company") was primarily engaged in the development of a multimedia home
shopping network offering in-home shoppers a convenient electronic shopping
experience through broadcast television, cable, satellite or the Internet,
and featuring a broad variety of high-quality, moderately priced, unique
consumer products. On June 8, 2000, in an effort to manage its remaining
cash, the Company laid off 12 contract employees. Currently, the Company is
being operated by one remaining officers. Further, the Company has suspended
its development efforts pending the receipt of additional financing or
capital. The Company is actively seeking a number of financing and strategic
alternatives.
8
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The Company incorporated a second wholly-owned subsidiary,
International Strategic Assets, Inc., in March 1999, which was engaged in direct
sales via outbound telemarketing of precious metals consisting of mainly gold
and silver coins and bars. As of March 31, 2000, the Company had discontinued
the operation of its precious metals business. On May 19, 2000, the Company and
Ronald G. Wolfbauer executed and closed an Agreement for the Purchase of
Corporate Stock (the "Purchase Agreement") pursuant to which the Company sold
all of the outstanding common stock of its wholly-owned subsidiary,
International Strategic Assets, Inc. Pursuant to the terms of the Purchase
Agreement, the Company received a cash payment of $175,000 in payment of the
full purchase price at the closing. The purchase price consisted of $75,000 for
the purchase of approximately 43% of the outstanding common stock of
International Strategic Assets, Inc. and $100,000 paid in connection with the
subsequent redemption of the remaining 57% of the outstanding common stock of
International Strategic Assets, Inc. The funds used for the payment of the
redemption price were provided to International Strategic Assets, Inc. by Mr.
Ronald Wolfbauer in the form of a loan which was funded prior to the purchase.
Prior to the sale of the common stock of International Strategic
Assets, Inc., Mr. Ronald G. Wolfbauer had served as a director of the Company
and International Strategic Assets, Inc. On May 15, 2000, Mr. Wolfbauer resigned
as a director of the Company.
LIQUIDITY AND CAPITAL RESOURCES
ISA has obtained its capitalization primarily through the sale of its
equity securities to a limited group of private investors known to the
management of ISA. Between the inception of ISA in 1997 through December 31,
1997, ISA raised $400,000 in cash through the sale of its common stock with
accompanying warrants. In calendar year 1998, ISA raised an additional $833,376
in cash through sales of common stock and common stock with accompanying
warrants. During a period from January through February 1999, ISA raised a total
of $1,171,040 through the exercise of outstanding warrants by existing
shareholders, of which $528,702 was in cash and $642,838 was in gold bullion and
coins transferred to ISA. Such gold bullion and coins were immediately liquid to
ISA, and have since been converted to cash. From September 1999 through
September 2000, the Company raised $1,591,640 through the sale of
convertible unsecured debentures.
[As of September 30, 2000, the Company had current assets of approximately
$4,730, consisting of $4,730 in cash. At the same time, the Company had
$2,435,857 in current liabilities, consisting of $670,890 in accounts
payable, $164,239 in interest payable, $9,088 in
9
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current liabilities and $1,591,640 in convertible debentures payable. As such,
the Company had a working capital deficit of $2,431,127 as of September 30,
2000. The Company's long term liabilities on September 30, 2000 consisted of
deferred lease costs and security deposits of $54,002.]
[The Company had no capital expenditures from its inception in October
1997 to yearend 1997. During the year ended December 31, 1998, the Company
incurred capital expenditures totaling $434,614, primarily for data processing
hardware and software systems, telemarketing and computer telephone equipment,
and broadcast and studio equipment for the Company's home shopping TV network
including extensive satellite uplink transmission equipment. During the year
ended December 31, 1999, the Company incurred capital expenditures of $78,844
primarily for equipment for its precious metals sales and administrative offices
in suburban Minneapolis/St. Paul.]
In an effort to manage its remaining cash, the Company announced the
layoff of 12 contract employees on June 8, 2000. Currently, the Company is being
operated by [1] remaining officer. In addition, the Company has suspended its
development efforts pending the receipt of additional financing and capital.
The Company was in default under the terms of the lease for its office
and warehouse facility located in Eagan, Minnesota as the Company has been
unable to make the monthly lease payment of $36,000 for the months from July
through November, 2000. The Company is also in default on its obligation to make
the first of its semi-annual interest payments in the amount of $164,239 on
certain convertible 12% debentures issued between September 1999 and September
June 2000. As such, all of these notes have been classified as current
liabilities as of September 30, 2000, as the Company is in default in
accordance with their terms.
The Company's current capital resources are not sufficient to supports
its planned development and continuing operations. The Company will not be able
to continue the development of its STV home shopping network and related website
or commerce operations thereof unless the Company is able to raise substantial
additional capital. Anticipated capital expenditures for the development and
ultimate operation of the STV shopping network include equipment purchases and
leases, leasehold improvements, salaries and wages and general working capital.
[Currently, the Company estimates that approximately $8,000,000 of additional
capital is necessary to commence and support the operation of the STV shopping
network.]
The Company is continuing to actively seek additional sources of debt
or equity financing. If additional funds are raised through the sale and
issuance of equity securities, our current stockholders may experience a
significant dilution in their ownership of the Company. There can be no
assurance that the necessary additional financing will be available to the
Company on a timely basis, or that such capital will be available on terms
favorable or acceptable to the Company. If the Company is unable to obtain
sufficient financing or to generate funds from operations sufficient to meet its
operating and development needs, the Company will be unable to implement its
current plans, develop the STV content and format, or continue its operations.
As a result of the Company's history of operating losses and its need
for significant additional capital, the reports of the Company's independent
auditors on the Company's consolidated financial statements for the years ended
December 31, 1999 and 1998, and the notes to the condensed consolidated
financial statements included in this Form 10-QSB, include an explanatory
paragraph concerning the Company's ability to continue as a going concern.
10
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INCOME TAX BENEFIT
The Company has an income tax benefit from net operating losses of
approximately $5,298,620at September 30,2000 which is available to offset any
future taxable income. These carryforwards start to expire in 2013 None of this
benefit was recorded in the accompanying financial statements as of September
30, 2000 and 1999. As a result of the Company's capital raising efforts, a
change of control may occur for income tax purposes that may severely limit the
Company's ability to utilize these net operating loss tax carryforwards.
IMPACT OF INFLATION
The Company believes that inflation has not had any effect on its
development or operations since its inception in 1997. Furthermore, the Company
does not believe inflation will have any material effect for the foreseeable
future. In any event, the Company believes it can offset any future inflationary
increases in the cost of goods and labor by increasing its sales and thereby
improving its operating efficiencies through economies of scale. The Company is
currently evaluating the possible divestiture of its precious metals business
through a sale of such business or by other appropriate means.
11
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company has been named as a defendent in a lawsuit alleging that two of
the Company's former officers and its formerly owned subsidiary, International
Strategic Assets, Inc., and the Parent Company itself, have caused damages
in excess of $50,000 to the former employer of the Company's former two
officers through the loss of confidential information. The Company believes
the lawsuit is without merit. Accordingly, no provision for damages has been
provided for in these financial statements.
Item 2. Changes in Securities and Use of Proceeds
The Company reports that 5,000 shares were issued for $6,850 during the
quarter ended June 30, 2000. Further, there were 636,666 shares issued for
$147,000 during the quarter ended September 30, 2000. Subsequent to September
30, 2000, there was 5,000,000 preferred shares, $.0001 par value, issued for
$1,000, and 2,900,000 common shares issued for 29.000, as a part of a new
capital financing arrangement commenced by the Company in November, 2000.
Item 3. Defaults Upon Senior Securities
The Company was in default with all of its convertible debentureholders at
September 30, 2000. Interest payments on these notes has not been paid in the
amount of $164,239. The Company does not currently have the financial ability
to make the scheduled interest payments.
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
12
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Item 6. Exhibits and Reports on Form 8K
(a) Exhibits. The exhibits to this quarterly report on Form 10-Q are listed
in the exhibit index beginning on Page 12.
(b) Form 8-K.
None
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on behalf by the
undersigned thereinto duly authorized.
ISA INTERNATIONALE, INC.
By Jack T. Wallace
---------------------
Jack T. Wallace
Chief Executive Officer
and President
November 14, 2000.
14
