U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or 12(g) of
The Securities Exchange Act of 1934
CLUBCHARLIE.COM, INC.
(Exact name of registrant as specified in its charter)
NEVADA 88-0380343
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10717 Wilshire Boulevard, Suite 1104, Los Angeles, California 90024
(Address of registrant's principal executive offices) (Zip Code)
877.882.5822
(Registrant's Telephone Number, Including Area Code)
Securities to be registered under Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on which
to be so Registered: Each Class is to be Registered:
None Not Applicable
Securities to be registered under Section 12(g) of the Act:
Common Stock, Par Value $.001
(Title of Class)
Copies to:
Thomas E. Stepp, Jr.
Stepp & Beauchamp, LLP
1301 Dove Street, Suite 460
Newport Beach, California 92660
949.660.9700
Facsimile: 949.660.9010
Page 1 of 6
Exhibit Index is specified on Page 5
1
<PAGE>
ClubCharlie.com, Inc.,
a Nevada corporation
Index to Amendment No. 1 to Form 10-SB
<TABLE>
<CAPTION>
Item Number and Caption Page
- ----------------------- ----
<S> <C>
PART I
7. Certain Relationships and Related Party Transactions 3
PART II
1. Market Price of and Dividends on the Registrant's Common Equity and Related
Stockholder Matters 3
2. Legal Proceedings 4
3. Changes in and Disagreements with Accountants 4
PART F/S
Financial Statements F-1 through F-14
PART III
Signatures 6
</TABLE>
2
<PAGE>
PART I
Item 7. Certain Relationships and Related Transactions.
Transactions with Promoters. There were no transactions with promoters.
Related Party Transactions. On or about July 13, 1999, the Company and Charlie
Chance Productions, a Canadian corporation ("Charlie Chance") entered into an
Original Screenplay Acquisition Agreement ("Agreement"). According to the terms
of the Agreement, the Company purchased from Charlie Chance all rights, title
and interest in all properties, interests, rights and claims to the original
story plot entitled "The Misadventures of Charlie Chance". In exchange, the
Company agreed to execute a promissory note in favor of Charlie Chance in the
amount of One Hundred Fifty Thousand Dollars ($150,000.00). The promissory note
includes a repayment term of six (6) months and bore no interest. The Company
also agreed to execute a royalty agreement whereby Charlie Chance would be
entitled to ten percent (10%) of the net profits (defined more particularly in
the Agreement, attached as Exhibit 10.1 to Form 10-SB filed on December 13,
1999). Zee Batal, an officer and a director of the Company, is the sole officer,
sole director and sole shareholder of Charlie Chance. The Company's valuation of
$150,000.00 for the screenplay rights to "The Misadventures of Charlie Chance"
was subjective in nature and based upon the negotiations with Charlie Chance,
which is typical for literary properties. The Company has not yet incurred any
costs that should be charged to production overhead, as defined in paragraph 17
of SFAS No. 53, and therefore, no such expenses appear on the Company's
financial statements. The Company anticipates that any costs incurred will be
charged to production overhead if the property is held for three (3) years and
is not set for production. Accordingly, once the costs are charged off by the
Company, the costs will not be reinstated if the property is set for production.
The Company did not pay the $150,000.00 when it was due on January 13, 2000, but
rather negotiated a six month extension of the due date. The Company is
conducting a private placement pursuant to Section 4(2) of the Securities Act of
1933 ("Act") and Rule 506 of Regulation D promulgated pursuant to that Act to
pay the $150,000.00. The date of the private offering is January 5, 2000 and, as
of January 28, 2000, no shares have been purchased pursuant to the offering.
Affiliates of director Thomas Stringham have provided certain website
construction services to the Company which are currently the subject of a
dispute. See "Legal Proceedings".
Employment Contracts. The Company has entered into employment contracts with
Glenn Chilton and Zee Batal. In his capacity as President of the Company, Mr.
Chilton receives $150,000 a year from the Company. In his capacity as Vice
President of Sales and Marketing, Zee Batal receives $150,000 a year from the
Company.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.
The Company participated in the OTC Bulletin Board, an electronic quotation
medium for securities traded outside of the Nasdaq Stock Market, under the
trading symbol "CLUC". The Company's common stock has closed at a low of $1/32
and a high of $2 7/16 for the 52-week period ending January 20, 2000. As of
January 21, 2000, the Company failed to comply with eligibility requirements
specified in Rule 6530 and therefore should have been delisted from the OTC
Bulletin Board on January 21, 2000. However, although the Company has notified
the OTC Bulletin Board Compliance Unit of its failure to so comply, the Company
has not yet been delisted. The Company anticipates that it will participate on
the National Quotation Bureau's Pink Sheets, an electronic quotation medium for
securities traded outside of the Nasdaq Stock Market, under the trading symbol
"CLUC" until Amendment No.1 to the Company's Registration Statement on Form
10-SB has cleared comments with the Securities and Exchange Commission.
As of January 28, 2000, there were no warrants to purchase common stock
outstanding. There have been no cash dividends declared on the Company's common
stock since the Company's inception. The Company has not yet adopted any policy
regarding payment of dividends.
Penny Stock Regulation. The Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks". Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, deliver a standardized
risk disclosure document prepared by the Commission, which (i) contained a
description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (ii) contained
3
<PAGE>
a description of the broker's or dealer's duties to the customer and of the
rights and remedies available to the customer with respect to violation to such
duties or other requirements of Securities' laws; (iii) contained a brief,
clear, narrative description of a dealer market, including "bid" and "ask"
prices for penny stocks and significance of the spread between the "bid" and
"ask" price; (iv) contains a toll-free telephone number for inquiries on
disciplinary actions; (v) defines significant terms in the disclosure document
or in the conduct of trading in penny stocks; and (vi) contains such other
information and is in such form (including language, type, size and format), as
the Commission shall require by rule or regulation. The broker-dealer also must
provide, prior to effecting any transaction in penny stock, the customer (i)
with bid and offer quotations for the penny stock; (ii) the compensation of the
broker-dealer and its salesperson in the transaction; (iii) the number of shares
to which such bid and ask prices apply, or other comparable information relating
to the depth and liquidity of the market for such stock; and (iv) month account
statements showing the market value of each penny stock held in the customer's
account. In addition, the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules, the broker-dealer must
make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written acknowledgment
of the receipt of a risk disclosure statement, a written agreement to
transactions involving penny stocks, and a signed and dated copy of a written
suitably statement. These disclosure requirements may have the effect of
reducing the trading activity in the secondary market for a stock that becomes
subject to the penny stock rules. If any of the Company's securities become
subject to the penny stock rules, holders of those securities may have
difficulty selling those securities.
Item 2. Legal Proceedings.
The Company is not aware of any pending litigation nor does it have any reason
to believe that any such litigation exists, except as follows:
On or about December 8, 1999, corporate counsel for the Company received a
demand letter from Paterson & Associates, Barristers and Solicitors located in
Vancouver, British Columbia. The demand letter requested immediate payment of
outstanding invoices for services provided to the Company by Thomas Stringham,
Hot Tomali Communications ("HTC"), and others. As specified above, Mr. Stringham
is a director of the company and is also the president and founder of HTC, which
provides Internet marketing and website construction services. Mr. Stringham and
HTC are demanding payment of approximately $38,000CDN (approximately $25,850US)
and are also demanding the Company provide them with various stock options to
purchase Company stock. In late December, 1999 the Company believed it had
settled this matter by the payment of $13,154.33 (U.S. Dollars) and the proposed
issuance of 38,000 options. However, certain disputes have arisen regarding the
performance by HTC, Stringham and others of all the terms and conditions
specified in the settlement agreement, and various significant issues remain in
dispute. In the event a final settlement in this matter is not reached, HTC may
take the Company's website offline, withhold certain copyrighted material, and
file suit in a Canadian court. Moreover, the Company intends to rigorously
prosecute its own action for breach of settlement agreement if the matters in
dispute are not resolved.
Item 3. Changes in and Disagreements with Accountants.
In August, 1999, the Company's former accountant, the firm of Barry L. Friedman,
P.C. ("Friedman") was dismissed. Friedman's reports on the financial statements
for either of the past two (2) years did not contain an adverse opinion or
disclaimer of opinion and the reports were not modified as to uncertainty, audit
scope or accounting principals. The decision to change accountants was
recommended and approved by the Board of Directors and did not result from any
disagreement regarding the Company's policies or procedures. There have been no
disagreements with the Company's accountants since the formation of the Company.
In August, 1999, a new accountant, Strabala, Ramirez & Associates, Inc. was
engaged as the principal accountant to audit the Company's financial statements.
PART F/S
Copies of the financial statements specified in Regulation 228.310 (Item 310)
are filed with this Registration Statement, Amendment No.1 to Form 10-SB.
4
<PAGE>
<TABLE>
<CAPTION>
(a) Index to Financial Statements. Page
<S> <C> <C>
1 Unaudited Balance Sheet for Period Ended September 30, 1999 F-1
2 Unaudited Statement of Operations for Period Ended
September 30, 1999 F-2
3 Unaudited Statement of Changes in Shareholder's Equity for
the Period Ended September 30, 1999 F-3
4 Unaudited Statement of Cash Flows for the Period Ended
September 30, 1999 F-4
5 Notes to Financial Statements F-5 through F-6
6 Independent Auditor's Report F-7
7 Audited Balance Sheets
as at December 31, 1997 and 1998 F-8 through F-9
8 Audited Statement of Statement of Operations
for Periods Ended December 31, 1997 and 1998 F-10
9 Audited Statements of Stockholders'
Equity for Period Ended December 31, 1997 and 1998 F-11
10 Audited Statements of Cash Flows
for Period Ended December 31, 1997 and 1998 F-12
11 Notes to Financial Statements F-13 through F-14
</TABLE>
5
<PAGE>
SIGNATURES
In accordance with the provisions of Section 12 of the Securities Exchange
Act of 1934, ClubCharlie.com, Inc., has duly caused this Registration Statement
on Amendment No. 1 to Form 10-SB to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, California, on January
31, 2000.
ClubCharlie.com, Inc.,
a Nevada corporation
By: /s/
------------------
Glenn Chilton
Its: President
6
<PAGE>
CLUBCHARLIE.COM, INC.
(FORMERLY LOTUS ENTERPRISE, INC.)
(A Development Stage Company)
Financial Statements
As of and for the years ended
September 30, 1998 and 1999
<PAGE>
TABLE OF CONTENTS
Page
INDEPENDENT ACCOUNTANTS REPORT ............................................1
BALANCE SHEET .............................................................2
STATEMENT OF OPERATIONS ...................................................3
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY ..............................4
STATEMENT OF CASH FLOWS ...................................................5
NOTES TO FINANCIAL STATAEMENTS ..........................................6-7
<PAGE>
CLUBCHARLLIE.COM, INC.
(FORMERLY LOTUS ENTERPRISES, INC.)
A Development Stage Company
BALANCE SHEET
<TABLE>
<CAPTION>
9/30/98 9/30/99
--------- ---------
<S> <C> <C>
Assets
Cash $ 0 $ 7
Screenplay rights, at cost 0 150,000
Organization costs 1,860 1,860
Accumulated amortization (1,860) (1,860)
--------- ---------
0 0
--------- ---------
Total Assets $ 0 $ 150,007
========= =========
Liabilities and Shareholders' Equity
Accounts payable $ 1,550 $ 70,043
Amounts due officers and directors 0 34,008
--------- ---------
1,550 104,051
Related party acquisition loan for screenplay 0 150,000
Common stock 1,860 3,860
($.001 par value; 50,000,000 shares
authorized; 1,860,000 and 3,860,000 shares
issued and outstanding at September 30,
1998 and 1999, respectively.)
Accumulated deficit (3,410) (107,904)
--------- ---------
(1,550) (104,044)
--------- ---------
Total Liabilities and Shareholders' Equity $ 0 $ 150,007
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
CLUBCHARLLIE.COM, INC.
(FORMERLY LOTUS ENTERPRISES, INC.)
A Development Stage Company
STATEMENT OF OPERATIONS
Inception
9 months ended (1/6/93)
-------------------------- through
9/30/98 9/30/99 9/30/99
----------- ----------- -----------
Revenue $ 0 $ 0 $ 0
Expenses
Salaries $ 0 $ 52,000 $ 52,000
Marketing 0 21,846 21,846
Research and development 0 13,992 13,992
Legal 0 5,812 5,812
General and administrative 1,100 10,844 14,254
----------- ----------- -----------
1,100 104,494 107,904
----------- ----------- -----------
Net loss $ (1,100) $ (104,494) $ (107,904)
=========== =========== ===========
Weighted average shares outstanding 1,860,000 3,090,769 1,977,827
Earnings per share $ (0.00) $ (0.03) $ (0.05)
The accompanying notes are an integral part of these statements.
3
<PAGE>
CLUBCHARLLIE.COM, INC.
(FORMERLY LOTUS ENTERPRISES, INC.)
A Development Stage Company
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock Accumulated Shareholders'
Shares Amount Deficit Equity
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1997 1,860,000 $ 1,860 $ (2,310) $ (450)
Net loss (1,100) (1,100)
---------- ---------- ---------- ----------
Balance, September 30, 1998 1,860,000 $ 1,860 $ (3,410) $ (1,550)
Net loss 0 0
---------- ---------- ---------- ----------
Balance, December 31, 1998 1,860,000 $ 1,860 $ (3,410) $ (1,550)
Shares issued to officers 4/16/99 for services 2,000,000 2,000 2,000
Net loss (104,494) (104,494)
---------- ---------- ---------- ----------
Balance, September 30, 1999 3,860,000 $ 3,860 $ (107,904) $ (104,044)
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
CLUBCHARLLIE.COM, INC.
(FORMERLY LOTUS ENTERPRISES, INC.)
A Development Stage Company
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Inception
9 months ended (1/6/93)
----------------------------- through
9/30/98 9/30/99 9/30/99
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities -
Net loss $ (1,100) $(104,494) $(107,904)
Adjustments to reconcile net loss to cash
used in operating activities -
Amortization 1,860
Common stock issued for services 2,000 3,860
Changes in assets and liabilities -
Organization costs (1,860)
Increase in payables 1,100 102,501 104,051
--------- --------- ---------
Cash provided by operating activities 0 7 7
Cash flows from investing activities -
Acquisition of screenplay rights 0 (150,000) (150,000)
--------- --------- ---------
Cash used in investing activities 0 (150,000) (150,000)
Cash flows from financing activities -
Loan to acquire screenplay rights 0 150,000 150,000
--------- --------- ---------
Cash provided by financing activities 0 150,000 150,000
Net increase in cash $ 0 $ 7 $ 7
Cash, beginning of the period 0 0 0
--------- --------- ---------
Cash, end of the period $ 0 $ 7 $ 7
========= ========= =========
</TABLE>
Supplemental information: No amounts were paid for interest or taxes during the
periods.
The accompanying notes are an integral part of these statements.
5
<PAGE>
Clubcharlie.com, Inc.
(Formerly Lotus enterprises, Inc.)
(A Development Stage Company)
As of and for the Nine Months ended September 30, 1998 and 1999
1. HISTORY AND OPERATIONS OF THE COMPANY
History. The Company was organized January 6, 1993, under the laws of the State
of Nevada, as Lotus Enterprises, Inc. On February 1, 1993, the Company issued
18,600 shares of its no par value common stock for $1,860.00. On December 17,
1997, the State of Nevada approved the restated Articles of Incorporation, which
changed the no par value common shares to a par value of $.001. The Company
increased its authorized capitalization to 25,000,000 common shares.
Additionally, the Company approved a forward stock split on the basis of 100:1
thus increasing the outstanding common stock from 18,600 shares to 1,860,000
shares. On April 6, 1999, the State of Nevada approved the restated Articles of
Incorporation, which increased its authorized capitalization to 50,000,000
common shares. The Company changed its name to Clubcharlie.com, Inc. On April
16, 1999, the Company issued 2,000,000 shares of its common stock to the three
board members for services valued at $2,000.
Operations. The Company currently has no operations and, in accordance with SFAS
#7, is considered a development stage Company. However, the Company owns
screenplay rights to "The Misadventures of Charlie Chance" which is in
pre-production (that is, they are identifying the players who will direct star
and in the movie.)
2. ACCOUNTING POLICIES AND PROCEDURES
Accounting policies and procedures have not been determined except as follows:
o The Company uses the accrual method of accounting.
o Earnings per share are computed using the weighted average number of shares
of common stock outstanding. There are no common stock equivalents, thus,
basic and diluted EPS are equal.
o Organization costs of $1,860 were amortized over a 60 month period
commencing January 6, 1993 to January 5, 1998.
o Research and development costs incurred to establish and maintain the
Company's web site are expensed as incurred.
o Deferred tax assets have not been recognized due to the uncertainty of the
Company's ability to recognize the benefit in the future.
3. GOING CONCERN
The Companys financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has generated no revenues. Without realization of
additional capital, it would be unlikely for the Company to continue as a going
concern. Management intends to seek additional financing through a private
placement offering in early 2000.
6
<PAGE>
CLUBCHARLLIE.COM, INC.
(FORMERLY LOTUS ENTERPRISES, INC.)
(A Development Stage Company)
As of and for the Nine Months ended September 30, 1998 and 1999
4. SCREENPLAY RIGHTS AND OBLIGATIONS
On July 13, 1999, the Company acquired the rights to the screenplay "The
Misadventures of Charlie Chance" from Charlie Chance Productions, a related
party, for a $150,000 note and royalties of 10% of net profits collected. Net
profits are defined as gross receipts collected reduced by direct production
services, general studio overhead, distribution fees and distribution expenses.
The note, due January 13, 2000, is non-interest bearing. No interest has been
imputed as the note is between related parties, and is due in less than one
year.
As required by Paragraph 17 of SFAS No. 53, the cost incurred to acquire the
screenplay was capitalized, (for cost incurred by the Company, please see the
1999 Acquisition Agreement which indicates that the Company paid $150,000 by
signing a promissory note. ) As the screenplay was acquired in 1999, the Company
has held the property for less than three years, and because management still
expects production to occur, the Company has appropriately not charged
screenplay costs to overhead production during the current period.
5. RELATED PARTY TRANSACTIONS
Rent. The officers of the Company currently work out of their own offices and do
not allocate any charges to the Company.
Research and Development. A director provides research and development services
to the Company, developing and maintaining the Company's web site. In the period
ended September 30, 1999, the Company paid approximately $4,000 for these
services. An additional $10,000 has been accrued. See Note 6 for further
discussion.
Screenplay acquisition. The Company acquired screenplay rights from Charlie
Chance Productions, a Canadian corporation, as discussed in Note 4. The
screenplay, written by Zee Batal, a director and officer of the Company, owns
Charlie Chance Productions. The non-interest bearing $150,000 acquisition loan
between the Company and Charlie Chance Productions will be repaid from proceeds
raised in the private placement offering discussed in Note 3.
6. COMMITMENTS AND CONTINGENCIES
Employment Contracts. In August 1999, the Company executed employment contracts
for two officers providing management and marketing services and overseeing the
establishment of the Company's operations. Each contract is for a five year term
with each officer earning $150,000 per year. The contract includes an additional
$600 monthly to each officer for a car allowance, permits annual increases and
is renewable. If the contract is terminated "without cause," the Company is
required to pay one year severance. As of September 30, 1999, expenses of
$52,000 were recorded of which approximately $24,000 remains due to the
officers.
Research and Development. In September 1999, the Company entered into a verbal
arrangement with a director who is developing and maintaining the Company's web
site whereby the director will provide such services until September 2000 in
exchange for 100,000 shares of stock. None of the shares have been issued to
date. However, $10,000 has been accrued as discussed in Note 5.
Film Production and Distribution. The Company intends to produce and distribute
the movie "The Misadventures of Charlie Chance." While the Company has not
entered into any talent, production or distribution contracts, the Company
intends to do so; these costs are not yet determinable.
7
<PAGE>
LOTUS ENTERPRISES INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
December 31, 1998
December 31, 1997
December 31, 1996
<PAGE>
TABLE OF CONTENTS
Page
INDEPENDENT ACCOUNTANTS REPORT ............................................1
ASSETS.....................................................................2
LIABILITIES AND STOCKHOLDERS' EQUITY.......................................3
STATEMENT OF OPERATIONS ..................................................4
STATEMENT OF STOCKHOLDERS' EQUITY..........................................5
STATEMENT OF CASH FLOWS ...................................................6
NOTES TO FINANCIAL STATAEMENTS ............................................7
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors May 19, 1999
Lotus Enterprises, Inc.
Las Vegas, Nevada
I have audited the accompanying Balance Sheets of Lotus Enterprises, Inc.
(A Development Stage Company), as of December 31, 1998, December 31, 1997, and
December 31, 1996, and the related statements of operations, stockholders'
equity and cash flows for the three years ended December 31, 1998, December 31,
1997, and December 31, 1996. These financial statements are the responsibility
of the Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Lotus Enterprises, Inc. (A
Development Stage Company), as of December 31, 1998, December 31, 1997, and
December 31, 1996, and the results of its operations and cash flows for the
three years ended December 31, 1998, December 31, 1997, and December 31, 1996,
in conformity with generally accepted accounting principles.
The accompanying financial statements have teen prepared assuming the
Company will continue as a going concern. As discussed in Note #3 to the
financial statements, the Company has suffered recurring losses from operations
and has no established source of revenue. This raises substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters are also described in Note #3. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Barry L. Friedman May 19, 1999
- ----------------------------
Barry L. Friedman
Certified Public Accountant`S
<PAGE>
LOTUS ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEET
ASSETS
December December December
31, 1998 31, 1997 31, 1996
-------- -------- --------
CURRENT ASSETS: $ 0 $ 0 $ 0
---- ---- ----
TOTAL CURRENT ASSETS $ 0 $ 0 $ 0
---- ---- ----
OTHER ASSETS:
Organization Costs (Net) $ 0 $ 0 $372
---- ---- ----
TOTAL OTHER ASSETS $ 0 $ 0 $372
---- ---- ----
TOTAL ASSETS $ 0 $ 0 $372
==== ==== ====
See accompanying notes to financial statements & audit report
2
<PAGE>
LOTUS ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEET
LIABILITIES All STOCKHOLDERS' EQUITY
December December December
31, 1998 31, 1997 31, 1996
CURRENT LIABILITIES
Accounts Payable $1,550 $ 450 $ 0
------ ------ ------
TOTAL CURRENT LIABILITIES $1,550 $ 450 $ 0
------ ------ ------
STOCKHOLDERS' EQUITY: (Note 1)
Common stock, no par value,
authorized 25,000 shares,
issued and outstanding at
December 31, 1996-18,600 shs $1,860
Common stock, $.001 par value,
authorized 25,000,000 shares,
issued and outstanding at
December 31, 1997-1,860,000 shs $1,860
December 31, 1997-8,860,000 shs $1,860
Accumulated loss -3,410 -2,310 -1,488
------ ------ ------
TOTAL STOCKHOLDERS' EQUITY $ -1,550 $ -450 $ 372
------ ------ ------
STOCKHOLDERS' EQUITY $ 0 $ 0 $ 372
------ ------ ------
See accompanying notes to financial statements & audit report
3
<PAGE>
LOTUS ENTERPRISES, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
Year Year Year Jan 6, 1993
Ended Ended Ended (inception)
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1997 1996 1998
---------- ---------- ---------- ----------
INCOME:
Revenue $ 0 0 0 0
---------- ---------- ---------- ----------
EXPENSES:
General and
Administrative $ 1,100 $ 450 $ 0 $ 1,550
Amortization 0 372 372 1,860
---------- ---------- ---------- ----------
Total Expenses $ 1,100 $ 822 372 3,410
---------- ---------- ---------- ----------
Net Profit/Loss (-) $-1,100 $- 822 $ - 372 $ -3,410
========== ========== ========== ==========
Net Profit/Loss (-)
per weighted
share (Note 1) $-.0006 $-.0004 $-.0002 $ -.0018
========== ========== ========== ==========
Weighted average
shares outstanding 1,860,000 1,860,000 1,860,000 1,860,000
========== ========== ========== ==========
See accompanying notes to financial statements & audit report
4
<PAGE>
LOTUS ENTERPRISES, INC.
(A Development Stage Company)
STATEMENT OF' STOCKHOLDERS' EQUITY
Common Stock Additional Accumu-
----------------------- Paid-in lated
Shares Amount Capital Deficit
--------- -------- ---------- --------
Balance,
December 31, 1995 18,600 $ 1,860 $ 0 $ -1,116
Net loss year ended
December 31, 1996 -372
--------- -------- -------- --------
Balance,
December 31, 1996 18,600 $ 1,860 $ 0 $ -1,488
December 17, 1997
Changed from no par
value to par value
of $.00l -1,841 +1,841
December 17, 1997
forward stock split
100:1 1,841,400 +1,841 -1,84l
Net loss year ended
December 31, 1997 -822
--------- -------- -------- --------
Balance,
December 31, 1997 1,860,000 $ 1,860 $ 0 $ -2,310
Net loss year ended
December 31, 1998 -1,100
--------- -------- -------- --------
Balance,
December 31, 1998 1,860,000 $ 1,860 $ 0 $ -3,410
========= ======== ======== ========
See accompanying notes to financial statements & audit report
5
<PAGE>
LOTUS ENTERPRISES1 INC.
(A Development stage Company)
STATEMENT OF CASH FLOWS
Year Year Year Jan. 6,1993
Ended Ended Ended (inception)
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1997 1996 1998
-------- ------- ------- -----------
Cash Flows from
Operating Activities;
Net Loss $-1,100 $ -822 $ -372 $-3,410
AdjuStment to
reconcile net loss to net cash
provided by operating activities
Amortization 0 +372 +372 +1,860
Changes in assets and
liabilities:
organization Costs -1,860
Increase in current
liabilities: +1,100 +450 0 +1,550
------ ------ ------ ------
Neb cash used in
operating activities $ 0 $ 0 $ 0 $-1,860
Cash Flows from
investing activities 0 0 0 0
Cash Flows from
Financing Activities:
Issuance of common
Stock 0 0 0 +1,860
------ ------ ------ ------
Net increase (decrease)
in cash $ 0 $ 0 $ 0 $ 0
Cash, beginning of
period 0 0 0 0
------ ------ ------ ------
Cash, end of period $ 0 $ 0 $ 0 $ 0
====== ====== ====== ======
See accompanying notes to financial statements & audit report
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LOTUS ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1998, December 31, 1997, and December 31, l$96
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized January 6, 1993, under the laws of the State of
Nevada, as Lotus Enterprises, Inc. The Company currently has no operations and,
in accordance with SFAS #7, is considered a development stage company.
On February 1, 1993, the company issued 18,600 shares of its no par value
common stock for $ 1,860.00
On December 17, 1997, the State of Nevada approved the restated Articles of
Incorporation, which changed the no par value common shares to a par value of
$.00l. Also, the Company increased it's capitalization from 25,000 common shares
to 25,000,000 common shares.
On December 17, 1997, the Company approved a forward stock split on the
basis of 100:1 thus increasing the outstanding common stock from 18,600 shares
to 1,860,000 shares.
NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES
Accounting policies and procedures have not been determined except as
follows:
1. The Company uses the accrual method of accounting.
2. Earnings per share is computed using the weighted average number of
shares of common stock outstanding.
3. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
4. Organization costs of $ 1,860.00 are being amortized over a 60 month
period commencing January 6, 1993, to January 5, 1998.
NOTE 3 - GOING CONCERN
The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's plan to seek additional capital
through a merger with an existing operating company.
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LOTUS ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Con't)
December 31, 1998, December 31, 1997, and December 31, 1996
NOTE 4 - RELATED PARTY TRANSACTION
The Company neither owns or leases any real property. Office services are
provided without charge by a director. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected therein. The
officers and directors of the Company are involved in other business activities
and may, in the future, become involved in other business opportunities. If a
specific business opportunity becomes available, such persons may face a
conflict in selecting between the Company and their other business interests.
The Company has not formulated a policy for the resolution of such conflicts.
NOTE 5 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional
shares of common stock.
NOTE 6 - SUBSEQUENT EVENTS (UNAUDITED)
On January 5, 1999, a new Board of Directors took over the Company.
On April 6, 1999, the state of Nevada approved the restated Articles of
Incorporation, which increased it's capitalization from 25,000,000 common shares
to 50,000,000 common shares.
On April 6, 1999, the Company changed its name to ClubCharlie. com, Inc.
On April 16, 1999, the Company issued 2,000,000 shares of its common stock
to the three board meters for services valued at $2,000.00.
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