Form 10-QSB
U. S. Securities and Exchange Commission
Washington, D. C. 20549
[X] Quarterly report pursuant section 13 or 15(d) of the Securities Act
of 1934
For the quarterly period ended June 30th, 2000
Commission file number: 000-28207
INTERNATIONAL BRANDS, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada 33-0652291
(State of Incorporation) (I.R.S. Employer
Identification
Number)
7729 Othello Ave.
San Diego, CA. 92111
(Address of Principal (Zip Code)
Executive Offices)
Tele: (858) 292-3380
Fax: (858) 292-1528
(Registrant's Executive Office Telephone Number)
Check whether the issuer:
[] 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
has been subject to such filing requirements for the past
90 days.
Yes____X_____ No___________-
Item 1. Financial Statements
The required financials are hereby attached as exhibit 99.1.
Item 2. Management's Discussion and Analysis or Plan of Operation
International Brands' Inc. is a diversified company whose current
emphasis has been on an e-commerce shopping mall. Our revenues are
generated by sales of products from this site as well as income we
receive from notes receivable from Z3 Capital Corporation.
Our operating expenses include rent, payments to independent
contractors and payment for merchandise sold on our website, various
professional expenses, such as audit, and legal.
We plan to enhance our website by acquiring new products and heighten
the products appeal to potential buyers with improved presentations.
We also plan to implement our acquisition in spin-off strategies. The
plan would increase investors equity through distribution of shares
in new companies. The company is currently in negotiations to acquire
three spin-off three "bricks-and-mortar" companies to enhance the
value of shareholder holdings and help insulate the company from wild
fluctuations in any one segment of the stock market. At this
particular time, it is important to remember that International
Brands is and always has been a diversified company with interests
outside-as well as inside the world of e-commerce. Currently, the
directors are negotiating with several companies to increase the
diversity of your portfolio by acquiring those companies and spinning
them off into independent enterprises in which all current IBI
stockholders would automatically be granted shares.
Possible uncertainties which may have an impact on the International
Brands, Inc short and long term liquidity include, market
conditions, competition from other dot com companies and Z3
Capital's ability to maintain its payments on the promissory notes
to IBI and possible legal challenges. A minor material commitment
for a capital expenditure exists in a pending agreement to purchase
an additional server/backup for our website.
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and "forward-
looking statements" as that term is defined in Section 27A of the
Securities Act of 1933 as amended (the "Securities Act"), and Section
21E of the Securities Exchange Act of 1934 as amended (the "Exchange
Act"). All statements that are included in this Registration Statement,
other than statements of historical fact, are forward-looking
statements. Although the management of INBR believes that the
expectations reflected in these forward-looking statements are
reasonable, it can give no assurance that such expectations will prove
to have been correct. There may be factors that could cause actual
results to differ materially from the expectations are disclosed in
this Statement, including, without limitation, in conjunction with
those forward-looking statements contained in this Statement.
Part II.
Item 1. Legal Proceedings.
On May 9, 2000, the Company received a final judgement against it as a
result of litigation initiated by the State of New Jersey against
International Brands and several other defendants. As a result, the
Company is enjoined from selling any of its stock within the State of
New Jersey. In addition, International Brands shall send a notice to
all New Jersey residents who purchased stock, allowing them a right of
recision. International Brands, Z3 Capital Corporation and its chief
executive are liable to the State of New Jersey for $7,770 in civil
monetary penalties. This amount has been accrued on the Company's books
and is reflected as a liability at December 31, 1999 and March 31, 2000
since the source for payment of the penalty shall come from the
Company. The Company is currently appealing this judgement, however the
success of this appeal is in doubt.
Item 2. Changes in Securities and Use of Proceeds.
None
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K
(a)
3.1 Certification of Incorporation filed as an exhibit to the
Company's registration statement on Form 10-SB filed on
November 19, 1999, and incorporated herein by reference.
3.2 By-Laws filed as an exhibit to the Company's registration
statement on Form 10-SB filed on November 19, 1999, and
incorporated herein by reference.
(b)
The Corporation filed an 8-K on January 12, 2000, and an amended 8-K on
January 18th. Pursuant to an Acquisition Agreement and Plan of Merger
dated as of January 12, 2000 between International Brands, Inc
("IBI"), a Nevada corporation, and Tele Special.Com ("TSC"), a Nevada
corporation, all the outstanding shares of common stock of TSC were
exchanged for 25,000 shares of common stock of IBI in a transaction
in which IBI was the surviving corporation. All document relating to such
transaction are incorporated by reference.
99.1 Financials for June 30th, 2000
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
International Brands, Inc.
/s/__________________________ Date: August 8-21-2000
Kellie Kitzgerald
Officer, International Brands.
INTERNATIONAL BRANDS, INC.
FINANCIAL STATEMENTS
FOR THE SECOND QUARTER
ENDED JUNE 30, 2000
TABLE OF CONTENTS
<TABLE>
<S> <C>
Balance Sheets 2
Statements of Income 4
Statement of Stockholders Equity 5
Statements of Cash Flows 6
Notes to the Financial Statements 7
</TABLE>
<TABLE>
INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
BALANCE SHEETS
<CAPTION>
ASSETS
December 31 June 30 2000
1999 (unaudited)
<S> <C> <C>
Current assets:
Cash $ 6,457 $ 461
Accounts receivable - 5,833
Inventory at lower of FIFO cost or market 4,429 4,400
Prepaid and other current assets 85 5,600,608
Total current assets 10,971 5,611,302
Property and 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 benefit - -
Investments at cost 35,000 35,000
Notes receivable - related party 1,598,000 7,552,306
Deposits and other assets 200 200
Total other assets 1,633,200 7,684,762
$ 1,653,489 $13,299,020
</TABLE>
<TABLE>
INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
BALANCE SHEETS
<CAPTION>
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
June 30
December 31 2000
1999 (unaudited)
Current liabilities:
<S> <C> <C>
Accounts payable $ 241,267 $ 582,918
Accrued expenses and other current
liabilities 7,787,885 7,774,047
Total current liabilities 8,029,152 8,356,965
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 June 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
11,522,832 shares at June 30, 2000 57,612 11,523
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 June 30, 2000 627 621
Series VI convertible preferred stock,
$.001 stated value
Authorized - 19,581,230 shares 753
Issued and outstanding - 0 shares at
December 31, 1999 -
and 752,515 shares at June 30, 2000 346,278,098 358,433,660
Additional paid-in capital
Accumulated deficit (352,722,083) (353,576,935)
Total stockholders equity (6,375,663) 4,942,055
$ 1,653,489 $ 13,299,020
</TABLE>
<TABLE>
INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
STATEMENTS OF INCOME
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
June 30,1999 June 30,2000 June 30,1999 June 30, 2000
(unaudited) (unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Net sales $16,377 $5,710 $25,614 $37,082
Cost of goods sold 5,921 10,488 11,526 33,150
Gross profit 10,456 (4,778) 14,088 3,932
Operating expenses General
and administrative 2,612,143 3,189,588 163,736,296 8,405,785
Loss from operations and
before other income and
provision for taxes (2,601,687) (3,194,366) (163,722,208) (8,401,853)
Other income - 7,552,306 - 7,552,306
Provision for income
taxes (benefit) - - - -
Net income (loss) $(2,601,687) $4,357,940 $(163,722,208) $(849,547)
Loss per share $(.044) $.042 $(2.788) $(.008)
Weighted average number
of common shares
outstanding 58,722,922 104,432,228 58,722,922 104,432,228
</TABLE>
<TABLE>
INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
STATEMENT OF STOCKHOLDERS EQUITY
<CAPTION>
SHARES
Preferred Preferred
Common Common Stock Stock Series Stock Series Common
Stock Restricted Series IV VI Stock
<S> <C> <C> <C> <C> <C>
Accumulated Deficit
Balance at December
31, 1999 10,083,054 57,612,293 626,639 - $10,083
Acquisition of
Tele Special.com
(unaudited) - - - - -
Shares issued in
settlement of
litigation
(unaudited) - 40,000 - - -
Preferred Stock
issued (unaudited) - - - 1,252,362 -
Conversion of Series
IV Preferred Stock
(unaudited) - 223,331 (5,895) - -
Conversion of Series
VI Preferred Stock
(unaudited) - 2,499,237 - (499,847) -
Conversion of
Warrants(unaudited) - 109,989 - - -
Expiration of
Restriction on
Common Stock through
the quarter ended
June 30,2000
(unaudited) 62,349,725 (62,349,725) - - -
Balance at June
30, 2000 72,432,779 11,522,832 - - -
</TABLE>
<TABLE>
AMOUNT
Common Preferred Preferred Additional
Stock Stock Series Stock Series Paid-In Accumulated
Restricted IV VI Capital Deficit
<S> <C> <C> <C> <C> <C>
Accumulated Deficit
Balance at December
31,1999 $57,612 $627 - $346,278,098 $(352,722,083)
Acquisition of
Tele Special.com - - - 5,000 (5,305)
Shares issued for
Services
(unaudited) 13,397 - - 11,991,320 -
Shares issued in
Settlement of
litigation
(unaudited) 40 - - 129,960 -
Preferred Stock
Issued (unaudited) - - 1,253 (1,253) -
Conversion of
SeriesIV preferred
Stock
(unaudited) 224 (6) - (218) -
Conversion of
SeriesVI Preferred
Stock
(unaudited) 2,499 - (500) (1,999) -
Conversion of
Warrants
(unaudited) 101 - - 32,752 -
Expiration of
Restriction on
Common Stock
through the
quarter ended
June 30,2000
(unaudited) (62,350) - - - -
- - - - (849,547)
Balance at June
30, 2000 $11,523 $621 $753 $358,433,660 $(353,576,935)
</TABLE>
<TABLE>
INTERNATIONAL BRANDS, INC.
(FORMERLY KNOWN AS STELLA BELLA CORPORATION, U.S.A.)
STATEMENTS OF CASH FLOWS
<CAPTION>
SIX MONTHS ENDED SIX MONTHS ENDED
JUNE 30, 1999 JUNE 30,2000
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Cash flow from operating activities:
Net loss $(163,722,208) $(854,852)
Adjustments to reconcile net loss
to net cash used by operations
Depreciation and amortization $6,362 $11,481
Common stock issued as compensation
for services 119,397,500 6,404,109
Common stock issued in settlement
of litigation - 130,000
Net adjustments to notes receivable 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 (5,833)
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) 327,813
163,217,212 816,003
Net cash used by operating activities (504,996) (38,849)
Cash flows from investing activities:
Exercise of warrants for common stock 521,701 32,853
Net cash provided by investing
activities 521,701 32,853
Net increase (decrease) in cash 16,705 (5,996)
Cash at the beginning of the year 4,516 6,457
Cash at the end of the year $21,221 $461
</TABLE>
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 and have been prepared
in accordance with generally accepted accounting principles for interim
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, stockholders'
equity and cash flows for the interim periods. These financial statements
should be read in conjunction 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 accompanying 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 advised by the Company's Senior Financial Advisor, who
was also the President of Z 3 Capital Corporation, that Z 3 will continue to
fund the Company's continued operations through private placements of the
Company's stock. Z 3 has demonstrated continued ability since 1994 to raise
capital for the Company. The Company's continued viability and its ability
to continue as a going concern as a going concern is dependent upon its
ability to issue stock and raise funds. In addition, on May 31, 2000, the
Company approved the extension 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 monthly payment 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 June
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:
A. For the Six Months Ended June 30, 1999
<TABLE>
<S><C>
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 Six Months Ended June 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 Tele Special.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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