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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
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 UNDER SECTION 12(b) OF THE ACT:
NONE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, Par Value $0.001 Per Share
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Check whether the issuer (1) 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 (2) has been
subject to such filing requirements for the past 90 days. Yes X No___
Check if there is no disclosure of delinquent filers in response to Item 405 of
<PAGE> 2
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $383,255
State the aggregate market value of the and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 day:
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 highest of the Company's stock was
$8.75 per share. The 52 week low occurred in February of 1999, at $7.00 per
share.
State the number of shares outstanding of each of the issuer's classes of common
equity, as of December 31, 1999 - the number of outstanding shares is one
million (1,000,000)
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TABLE OF CONTENTS
PART I
<TABLE>
<S> <C> <C>
ITEM 1. DESCRIPTION OF BUSINESS ......................................... 4
ITEM 2. DESCRIPTION OF THE PROPERTY ..................................... 9
ITEM 3. LEGAL PROCEEDINGS ............................................... 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ............. 9
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS ....... 9
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION ....... 10
ITEM 7. FINANCIAL STATEMENT ............................................. 11
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES ........................................ 12
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS .... 12
ITEM 10. EXECUTIVE COMPENSATION .......................................... 15
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT .. 15
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .................. 17
ITEM 13. FINANCIAL STATEMENTS AND EXHIBITS ............................... 18
</TABLE>
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
The Company was incorporated under the laws of the State of Nevada on
September 6, 1995. One July 1, 1999, the Company acquired all of the issued and
outstanding common stock of Broward Recycling, Inc. ("BRI") through the
statutory merger of BRI's parent company, International Management, Inc., of
Florida. The Company's one subsidiary, BRI, was incorporated under the laws of
the State of Florida on 7/10/81. 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.
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, 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
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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 accept in some future 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 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.
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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.
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. 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 goods.
This would enable the Company to ship large volumes of material to major
consumers.
The company has signed two non-binding letters of intent. They are with
two local recycling companies. The letters are general statements of intent, the
material term of which is that IEMI will acquire all of the stock of each
company. One was signed in June 1999 and the other in September 1999. No final
purchase agreement has been executed in regard to either letter of intent. The
parties have informally agreed that the acquisitions will not go forward until
after IEMI is fully approved for trading. Accordingly, IEMI has not received
audited financial information from either proposed acquisition target.
Accordingly, audited financial information is not available at this time, and
will not be available until after the company obtains its NASDAQ Bulletin Board
listing.
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.
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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 businesses 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 is 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 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 or 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
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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 has entered into two
letters-of-intent, one with a smaller operation and one with a larger operation,
calling for mergers with the referenced companies . The Company believes certain
other dealers in the local market may be prepared for merger as well. 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.
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ITEM 2. DESCRIPTION OF PROPERTY
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 3. 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no submissions of matters to a vote of security holders.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
At December 31 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 highest 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.
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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.
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,
it intends to pay dividends as soon as business operations permit.
ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
ASSUMPTIONS
The following management's discussion and analysis or plan of operation
is based on the audited financial statements exhibit. The audited financial
statements reflect the financial condition of the Company for the periods ended
December 31, 1999 & 1998
RESULTS OF OPERATIONS
Year Ended December 31, 1999 Compared to Year Ended December 31, 1998
Total sales of the Company for the year ended December 31, 1999 increased
by $358,255 from sales for the year ended December 31, 1997 as the company was
developmental state. This increase was due to the acquisition of Broward
Recycling and entry into the metals/scrap market.
Cost of goods sold increased $267,780 and the gross profit increased by $115,465
for the year ended December 31, 1999 as compared to the previous year. Gross
profit as a
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percentage of revenue for 1999 increased to 30%.
Net income increased $8,370 to ($161,402) from ($170,772) for the year
ended December 31, 1999 as compared to the previous year. Management does
consider this a material increase. These numbers essentially reflect the costs
of operating the business, versus a developmental stage company, prior to
commencing operations.
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 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
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 Corporation.
ITEM 7. FINANCIAL STATEMENTS
The following table sets forth the current year and last two years of operating
data 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 $ 383,255
TOTAL COSTS AND EXPENSES $ 721,451 $ 649,606 $ 264,842
PROFIT (LOSS) FROM OPERATIONS $ (3,273) $ (89,454) $(149,377)
NET PROFIT (LOSS) APPLICABLE TO COMMON
SHAREHOLDERS $ (3,273) $ (89,454) $(161,402)
NET PROFIT (LOSS) PER COMMON SHARE $ (0.0013) $ (0.0358) $ (0.0587)
BALANCE SHEET DATA
YEAR ENDED DECEMBER 31,
WORKING CAPITAL $(254,031) $(374,826) $ (32,814)
</TABLE>
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<TABLE>
<S> <C> <C> <C>
TOTAL ASSETS $ 155,644 $ 189,479 $ 289,004
TOTAL LIABILITIES $ 301,375 $ 528,792 $ 321,818
STOCKHOLDERS' EQUITY (ACCUMULATED DEFICIT) $(145,731) $(339,313) $ 32,814
</TABLE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. 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.
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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, 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
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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.
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 Bally'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 Bally'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
sales 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
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Undergarment in various management capacities. For the past year he has been
responsible for their locating and building a facility in Uman, Mexico.
ITEM 10. EXECUTIVE COMPENSATION.
Mr. Solomon is 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 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth, as of February 6, 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>
- -------------------------------------------------------------------------------------------------------
NUMBER OF SHARES PER CENT OF
CLASS OF SHARES BENEFICIAL OWNER BENEFICIALLY HELD BENEFICIAL OWNERSHIP
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Harold Solomon 1,500,000 51%
5801 Wiley Street
Hollywood
FL 33023
- -------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Common Global Capital 1,225,000 7.5%
Group, Inc.
225 Mizner Blvd
Boca Raton
FL 33432
David Van Vort
President
- -------------------------------------------------------------------------------------------------------
Common Global Capital 215,000 7.166%
Management
Group Inc
14999 W. Palmetto
Park Road
Boca Raton
FL 33486
William Haynes
President
- -------------------------------------------------------------------------------------------------------
Common DVV Investments Inc. 180,000 6%
428 Wavecrest Ct.
Boca Raton
FL 334323
Jeff Monroe
President
- -------------------------------------------------------------------------------------------------------
Common Palmetto Art 130,000 4.33%
Associates, Inc.
3094 Westbury H
Deerfield Beach
FL 33442
Karina Vidal
President
- -------------------------------------------------------------------------------------------------------
Common Q Capital, Inc. 125,000 4.166%
5551 Marbella Dr.
Boca Raton
FL 33433
Karina Vidal
President
- -------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Common Opportunity Int'l 125,000 4.166%
Group, Inc.
9953 Ramblewood
Drive
Coral Springs
FL 33071
Rochelle Gross
President
- -------------------------------------------------------------------------------------------------------
</TABLE>
The shareholders identified above other than Mr. Solomon comprise a group
as that term is defined in Section 13(d)(3) of the Exchange Act.
ITEM 12. 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, 1999, 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. In addition, Global received the right to purchase up to
$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 are to be issued effective January 29, 2000. The
accounting consequences are set forth in Note 7 to 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, 1999. The parties to the loans are as follows (1998
dollar amount of loan followed by name): $18,194, Betsy Firger, daughter of
former mortgage holder; $25,000, Sun Financial; $115,134, George Klien,
shareholder; $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
-17-
<PAGE> 18
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 13. EXHIBITS AND REPORTS ON FORM 8K
Please see attached Consolidated Financial Statements - December 31, 1999
and 1998 - for International Environmental Management, Inc.
The exhibits that are required to be filed herein are incorporated by
reference to the Form 10-SB-a (See General Form for Registration of Securities
of Small Issuers Under section 12(b) or 12(g) of the Securities Exchange Act of
1934).
-18-
<PAGE> 19
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange
Act, 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
By: /s/ George R. Keller, Jr.
--------------------------------
George R. Keller, Jr.
Director
By: /s/ Francis LaTorre
--------------------------------
Francis LaTorre
Director
By: /s/ Anthony Caliendo
--------------------------------
Anthony Caliendo
Director
By: /s/ Sam Benson
--------------------------------
Sam Benson
Director
Dated: March 29, 2000
-19-
<PAGE> 20
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC.
INDEX TO EXHIBITS
ITEM 1. INDEX TO EXHIBITS
See Index to Exhibits (previously filed Form 10 SB-a on January 6, 2000,
incorporated herein by reference)
ITEM 2. DESCRIPTION OF EXHIBITS
Exhibit Description
No.
1. Stock Exchange and Merger Agreement Between Tyrol Pines,
Inc. and Registrant
2. Articles of Merger Between Tyrol Pines, Inc. and Registrant
3. Articles of Incorporation of Registrant (f/k/a/Tyrol Pines,
Inc.).
4. By-Laws of Registrant (f/k/a/Tyrol Pines, Inc.).
5. Subscription Agreements Between Global Capital Group, Inc.
and Registrant, and between Global Capital Management Group,
Inc. and Registrant
6. Consulting Agreement between Global Capital Management
Group, Inc. and Registrant
7. Subsidiaries of Registrant
-20-
<PAGE> 21
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
<PAGE> 22
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report 1
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Stockholders' Equity 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6 - 9
</TABLE>
<PAGE> 23
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 sheet of International Environmental
Management, Inc. and Subsidiary as of December 31, 1999 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.
March 15, 2000
Coral Springs, Florida
<PAGE> 24
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999
ASSETS
<TABLE>
<S> <C>
Current Assets
Inventory $ 19,167
Property, Plant and Equipment
(Net of $5,859 of
accumulated depreciation) 269,390
Other Assets
Organizational cost (net of
$693 of accumulated amortization) 107
Deposits 340
----------
447
----------
Total Assets $ 289,004
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes Payable - Current Portion $ 26,592
Accounts Payable and Accrued Expenses 117,486
Cash Overdraft 1,246
Customer Deposits 18,152
----------
Total Current Liabilities $ 163,476
Long Term Liabilities
Notes Payable 158,342
----------
Total Liabilities 321,818
----------
Stockholders' Equity
Common Stock, $.001 Par Value 25,000,000 Shares
Authorized 3,500,000 Issued and Outstanding 3,500
Additional paid in capital 422,772
Accumulated deficit (161,441)
Accumulated deficit during development stage (171,145)
----------
93,686
Less: Subscriptions Receivable (126,500)
----------
Total Equity 32,814
----------
Total Liabilities and Stockholders'
Equity $ 289,004
==========
</TABLE>
See accountants' report and accompanying footnotes
-2-
<PAGE> 25
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,1999 AND 1998
<TABLE>
<CAPTION>
DEVELOPMENT
STAGE
1999 1998
---------- ----------
<S> <C> <C>
Revenues $ 383,255 $ - 0 -
Cost of Goods Sold 267,790 - 0 -
---------- ----------
Gross Profit 115,465 - 0 -
---------- ----------
Salaries and Wages 145,110 100,000
Other General and Administrative
Expenses 119,732 70,772
---------- ----------
Total Operating Expenses 264,842 (170,772)
---------- ----------
Income (Loss) Before Other Income and
(Expense)and Provision for Income
Taxes (149,377) (170,772)
Other Income(Expense) - 0 -
Interest Expense (12,064) - 0 -
---------- ----------
Income (Loss) Before Provision For
Income Taxes (161,441) (170,772)
Provision for Income Taxes - 0 - - 0 -
---------- ----------
Net Income (Loss) $ (161,402 (170,772)
========== ==========
Loss Per Common Share $ (.0587) NIL
========== ==========
Weighted Average Common Shares
Outstanding 2,750,000 1,900,000
========== ==========
</TABLE>
See accountants' report and accompanying footnotes
-3-
<PAGE> 26
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, AND 1998
<TABLE>
<CAPTION>
ACCUMULATED
COMMON STOCK ADDITIONAL DEFICIT DURING
------------------- PAID-IN ACCUMULATED DEVELOPMENT
# SHARES AMOUNT CAPITAL DEFICIT STAGE
--------- ------- --------- ----------- --------------
<S> <C> <C> <C> <C> <C>
December 31, 1998 2,500,000 $ 2,500 $ (2,432) -- $ (171,145)
Issuance of common stock 1,000,000 1,000 499,000 -- --
Adjustments to capital to
reflect acquisition of
subsidiary -- (73,796) -- --
Net (Loss) December 31, 1999 (161,441)
--------- ------- --------- ----------- --------------
December 31, 1999 3,500,000 $ 3,500 $ 422,772 $ (161,441) $ (171,145)
========= ======= ========= =========== ==============
</TABLE>
See accountants' report and accompanying footnotes
-4-
<PAGE> 27
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
DEVELOPMENT
STAGE
1999 1998
------------ ------------
<S> <C> <C>
Cash Flow from Operating Activities
Net (Loss) $(161,441) $(170,772)
Adjustments to reconcile net loss
to net cash used for operating
activities:
Depreciation and amortization 6,019 160
Changes in assets and liabilities
(Increase) in inventory (19,167) - 0 -
(Increase) in deposits (340) - 0 -
Increase in accounts payable
and accrued expenses 16,584 100,100
Increase in cash overdrafts 1,246 - 0 -
Increase in customer deposits 18,152 - 0 -
(Increase) decrease in loan
receivable 34,500 (34,500)
------------ ------------
Net cash used in operating activities (104,447) (105,012)
------------ ------------
Cash flows from investing activities
Acquisition of property, plant and
equipment (244,694) - 0 -
------------ ------------
Cash flows from financing activities
Proceeds from common stock 500,000 68
Proceeds from notes and leases
payable 160,283
Reduction in notes and leases payable (5,902)
Proceeds from loans payable (105,000) 105,000
Subscriptions receivable (126,500)
Adjustments to capital to reflect
acquisition of subsidiary (73,796)
------------ ------------
Net cash flows from financing
activities 349,085 105,068
------------ ------------
Net increase (decrease) in cash (56) 56
Cash - beginning 56 - 0 -
------------ ------------
Cash - ending $ - 0 - $ 56
============ ============
</TABLE>
See accountants' report and accompanying footnotes
-5-
<PAGE> 28
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
The Company was organized in the State of Nevada on September 6, 1995.
On June 16, 1998, the Company acquired the net assets of International
Environmental Management, Inc. in a reverse merger and changed its
name to International Environmental Management, Inc. The Company was
formerly named Tirol Pines, Inc. until June 16, 1998.
On July 1, 1999, the Company entered into a merger agreement with
Broward Recycling, Inc. (a Florida Corporation). Though this
acquisition was treated as a separate legal transaction, it was
considered by all parties as a second part of the above mentioned
merger. No further consideration changed hands. Broward Recycling,
Inc. is in the business of collecting and processing scrap metal.
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 is amortizing its organization costs over a five year
period on a straight line basis. Amortization expense for the years
ended December 31, 1999 and 1998 was $160.
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 results can differ from those estimates.
INVENTORIES
Inventories (stated at the lower of cost market) consist of scrap
metal.
-6-
<PAGE> 29
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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 various customers 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
years ended December 31, 1999 and 1998 were 2,750,000 and 1,900,000,
respectively.
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<S> <C>
Land $ 50,000
Building 140,000
Machinery and Equipment 85,249
---------
Total 275,249
Less: Accumulated Depreciation (5,859)
---------
Net Property Plant and Equipment $ 269,390
=========
</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 rates
appropriate at the inception of the lease.
The following is a schedule of future minimum lease payments under
-7-
<PAGE> 30
the capital leases together with the present value of the net minimum
lease payments as of December 31, 1999.
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 3 - LEASING COMMITMENTS (CONTINUED)
<TABLE>
<CAPTION>
Year ending December 31:
<S> <C>
2000 $ 9,252
2001 8,065
2002 8,042
2003 8,623
--------
Total future minimum lease payments $ 33,982
========
</TABLE>
NOTE 4 - NOTES PAYABLE
<TABLE>
<S> <C>
Notes Payable consist of the following:
Note Payable, individual, 12.9% interest, secured by
mortgage on Company land and building, monthly payments
$1,460, matures September 2013. The principle and
interest rate 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 33,982
--------
Total notes payable and leases payable 184,934
Current portion 26,592
--------
Non current portion $158,342
========
</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 assets
and liabilities and their respective tax bases. The Company has net
operating losses (NOL's) of approximately $300,000 expiring through
2014.
<TABLE>
<S> <C>
Deferred tax benefit $100,000
Valuation allowance (100,000)
--------
Net Benefit $ - 0 -
========
</TABLE>
-8-
<PAGE> 31
INTERNATIONAL ENVIRONMENTAL MANAGEMENT, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 5 - INCOME TAXES (CONTINUED)
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.
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>
-9-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 1999 AUDITED
FINANCIAL STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-K.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 19,167
<CURRENT-ASSETS> 19,167
<PP&E> 275,696
<DEPRECIATION> (5,859)
<TOTAL-ASSETS> 289,004
<CURRENT-LIABILITIES> 163,476
<BONDS> 0
0
0
<COMMON> 3,500
<OTHER-SE> 285,504
<TOTAL-LIABILITY-AND-EQUITY> 289,004
<SALES> 383,255
<TOTAL-REVENUES> 383,255
<CGS> (267,790)
<TOTAL-COSTS> (264,842)
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (149,377)
<INTEREST-EXPENSE> (12,064)
<INCOME-PRETAX> (161,441)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (161,441)
<EPS-BASIC> (.06)
<EPS-DILUTED> (.06)
</TABLE>
