<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-SB - a
General Form For Registration of Securities
of Small Issuers Under Section 12(b) or 12(g) of
the Securities Exchange Act of 1934
International Environmental Management, Inc.
(Exact name of Small Business Issuer as specified in its Charter)
NEVADA 65-0861102
------ ----------
(State or other jurisdiction (IRS Employee
of incorporation or organization) Identification Number)
5801 Wiley Street Hollywood Florida 33023
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(Address of principal executive offices (Zip code)
Issuer's telephone number, including area code: (954) 961-3033.
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
----------------
(TITLE OF CLASS)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, PAR VALUE $0.001 PER SHARE
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(TITLE OF CLASS)
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I
<S> <C>
ITEM 1. DESCRIPTION OF BUSINESS ........................................................................ 3
ITEM 2. PLAN OF OPERATION............................................................................... 7
ITEM 3. DESCRIPTION OF PROPERTY......................................................................... 13
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.................................. 13
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.................................... 16
ITEM 6. EXECUTIVE COMPENSATION.......................................................................... 19
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................. 19
ITEM 8. DESCRIPTION OF SECURITIES....................................................................... 20
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER STOCKHOLDER MATTERS... 21
ITEM 2. LEGAL PROCEEDINGS............................................................................... 22
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS................................................... 22
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES......................................................... 22
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS....................................................... 24
PART F/S FINANCIAL STATEMENTS AND EXHIBITS............................................................... 27
PART III
ITEM 1. INDEX TO EXHIBITS............................................................................... 27
ITEM 2. DESCRIPTION OF EXHIBITS......................................................................... 27
</TABLE>
<PAGE> 3
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(a) BUSINESS DEVELOPMENT
The Company was incorporated under the laws of the State of Nevada on
September 6, 1995 as Tirol Pines, Inc. On June 16, 1998, the Company acquired
the net assets of International Environmental Management, Inc. (old-IEMI) in a
reverse merger and changed its name to IEMI. The former shareholder of old-IEMI
received 1,500,000 shares of IEMI common stock representing a majority of the
company's outstanding shares.
Concurrently, on June 16, 1998, the Company entered into a merger
agreement with Broward Recycling, Inc., a Florida corporation ("BRI) which was
wholly-owned by the sole shareholder of old-IEMI. The objective of the two
transactions was to offer the shares of BRI to the public. The operations of
BRI would represent the sole operations of the company, with the former
shareholder of old-IEMI and BRI having the majority ownership and operating
control of the company.
On July 1, 1999, the sole shareholder of BRI legally transferred his
interests in BRI to IEMI. As the two entities were under common control, the
transfer was accounted for at historical cost in a manner similar to
pooling-of-interests. Following the transaction, BRI became a wholly-owned
subsidiary of IEMI.
BRI has been in the recycling business for approximately 18 years. The
Company seeks to develop its market reach through the acquisition, expansion
and integration of other recycling companies. The Company's goal is to be a
significant regional supplier of non-ferrous recyclable materials. In addition,
it has identified several other recycling opportunities in the non-ferrous
segment.
The merger agreement between IEMI and BRI was re-executed July 1,1999,
and is included herewith as Exhibit 8. The merger agreement between IEMI and
BRI was intended to resolve any then outstanding defects in the June 16, 1998
merger between IEMI and Tirol Pines. Exhibits 1 and 2 incorporated herein by
reference to the Company's January 6, 2000 10SB filing with the Commission,
relate to the merger between IEMI and Tirol Pines, whereby 1.5 million shares
of Tirol Pines was conveyed to the owner of IEMI, and whereby Tirol was the
surviving corporation, with its name changed to IEMI. The July 1999 merger
between IEMI and BRI was carried out to give effect to the purpose of the 1998
merger, i.e., to convey the assets, rights, and liabilities of
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Broward to Tirol/IEMI (Nevada). The 1999 merger was recorded as a merger to
which IEMI was a party, as if the 1999 merger had been conducted in June of
1998 simultaneously with the merger of IEMI (Nevada) into Tirol.
The total assets of Tirol Pines as of June 15, 1998 was $354.00, while
the total amount of liabilities were $800.00. The total assets of IEMI as of
June 15, 1998 was $68.00, while the total amount of liabilities were $0. The
total assets and liabilities of the combined entity immediately following the
transaction was assets of $422.00 and liabilities of $800.00. The names of the
25 shareholders of Tirol Pines, Inc., immediately preceding the merger, along
with the number of shares held by each shareholder, are attached hereto in the
form of the Stock Transfer Ledger of Tirol Pines, Inc., Ex. 9.
The number of shares issued in the transaction, and to whom, is
comprised of the following: Harold Solomon (1,500,000 shares); Shareholders 1-5
and 7-25 on Ex. 9 (50,000 shares proportionate to pre-merger holdings); Global
Asset Management, Inc. ("Global"), and Related Parties (750,000 shares held in
the name of Cede & Co; and Aida Carrisquillo, no. 6 on the Ex. 9 and/or Dennis
Jordan relative (200,000 shares held in the name of Cede & Co).
As for any other consideration paid to shareholders of Tirol Pines,
IEMI and any other amounts paid to third parties, Global Asset Management,
Inc., paid $100,000.00 to Dennis Jordan for the 750,000 shares transferred to
Global at the time of the merger. No other consideration was paid.
The percentage ownership of the former shareholders of Tirol Pines,
IEMI, and any other investors in the new entity immediately following the June
16, 1998 transaction is as follows: Former shareholders of Tirol Pines no. 1-5
and no. 7-25 on Ex. 9 (2.5%); Harold Solomon (50%); Global and related entities
(37.5%); and Dennis Jordan and/or Aida Carrisquillo (10%).
In the course of the merger, 950,000 shares were issued pursuant to
Rule 144 and are currently held as follows:
<TABLE>
<CAPTION>
CLASS BENEFICIAL NUMBER OF SHARES NATURAL PERSONS OFFICER
OWNER BENEFICIALLY HELD (DIRECTOR)
----- ----------- ----------------- ----------
<S> <C> <C> <C>
Common Sam & Raquel Benson 15,000 Individual
Common Maurice Burke 12,500 Individual
Common Leanardo Castro 5,000 Individual
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Common I.O. Marcus 5,000 Individual
Common Jose Pedro Pires 1,500 Individual
Common Henry Watson 6,000 Individual
Common Adrian Yeap 10,000 Individual
Common Kent Whitesel 33,795 Individual
Common Anthony Caliendo 10,000 Individual
Common Independent Securities 200,000 Corporation Jordan
Common GAMP/GAP Escrow 5,000 Corporation Haynes
Common GAP FBO Hampden
Kent Group LLC 85,000 Corporation Haynes
Common DVV, Inc 64,500 Corporation D. Van Vort
Common Investments Plus 12,500 Corporation Rochelle
Gross
Common Opportunity Int'l Group 47,900 Corporation Gross
Common GAMP, Inc 86,305 Corporation Haynes
Common GAMP/GAP Ltd. 150,000 Corporation Haynes
Common Barry Herman 200,000
------ ------------ -------
Total 950,000
</TABLE>
(b) BUSINESS OF THE ISSUER
Through its subsidiary, ("BRI") the Company was in Hollywood Florida
as an operating entity during the September 6, 1995 through July 1, 1999
period, operating as Broward Recycling. The company purchased various
recyclable metals from the general public. It sorted and prepared the material
to be sold to a wholesaler. The wholesaler then shipped the material directly
to the mills, which are the end users of the recycled material. The material is
melted and manufactured into new end products. IEMI, as the parent of Broward,
currently engages in the same recycling business.
Through its subsidiary, BRI, the Company currently operates one
recycling location in South Florida. This operation currently services three
counties: Miami-Dade,
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Broward, and Palm Beach, for a total population served of 5,000,000 people. The
Company is a recycling reclamation and processing facility which processes up
to six tons of recyclable material per day. Such material includes aluminum,
copper, brass, stainless steel, and other non-ferrous materials. In addition,
the Company processes five to ten tons of aluminum cans per month. The purpose
of recycling reclamation and processing facilities is to process recyclable
material so that it may be reused by businesses in the manufacturing of
consumable goods. The Company's primary goal is to create several divisions
which each offer a distinct recycling reclamation product.
Ninety five percent of the material that IEMI purchases is purchased
from the general public, generally small businesses. The company does a very
small amount of business with large industrial accounts. The small business
customers deliver their scrap materials to IEMI. These small business customers
are [a] plumbers who recycle their copper tubing and old brass fixtures; [b]
air condition repair services who deliver parts from old units; [c] local
garages which deliver cast aluminum wheels, automobile radiators, aluminum
evaporator coils and assorted aluminum. IEMI does not have any contracts with
counties in Florida at this time. The company does not have contracts with its
small business clients. The company pays its small accounts in cash.
IEMI is not tied to one particular source to sell material. Prices are
determined by local conditions. The company sells its material to the buyer
that offers the highest price, most favorable terms of payment, and most
favorable pickup service. The company does not have in place any purchase
agreements for its finished material.
The market for the company's raw finished goods includes the local
entities to whom it sells, and an overseas market. The local market includes
purchasers such as Titan Recycling and Arrow Recycling. The overseas market
includes International Global Metals and East Coast Scrap Metal.
IEMI complies with environmental regulations by obtaining all of the
necessary permits and licenses to operate its facility. The company has current
local City of Hollywood licenses, a regional Broward County license, and a
State of Florida certification to conduct business as a Secondary Metals
recycling facility. No additional licenses or permits beyond those in place are
required for the company's operations at this time. As the Company grows and
expands its business, it may in the future accept material that requires
special handling. IEMI would at that time acquire any necessary licenses or
permits.
The industry is highly fragmented and ripe for consolidation through
acquisition. The Company believes that its subsidiary, BRI, has the experience
necessary to acquire
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solid companies in this profitable and growing industry. The company is filing
the Form 10-SB at this time to create the potential for capital formation to
implement the company's proposed acquisition plan. It is anticipated by
management of the company that liquidity of the company's shares, combined with
a potentially favorable market response to the company, will facilitate the
company as it moves forward to implement its acquisition plan.
Beginning in early 1990, Broward had a large contract with the City of
Hollywood, Florida. That contract was discontinued in March 16, 1996. As a
consequence of that loss, Broward's auditors in 1997 expressed its doubts about
the viability of Broward as a going concern. Accordingly, the Company embarked
upon a plan to acquire capital and enhance the liquidity of the Company's
shares with a view to moving beyond this concern. In this regard, the Company
received paid in capital in cash and notes in 1999 and 2000.
The Company intends to establish a central processing facility and
have two or three recycling facilities on line which should enable the Company
to expand the number of recyclable items it handles such as newspaper,
cardboard, glass bottles and plastic. As the Company develops these facilities,
it will be in a position to expand its wholesale recycling business. For
example, the Company currently purchases copper, brass and aluminum from
plumbing and air conditioning repair businesses as well as radiators from car
radiator shops and local garages. Using this strategy, the Company believes
that within two or three years, it can position itself to operate as a
profitable, integrated recycling business.
ITEM 2. PLAN OF OPERATION
The Company's primary business objective is to enhance its revenue
growth through the acquisition and consolidation of other scrap metal
businesses. Acquisition targets should have a successful operating history
which means a record of growth and profitability. Management intends to retain
the owners and experienced management of such acquisitions because their
knowledge and expertise can provide immediate entry in the market. In addition,
acquisition targets should be located in major market areas and should either
be the leader in its respective market, or have the potential to assume the
first or second position in that market. The Company will prefer target
facilities located along the southeast Florida economic area or having access
to transportation. The company prefers to merge with or acquire facilities that
are close to a highway or expressway. IEMI intends to acquire facilities with
clear access to at least one major roadway. Such locations facilitate receipt
of raw materials and resale of raw finished
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goods. This would enable the Company to ship large volumes of material to major
consumers.
Another strategy of the Company is to develop the capacity to recycle
products other than non-ferrous metals. This could be accomplished through the
establishment of a central processing facility, with two to three recycling
facilities on line. This should enable the Company to expand its wholesale
recycling business and to develop a ferrous (steel) recycling division. The
wholesale division will work with existing businesses.
The Company also intends to have a container service division located
in South East Florida, if negotiations proceed successfully. The potential
value of the market for this service is $5-$10 billion, within the Company's
operating geographic range. The source for this statement is the October 26,
1996 edition of "Waste News;" article entitled "Chicago Firm Targets Larger
Scrap Industry," author, Tom Andreoli. Principal users of this service are real
estate developers, who need containers on site to remove construction debris.
To enter this market, the Company must build a facility, acquire a small fleet
of trucks, and acquire containers. The cost of this undertaking is projected at
approximately $750,000.
As the Company grows, it intends to establish a solid waste-brush and
yard waste composting facility. Municipalities are coming to the realization
that incineration and land filling are not the most environmentally sound ways
of handling their solid waste, trash and brush material. (Brush material is
yard waste such as tree trimmings, grass clippings, and associate shrubs,
weeds, or other plant life.) The Company believes this business segment of the
market has a potential value of $250-$500 million. To implement this strategy,
the Company must build the facility referenced in the preceding paragraph. The
Company projects that entry into this industry sector would be feasible in the
third or fourth quarter of the year 2000.
Consulting services are yet another strategy for growth in the
industry. Many, if not most, of the communities in the U.S. are imposing
mandatory recycling requirements on the business community. The Company intends
to position itself to respond to this emerging market, offering recycling
consulting services to assist businesses in compliance with governmental
regulations. To implement this strategy, the Company must employ two
consultants.
A final strategy for growth would be entry into the solid waste and
landfill management business. The Company perceives a window of opportunity to
acquire smaller privately owned landfills. There are several hundred of these
landfills nationwide and are selling in the $3 million to $10 million range.
Such an acquisition would provide
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immediate cash flow and substantial net profit to the Company's operations.
Management believes it is essential to get a solid waste landfill division on
line as soon as possible.
The Company has no product, or product in development, which would
materially impact its financial and operating condition. The Company is not
dependent upon the availability of raw materials in order to operate. The
Company does not rely on any patents, copyrights, trademarks, or other
intellectual property in order to operate. The Company's operations are not
affected by seasonal changes. The Company does not maintain a material amount
of production inventory. The Company does not extend terms to customers. The
Company is not dependent upon a single customer or a small group of customers.
The largest customer of the Company purchases less than 5% of the Company's
production. There is no back log in the Company's production. The Company does
not rely on government contracts for its revenues.
The Company is aware there is significant competition in the recycling
industry. The Company will be competing with numerous companies that already
have a substantial share of the market as well as greater management and
technological resources. Competitors also may have greater financial resources
than that of the Company. Current local competition and local conditions are as
follows. The Company's local market is primarily in Miami-Dade, Broward and
Palm Beach counties. There are several dozen small to medium size scrap metal
recycling dealers. There are five or six larger dealers and a few wholesale
companies that ship all of their material direct to the mills who are the end
users. Many of the small and medium size operations buy and sell on a weekly
basis and do not have the resources to compete with the few larger operations.
It is a highly fragmented industry. The Company believes this market is ready
for consolidation. Each small and medium size operation can only handle what is
delivered to them or they can pick -up in a very small radius from their
location. The Company's goal is to become the number one regional scrap metal
recycling operation in the south Florida area.
The Company is not regulated by any federal or state regulatory agency
with regard to environmental matters.
The Company employs two full time managerial staff at the parent
level, and five full and part time non-management employees at the subsidiary
level.
FINANCIAL INFORMATION
The following table sets forth the current year and last two years of
operating data
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from the Company's South Florida market area.
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS DATA
YEAR ENDED DECEMBER 31,
1997 1998 1999
-------------------------------------------
<S> <C> <C> <C>
TOTAL REVENUE
$718,178 $560,152 $661,729
TOTAL COSTS AND EXPENSES
$721,291 $720,106 $778,914
PROFIT (LOSS) FROM OPERATIONS
$(3,113) $(159,954) $(117,185)
NET PROFIT (LOSS) APPLICABLE TO COMMON
SHAREHOLDERS
$(3,113) $(159,954) $(117,185)
NET PROFIT (LOSS) PER COMMON SHARE
$(0.0013) $(0.1019) $(0.0546)
BALANCE SHEET DATA
YEAR ENDED DECEMBER 31,
WORKING CAPITAL
$(254,031) $(239,925) $111,281
TOTAL ASSETS
$155,217 $154,979 $324,034
TOTAL LIABILITIES
$300,575 $494,292 $223,390
STOCKHOLDERS' EQUITY (ACCUMULATED DEFICIT)
$(145,358) $(339,313) $100,644
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF PLAN OF OPERATION
ASSUMPTIONS
The following management's discussion and analysis or plan of
operation is based on the enclosed financial statements exhibit.
The Company acquired Broward Recycling, Inc. on July 1, 1999. The
financial statements reflect the condition of the Company and the acquisition
as occurred in the prior periods being discussed.
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RESULTS OF OPERATIONS
Year ended December 31, 1999, compared to Year Ended December 31, 1998.
IEMI's net revenues for Year Ended 1999 increased by 18% compared to 1998 (The
1999 numbers for comparison are Broward Recycling, prior to the acquisition by
IEMI in June of 1999).
The Company's significant revenue improvement is almost entirely directly
related to local sales and marketing efforts and expansion of its international
business segments. During the fourth quarter, 1999, IEMI started recycling
cruise ship aluminum cans from international (mainly Caribbean) ports, which is
continuing and has also started its own pick up service for a targeted
commercial customer group.
The Company expects revenue for the future to be up significantly as management
continues to infuse capital, following its business plan. Revenue is partly a
function of the mix of material types and the instability of the metals
markets, which is difficult to predict. Revenue is also subject to the impact
of the economic conditions in the various geographic regions that the Company
services, both domestically and internationally. The Company is on target to
exceed $1.0 million in sales and expects to reach this Year 2000 business
objective.
The total cost and expenses for the Company were up only 8% for 1999 versus
1998 Year end time frame. The Company's losses were reduced by $42,000 or
approximately 26%.
The actual loss for 1999 was $117,185. On a per share basis, the Company lost
less than $ (.06) per common share in 1999 and an improvement of about $.05 per
share. The loss improvement is attributable to increased sales and an
aggressive marketing program, designed to increase the company's operating
range.
The Company's administrative expenses have increased significantly, year over
year, due to its current business plan and model, which includes an aggressive
marketing and acquisition plan.
The loss is attributable to the expansion and acquisition plan the Company has
put forward for the year 2000.
That process has translated into very expensive general and administrative
expenses. Without the acquisition expenses, the Company would have been
profitable in the second
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quarter. The Company has filed its 10K-SB with the Securities and Exchange
Commission and has made three amendments to that filing.
The Company expects the gross profit percentage to increase several points in
the third quarter and for that trend to continue during the remainder of 2000.
IEMI's gross margin percentages in any period varies dependent on the product
mix, as well as the need of the metals market, supply and demand. The Company
is implementing new cost control measures to increase gross margin. Various
other factors such as metals yield and inventory levels will also continue to
affect the amount of cost of sales and the variability of gross margin
percentages.
A worst case scenario involving a critical supplier of raw materials would be
the partial or complete shutdown of the supplier and its resulting inability to
provide materials to the Company on a timely basis. Where efforts to work with
suppliers continue, contingency planning has emphasized the identification of
secondary sources.
Spending on its acquisition plan will continue throughout 2000.
The Company does not expect a change in tax rate and anticipates no corporate
income tax for year 2000.
The Company became a fully reporting firm on February 6, 2000.
IEMI is not currently party to any legal proceedings.
The Company continues to receive financial support from its venture capitalist
and is committed to receiving funds in excess of $550,000 during the year 2000.
LIQUIDITY AND CAPITAL RESOURCES
The Company has in recent years financed its operations primarily with
loans directly from and/or guaranteed by the principle shareholders. The
Company anticipates that revenues from operations will gradually be able to
satisfy the Company's cash requirements. Periodic equity financing has assisted
the Company in working towards this goal during the subsequent six month
period. No assurance can be given, however, that additional debt or equity
financing will not be required or will be available if required.
Present cash on hand is not sufficient to meet the Company's operating
plan as
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stated in the original management discussion and analysis. Although each month
the company is improving its position, the Company will continue to seek equity
funding during the next six month period to meet its business objectives. The
alternative financial support will come from Global Capital Group.
BRI has reached a settlement agreement in litigation discussed in the
attached financial statements. The Company has made monthly payments on a
timely basis since July, 1999. This settlement created no material effect on
the company.
ITEM 3. PROPERTIES
The Company owns its headquarters and operating facility at 5801 Wiley
Street Hollywood, Florida 33023. The estimated value of the land and building
is $225,000. The company owns operating equipment with a depreciated value of
approximately $50,000.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of August 1, 2000, the shares of common
stock beneficially owned by each person who was a beneficial owner of more than
five percent of the outstanding shares of common stock and by directors and
executive officers.
<TABLE>
<CAPTION>
------------------------------ ---------------------------- --------------------------- ----------------------------
CLASS OF SHARES BENEFICIAL OWNER NUMBER OF SHARES PER CENT OF
BENEFICIALLY HELD BENEFICIAL OWNERSHIP
------------------------------ ---------------------------- --------------------------- ----------------------------
<S> <C> <C> <C>
Common Harold Solomon 1,500,000 42.9%
5801 Wiley Street
Hollywood
FL 33023
------------------------------ ---------------------------- --------------------------- ----------------------------
</TABLE>
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<TABLE>
<S> <C> <C> <C>
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Global Capital 225,000 6.4%
Group, Inc.
225 Mizner Blvd
Boca Raton
FL 33432
David Van Vort
President
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Global Capital 215,000 6.1%
Management
Group Inc
14999 W. Palmetto
Park Road
Boca Raton
FL 33486
William Haynes
President
------------------------------ ---------------------------- --------------------------- ----------------------------
Common DVV Investments Inc. 180,000 5.1%
428 Wavecrest Ct.
Boca Raton
FL 334323
Jeff Monroe
President
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Palmetto Art 130,000 3.7%
Associates, Inc.
3094 Westbury H
Deerfield Beech
FL 33442
Karina Vidal
President
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Q Capital, Inc. 125,000 3.6%
5551 Marbella Dr.
Boca Raton
FL 33433
Karina Vidal
President
------------------------------ ---------------------------- --------------------------- ----------------------------
</TABLE>
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<PAGE> 15
<TABLE>
<S> <C> <C> <C>
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Opportunity Int'l 172,900 4.9%
Group, Inc.
9953 Ramblewood
Drive
Coral Springs
FL 33071
Rochelle Gross
President
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Kent Whitesel 43,795 1.3%
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Anthony Caliendo 10,000 0.3%
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Independent Securities, 200,000 5.7%
Jordan, Director
------------------------------ ---------------------------- --------------------------- ----------------------------
Common GAMP/GAP Escrow, William 5,000 0.1%
Haynes, Director
------------------------------ ---------------------------- --------------------------- ----------------------------
Common GAP FBO Hampden Kent 85,000 2.4%
Group, LLC, William
Haynes, Director
------------------------------ ---------------------------- --------------------------- ----------------------------
Common DVV, Inc., 64,500 1.8%
David Van Vort, Director
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Investments Plus, Rochelle 12,500 .4%
Gross, Director
------------------------------ ---------------------------- --------------------------- ----------------------------
Common GAMP, Inc., William 86,305 2.5%
Haynes, Director
------------------------------ ---------------------------- --------------------------- ----------------------------
Common GAMP/GAP Ltd., William 150,000 4.3%
Haynes, Director
------------------------------ ---------------------------- --------------------------- ----------------------------
</TABLE>
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<TABLE>
<S> <C> <C> <C>
------------------------------ ---------------------------- --------------------------- ----------------------------
Common Barry Herman 200,000 5.7%
------------------------------ ---------------------------- --------------------------- ----------------------------
</TABLE>
The shareholders identified above other than Mr. Solomon and Mr. Herman
comprise a group as that term is defined in Section 13(d)(3) of the Exchange
Act.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.
The Board of Directors of the Company is currently composed of five
members, each of whom serves for a term of one year. Executive officers are
elected annually by the Board of Directors and serve at the Board's discretion.
The following table sets forth information with respect to the directors and
executive officers of the Company.
<TABLE>
<CAPTION>
NAME AGE POSITION CURRENT TERM EXPIRES
---- --- -------- ------------ -------
<S> <C> <C> <C> <C>
Harold Solomon 45 Chairman, CEO, Pres July 1999 2000
George R. Keller, Jr. 44 Director July 1999 2000
Francis LaTorre 31 Director July 1999 2000
Anthony Caliendo 30 Director July 1999 2000
Sam Benson 43 Director July 1999 2000
</TABLE>
All directors hold office until the next annual meeting of the Company
(currently expected to be held during the first Monday of December 2000) and
until their successors are elected and qualified, subject to earlier removal
and replacement by the shareholders. Officers hold office until the first
meeting of directors following the annual meeting of shareholders and until
their successors are elected and qualified, subject to earlier removal and
replacement by the Board of Directors. All of the directors reside in the State
of Florida.
Harold Solomon currently serves as Chairman of the Board, CEO and President of
the Company. Mr. Solomon founded BRI in 1980 and has been overseeing its
operation since it was formed. He transformed BRI from an old fashioned
"junkyard" into a complete non-ferrous scrap metal recycling facility. Mr.
Solomon, with 19 years experience in the field of recycling, has also
instituted programs for inventory control,
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process management and quality control procedures. He is responsible for the
hiring and training of employees, and for the Company's public relations,
marketing and advertising. Prior to forming BRI, Mr. Solomon was the Director
of Admission and Records at Florida International University. He was part of
the team that formed the University's North Miami campus and initiated many of
the procedures in the Admission and Records office that helped the new campus
grow and prosper. Mr. Solomon holds a B.A. in History and Educational
Administration, with a Minor in Music Education, from Florida International
University. Mr. Solomon also currently serves as the President of the Hollywood
Philharmonic Orchestra.
George R. Keller, Jr. currently serves as a Director/Treasurer. Mr. Keller is
the Assistant Director, Department of Safety and Emergency Service for Broward
County. Mr. Keller previously served as the Director of the Department of
Development Administration of the City of Hollywood, Florida. He was also
previously employed by the Urban and Regional Research Center in Gainesville.
Mr. Keller held the following positions in the City of Hollywood: Assistant
City Manager (Interim City Manager), Director or Development Administration,
Planning Administrator, Community Development Director and Post Disaster
Recovery Director. Much of Mr, Keller's work experience has been in the areas
of land use planning, zoning, real estate development, urban redevelopment
economic development, annexation, emergency management and code enforcement.
Recently, in the spring of 1999, Mr. Keller completed the Community Emergency
Response Team (CFRT) training program available to local residents. Other
professional memberships and affiliations include: the International
City/County Manager's Association, American Institute of Certified Planners
(AICP), American Planning Association, Hollywood Housing Authority (former
Commissioner), 1990 Price Waterhouse/South Florida Business Journal "Up &
Comers" Award, Florida Real Estate License (inactive), Juvenile Diabetes
Foundation and Broward County Humane Society. He holds a B.S. Degree in Urban
Geography and a M.A.T. Degree in Urban Geography and Urban and Regional
Planning from the University of Florida, Gainesville, Florida.
Francis LaTorre serves as a Director. He is a Loan Consultant to South Florida
Mortgage Consultants, Inc., and a realtor for Broward Real Estate Sales Co.,
Inc. He previously worked in sales for Galacticomm., Inc. While active duty
in the US Navy, Mr. LaTorre received the Hospital Corpsman Certificate with
honors from the Naval School of Health Sciences, San Diego. Mr. LaTorre is a
1995 graduate of Columbia College. Mr. LaTorre also serves as Chairperson of
the finance committee of the Hollywood Philharmonic Orchestra.
-17-
<PAGE> 18
Anthony Caliendo currently serves as a Director/V.P. Sales & Marketing. He is
presently a Sales Manager for Global Asset Partners, of Nassau, Bahamas, an
asset management company. (See, "Conflicts of Interest".) He has previously
served as a loan officer for K&B Capitol, and as Finance Manager for Royal Palm
Homes, both in Boca Raton, Florida. He also held various management positions
with Bally's Fitness Corp. Mr. Caliendo held both General Manager and District
Manager positions with Sally's Fitness Corp. in Chicago, from 1987 to 1990. At
age 18, he was the youngest G.M. in Bally's history and as District Manager, he
was recognized for his managerial and marketing skills by earning Manager of
the Year, Employee.- of the Year and Salesman of the Year Awards, in addition
to winning Sally's Annual National Sales Contest.
As General Manager of two different World Gym locations in Chicago in 1992
and 1993, Mr. Caliendo oversaw Human Resources & Marketing and Sales, exceeded
sates projections of over $2 million, and helped to make the World Gym the
fastest growing fitness facility in Chicago. In 1994, as a General Securities
Representative (NASD I Series Seven) for a small boutique investment banking
firm in South Florida, Mr. Caliendo became the top producer within 4 months,
recruited brokers and conducted training courses and raised equity in excess of
$2 million. At present, Mr. Caliendo serves as the Vice President of Investor
Relations for Royal Palm Homes, a real estate development company in South
Florida. He is also a Loan Officer for K&B Capital Corp., currently engaged in
several commercial finance ventures and residential mortgages, and also serves
as a Sales Manager for Global Asset Partners, working in Investment Banking
Financing and training new Account Executives.
Sam Benson currently servers as a Director/Secretary. Mr. Benson graduated in
1978 from the University of Miami with a B.B.A. in International Finance and
Marketing, From 1978 to 1982 Mr. Benson worked for Quaker Oats. First to set up
major accounts for Quaker Oats in South Florida, he was then the Southeast
United States liaison for these major accounts. From 1982 to 1986 Mr. Benson
attended medical school, graduating in 1986 with his M.D. degree. From 1986 to
1989 Mr. Benson participated with a South Florida pediatrician. From 1989 to
present Mr. Benson has worked for Elise Undergarment in various management
capacities. For the past year he has been responsible for their locating and
building a facility in Urnanl Mexico.
-18-
<PAGE> 19
ITEM 6. EXECUTIVE COMPENSATION.
Mr. Solomon compensated at the rate of $120,000 per year, plus
customary benefits.
Mr. Albert Massucco, Jr., is compensated at the rate of $65,000 per
year.
Mr. Solomon and Mr. Massucco are the only members of management of the
Company who receive regular salaried compensation.
All officers and directors will be reimbursed for any expenses
incurred on behalf of the Company. Directors will be reimbursed for expenses
pertaining to attendance at meetings, including travel, lodging and meals.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Company was incorporated on September 6, 1995. Since its
incorporation, the Company has issued 3,500,000 shares of its Common Stock. A
majority of these shares are held by the Company's President and CEO.
On June 2, 1998, the Company entered into a Consulting Agreement with
Global Capital Management, Inc. ("Global"), whereby Global will offer strategic
advice regarding capitalization, capital structure, potential investors,
corporate transactions, in order to implement the Company's business plan.
Pursuant to the Consulting Agreement, Global received 200,000 shares of the
Company's common stock, and Global's right to hold the shares was renewed in
the 1999 Consulting Agreement. The consulting agreement is Ex. 6 to the Form
10SB.
In addition, Global received the right to purchase up $950,000 of the
stock in the limited offering conducted by the Company in late 1999 and early
2000, pursuant to Rule 504 which stock was issued without restrictive legend.
The application of Rule 504 to the offering is discussed under Item 8. The
shares were issued effective September 11, 1999 and January 23, 2000 (see Item
8). The accounting consequences are set forth in Note 7 to the IEMI 1998
Consolidated Financial Statement.
The Company has entered into loan transactions with certain related
parties, as set forth on the unaudited consolidated financial statements for
the period ended September 30,
-19-
<PAGE> 20
1999. The parties to the loans are as follows (1998 dollar amount of loan
followed by name): $18,194, Betsy Firger, private mortgage holder; $25,000,
George Klien, shareholder; $115,134, Dr. Joseph Rosaler, private mortgage
holder, $60,000, Robert Elmore, business associate; $11,125, Al Massucco, Sr.,
relative of employee; $12,348, Diane Hasett, relative of employee.
Mr. Anthony Caliendo, a director of the Company, is employed as a
Sales Manager for Global Asset Partners, a Bahamian asset management company.
Global Asset Partners, Ltd., is affiliated with Global Capital Management, Inc.
through certain common ownership.
ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The Shares registered are the common Shares of the Company. One
million shares of stock were offered on September 11, 1999 and one million
shares of stock were offered on January 23, 2000. The following persons
invested in these offerings: [1] September 11, 1999: Global Capital Group, Inc.
(225,000 shares), Global Capital Management Inc. (215,000 shares), DVV
Investments Inc. (180,000 shares), Palmetto Art Associates, Inc. (130,000
shares), Q Capital, Inc. (125,000 shares), and Opportunity International Group
Inc. (125,000), [2] January 23, 2000: Global Capital Group, Inc. (1,000,000
shares).
The aggregate offering price of the September 11, 1999 offering was
$500,000, and the aggregate offering price of the January 23, 2000 offering was
also $500,000, for a total of $1,000,000 under Rule 504.
No dividends have been paid on the Company's common Shares to date,
and no dividends are anticipated for the Shares offered hereby. The Shares
carry full voting rights on the same terms as Shares held by management. The
Shares are qualified for resale in any jurisdiction in which trading of Rule
504 stock issued pursuant to the intrastate exemption for offerings to
accredited investors is recognized. The Shares are not subject to an
anti-dilution provision.
The Company is authorized to issue 25,000,000 shares of Common Stock,
$.001 par value per share. The holders of Common Stock have one vote per share
on all matters (including election of directors) without provision for
cumulative voting. Thus, holders of more than 50% of the shares voting for the
election of directors can elect all of the directors, if they choose to do so.
There are no sinking fund provisions. Holders of Common Stock will not have
preemptive rights with respect to any additional shares of Common Stock
-20-
<PAGE> 21
which may be issued. Therefore, the Board of Directors may sell shares of
capital stock of the Company without first offering such shares to existing
stockholders of the Company. The Common Stock is not subject to call for
redemption The Common Stock currently outstanding is fully paid and
non-assessable. In the event of liquidation of the Company, the holders of
Common Stock will share equally in any balance of the Company's assets
available for distribution to them after satisfaction of creditors and
Preferred shareholders, if any. The Company may pay dividends, in cash or in
securities or other property when and as declared by the Board of Directors
from funds legally available therefore, but has paid no cash dividends on its
Common Stock to date.
PART II.
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
At November 1, 1999, there were 34 holders of Common Stock. The
Company's Common Stock is not listed or quoted on any exchange or quotation
service and there is no established public trading market for the Common Stock.
To the knowledge of the Company, trading to date has been irregular and
extremely limited. As of October 1, 1999, the current price of the Company's
stock was $8.75 per share. The 52 week low occurred in February of 1999, at
$7.00 per share.
The Company will seek a market maker to submit an application with
NASDAQ's OTC Bulletin Board to have its Common Stock quoted . In order to be
approved for OTC Bulletin Board quotation, the Company must be current in
reporting pursuant to the Securities and Exchange Act of 1934. The Company will
seek to encourage at least one market maker for the Common Stock. Making a
market involves maintaining bid and ask quotations and being able, as
principal, to effect transactions in reasonable quantities at those quoted
prices, subject to various securities laws and other regulatory requirements.
The development of a public market having the desirable
characteristics of depth, liquidity and orderliness depends upon the presence
in the marketplace of a sufficient number of willing buyers and sellers at any
given time, over which neither the Company nor any market maker has any
control. Accordingly, there can be no assurance that an active and liquid
trading market for the Common Stock will develop, or if a market develops, that
it will continue.
-21-
<PAGE> 22
The Board of Directors may consider paying dividends in the future and
will periodically review its policy regarding dividends. Declaration of
dividends, if any, by the Board of Directors will depend upon a number of
factors, including capital requirements, investment opportunities available to
the Company or the Bank, capital requirements, regulatory limitations, the
Company's results of operations and financial condition, tax considerations and
general economic conditions, as well as other relevant factors. No assurances
can be given, however, that any dividends will be declared, what amount the
dividends will be, or whether such dividends, once commenced, will continue to
be paid. The Company may pay stock dividends in lieu of, or in addition to,
cash dividends. The Company has not paid any dividends since its inception.
However, the Company intends to pay dividends as soon as business operations
permit.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any litigation nor, to the knowledge of
management, is any litigation pending or threatened against the Company. The
Company is not a party to any other legal proceedings which would have a
material impact on the Company's operations and/or financial condition, nor is
the Company aware of any such threatened proceeding.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Set forth below is certain information concerning all sales of
securities by the Company during the past three years that were not registered
under the Securities Act of 1933.
Pursuant to Rule 504 of Regulation D, one million shares of stock were
offered on September 11, 1999 and one million shares of stock were offered on
January 23, 2000. The Shares sold in these offerings were the common Shares of
the Company. In total, the Company sold two million shares of its common stock
at $.50 per share (US $1,000,000) in exchange for forty nine per cent of the
Company's equity. There were no underwriting discounts or commissions paid. The
shares were offered directly to investors without the use
-22-
<PAGE> 23
of underwriters.
The shares were sold in minimum subscriptions of $25,000. The Shares were
offered by the Company's officers and directors at a gross offering price of
$0.50 per Share. Certain of the shares were purchased by Global Capital
Management Group, Inc., and companies affiliated or acting therewith. The
shareholders of Global and affiliates who purchased 1,000,000 million shares of
stock on September 11, 1999 are the following:
<TABLE>
<CAPTION>
Name of Purchaser # of shares
----------------- -----------
<S> <C>
Global Capital Group, Inc. 225,000
Global Capital Management, Inc. 215,000
DVV Investments Inc. 180,000
Palmetto Art Associates, Inc. 130,000
Q Capital, Inc. 125,000
Opportunity Int'l Group Inc. 125,000
</TABLE>
The purchase of a further 1,000,000 shares pursuant to Rule 504 was
made by Global Capital Group, Inc. on January 23, 2000.
The exemption from registration is SEC Rule 504. Two million of the
Shares were issued pursuant to a Florida state law exemption that permits
general solicitation and general advertising so long as sales are made only to
"accredited investors" as that term is defined in Regulation D. The Commission
stated in Securities Act Release No. 33-7644 (February 19, 1999) that "freely
tradeable" securities may be issued in reliance on Rule 504 in transactions (1)
registered under state law requiring public filing and delivery of a disclosure
document to investors before sale, or (2) exempted under state law permitting
general solicitation and general advertising so long as sales are made only to
"accredited investors." The Company relied on the second point of this test to
issue shares without restrictive legend. The Company believes that Florida law
permits general written solicitation of accredited investors, and investors
otherwise capable of assessing the risk of investment, as provided in
Commission Release No. 33-7644, and other applicable Commission authority. The
Florida Administrative Code, Section 3E-500.007, provides in relevant part as
follows:
(3) Any seminar, meeting, letter, circular, notice or other
written communication shall be deemed not to be in a form of general
solicitation or general advertising when the issuer and any person
acting on its behalf shall have reasonable grounds to believe after
inquiry and shall believe that persons invited to or attending such
seminar or meeting or receiving such letter,
<PAGE> 24
circular, notice or other written communication:
(a) have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of the
prospective investment; and
(b) are able to bear the economic risk to the prospective
investment; or
(c) as to persons invited to or attending any seminar or meeting
who qualify only under subparagraph (3)(b) of this Rule, such persons
are accompanied by an investment adviser.
Every potential investor, and/or every actual investor, in the Rule 504
offering fell within the ambit of the foregoing provision. Shares were sold to
"accredited investors" only, as defined by Rule 501 of Regulation C.
Each potential investor, and/or every actual investor, either possessed the
necessary knowledge and experience, or was capable of bearing the economic risk
of the investment. Accordingly, the shares were issued without restrictive
legend.
The price of the stock in the Rule 504 offering is explained because the
agreement to issue the shares under Rule 504 was entered into as a part of the
consulting agreement between Global and Broward Recycling in June of 1998, more
than one year prior to the merger of Broward into IEMI. Global was not a
related party prior to the consummation of the consulting agreement.
Consequently, the consulting agreement was entered into on an arms length
basis. At the time the price of the Rule 504 stock was established, there was
no trading market at all for the stock of Broward Recycling. The Board of
Directors of Broward Recycling considered the Company's need for capital in
light of the total lack of liquidity for the stock of Broward Recycling, the
Company's cash deficiency, and the possibility of the infusion of $1 million in
equity capital.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company intends to indemnify its officers and directors as
provided under Nevada law. The applicable statute is Nev. Rev. Stat. Ann.
Section 78.7502 (1998), which provides as follows:
-24-
<PAGE> 25
Section 78.7502. Discretionary and mandatory indemnification of
officers, directors, employees and agents: General provisions
1. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, except an action by or in the right
of the corporation, by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with the action, suit or
proceeding if he acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo
contendere or its equivalent, does not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal
action or proceeding, he had reasonable cause to believe that his
conduct was unlawful.
2. A corporation may indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or
was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts
paid in settlement and attorneys' fees actually and reasonably
incurred by him in connection with the defense or settlement of the
action or suit if he acted in good faith and in a manner which he
reasonably believed to be in or
-25-
<PAGE> 26
not opposed to the best interests of the corporation. Indemnification
may not be made for any claim, issue or matter as to which such a
person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation
or for amounts paid in settlement to the corporation, unless and only
to the extent that the court in which the action or suit was brought
or other court of competent jurisdiction determines upon application
that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the
court deems proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense
of any action, suit or proceeding referred to in subsections 1 and 2,
or in defense of any claim, issue or matter therein, the corporation
shall indemnify him against expenses, including attorneys' fees,
actually and reasonably incurred by him in connection with the
defense.
It is the view of the Company that the foregoing statute permits
indemnification of officers and directors for actions taken in good faith. The
Company intends to indemnify officers and directors to the full extent
permissible under Nevada law.
-26-
<PAGE> 27
PART F/S. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Please see the Consolidated Financial Statements appearing on F-1 to
F-9.
PART III. INDEX TO EXHIBITS.
ITEM 1. INDEX TO EXHIBITS
See Index to Exhibits (previously filed, incorporated herein by reference).
ITEM 2. DESCRIPTION OF EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description
No.
<S> <C>
1. Stock Exchange and Merger Agreement Between Tyrol Pines, Inc. and
Registrant (previously filed, incorporated herein by reference to
January 6, 2000 submission).
2. Articles of Merger Between Tyrol Pines, Inc. and Registrant
(previously filed, incorporated herein by reference to January 6,
2000 submission).
3. Articles of Incorporation of Registrant (f/k/a/Tyrol Pines, Inc.)
(previously filed, incorporated herein by reference to January 6,
2000 submission).
4. By-Laws of Registrant (f/k/a/Tyrol Pines, Inc.) (previously filed,
incorporated herein by reference to January 6, 2000 submission).
5. Subscription Agreements Between Global Capital Group, Inc. and
Registrant, and between Global Capital Management Group, Inc. and
Registrant (previously filed, incorporated herein by reference to
January 6, 2000 submission).
6. Consulting Agreement between Global Capital Management Group, Inc.
and Registrant (previously filed, incorporated herein by reference to
January 6, 2000 submission).
7. Subsidiaries of Registrant (previously filed, incorporated herein by
reference to January 6, 2000 submission).
</TABLE>
-27-
<PAGE> 28
<TABLE>
<S> <C>
8. Merger Agreement between IEMI (Nevada) and Broward Recycling.
9. Stock Transfer Ledger of Tirol Pines.
</TABLE>
-28-
<PAGE> 29
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC.
By: /s/ Harold Solomon
------------------------------
Harold Solomon
President
Dated: September 29, 2000
-29-
<PAGE> 30
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE> 31
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
INDEPENDENT AUDITORS' REPORT 1
CONSOLIDATED BALANCE SHEET 2
CONSOLIDATED STATEMENT OF OPERATIONS 3
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 4
CONSOLIDATED STATEMENT OF CASH FLOWS 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6 - 9
</TABLE>
<PAGE> 32
BAUM & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
1515 UNIVERSITY DRIVE - SUITE 209
CORAL SPRINGS, FLORIDA 33071
(954) 752-1712
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
HOLLYWOOD, FLORIDA
WE HAVE AUDITED THE ACCOMPANYING BALANCE SHEETS OF INTERNATIONAL ENVIRONMENTAL
MANAGEMENT, INC. AND SUBSIDIARY AS OF DECEMBER 31, 1999 AND 1998 AND THE
RELATED STATEMENTS OF OPERATIONS, STOCKHOLDERS' EQUITY AND CASH FLOWS FOR THE
YEARS ENDED DECEMBER 31, 1999 AND 1998. 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 AUDIT.
WE CONDUCTED OUR 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. WE BELIEVE THAT OUR AUDIT PROVIDES 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 INTERNATIONAL ENVIRONMENTAL
MANAGEMENT, INC. AND SUBSIDIARY AS OF DECEMBER 31, 1999 AND 1998 IN CONFORMITY
WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
/s/ BAUM & COMPANY, P.A.
-------------------------------
JULY 15, 2000
CORAL SPRINGS, FLORIDA
<PAGE> 33
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 AND 1998
ASSETS
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Current Assets
Cash on hand $ 1,571 $ 1,856
Inventory 19,167 4,728
Receivables 126,500 - 0 -
--------- ---------
147,238 6,584
Property, Plant and Equipment
(Net of $108,920 and $109,199 of accumulated depreciation,
respectively) 170,473 141,485
Other Assets
Deferred costs (net of $1,227 and $640 of accumulated
amortization, respectively) 5,983 6,570
Deposits 340 340
--------- ---------
Total Assets $ 324,034 $ 154,979
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes Payable - Current Portion $ - 0 - $ 111,831
Accounts payable and accrued expenses 8,203 82,604
Cash overdraft 2,818 3,411
Customer deposits 18,152 23,284
Payroll taxes 6,784 - 0 -
Shareholders' Loans - 0 - 160,280
--------- ---------
Total Current Liabilities 35,957 381,410
Long Term Liabilities
Notes Payable 187,433 112,882
--------- ---------
Total Liabilities 223,390 494,292
--------- ---------
Stockholders' Equity
Common Stock, $.001 Par Value 3,500,000 and 2,500,000 Shares, respectively,
authorized 25,000,000 Issued and
Outstanding 3,500 2,500
Additional paid in capital 679,471 23,668
Accumulated deficit (582,327) (365,481)
--------- ---------
Total Equity 100,644 (339,313)
--------- ---------
Total Liabilities and Stockholders' Equity $ 324,034 $ 154,979
========= =========
</TABLE>
SEE ACCOUNTANTS' REPORT AND ACCOMPANYING FOOTNOTES
-2-
<PAGE> 34
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31,1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
Revenues $ 661,729 $ 560,152
Cost of Goods Sold 457,830 429,462
----------- ----------
Gross Profit 203,899 130,690
----------- ----------
Salaries and Wages 164,360 68,440
Legal and Accounting 12,224 82,838
Other General and Administrative Expenses 144,500 139,366
----------- ----------
Total Operating Expenses 321,084 290,644
----------- ----------
Income (Loss) Before Other Income and (Expense)
and Provision for Income Taxes (117,185) (159,954)
Other Income (Expense)
Interest Expense (32,865) (33,696)
----------- ----------
Income (Loss) Before Provision For Income Taxes (150,050) (193,650)
Provision for Income Taxes - 0 - - 0 -
----------- ----------
Net Income (Loss) (150,050) (193,650)
=========== ==========
Loss Per Common Share (0.0546) (0.1019)
=========== ==========
Weighted Average Common Shares Outstanding 2,750,000 1,900,000
=========== ==========
</TABLE>
SEE ACCOUNTANTS' REPORT AND ACCOMPANYING FOOTNOTES
-3-
<PAGE> 35
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN ACCUMULATED
# SHARES AMOUNT CAPITAL DEFICIT
--------- ------- -------- -----------
<S> <C> <C> <C> <C>
December 31, 1997 1,000,000 $1,000 $ 25,000 $(171,458)
Issuance of common stock 1,500,000 1,500
Adjustments to capital to reflect
acquisition of subsidiary -- (1,432) (373)
Net (Loss) December 31, 1998
--------- ------ -------- ---------
December 31, 1998 2,500,000 $2,500 23,668 (365,481)
--------- ------ --------- ---------
Issuance of common stock 1,000,000 1,000 655,803 --
Distribution to Shareholders -- (66,796)
Net (Loss) December 31, 1999 (150,050)
--------- ------ -------- ---------
December 31, 1999 3,500,000 $3,500 $679,471 $(582,327)
========= ====== ======== =========
</TABLE>
SEE ACCOUNTANTS' REPORT AND ACCOMPANYING FOOTNOTES
-4-
<PAGE> 36
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOW
FOR THE YEAR ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Cash Flow from Operating Activities
Net (Loss) $(150,050) $(193,650)
Adjustments to reconcile net loss to net cash
used for operating activities:
Depreciation 9,512 6,984
Amortization 587 640
Changes in assets and liabilities:
(Increase) in inventory (14,439) (220)
(Increase) in receivables (126,500) - 0 -
Decrease in loans receivable 34,500 - 0 -
(Decrease) Increase in notes payable (146,331) 44,579
(Decrease) Increase in accounts payable (74,401) 42,026
(Decrease) in cash overdrafts (593) (3,110)
(Decrease) in customer deposits (5,132) (3,616)
(Decrease) Increase in shareholder loans (160,280) 41,892
Increase in taxes payable 6,784 - 0 -
--------- ---------
Net cash used in operating activities (626,343) (64,475)
--------- ---------
Cash flows from investing activities
Acquisition of property, plant, and equipment (38,500) - 0 -
--------- ---------
Cash flows from financing activities:
Proceeds from additional paid-in capital and
common stock 656,803 68
Distributions to shareholders (66,796) - 0 -
Proceeds from notes and loans 74,551 71,946
--------- ---------
Net cash flows from financing activities 664,558 72,014
--------- ---------
Net increase (decrease) in cash (285) (44)
Cash - beginning 1,856 1,900
--------- ---------
Cash - ending $ 1,571 $ 1,856
========= =========
</TABLE>
SEE ACCOUNTANTS' REPORT AND ACCOMPANYING FOOTNOTES
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<PAGE> 37
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS AND ORGANIZATION
IEMI is in the business of collecting and processing scrap metal
through its wholly-owned subsidiary Broward Recycling Inc. (a Florida
Corporation). IEMI was organized in 1998. On June 16, 1998, IEMI
acquired the non-operating public shell of Tirol Pines, a Nevada
corporation, in a transaction accounted for as as recapitalization.
The only former shareholder of IEMI received 1,500,000 shares common
stock representing a majority of the company's outstanding shares.
Also on June 16, 1998, the company entered into a merger agreement
with Broward Recycling, Inc. (BRI), a company incorporate d in the
state of Florida on July 1, 1981 and which was wholly-owned by the
former shareholder of IEMI. The objective of the two transactions was
to offer the shares of BRI to the public. The operations of BRI would
represent the sole operations of the company, with the former
shareholder of IEMI and BRI having majority ownership and operating
control of the company.
On July 1, 1999, the sole shareholder of BRI legally transferred his
interests in BRI to IEMI. As the two entities were under common
control, the transfer was accounted for at historical cost in a manner
similar to a pooling of interests. Following the transaction, BRI
became a wholly-owned subsidiary of IEMI.
BASIS OF PRESENTATION
These financial statements present the operations of IEMI and BRI on a
consolidated basis as though the companies had been combined from the
beginning of the periods presented. The effects of all significant
intercompany accounts and transactions have been eliminated.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiary Broward Recycling, Inc. All
significant intercompany accounts and transactions have been
eliminated.
ORGANIZATIONAL COSTS
The Company and its subsidiaries are amortizing their deferred costs
over a five year period on a straight line basis. Amortization expense
for the year ended December 31, 1999 was $587.
USE OF ESTIMATES
The accounting and reporting policies of the Company are in conformity
with generally accepted accounting principles. The presentation 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 disclosures
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the period. Actual
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<PAGE> 38
results can differ from those estimates.
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
Inventories (stated at the lower of cost or market value) consist of
scrap metal.
FIXED ASSETS
Fixed Assets are stated at cost and depreciated over their estimated
allowable useful lives (5 to 39 years), utilizing both the
straight-line and declining balance methods. Expenditures for major
renewals and betterments that extend the useful lives of fixed assets
are capitalized. Expenditures for maintenance and repairs are charged
to expense as incurred.
CUSTOMER DEPOSITS
The Company obtained advances and deposits from certain vendors for
working capital purposes. These deposits are periodically applied to
accounts receivable.
Revenue Recognition
Revenue is recognized upon the sale of scrap metal.
Earnings (Loss) Per Share
Primary earnings per common share are computed by dividing the net
income (loss) by the weighted average number of shares of common stock
outstanding during the year. The number of shares used for the fiscal
year ended December 31, 1999 was 2,750,000.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
1999 1998
--------- --------
<S> <C> <C>
Land $ 50,000 $ 50,000
Building 127,058 127,058
Machinery and equipment 90,615 73,536
Furniture and fixtures 11,720 - 0 -
--------- --------
Total 279,393 $250,594
Less: Accumulated Depreciation (108,920) ( 109,109)
--------- --------
Net Property Plant and Equipment $ 170,473 141,485
========= ========
</TABLE>
NOTE 3 - LEASING COMMITMENTS
The Company has entered into various leases for equipment in 1999
under agreements classified as capital leases. Assets under capital
leases in accordance with FASB 13 are capitalized using interest
-7-
<PAGE> 39
rates appropriate at the inception of the lease.
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 3 - LEASING COMMITMENTS (CONTINUED)
The following is a schedule of future minimum lease payments
under the capital leases together with the present value of
the net minimum lease payments as of December 31, 1999.
<TABLE>
<S> <C>
Year ending December 31:
2000 $ 9,252
2001 8,065
2002 8,042
2003 8,623
-------
Total future minimum lease payments $33,982
=======
</TABLE>
NOTE 4 - NOTES PAYABLE
Notes Payable consist of the following:
<TABLE>
<S> <C>
Note Payable, individual, 12.9% interest, secured by mortgage
on Company land and building, monthly payments $1,460, matures
September 2013. The principal and interest of the 1997
balance was refinanced in 1998 $ 112,552
Note incurred to settle a litigation
payable in monthly installments of $1,200
Unsecured and non-interest bearing 38,400
Capitalized equipment leases secured by
equipment 36,481
---------
Total notes payable and leases payable $ 187,433
=========
</TABLE>
NOTE 5 - INCOME TAXES
Under FASB 109 deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing
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<PAGE> 40
assets and liabilities and their respective tax bases. The Company has
net operating losses (NOL's) of
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 5 - INCOME TAXES (CONTINUED)
approximately $300,000 expiring through 2014.
<TABLE>
<S> <C>
Deferred tax benefit $ 100,000
Valuation allowance (100,000)
-----------
Net Benefit $ - 0 -
===========
</TABLE>
Due to uncertainty of utilizing the NOL and recognizing the deferred
tax benefit an offsetting valuation allowance has been provided.
NOTE 6 - CAPITAL TRANSACTIONS
On May 22, 1998, the Company amended its Articles of Incorporation to
increase its authorized shares of common stock from 25,000 shares to
25,000,000. Additionally the Board of Directors approved a 40 to 1
forward stock split of its common stock thereby increasing the number
of outstanding shares from 25,000 to 1,000,000. A further 1,500,000
shares were issued on June 16, 1998, and 1,000,000 shares were issued
during 1999.
NOTE 7 - PRIVATE PLACEMENT MEMORANDUM
The Company pursuant to Regulation D of the Securities and Exchange
Act of 1933 conducted a private placement of $1,000,000. The offering
consists of 2,000,000 shares at $.50 per share.
NOTE 8 - SUPPLEMENTAL CASH FLOW INFORMATION
The Company acquired $34,553 of equipment subject to a capitalized
lease obligation.
<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Taxes paid $ - 0 - $ - 0 -
Interest expense $ 12,064 $ - 0 -
</TABLE>
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