Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] 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: 0-27827
MEZZANINE INVESTMENT CORPORATION
(Exact name of Registrant as specified in charter)
NEVADA 33-0874810
State or other jurisdiction of I.R.S. Employer I.D. No.
incorporation or organization
1516 BROOKHOLLOW DRIVE, SUITE D, SANTA ANA, CA 92705
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (714) 430-9209
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, Par
Value $.001
Check whether the Issuer (1) has 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. (1) Yes
[X] No [ ] (2) Yes [ ] No [ X ]
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $-0-
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant computed by reference to the price at which the stock was sold,
or the average bid and asked prices of such stock, as of a specified date
within the past 60 days: The aggregate market value of the voting stock held
by non-affiliates of the Registrant computed by using the closing sale price
has been indeterminable within the past 60 days as there has been no market
for the stock.
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At March 21, 2000, there were
33,000 shares of the Registrant's Common Stock outstanding.
Documents Incorporated by Reference: Exhibits from the Registrant's
registration statement on Form 10-SB (File No. 0-27827) are incorporated by
reference into Part III hereof.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
History and Organization
Mezzanine Investment Corporation (the "Company") was incorporated under
the laws of the State of Nevada on August 19, 1999. The Company has conducted
no activities since its inception except in connection with the filing of a
registration statement on Form 10-SB on October 26, 1999. The registration
statement became effective on December 27, 1999.
Business
The Company is seeking potential business acquisitions or opportunities
to enter into in an effort to commence business operations. The Company does
not propose to restrict its search for a business opportunity to any
particular industry or geographical area and may, therefore, engage in
essentially any business in any industry. The Company has unrestricted
discretion in seeking and participating in a business opportunity.
The Company's Board of Directors, which consists of a single individual,
Eric Chess Bronk, shall make the initial determination whether to complete any
such venture; however, the Board of Directors intends to submit final approval
of any proposed transaction to the shareholders. In connection with such
approval by the shareholders, the Company intends to provide disclosure
documentation to its shareholders as required under Section 14 of the
Securities Exchange Act of 1934, and the rules and regulations promulgated
thereunder.
The selection of a business opportunity in which to participate is
complex and risky. Additionally, as the Company has only limited resources
available to it, it may be difficult to find good opportunities. There can be
no assurance that the Company will be able to identify and acquire any
business opportunity based on management's business judgement.
The Company has begun negotiations with potential business ventures, but
has not entered into any definitive agreement or arrangement. Management
decided to file its Registration Statement on a voluntary basis before seeking
a business venture. Management believes that being a reporting company may
increase the likelihood that existing business ventures may be willing to
negotiate with the Company. The Company also intends to seek quotation of its
common stock on the OTC Bulletin Board following such an acquisition or merger
transaction. In order to have stock quoted on the OTC Bulletin Board, a
company must be subject to the reporting requirements of the 1934 Act, either
by virtue of filing a registration statement on Form 10 or Form 10-SB, or by
filing a registration statement under the 1933 Act. The Company anticipates
that it would voluntarily file periodic reports with the Securities and
Exchange Commission, in the event its obligation to file such reports is
terminated under the Securities Exchange Act of 1934, if the common stock of
the Company were quoted on the OTC Bulletin Board.
In connection with the application for quotation of the Company's common
stock on the OTC Bulletin Board, management intends, following an acquisition
of a business venture, to seek a broker-dealer to become the initial market
maker for the Company's common stock and to submit the application to the OTC
Bulletin Board. There have been no preliminary discussions or understandings
between the Company, or anyone acting on its behalf, and any market maker
regarding such application or the participation of any such market maker in
the future trading market for the Company's common stock. Management intends
to contact broker-dealers who make markets in Bulletin Board companies until
one agrees to make the application. There is no assurance that the Company
will be successful in locating such a broker-dealer, or that the application,
if submitted, would be approved. The Company does not intend to use outside
consultants to obtain market makers. In addition, the Company does not intend
to use any of its shareholders to obtain market makers.
Management intends to consider a number of factors prior to making
any final decision as to whether to participate in any specific business
endeavor, none of which may be determinative or provide any assurance of
success. These may include, but will not be limited to, an analysis of the
quality of the entity's management personnel; the anticipated acceptability of
any new products or marketing concepts; the merit of technological changes;
its present financial condition, projected growth potential and available
technical, financial and managerial resources; its working capital, history of
operations and future prospects; the nature of its present and expected
competition; the quality and experience of its management services and the
depth of its management; its potential for further research, development or
exploration; risk factors specifically related to its business operations; its
potential for growth, expansion and profit; the perceived public recognition
or acceptance of its products, services, trademarks and name identification;
and numerous other factors which are difficult, if not impossible, to properly
or accurately analyze, let alone describe or identify, without referring to
specific objective criteria.
Regardless, the results of operations of any specific entity may not
necessarily be indicative of what may occur in the future, by reason of
changing market strategies, plant or product expansion, changes in product
emphasis, future management personnel and changes in innumerable other
factors. Further, in the case of a new business venture or one that is in a
research and development stage, the risks will be substantial, and there will
be no objective criteria to examine the effectiveness or the abilities of its
management or its business objectives. Also, a firm market for its products or
services may yet need to be established, and with no past track record, the
profitability of any such entity will be unproven and cannot be predicted with
any certainty.
Management will attempt to meet personally with management and key
personnel of the entity sponsoring any business opportunity afforded to the
Company, visit and inspect material facilities, obtain independent analysis or
verification of information provided and gathered, check references of
management and key personnel and conduct other reasonably prudent measures
calculated to ensure a reasonably thorough review of any particular business
opportunity; however, due to time constraints of management, these activities
may be limited.
The Company is unable to predict the time as to when and if it may
actually participate in any specific business endeavor. The Company
anticipates that proposed business ventures will be made available to it
through personal contacts of directors, executive officers and stockholders,
professional advisors, broker dealers in securities, venture capital
personnel, members of the financial community, attorneys, and others who may
present unsolicited proposals. In certain cases, the Company may agree to pay
a finder's fee or to otherwise compensate the persons who submit a potential
business endeavor in which the Company eventually participates. Such persons
may include the Company's directors, executive officers, beneficial owners or
their affiliates. In this event, such fees may become a factor in negotiations
regarding a potential acquisition and, accordingly, may present a conflict of
interest for such individuals.
The Company's directors and executive officers have not used any
particular consultants, advisors or finders on a regular basis.
The possibility exists that the Company may acquire or merge with a
business or company in which the Company's executive officers, directors,
beneficial owners or their affiliates may have an ownership interest. Current
Company policy does not prohibit such transactions. Because no such
transaction is currently contemplated, it is impossible to estimate the
potential pecuniary benefits to these persons.
Although it currently has no plans to do so, depending on the nature and
extent of services rendered, the Company may compensate members of management
in the future for services that they may perform for the Company. Because the
Company currently has extremely limited resources, and is unlikely to have any
significant resources until it has completed a merger or acquisition,
management expects that any such compensation would take the form of an
issuance of the Company's stock to these persons; this would have the effect
of further diluting the holdings of the Company's other stockholders.
However, due to the minimal amount of time devoted to management by any person
other than the Company's current sole director and executive officer, there
are no preliminary agreements or understandings with respect to management
compensation. Although it is not prohibited by statute or its Articles of
Incorporation, the Company has no plans to borrow funds and use the proceeds
to make payment to its management, promoters or affiliates.
Further, substantial fees are often paid in connection with the
completion of these types of acquisitions, reorganizations or mergers, ranging
from a small amount to as much as $250,000. These fees are usually divided
among promoters or founders, after deduction of legal, accounting and other
related expenses, and it is not unusual for a portion of these fees to be paid
to members of management or to principal stockholders as consideration for
their agreement to retire a portion of the shares of common stock owned by
them. However, management does not presently anticipate actively negotiating
or otherwise consenting to the purchase of all or any portion of its common
stock as a condition to, or in connection with, a proposed merger or
acquisition.
In the event that such fees are paid, they may become a factor in negotiations
regarding any potential acquisition by the Company and, accordingly, may
present a conflict of interest for such individuals.
The activities of the Company are subject to several significant risks
which arise primarily as a result of the fact that the Company has no specific
business and may acquire or participate in a business opportunity based on the
decision of management, subject to the approval of the Company's
shareholders. The risks faced by the Company are further increased as a
result of its lack of resources and its inability to provide a prospective
business opportunity with significant capital.
The Company has had no employees since its inception and does not intend
to employ anyone in the future, unless its present business operations were to
change. The Company is not paying salaries or other forms of compensation to
its present officer and director for his time and effort. Unless otherwise
agreed to by the Company, the Company does intend to reimburse its officers
and directors for out-of-pocket expenses.
ITEM 2. DESCRIPTION OF PROPERTY
Since inception the Company's administrative offices, consisting of
approximately 1,500 square feet of office space, have been located at 1516
Brookhollow Drive, Suite D, Santa Ana, California, which are the offices of
Mezzanine Associates LLC, a corporation affiliated with Eric Chess Bronk, the
president and sole director of the Company. The office space is furnished at
no cost to the Company by Mr. Bronk and Mezzanine Associates LLC.
ITEM 3. LEGAL PROCEEDINGS
No legal proceedings are reportable pursuant to this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
No matters were submitted to a vote of shareholders of the Company during
the fourth quarter of the fiscal year ended December 31, 1999.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no established trading market for the common stock of the
Company.
None of the common shares are subject to outstanding options or
warrants. Of the 33,000 outstanding common shares, all are subject to Rule
144 under the Securities Act and would not be available for resale pursuant to
such rule until at least September 2000.
Since its inception, the Company has not paid any dividends on its common
stock and the Company does not anticipate that it will pay dividends in the
foreseeable future.
At March 22, 2000, the Company had 12 shareholders of record. The
Company has appointed Interwest Transfer Company, Inc., 1981 East 4800 South,
Suite 100, Salt Lake City, UT 84117, to act as its transfer agent.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company is a development stage company. Since its inception, the
Company has had no operations. The Company was organized for the purpose of
engaging in any lawful activity permitted under Nevada state law; however, the
Company does not have any significant cash or other material assets, nor does
it have an established source of revenues sufficient to cover operating costs
and to allow it to continue as a going concern. The Company intends to take
advantage of any reasonable business proposal presented which management
believes will provide the Company and its stockholders with a viable business
opportunity. The board of directors will make the final approval in
determining whether to complete any acquisition, but will submit the proposal
to the shareholders for final approval.
The original shareholders contributed a total of $25,383 as capital
contributions for stock of the Company and Mezzanine Capital Ltd. loaned
$4,617 to the Company for operating expenses. See "Item 12. Certain
Relationships and Related Transactions."
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and
other instruments will require substantial management time and attention and
will require the Company to incur costs for payment of accountants, attorneys,
and others. If a decision is made not to participate in or complete the
acquisition of a specific business opportunity, the costs incurred in a
related investigation will not be recoverable. Further, even if an agreement
is reached for the participation in a specific business opportunity by way of
investment or otherwise, the failure to consummate the particular transaction
may result in a the loss to the Company of all related costs incurred.
Currently, management is not able to determine the time or resources that
will be necessary to locate and acquire or merge with a business prospect.
There is no assurance that the Company will be able to acquire an interest in
any such prospects, products, or opportunities that may exist or that any
activity of the Company, regardless of the completion of any transaction, will
be profitable. If and when the Company locates a business opportunity,
management of the Company will give consideration to the dollar amount of that
entity's profitable operations and the adequacy of its working capital in
determining the terms and conditions under which the Company would consummate
such an acquisition. Potential business opportunities, no matter which form
they may take, will most likely result in substantial dilution for the
Company's shareholders due to the likely issuance of stock to acquire such an
opportunity.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of the Company are set forth immediately
following the signature page of this annual report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
No change in accountant is reportable pursuant to this item.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The following table sets forth as of March 22, 2000, the name, age, and
position of the sole executive officer and director of the Company and the
term of office of such director:
Name Age Position(s) Director Since
Eric Chess Bronk53Director, President &August 1999
Secretary/Treasurer
Directors are elected for a term of one year and until their successors
are elected and qualified. Annual meetings of the stockholders, for the
selection of directors to succeed those whose terms expire, are to be held at
such time each year as designated by the Board of Directors. The Board of
Directors has not selected a date for the next annual meeting of
shareholders. Officers of the Company are elected by the Board of Directors,
which is required to consider that subject at its first meeting after every
annual meeting of stockholders. Each officer holds his office until his
successor is elected and qualified or until his earlier resignation or
removal.
Set forth below is certain biographical information regarding the
Company's current sole executive officer and director:
ERIC CHESS BRONK has been the chairman and president of Mezzanine Capital
Ltd., a closed-end investment company, since August 1997. From April 1997
until August 10, 1997, he was the president of Xtranet Systems, Inc., a credit
card processing and risk management company, and from October 21, 1997, to
June 1. 1999, he was the secretary of such entity. From June 1998 to the
present, Mr. Bronk has been the President of Mezzanine Associates, LLC, a
California limited liability company engaged in corporate investor relations
services. From September 1995 until August 23, 1996, he was the president,
and from August 23, 1996 to December 1, 1996, he was the chief operating
officer, of Satellite Control Technologies, Inc. (See "Other Public Shell
Activities" below.) From 1972 to the present Mr Bronk has been a practicing
attorney, licensed to practice law in the State of California and in
Washington, D.C. Mr. Bronk received his bachelor of arts degree in 1967 from
Penn State University, and he received his law degree in 1972 from America
University, Washington College of Law. Mr. Bronk was the President of Bruston
Corp. which filed for protection under the U.S. Bankruptcy Code in 1991. The
action was dismissed in 1996.
Management devotes only nominal time to the activities of the Company.
If the Company is able to locate a suitable new business venture, it is
anticipated that Mr. Bronk will devote substantially all of his time to
completing the acquisition.
Other Public Shell Activities
Mr. Bronk has been involved as a director or executive officer of other
companies that may be deemed to be "blank check" companies, but has not been
involved in any blank check public offerings.
The information set forth below is provided for the companies for which
Mr. Bronk has served as a director, executive officer, or consultant, and
which have completed a reorganization or merger, the consideration received in
connection with each reorganization, and his involvement with the company
after the reorganization. In each instance, Mr. Bronk was involved solely
with the private company which acquired the publicly held shell company prior
to the reverse acquisition.
1.PageStar, Inc., a Nevada corporation ("PageStar"). Mr. Bronk was a
director of PageStar from September 26, 1995 to January 6, 1997; he was the
president from September 1995 to August 29, 1996; and was the chief operating
officer from August 23, 1996 to December 1, 1996. In 1995 PageStar
(originally known as Westland Resources, Inc., a Utah corporation) acquired a
business engaged in providing electronic paging services. The reorganization
was completed on September 26, 1995, and PageStar changed its domicile to the
State of Nevada. Of the 15,000,000 shares issued in the reorganization, Mr.
Bronk received 4,400,000. PageStar subsequently reverse split its shares
one-for-five effective October 13, 1995. On or about August 30, 1996,
PageStar acquired Satellite Control Technologies, Inc. ("SCT") and changed its
business to focus on marketing electronic remote control wireless switching
devises owned by SCT. PageStar also changed its name to Satellite
Technologies, Inc. Mr. Bronk was the president and chief operating officer of
SAT at the time of the acquisition and received no compensation or other
remuneration in the acquisition of SCT. Mr. Bronk has no knowledge of
PageStar's current operations or financial condition since he left the
company. On November 24, 1998, a class action suit was filed in Los Angeles
Superior Court (Case No. BC190882) by Joseph A. Nigro, as a representative of
a class of shareholders of PageStar, against PageStar, Eric Chess Bronk, and
others. The complaint alleges that PageStar released public information from
approximately October 1996 until September 1997, containing material
misstatements about its business. Mr. Bronk has denied all of the allegations
against him.
2.Xtranet Systems, Inc., a Nevada corporation ("Xtranet"). The
reorganization was completed on October 22, 1997. Mr. Bronk was the chairman
of Xtranet at the time of the reorganization. He received no additional
compensation in connection with the reorganization, but maintained his stock
in the company. According to the most recent annual report of Xtranet for the
year ended December 31, 1998, Xtranet had revenues of $298,557 for such year
and provides credit card procession and risk management services. From April
1997 until August 10, 1997, he was the president of Xtranet, and from October
21, 1997, until June 1, 1999, he was the secretary of such entity. On
November 29, 1999, Voice Media Incorporated, an Internet service provider,
filed a lawsuit in United States District Court in Los Angeles (Case No.
CV-99-12341 GHK) against Xtranet Systems, Inc., Mr. Bronk, and others, who
were involved in providing credit card processing services to Voice Media
Incorporated. The lawsuit seeks damages of approximately $2,000,000, punitive
damages and other penalties, and injunctive relief against the parties
involved in the credit card processing services. Mr. Bronk and Xtranet have
filed separate answers which deny all of the allegations against them.
ITEM 10. EXECUTIVE COMPENSATION
There has been no compensation awarded to, earned by, or paid to any of
the executive officers of the Company since its inception. However, Mr.
Bronk, the sole officer and director of the Company, received 3,000 shares of
restricted stock of the Company for services rendered in connection with the
organization of the Company, which shares were issued during the year ended
December 31, 1999.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information furnished by current
management concerning the ownership of common stock of the Company as of March
22, 2000, of (i) each person who is known to the Company to be the beneficial
owner of more than 5 percent of the Common Stock; (ii) all directors and
executive officers; and (iii) directors and executive officers of the Company
as a group:
Amount and Nature
Name and Address of Beneficial
of Beneficial Owner Ownership (1) Percent of Class
Eric C. Bronk 6,000(2) 18.18%
3857 Birch St., #606
Newport Beach, CA 92660
Mezzanine Capital, Ltd 3,000(2) 9.09%
Clarendon House
2 Church St.
Hamilton, Bermuda HM DX
Baldwin Securities 3,000 9.09%
99-101 Regent Street
1st Floor
London W1R 7HB, UK
Verde Investments Limited 3,000 9.09%
Villa Athene, Broadway, Mill Hill
London, England NW7 3TB
Fleming Securities 2,883 8.74%
Suites 1601-1603
32 Hollywood Rd.
Hong Kong
Joe Glenn 3,000 9.09%
3104 E. Camelback Rd., #527
Phoenix, AZ 85016
Starling Securities Ltd. 3,000 9.09%
Suite 2B, Mansion House
143 Main Street
Gibraltar
Carl Suter 3,000 9.09%
6765 E. Kentucky Ave.
Anaheim, CA 92807
William D. Yotty 3,000 9.09%
1110 West Kettleman, #48
Lodi, CA 95240
Jason Daggett 3,000 9.09%
2895 Pacific Coast Highway
Suite 210
Malibu, CA 90265
Executive Officers and
Directors as a Group
(1 Person) 6,000 18.18%
(1) Unless otherwise indicated, this column reflects amounts as to which
the beneficial owner has sole voting power and sole investment power.
(2) Of the shares beneficially owned by Mr. Bronk, 3,000 are owned
directly by Mezzanine Capital Ltd, a company of which Mr. Bronk is the
president and chairman. While Mr. Bronk disclaims any interest in these
shares, he is deemed to share beneficial ownership of such shares with this
entity.
The Company is seeking potential business acquisitions or opportunities.
(See "Item 1. Description of Business.") It is likely that such a
transaction would result in a change of control of the Company, by virtue of
issuing a controlling number of shares in the transaction, change of
management, or otherwise.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the organization of the Company, Eric Chess Bronk, the
sole officer and director of the Company, received 3,000 shares for services
rendered by Mr. Bronk to the Company.
On September 29, 1999, Mezzanine Capital Ltd., a corporation of which Mr.
Bronk is the president and chairman, loaned $4,617 to the Company. The
promissory note bears 10% interest per annum and is due on or before September
28, 2000.
The Company received capital contributions of $25,383 from the initial
shareholders for 25,383 shares. These funds were paid to the Company by
Mezzanine Capital Ltd. on behalf of itself for 3,000 shares and such other
shareholders, each of whom executed a one year promissory note to Mezzanine
Capital Ltd. for such capital contribution. Fleming Securities, Baldwin
Securities, Starling Securities Ltd., and Verde Investments Ltd. have repaid
such notes in full.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
(a)(1) Financial Statements. The following financial statements are
included in this report:
Page
Report of Auditor F-1
Balance Sheet as of December 31, 1999 F-2
Statements of Operations for the period from inception to
December 31, 1999 F-3
Statement of Stockholders' Equity from inception to
December 31, 1999 F-4
Statements of Cash Flows for the period from inception to
December 31, 1999 F-5
Notes to Financial Statements F-6
(a)(2) Exhibits. The following exhibits are included as part of this
report:
Exhibit No. Description of ExhibitPage
3.1 Articles of Incorporation filed August 19, 1999*
3.2 Current Bylaws*
4.1 Form of Common Stock Certificate*
10.1 Promissory Note dated September 29, 1999*
23.1 Consent of Auditor
*Incorporated by reference from the Company's registration statement
on Form 10-SB filed with the Securities and Exchange Commission on October 26,
1999, File No.0-27827.
(b) Reports on Form 8-K: No reports on Form 8-K were filed during the
fourth quarter of the fiscal year ended December 31, 1999.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Mezzanine Investment Corporation
Date: March 22, 2000By: /s/ Eric Chess Bronk, President,
Chief Financial & Principal Accounting Officer
In accordance with the Exchange Act, this report has been signed below by
the following person on behalf of the registrant and in the capacitates and on
the dates indicated.
Date: March 22, 2000/s/ Eric Chess Bronk, Sole Director
<PAGE>
Mezzanine Investment Corporation
(a Development Stage Company)
Financial Statements
December 31, 1999
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Mezzanine Investment Corporation
We have audited the accompanying balance sheet of Mezzanine Investment
Corporation (a Nevada corporation) (a Development Stage Company) as of
December 31, 1999 and the related statements of operations, stockholders'
equity and cash flows for the period August 19, 1999 (inception) to December
31, 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 audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Mezzanine Investment
Corporation as of December 31, 1999 and the results of its operations and cash
flows for the period from August 19, 1999 (inception) to December 31, 1999 in
conformity with generally accepted accounting principles.
Salt Lake City, Utah
March 1, 2000
The accompanying notes are an integral part of these financial statements
<PAGE>
Mezzanine Investment Corporation
(a Development Stage Company)
Balance Sheet
Assets
December 31,
1999
Current assets
Cash $ 7,099
Total Current Assets 7,099
Total Assets $ 7,099
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 1,770
Interest payable 115
Notes payable 4,617
Total Current Liabilities 6,502
Stockholders' Equity
Common Stock, 100,000,000 authorized
shares of $.001 par value, 33,000 shares
issued and outstanding 33
Additional Paid in Capital 32,967
Retained Deficit Accumulated during the
Development Stage (32,403)
Total Stockholders' Equity 597
Total Liabilities and Stockholders' Equity $ 7,099
<PAGE>
Mezzanine Investment Corporation
(a Development Stage Company)
Statement of Operations
For the period August 19, 1999 (Inception) through December 31, 1999
December 31,
1999
Sales: $ -
Expenses:
General & Administrative 32,403
Total Expenses 32,403
Net Loss from Operations -
Net (Loss) $ (32,403)
Net Loss Per Share $ (0.98)
Weighted average shares outstanding 33,000
<PAGE>
Mezzanine Investment Corporation
(a Development Stage Company)
Statement of Stockholders' Equity
For the period August 19, 1999 (Inception) through December 31, 1999
Retained
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage
Balance, August 19, 1999 - $ - $ - $ -
Shares issued for cash at $1 per
share 25,383 25 25,358 -
Shares issued for services 7,617 8 7,609 -
Net loss December 31, 1999 - - - (32,403)
Balance, December 31, 1999 33,000 $ 33 $ 32,967 $(32,403)
<PAGE>
Mezzanine Investment Corporation
(a Development Stage Company)
Statement of Cash Flows
For the period August 19, 1999 (Inception) through December 31, 1999
1999
Cash Flows from Operating Activities
Net loss $ (32,403)
Items not requiring cash flow
Stock issued for services 7,617
Increase in accounts payable 1,885
(22,901)
Cash Flows from Financing Activities
Cash from notes receivable 4,617
Cash from stock sales 25,383
Total 30,000
Cash Flows from Investing Activities -
Change in cash 7,099
Cash, beginning of period -
Cash, end of period $ 7,099
Supplemental Cash Flow Information
Cash Paid For:
Interest $ -
Taxes $ -
<PAGE>
Mezzanine Investment Corporation
(a Development Stage Company)
Notes to The Financial Statements
December 31, 1999
NOTE 1 - BACKGROUND AND HISTORY
Mezzanine Investment Corporation (the Company) was organized on August 19,
1999 in the State of Nevada for the purpose of conducting any type of
business. The Company has yet to identify its specific business purpose.
NOTE 2 - CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows, the Company considers all highly
liquid debt instruments with an original maturity of three months or less to
be equivalents.
NOTE 3 - STOCK TRANSACTIONS
In its initial act as a corporation, the Company issued 33,000 shares of
stock; 25,383 for cash at $1 per share, 6,000 shares for services from the
organizers/officers/directors of the Company and 1,617 shares of stock for
legal work to organize the Company. The stock issued for services was valued
at $1, the same value as the common stock that was sold for cash.
NOTE 4 - USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. In these financial
statements, assets, liabilities and earnings involve extensive reliance on
management's estimates. Actual results could differ from those estimates.
NOTE 5 - INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" in the fiscal year ended December 31, 1999 and
has applied the provisions of the statement to the current year which resulted
in no significant adjustment.
Statement of Financial Accounting Standards No. 109 " Accounting for Income
Taxes" requires an asset and liability approach for financial accounting and
reporting for income tax purposes. This statement recognizes (a) the amount
of taxes payable or refundable for the current year and (b) deferred tax
liabilities and assets for future tax consequences of events that have been
recognized in the financial statements or tax returns.
Deferred income taxes result from temporary differences in the recognition of
accounting transactions for tax and financial reporting purposes. There were
no temporary differences at December 31, 1999 and earlier years; accordingly,
no deferred tax liabilities have been recognized for all years.
<PAGE>
Mezzanine Investment Corporation
(a Development Stage Company)
Notes to The Financial Statements
December 31, 1999
NOTE 5 - INCOME TAXES (continued)
The Company has cumulative net operating loss carryforwards over $30,000 at
December 31, 1999. No effect has been shown in the financial statements for
the net operating loss carryforwards as the likelihood of future tax benefit
from such net operating loss carryforwards is not presently determinable.
Accordingly, the potential tax benefits of the net operating loss
carryforwards, estimated based upon current tax rates at December 31, 1999
have been offset by valuation reserves in the same amount. The net operating
losses begin to expire in 2019.
NOTE 6 - NOTES PAYABLE
As start up operating capital for the Company, a loan for $4,617 was taken out
from a corporation at a rate of 10% interest, due in one year. The loan is
unsecured. The corporation giving the loan is also a shareholder of the
Company.
<PAGE>
Crouch, Bierwolf & Chisholm
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
ACCOUNTANTS' CONSENT
We hereby consent to the use of our audit report of Mezzanine Investment
Corporation dated March 1, 2000, for the year ended December 31, 1999, to be
included in the annual report on Form 10-KSB to be filed with the Securities
and Exchange Commission.
/s/ Crouch Bierwolf & Chisholm
March 28, 2000
Salt Lake City, Utah
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<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 7,099
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<RECEIVABLES> 0
<ALLOWANCES> 0
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<CURRENT-ASSETS> 7,099
<PP&E> 0
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0
0
<COMMON> 33
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<TOTAL-COSTS> 32,403
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