<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from ____________ to _____________
Commission file number: 0-27637
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
(Name of small business issuer in its charter)
Colorado 47-0811483
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6235 SOUTH 90TH STREET, OMAHA, NEBRASKA 68127
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (402) 331-3189
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
As of September 30, 2000, there were 10,326,540 outstanding shares of the
issuer's common stock, par value $0.001.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I - FINANCIAL INFORMATION........................................................................1
ITEM 1. Financial Statements............................................................... 1
ITEM 2. Management's Discussion and Analysis or Plan of Operation...........................2
PART II - OTHER INFORMATION...........................................................................4
ITEM 1. Legal Proceedings...................................................................4
ITEM 5. Other Information...................................................................5
ITEM 6. Exhibits and Reports on Form 8-K....................................................5
INDEX TO EXHIBITS.....................................................................................7
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
As used herein, the term "Company" refers to Global Entertainment
Holdings/Equities, Inc., and its subsidiaries and predecessors unless otherwise
indicated. Consolidated, unaudited, condensed interim financial statements
including a balance sheet for the Company as of the quarter ended September 30,
2000 and statements of operations and statements of cash flows for the interim
period up to the date of such balance sheet and the comparable period of the
preceding year are attached hereto as Pages F-1 through F-7 and are incorporated
herein by this reference.
The consolidated financial statements for the Company included herein are
unaudited but reflect, in management's opinion, all adjustments, consisting only
of normal recurring adjustments, that are necessary for a fair presentation of
the Company's financial position and the results of its operations for the
interim periods presented. Because of the nature of the Company's business, the
results of operations for the three months ended September 30, 2000 are not
necessarily indicative of the results that may be expected for the full fiscal
year. The financial statements included herein should be read in conjunction
with the financial statements and notes thereto included in the Form 10K-SB for
the year ended December 31, 1999.
1
<PAGE> 4
ITEM 2. Management's Discussion and Analysis or Plan of Operation.
Forward-Looking Information-General
This report contains a number of forward-looking statements, which reflect the
Company's current views with respect to future events and financial performance
including statements regarding the Company's projections, and the internet
gaming industry. These forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ materially from
historical results or those anticipated. In this report, the words
"anticipates", "believes", "expects", "intends", "future", "plans", "targets"
and similar expressions identify forward-looking statements. Readers are
cautioned to not place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof the Company undertakes
no obligation to publicly revise these forward-looking statements, to reflect
events or circumstances that may arise after the date hereof.
Additionally, these statements are based on certain assumptions that may prove
to be erroneous and are subject to certain risks including, but not limited to,
the Company's dependence on limited cash resources, and its dependence on
certain key personnel within the Company. Accordingly, actual results may
differ, possibly materially, from the predictions contained herein.
Results of Operations
The Company generates operating revenues exclusively from its wholly owned
subsidiaries, Interactive Gaming and Wagering, NV ("IGW") and Prevail Online
("Prevail"). IGW and Prevail currently generate revenues from three (3) primary
sources: (i) licensing fees, (ii) monthly website hosting and maintenance fees,
and (iii) royalties and advertising fees.
The acquisition of Prevail resulted in an additional source of revenue for the
Company through Prevail's website advertising fees. For the quarter ended
September 30, 2000, Prevail generated revenues of over $216,000, which accounted
for approximately 22% of the Company's revenues for that period.
Historically, approximately 50% of all gaming revenue for "Sportsbook"
operators, in the USA and abroad, are generated during American Professional and
Collegiate football season. This statistic has proven to be steadfast during the
short time that IGW began licensing its Internet Sportsbook software platform,
as fourth quarter royalty revenue represented over 50% of all revenue generated
in 1998 and 1999. This seasonal royalty revenue is anticipated to continue for
the Sportsbook software platform; however, with the recent development,
licensing and introduction of the new Internet based casino software, revenues
should balance out during the off season months as a result of the additional
royalties gained through the licensing of the newly introduced Casino software.
Seasonal royalty revenue for football season currently represents over 50% of
all Company revenue, however, as new licensees and additional software platforms
are added, the revenues are hoped to become more balanced during the other sport
seasons.
2
<PAGE> 5
Through research and development in the past four years, the Company identified
the opportunity of offering proprietary software and related services to online
gaming operators and successfully launched its first licensee in November 1997.
The Company encourages its licensee's to target only customers in countries that
regulate online gaming. Currently, there are several countries which support the
online gaming industry through regulation and/or taxation, including; such
nations as Sweden, Finland, Australia, Germany, Liechtenstein, the Netherlands
Antilles, Dominica and Antigua and several other countries.
Since the beginning of January 2000, through September 30, 2000, revenues from
all components of the software licensing business, which include software
licensing, Website services and software licensing royalties have undergone
growth and increased to more than $3.2 Million.
The Company's revenues increased to $1,211,611 for the quarter ended September
30, 2000 as compared to $322,981 for the quarter ended September 30, 1999. The
growth is primarily due to additional revenues generated from software
licensing, Website services for licensees (including royalties), and advertising
(through Prevail). The Company, through IGW, offers to its licensees Internet
based Casino and Sportsbook software as well as telephone based (call centers)
Sportsbook software. Revenue from software licensing services accounted for 51%
of the Company's total revenues for the three months ended September 30, 2000.
The Company expects licensing revenues to continue to grow as more licensees
commence operations and royalties from existing licensee's Internet gaming
operations increase.
Loss from operations for the three months ended September 30, 2000, was
($44,215) as compared to loss from operations of ($170,961) for the three months
ended September 30, 1999.
Operating expenses were $1,255,836 for the three months ended September 30, 2000
and $503,942 for this same period in 1999. During the three months ended
September 30, 2000 there were significant increases in operating expenses due to
the continuing operational and employment expansion of Interactive Gaming and
Wagering, NV (IGW). More specifically, depreciation expense was $118,643 at
September 30, 2000 compared to $77,972 at September 30, 1999. These expense
increases are attributed to the increase in an investment in assets during the
last fiscal year. Rent expense at September 30, 2000 was $88,014, increasing
from $63,709 at September 30, 1999 because of larger facilities in Curacao for
IGW. Administrative expenses increased to $125,195 at September 30, 2000
compared to $63,498 at September 30, 1999, which reflects the cost of the
expanded employment force at IGW and the additional administrative costs of
Prevail Online, Inc.
Additionally, the Company has intensified its efforts to refine and enhance its
computer programs and operations at IGW in Curacao. This resulted in an increase
in consulting expenses for programming and bandwidth expenses from $187,578 at
September 30, 1999 to $659,273 at September 30, 2000.
3
<PAGE> 6
Liquidity and Capital Resources
At September 30, 2000, the Company had $126,172 in cash and cash equivalents, as
compared to $236,184 at September 30, 1999.
Accounts receivable at September 30, 2000 increased to $2,276,094 as compared to
$1,511,226 at September 30, 1999. The majority of the receivables are from new
licensees that were offered an installment payment plan on the initial licensing
fees and from operating licensees, which have a 30-day term agreement for
royalties.
Net cash used from operating activities for the nine months ended September 30,
2000, was $139,783 as compared to a net used of $393,691 for the nine months
ended September 30, 1999.
Net cash used for investing activities for the nine months ended September 30,
2000, was $176,718 as compared to $1,249,550 for the nine months ended September
30, 1999.
Net cash provided by financing activities for the nine months ended September
30, 2000, was $206,486, as compared to $1,675,158 for the nine months ended
September 30, 1999.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
On November 26, 1997, the Company as Masadi Resources, Inc. ("Company") entered
into an Agreement of Purchase and Sale ("Agreement") to purchase Beverage Source
Worldwide, Inc. ("BSI"). On May 5, 1998, the Company filed a Complaint in the
Superior Court of California, County of San Diego, asking the Court to declare
the Agreement rescinded. The Company further alleged that various individuals
including Mark Darnell ("Darnell") had breached the Agreement and alleged, the
individuals, including Darnell had breached their fiduciary duties and had
committed other malfeasance and illegal acts. All parties to the lawsuit other
than Darnell were dismissed prior to Trial. The trial was held on November 8-10,
1999, in the Superior Court of San Diego. In a Minute Order dated December 23,
1999, the Court ruled against the Company on all counts and further ordered that
a rescission had not taken place and ordered that Darnell retained all
previously held stock interest in the company. Subsequent to the Court's ruling,
the Company and Darnell entered into a Settlement Agreement and Mutual Release
of all Claims ("Settlement Agreement") wherein the Company paid Darnell $75,000
and Darnell agreed to rescind the Agreement. The $75,000 per the Settlement
Agreement was to be paid as follows: $35,000 on 2/23/00; $20,000 on 5/18/00; and
$20,000 on 8/18/00. The first two payments have been made by the Company and the
final payment was made when due per the Agreement, on 8/18/00. This final
payment resolved all aspects of this litigation.
The Company is not a party to any other litigation and none is contemplated nor
has any been threatened.
4
<PAGE> 7
ITEM 5. Other Information
On November 1, 2000, the Company accepted the resignation of David Wintroub as
its president and chief executive officer. Wintroub is remaining on the
Company's board of directors. Wintroub was replaced by Donald J. Lisa. Lisa was
appointed to the Company's board of directors in August 2000.
R. Scott Van Kirk resigned from the Company's board of directors in November
2000. Van Kirk is remaining as chief developer for the Company's subsidiary,
Interactive Gaming and Wagering.
Steven Abboud resigned from the Company's board of directors in August 2000.
ITEM 6. Exhibits and Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter for which this report is
filed. However, the Company filed a Form 8-K on November 7, 2000, relating to
the Company's new auditor, Clyde Bailey, P.C. This appointment represents a
change in the Company's independent auditor, which was necessitated by the
recent death of the principal of the Company's previous auditor, Mr. Darrell
Schvaneveldt, of Darrell Schvaneveldt & Company, Certified Public Accountant.
The following exhibits are attached hereto.
3.1 Articles of Incorporation
3.2 Bylaws.
27 Financial Data Schedule for the quarter ending September 30, 2000.
5
<PAGE> 8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Quarterly
Report on Form 10-QSB to be executed on its behalf by the undersigned, hereunto
duly authorized.
Global Entertainment Holdings/Equities, Inc.
/s/ Donald J. Lisa
-------------------------
Donald J. Lisa, President
November 13, 2000
<PAGE> 9
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 (UNAUDITED) AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
As of September 30, As of December 31,
2000 1999
------------------- ------------------
(Unaudited) (Audited)
------------------- ------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash & Cash Equivalents 126,172 236,184
Accounts Receivable Net of Provision 2,276,094 1,511,226
for Bad Debts of $119,590 in 2000
and $71,800 in 1999
Prepaid Expenses 33,783 67,941
Interest Receivable 5,040 2,632
Employee Accounts Receivable 42,000 51,312
------------- -------------
Total Current Assets 2,483,089 1,869,295
PROPERTY & EQUIPMENT
Automobile- Net 35,484 59,484
Package Software- Net 110,202 108,951
Office Improvements- Net 33,297 21,696
Computer Equipment- Net 498,771 590,819
Furniture & Fixtures- Net 125,296 121,288
Websites - Net 669,674 737,897
------------- -------------
Total Property & Equipment 1,472,724 1,640,135
OTHER ASSETS
Security Deposit 29,269 17,220
Software Design & Development-Net 232,526 117,975
------------- -------------
Total Other Assets 261,795 135,195
------------- -------------
Total Assets $ 4,217,608 $ 3,644,625
============= =============
</TABLE>
See accompanying summary of accounting principles and
notes to financial statements
F-1
<PAGE> 10
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC. & SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 (UNAUDITED) AND DECEMBER 31, 1999
<TABLE>
<CAPTION>
As of September 30, As of December 31,
2000 1999
------------------- ------------------
(Unaudited) (Audited)
------------------- ------------------
<S> <C> <C>
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable 545,825 304,021
Accrued Expenses -- 13,471
Accrued Interest 59,262 40,170
Accrued Wages 40,907 49,930
Customer Deposits -- 35,880
Current Portion- Capital Leases 23,839 31,285
Current Portion- Notes Payable 463,000 240,000
Note Payable- Line of Credit 293 35,693
Income Taxes Payable 11,571 11,571
------------- -------------
Total Current Liabilities $ 1,144,697 $ 762,021
LONG TERM LIABILITIES
Notes Payable 718,000 565,000
Less Current Portion (463,000) (240,000)
------------- -------------
Total Long Term Notes Payable 255,000 325,000
Capital Lease Payable 26,013 35,395
------------- -------------
Net Long Term Liabilities 281,013 360,395
------------- -------------
Total Liabilities $ 1,425,710 $ 1,122,416
------------- -------------
STOCKHOLDERS' EQUITY
Preferred Stock, 25,000,000 Shares Authorized,
at $.001 Par Value, None Issued
Common Stock, 100,000,000 Shares Authorized 10,326 9,940
Par Value of $.001;
10,272,723 & 9,940,353 Shares Issued and
Outstanding Respectively Retroactively Restated
Paid in Capital 3,278,154 2,854,948
Retained Earnings(Deficit) (362,082) (342,679)
Treasury Stock, at Cost (134,500) --
------------- -------------
Net Stockholders' Equity 2,791,898 2,522,209
------------- -------------
Total Liabilities and Stockholders' Equity $ 4,217,608 $ 3,644,625
============= =============
</TABLE>
See accompanying summary of accounting principles and
notes to financial statements
F-2
<PAGE> 11
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC. & SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
----------------------------- -----------------------------
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
----------------------------- -----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
License Fees 29,400 -- 29,400 --
Royalty Fees 625,649 292,793 1,943,309 1,520,291
Hosting Income 155,804 475,975 --
Advertising Revenues 400,768 40,188 851,208 61,658
------------ ------------ ------------ ------------
Total Revenues $ 1,211,621 $ 332,981 $ 3,299,892 $ 1,581,949
------------ ------------ ------------ ------------
Expenses
Bad Debt Provision 14,038 -- 61,828 --
Uncollectible Fees Written Off -- -- 25,000 --
Amortization 29,612 35,528 133,861 98,918
Depreciation 118,643 77,972 294,126 150,557
Rents 88,014 63,709 282,999 147,276
Professional Fees -- 55,966 60,731 136,705
Travel 27,523 19,691 95,935 57,127
Financial & Investor Relations 27,616 -- 60,115 --
Administrative Expenses 125,195 63,498 563,101 265,959
Consulting 512,273 187,578 1,103,923 460,158
Advertising 138,934 -- 314,810 27,724
Bandwidth Expenses 147,050 -- 216,560 --
Wages and Salaries 26,938 -- 92,061 22,201
------------ ------------ ------------ ------------
Total Expenses $ 1,255,836 $ 503,942 $ 3,305,050 $ 1,366,625
------------ ------------ ------------ ------------
Income (Loss) from Operations (44,215) (170,961) (5,158) 215,324
Other Income(Expenses)
Interest(Expense) (14,316) -- (40,381) (14,128)
Interest Income 1,033 1,339 4,867 1,885
Other Income(Expense) (29,478) -- 15,697 (122,795)
------------ ------------ ------------ ------------
Total Other Income(Expenses) (42,761) 1,339 (19,817) (135,038)
------------ ------------ ------------ ------------
Income Before Taxes (86,976) (169,622) (24,975) 80,286
Provisions for Income Tax -- -- 5,572 (58,140)
------------ ------------ ------------ ------------
Net Income $ (86,976) $ (169,622) $ (19,403) $ 22,146
============ ============ ============ ============
Basic Earnings Per Share $ (0.01) $ (0.02) $ 0.01 $ 0.00
Diluted Earnings Per Share $ (0.01) $ (0.02) $ 0.01 $ 0.00
Weighted Average Shares Outstanding 10,301,282 9,531,057 10,301,282 9,531,057
Retroactively Restated
Weighted Average Shares & Options 11,021,282 9,531,057 11,021,282 9,531,057
Outstanding
</TABLE>
See accompanying summary of accounting principles and
notes to financial statements
F-3
<PAGE> 12
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC. & SUBSIDIARIES
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS PERIOD JANUARY 1, 2000 AND
1999 TO SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
-------------------------------
For the Six Months Ended
September 30
-------------------------------
2000 1999
------------- -------------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income $ (19,403) $ 22,146
Adjustments to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities;
Amortization 133,861 98,918
Depreciation 294,126 150,557
Provisions for Bad Debt 61,828 --
Non Cash Expenses 71,550 --
Change in Operating Assets & Liabilities
(Increase) Decrease in Fees Receivable (764,868) (587,538)
(Increase) Decrease in Prepaid Expenses 34,158 (126,950)
(Increase) Decrease in Security Deposits (12,049) (10,240)
(Increase) Decrease in Interest Receivable (2,408) (840)
(Increase) Decrease in Employee Receivable 9,312 (42,000)
Increase in Accounts Payable 241,804 137,125
Increase in Software Design (148,412) (54,578)
Increase in Accrued Expenses (13,471) 31,426
Increase in Taxes Payable -- --
(Decrease) Increase in Accrued Interest 19,092 (2,760)
(Decrease) Increase in Accrued Wages (9,023) (2,609)
(Decrease) Increase in Cash in Escrow Restricted (35,880) (6,348)
------------- -------------
Net Cash Provided (Used) in Operating Activities $ (139,783) $ (393,691)
------------- -------------
Cash Flows from Investing Activities
Purchase of Fixed Assets (176,715) (1,249,550)
------------- -------------
Net Cash (Used) in Investing Activities $ (176,715) $ (1,249,550)
------------- -------------
</TABLE>
See accompanying summary of accounting principles and
notes to financial statements
F-4
<PAGE> 13
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC. & SUBSIDIARIES
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS PERIOD JANUARY 1, 2000 AND
1999 TO SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
-------------------------------
For the Six Months Ended
September 30
-------------------------------
2000 1999
------------- -------------
<S> <C> <C>
Cash Flows from Financing Activities
Increase( Decrease) in Capital Lease Liabilities (16,828) 30,648
Increase (Decrease) in Notes Payable 293,000 425,000
Treasury Stock (134,500) --
Sale of Common Stock 64,814 1,219,510
------------- -------------
Net Cash Provided by Financing Activities $ 206,486 $ 1,675,158
------------- -------------
Increase (Decrease) in Cash & Cash Equivalents (110,012) 31,917
Cash & Cash Equivalents at Beginning of Period 236,184 122,422
------------- -------------
Cash & Cash Equivalents at End of Period $ 126,172 $ 154,339
============= =============
Disclosures from Operating Activities:
Interest Expense 40,381 14,128
Taxes 13,698 16,169
Significant Non-Cash Transactions:
Issued 39,000 for Prepaid Public Relations 0 130,000
Issued 6,000 shares for Interest 0 2,250
Issued 13,500 shares for Consulting -- 43,000
Issued 49,400 shares for Consulting 71,550
Issued 7,000 shares for Legal Services 24,000
</TABLE>
F-5
See accompanying summary of accounting principles and
notes to financial statements
<PAGE> 14
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement
NOTE #1 - Organization
The Company was incorporated on July 10, 1997, under the laws of the state of
Colorado using the name Masadi Resources, Inc. On February 10, 1998, Articles of
Amendment were filed changing the name to International Beverage Corporation.
Pursuant to a Merger Agreement dated August 27, 1998, International Beverage
Corporation merged with Global Entertainment Holdings/Equities, Inc., and
subsequently the surviving corporation became known as Global Entertainment
Holdings/Equities, Inc.
The purpose of the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the laws of the state of Colorado. The
Company currently has two wholly owned subsidiaries; Interactive Gaming and
Wagering NV, (IGW), a Netherlands Antilles Corporation in Curacao, Netherlands
Antilles, and Prevail Online, Inc., (Prevail), a Colorado Corporation. IGW, is
engaged in the conception and creation of computer software programs for the
gaming and wagering industry. Prevail, was purchased in August of 1999 and it is
engaged in the creation and operation of websites and derives its revenues from
banner advertising.
NOTE #2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period in
which they occur. Revenues and related expenses are recognized from the
sale of the licenses when persuasive evidence of an arrangement exists,
delivery of access to the software has occurred, the license fee has
been determined and collectability of the license fee is probable.
License fees are billed to be paid in three installments over a
relatively short period of time, usually within ninety days.
C. The Company considers all short term, highly liquid investments that
are readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Shares are computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted Earnings Per Share shall be
computed by including contingently issuable shares with the weighted
average shares outstanding during the period. When inclusion of the
contingently issuable shares would have an antidilutive effect upon
earnings per share no diluted earnings per share shall be presented.
E. Consolidation Policies: The accompanying consolidated financial
statements include the accounts of the company and its wholly-owned
subsidiaries. Inter-company transactions and balances have been
eliminated in consolidation.
F. Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of leasehold
improvements is amortized over the lesser of the length of the lease of
the related assets of the estimated lives of the assets. Depreciation
and amortization is computed on the straight-line method.
G. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
F-6
<PAGE> 15
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE #2 - Significant Accounting Policies -Continued-
H. Foreign Currency: All cash transactions in the Netherlands Antilles are
conducted from the Antilles Banking Corporation in United States
dollars.
I. Stock Options are valued at the difference in the market price of the
shares on the day of the grant and the present value of the shares at a
risk free discounted rate for the option period. When restricted shares
are to be acquired by exercise of the options the Company may apply a
marketability discount to the deemed value of the options.
NOTE #3 - Statement Preparation
The Company has prepared the accompanying financial statements with interim
financial reporting requirements promulgated by the Securities & Exchange
Commission. The information furnished reflects all adjustments which are, in the
opinion of management, necessary for a fair presentation of financial position
and results of operations.
The financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's 1999 10-K
report.
F-7
<PAGE> 16
INDEX TO EXHIBITS
Exhibits marked with an asterisk have been filed previously with the
Commission and are incorporated herein by reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.1* Articles of Incorporation
3.2* Bylaws.
27 Financial Data Schedule for the quarter ending June 30, 2000.
</TABLE>
