UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C., 20549
Form 8-K/A
Amendment No. 2
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 24, 2000
Commission file number 000-28697
PRESIDENTS TELECOM, INC.
--------------------------------------------------
(Exact name of registrant as specified in charter)
Nevada 94-3342064
- ------------------------------- --------------------------------------
(State of other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
460-1301 Dove St.
Newport Beach, California 92660
- -------------------------------------- -------------
(Address of Principal Executive Office) (Zip Code)
(604) 469-6957
------------------------------------------------
(Registrant's Executive Office Telephone Number)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On March 7, 2000 the Company executed a Rescission Agreement with HIV-VAC,
Inc. to rescind the transaction filed in a Form 8-K on February 23, 2000. On
February 23, 2000 Debra Nicholson resigned as President, Secretary, Treasurer
and Director and Anthony N. DeMint became Sole Director, President, Secretary,
Treasurer and the only stockholder of record.
Pursuant to an Acquisition Agreement and Plan of Merger (the "Merger
Agreement") dated as of March 15, 2000 between Presidents Telecom, Inc.,
("PTI"), a Nevada corporation, and Central America Fuel Technology, Inc.
("CAFT"), a Nevada corporation, all the outstanding shares of common stock of
CAFT were exchanged for 5,000 shares of 144 restricted common stock of PTI in a
transaction in which PTI was the successor corporation.
A copy of the Merger Agreement and Certificate of Merger are filed as
exhibits to this Form 8-K and are incorporated in their entirety herein.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
The consideration exchanged pursuant to the Merger Agreement was negotiated
between PTI and CAFT
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
On February 23, 2000 Debra Nicholson resigned as President, Secretary,
Treasurer and Sole Director and Anthony N. DeMint became Sole Director,
President, Secretary and Treasurer.
Pursuant to the merger the Officers and Directors of PTI, the successor
corporation, will remain the same.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
a) Financial Statements
1. Audited financial statements for the years ended December 31,
1999 and 1998.
2.* Audited financial statements for the years ended December 31,
1998, 1997, 1996
3.* Unaudited financial statements for the ten months ending October
31, 1999.
b) Exhibits
2.1* Agreement and Plan of Merger between Presidents Telecom, Inc. and
Central America Fuel Technology, Inc.
2.2* Certificate of Merger between Presidents Telecom, Inc. and
Central America Fuel Technology, Inc.
2.3* Unanimous consent of Stockholder
- -----------------
* Previously filed.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
PRESIDENTS TELECOM, INC.
By: /s/ Alexander Anderson
---------------------------
Alexander Anderson, President
Date: April 21, 2000
<PAGE>
C O N T E N T S
Independent Auditors' Report................................................F-1
Balance Sheet...............................................................F-2
Statements of Operations....................................................F-3
Statements of Stockholders' Equity..........................................F-4
Statements of Cash Flows....................................................F-5
Notes to the Financial Statements...........................................F-6
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders of
Presidents Telecom, Inc.
(A Development Stage Company)
Newport Beach, California
We have audited the accompanying balance sheet of Presidents Telecom, Inc. (a
development stage company) as of December 31, 1999 and the related statements of
operations, stockholders' equity (deficit) and cash flows for the years ended
December 31, 1999 and 1998 and from inception on May 4, 1987 through 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 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.
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 Presidents Telecom, Inc. (a
development stage company) as of December 31, 1999 and the results of its
operations and its cash flows for the years ended December 31, 1999 and 1998 and
from inception on May 4, 1987 through December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company is a development stage company with no
significant operating results to date, which raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note 5. The financial statements do not include
any adjustments that might result from the outcome of the uncertainty.
Jones, Jensen & Company
Salt Lake City, Utah
March 25, 2000
F-1
<PAGE>
PRESIDENTS TELECOM, INC
(A Development Stage Company)
Balance Sheet
ASSETS
December 31,
1999
------------
CURRENT ASSETS
Cash $ 8,339
Accounts receivable 4,894
----------
Total Current Assets 13,233
----------
FIXED ASSETS (Note 3) 254,306
----------
OTHER ASSETS
Notes receivable - related party (Note 4) -
Deposits 34,968
----------
Total Other Assets 34,968
----------
TOTAL ASSETS $ 302,507
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - related party (Note 2) 131,599
----------
Total Current Liabilities 131,599
----------
STOCKHOLDERS' EQUITY
Common stock: 100,000,000 shares authorized of
$0.0001 par value 21,095,002 shares issued
and outstanding 2,110
Additional paid-in capital 785,619
Subscription receivable (150,000)
Deficit accumulated during the development stage (466,821)
----------
Total Stockholders' Equity 170,908
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 302,507
==========
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
PRESIDENTS TELECOM, INC.
(A Development Stage Company)
Statements of Operations
From
Inception on
May 4, 1987
Through
December 31, December 31,
1999 1998 1999
------ ------ ---------------
REVENUES $ 36,117 $ - $ 36,117
EXPENSES 500,488 1,450 502,938
---------- -------- ---------
NET LOSS $ (464,371) $ (1,450) $ (466,821)
========== ======== =========
BASIC LOSS PER SHARE $ (0.09) $ (0.00)
========== ========
WEIGHTED AVERAGE NUMBER
OF SHARES 5,259,096 1,250,000
========== ==========
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
PRESIDENTS TELECOM, INC.
(A Development Stage Company)
Statements of Stockholders' Equity
<TABLE>
Deficit
Accumulated
Additional During the
Common Stock Paid-in Subscription Development
Shares Amount Capital Receivable Stage
-------- -------- ------------ ------------- --------------
<S> <C> <C> <C> <C> <C>
Inception, May 4, 1987 - $ - $ - $ - $ -
Common stock issued for cash 10,000,000 1,000 - - -
Net loss from inception on May 4,
1997 through December 31, 1997 - - - - (1,000)
------------ --------- --------- ---------- -----------
Balance, December 31, 1997 10,000,000 1,000 - - (1,000)
Net loss for the year ended
December 31, 1998 - - - - (1,450)
------------ --------- --------- ---------- -----------
Balance, December 31, 1998 10,000,000 1,000 - - (2,450)
Common stock issued for cash
at $0.15 per share 1,000,000 100 149,900 (150,000) -
Common stock issued for
purchase of Global E-Com
at $0.054 per share 10,000,000 1,000 540,662 - -
Contributed capital - - 67 - -
Stock issued for cash at $1.00
per share 90,002 9 89,991 - -
Stock issued for services at $1.00
per share 5,000 1 4,999 - -
Net loss for the year ended
December 31, 1999 - - - - (464,371)
------------ --------- --------- ---------- -----------
Balance, December 31, 1999 21,095,002 $ 2,110 $785,619 $(150,000) $ (466,821)
============ ========= ========= ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
PRESIDENTS TELECOM, INC.
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
From
Inception on
May 4, 1987
Through
December 31, December 31,
1999 1998 1999
------ ------ --------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (464,371) $ (1,450) $ (466,821)
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation expense 16,774 - 16,774
Bad debt expense 366,483 - 366,483
Common stock issued for services 5,067 - 6,067
Changes in operating assets and liabilities:
Increase (decrease) in accounts receivable (4,894) - (4,894)
Increase (decrease) in notes receivable 46,395 - 46,395
Increase (decrease) in deposits (750) - (750)
Increase (decrease) in current liabilities
and accrued interest (1,450) 1,450 -
---------- ---------- ------------
Net Cash Provided (Used) by Operating
Activities (36,746) - (36,746)
---------- ---------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of fixed assets (43,290) - (43,290)
---------- ---------- ------------
Net Cash Provided (Used) by Investing
Activities (43,290) - (43,290)
---------- ---------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash purchased in acquisition 6,776 - 6,776
Common stock issued for subscription
receivable (150,000) - (150,000)
Payment on note payable (8,881) - (8,881)
Proceeds from note payable - related party 480 - 480
Common stock issued for cash 240,000 - 240,000
---------- ---------- ------------
Net Cash Provided (Used) by Financing
Activities 88,375 - 88,375
---------- ---------- ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS - - -
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD - - -
---------- ---------- ------------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD $ 8,339 $ - $ 8,339
========== ========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
PRESIDENTS TELECOM, INC.
(A Development Stage Company)
Statements of Cash Flows (Continued)
From
Inception on
May 4, 1987
Through
December 31, December 31,
1999 1998 1999
------ ------ ---------------
CASH PAID FOR:
Interest $ - $ - $ -
Taxes $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for
acquisition of Global E-Com $ 541,662 $ - $ 541,662
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
PRESIDENTS TELECOM, INC.
(A Development Stage Company)
Notes to the Financial statements
December 31, 1999 and 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Presidents Telecom,
Inc. is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of
the Company's management, which is responsible for their integrity and
objectivity. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the
preparation of the financial statements.
a. Organization and Business Activities
The Company was organized May 4, 1987, under the laws of the State of
Nevada, as Energy Realty Corp. On July 31, 1992, the name changed to
Balcor International. On December 18, 1998, the Company's name changed
to Dimension House, Inc. On October 28, 1999, the corporate name was
changed to Presidents Telecom, Inc. The Company has obtained to sales
of long distance services in Costa Rico. The Company currently has
minimal operations and, in accordance with SFAS #7, is considered a
development stage company.
b. Common Stock
On May 5, 1987, the Company issued 2,500 shares of its no par value
common stock for $1,000 cash.
On September 2, 1998, the State of Nevada approved the Company's
restated Articles of Incorporation, which increased its capitalization
from 2,500 common shares of no par value stock to 25,000,000 common
shares of $0.0001 par value.
On September 2, 1998, the Company forward split it's common stock
500:1, thus increasing the number of outstanding common shares from
2,500 shares to 1,250,000 shares.
On December 18, 1998, the State of Nevada approved the Company's
restated Articles of Incorporation, which increased its capitalization
from 25,000,000 common shares to 100,000,000 common shares. The par
value remained unchanged at $0.0001.
Effective January 1, 1999, the Company forward split its common stock
of an 8:1 basis bringing the outstanding shares to 10,000,000 shares.
Statement of stockholders' equity is presented retroactively
considering both the 500:1 and 8:1 forward common stock splits.
On October 2, 1999 the Company entered into a purchase agreement to
acquire 100% of equity interest of Global E-COM, S.A. (Global), a
Costa Rican telecommunications company from E-Vegas.COM. Inc., a
Nevada corporation, for 10,000,000 shares of authorized and unissued
common stock. The acquisition of Global was accounted for as a
purchase per APB No. 16.
F-7
<PAGE>
PRESIDENTS TELECOM, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
c. Revenue Recognition Policy
The Company recognizes revenue upon delivery of the services by the
customer.
d. Basic Loss Per Share
The computations of basic loss per share of common stock are based on
the weighted average number of shares outstanding during the period of
the financial statements as follows:
Loss Shares Per Share
(Numerator) (Denominator) Amount
----------- ------------- ----------
For the year ended
December 31, 1998 $ (1,450) 1,250,000 $ (0.00)
For the year ended
December 31, 1999 $ (97,887) 5,259,096 $ (0.02)
e. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
f. Income Taxes
No provision for income taxes has been accrued because the Company has
net operation losses from inception. The net operating loss
carryforwards of approximately $100,000 at December 31, 1999 expire in
2019. No tax benefit has been reported in the financial statements
because the Company is uncertain if the carryforwards will expire
unused. accordingly, the potential tax benefits are offset by a
valuation account of the same amount.
NOTE 2 - SHAREHOLDER LOAN
In October 1999, a shareholder and an officer advanced $40,480 and
$91,119, respectively, to the Company. The loans accrue no interest
and are unsecured. The loans are due December 31, 2000.
F-8
<PAGE>
PRESIDENTS TELECOM, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 3 - FIXED ASSETS
Fixed assets at December 31, 1999 consisted of the following:
1999
------
Telecommunications equipment $ 271,080
Less accumulated depreciation (16,774)
$ 254,306
Equipment was purchased in the acquisition of Global E-COM,
transferring equipment in October 1999. Telecommunications equipment
was depreciated over an 8 year life using the straight-line method of
depreciation. Office equipment and furniture is depreciated over 5
years.
NOTE 4 - NOTES RECEIVABLE - RELATED PARTY
The Company has related party accounts receivable consisting of the
following at December 31, 1999:
E-Vegas.COM, Inc. $ 96,417
Allied Telecom 270,066
Less: allowance for bad debt (366,483)
Total $ -
The above companies are start-up companies and have minimal cash flow,
therefore, an allowance for bad debt was made for the entire balances.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using 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 does not have
significant operations to date, nor does it have an established source
of revenues sufficient to allow it to continue as a going concern. It
is the intent of the Company to expand the sales of its telephone long
distance services.
NOTE 6 - FOREIGN OPERATIONS
Business operations and services supplied by the Company are located
in Costa Rica S.A. and are subjected to all Costarican laws and
regulations.
F-9
<PAGE>
PRESIDENTS TELECOM, INC.
(A Development Stage Company)
Notes to the Financial Statements
December 31, 1999 and 1998
NOTE 7 - CONSOLIDATED PROFORMA STATEMENTS OF OPERATIONS
The historical information contained herein has been consolidated on a
proforma basis. The purchase of GlobalE.com on October 2, 1999 is
described in Note 1. The purchase has been presented as though it were
effective January 1, 1998. All significant accounting policies for
Presidents Telecom, Inc. are the same as the Company's as defined in
Note 1.
<TABLE>
For the Year Ended
December 31, 1998
--------------------------------------------------------
Presidents
Telecom, Global Proforma Proforma
Inc. E-com Adjustments Combined
------------ ---------- -------------- -----------
<S> <C> <C> <C> <C>
Revenues $ - $ - $ - $ -
Cost of products sold - - - -
--------- -------- -------- ----------
Gross Margin - - - -
--------- -------- -------- ----------
Depreciation and
amortization - 5,271 - 5,271
General and
administration 1,450 3,117 - 4,567
--------- -------- -------- ----------
Total Operating
Expenses 1,450 (8,338) - (9,838)
--------- -------- -------- ----------
Operating Loss (1,450) (8,338) - (9,838)
--------- -------- -------- ----------
Net Loss $ (1,450) $ (8,338) $ - $ (9,838)
--------- -------- -------- ----------
</TABLE>
F-10
