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INTERNATIONAL BRANDS, INC.
FINANCIAL STATEMENTS
FOR THE THIRD QUARTER
ENDED SEPTEMBER 30, 2000
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TABLE OF CONTENTS
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Balance Sheets ............................ 2
Statement of Income ........................ 4
Statement of Stockholder's Equity .......... 5
Statements of Cash Flows ................... 6
Notes to the Financial Statements .......... 7
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INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
BALANCE SHEETS
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ASSETS
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September 30
December 31 2000
1999 (unaudited)
Current Assets:
Cash $ 6,457 $ 1,932
Accounts receivable - 4,352
Inventory at lower of FIFO cost of market 4,429 4,390
Prepaid and other current assets 85 4,200,456
Total current assets 10,971 4,211,130
Property equipment:
Furniture and fixtures 38,468 38,468
Computers and equipment 21,750 21,750
60,218 60,218
Less: Accumulated depreciation (50,900) (57,262)
Net property and equipment 9,318 2,956
Other assets:
Goodwill, net - 97,256
Deferred tax benefits - -
Investments at cost 35,000 35,000
Notes receivable- related party 1,598,000 5,778,586
Deposits and other assets 200 200
Total other assets 1,633,200 5,778,786
$ 1,653,489 $ 9,989,916
See Accountant's Report.
The accompanying notes are an integral part of these financial statements.
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INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
BALANCE SHEETS
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LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
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September 30
December 31 2000
1999 (unaudited)
Current liabilities
Accounts payable $ 241,267 $ 450,423
Accrued expenses and other current liabilities 7,787,885 7,774,047
Total liabilities 8,029,152 8,224,470
Commitments and contingencies - -
Stockholders' equity
Common stock, $.001 par value
Authorized - see restricted common stock
authorization
Issued and outstanding-10,083,054 shares at
December 31, 1999 and 72,432, 779 shares at
September 30, 2000 10,083 72,433
Restricted common stock, $.001 par value
Authorized-400,000,000 shares
Issued and outstanding-57,612,293 shares at
December 31, 1999 and 16,288,253 shares at
September 30, 2000 57,612 16,288
Series IV convertible preferred stock, $.001 stated value
Authorized-663,800 shares
Issued and outstanding-626,639 shares at December
31,1999 and 620,744 shares at September 30,
2000 627 619
Series IV convertible preferred stock, $.001 stated value
Authorized-19,581,230 shares
Issued abd outstanding-0 shares at December 31, 753
1999 and 752,515 shares at September 30, 2000 (346,278,098)
Additional paid-in capital 358,433,660
Accumulated deficit (352,722,083) (359,879,540)
Total stockholders' equity (6,375,663) 1,355,787
$ 1,653,489 $ 9,580,257
INTERNATIONAL BRANDS, INC.
See Accountant's Report.
The accompanying notes are an integral part of these financial statements.
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(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
STATEMENTS OF INCOME
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Three months Three months Nine months Nine months
ended ended ended ended
Sept 30,1999 Sept 30,1999 Sept 30,2000
(unaudited) Sept 30,2000 (unaudited) (unaudited)
(unaudited)
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Net sales $ 24,566 $ 8,565 $ 38,421 $ 55,623
Cost of goods sold 8,882 15,732 17,289 49,725
Gross profit 15,684 (7,167) 21,132 5,898
Opersting expenses
General and
Administrative 3,918,215 2,044,509 245,604,444 9,688,403
Loss from Operations and
before other income and
provisions for
taxes $ (3,902,531) $(2,051,676) $(245,583,312) $(9,682,505)
Other income - 688,722 - 1,396,211
Provision for income
taxes (benefit) - - - -
Net income (loss) $ (3,902,531) $ (1,362,954) $(245,583,312) $(8,286,294)
Loss per share $ (.044) $ .042 $ (2,788) (.12)
Weighted average number of
common shares
outstanding 58,722,922 104,432,228 58,722,922 104,432,228
See Accountants' Report
The accompanying notes are an integral part of these financial statements
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INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
STATEMENT OF STOCKHOLDERS' EQUITY
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SHARES
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Preferred Preferred
Common Common Stock Stock Series Stock Series Common
Stock Restricted IV VI Stock
10,083,054 57,612,293 626,639 - $ 10,083
- - - - -
- 15,658,958 - - -
- 40,000 - - -
- - - 1,252,362 -
- 223,331 (5,895) - -
- 2,499,237 - (499,847) -
- 109,989 - - -
62,349,725 (62,349,725) - - 62,350
- - - - -
--------- --------- -------- ----------- -------
72,432,779 11,585,858 620,744 752,515 $72,433
========== ========== ======== =========== =======
AMOUNT
<CAPTION>
Common Preferred Preferred Additional Accumulated
Stock Stock Series Stock Series Paid-In Deficit
Restricted IV VI Capital
---------- ------------ ------------ ---------- ----------
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$ 57,612 $ 627 $ - $346,278,098 $(352,722,083)
- - - 5,000 (5,305)
13,397 - - 11,991,320 -
40 - - 129,960 -
- - 1,253 (1,253) -
224 (6) - (218) -
2,499 - (500) (1,999) -
101 - - 32,752 -
(62,350) - - - -
- - - - (849,547)
-------- --------- ---------- ------------ --------------
$ 11,523 $ 621 $ 753 $358,433,660 $(359,879,540)
========= ========= ========== ============ ==============
See Accountant's Report.
The accompanying notes are an integral part of these financial statements.
INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, USA)
STATEMENTS OF CASH FLOWS
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Nine months ended Nine months ended
September 30, 1999 September 30, 2000
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Cash flows from operating
activities
Net loss $(1,362,954) $(9,682,505)
(163,722,208) (854,852)
Depreciation and amortization $ 6,362 $ 11,481
Common stock issued as compen-
sation for services 119,397,500 6,404,109
Common stock issued in
settlement of litigation - 130,000
Net adjustments to notes receiv-
able 3,811,973 (5,954,306)
Common stock issued for note
receivable 40,000,000 -
Net equity adjustment for
acquisition of Tele Special.com - (97,375)
Change in assets and liabilities:
Decrease (increase) in accounts
receivable 38,772 4,890
Decrease in deposits and other assets 2,330 -
Decrease in inventories 3,236 29
Decrease in prepaids and other
current assets 65 85
Increase (decrease) in accounts
payable (43,026) 208,766
-------- ---------
163,217,212 7,010,284
----------- -----------
Net cash used by operating activities (504,996) (38,849)
Cash flows from investing activities:
Exercise of warrants for common
stock 521,701 66,734
-------- ---------
Net cash provided by investing
activities 521,701 66,734
------------ -----------
Net increase (decrease) in cash 16,705 (4,525)
Cash at the end of the year $ 21,221 $ 1,932
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INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
NOTES TO THE FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements included herein are unaudited abd have been
prepared in accordance with generally accepted accounting principles for interin
financial reporting and Securities and Exchange Commission ("SEC") regulations.
Certain information and footnote disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. In
management's opinion, the financial statements reflect all adjustments (of a
normal and recurring nature) which are necessary to present fairly the financial
position, results of operations, stockholder's equity and cash flows for the
interim periods. These financial statements should be read in conjunctions
with the audited financial statements for the year ended December 31, 1999, as
set forth in the Company's Annual Report on Form 8-K. The results of the six
months ended June 30, 2000 are not necessarily indicative of the results that
may be expected for the year ending December 31, 2000.
2. GOING CONCERN
The accompnaying financial statements have been prepared in conformity
with generally accepted accounting principles, which contemplates continuation
of the Company as a going concern. However, the Company has sustained
substantial operating losses in recent years. In addition, the Company has
used substantial amounts of working capital in its operations. Furthermore,
the Company has incurred a loss of $189,985,747 as of December 31, 1999 and
$849,547 through the second quarter of 2000, as well working capital deficits
of $8,018,181 as of December 31, 1999, and $2,745,663 as of the second quarter
of 2000.
Management has been supervised by the Company's Senior Financial Advisor,who
was also President of Z 3 Capital Corporation, that Z 3 will continue to fund
the Company's operations through private placements of the Company's stock.
The Company's ability to continue as a going concern is dependent upon its
ability to issue stock and raise funds. In addition, on May 31, 2000, the
Compnay approved the extention of the management contract with Z-3. The
agreement calls for the Company to pay Z 3 a monthly management fee of
$650,000. The agreement calls for the Company to pay Z 3 a monthly management
fee of $650,000. The monthly paymrnt will be applied as a payment against the
Company's note receivable from Z 3, which had been previously fully reserved.
As a result, the Company recognized a loss recovery of $7,552,306, which is
recognized as other income for the three months and six months ending September
30, 2000.
3. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
In addition to cash provided or used for operations, investing and financing,
the Company had the following non-cash investing and financing activities:
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INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
NOTES TO THE FINANCIAL STATEMENTS
A. For the Nine Month's Ended September 30, 1999
1. The Company issued 40,000,000 shares of restricted common stock in
exchange for a $40,000,000 note receivable and $80,000,000 in consulting
services from Z 3 Capital Corporation.
2. The Company issued its President 13,000,000 shares of restricted common
stock, having a fair market value of $39,000,000.
3. The Company issued 50,000 shares of restricted common stock in
consideration for various services, having a market value of $397,500.
4. Net adjustments to notes receivable consisted of $3,811,973.
B. For the Nine Month's Ended September 30, 2000
1. The Company issued 13,396,707 shares of restricted common stock in
consideration for various services, having a market value of $12,004,717. Of
these services $7,008,700 were capitalized as prepaid advertising.
2. The Company issued 40,000 shares of restricted common stock in
settlement of a lawsuit, having a fair market value of $130,000.
3. The Company issued 31,500 shares restricted common stock to purchase
TeleSpecial.com. The net fair market value of the transaction was $97,375.
4. Net adjustments to notes receivable consisted of ($5,954,306).
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