FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
Universal Media Holdings, Inc.
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(Name of Small Business Issuer in its charter)
Delaware 22-3360133
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(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
110 Smithtown, Nesconset, NY 11767
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number (201) 804-8500
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Securities to be registered under Section 12(b) of the Act:
<TABLE>
<CAPTION>
Title of each class Name of each exchange on which
to be so registered each class is to be registered
<S> <C>
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</TABLE>
Securities to be registered under Section 12(g) of the Act:
Common Stock
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(Title of class)
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(Title of class)
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<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I PAGE
<S> <C>
Item 1 Description of Business 2
Item 2 Management's Discussion and Analysis or 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 14
Item 6 Executive Compensation 15
Item 7 Certain Relationships and Related Transactions 16
Item 8 Description of Securities 16
PART II
Item 1 Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters 17
Item 2 Legal Proceedings 18
Item 3 Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 18
Item 4 Recent Sales of Unregistered Securities 18
Item 5 Indemnification of Directors and Officers 19
</TABLE>
FINANCIAL STATEMENTS
See attached Financial Statements
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EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Description of Exhibit
--- ----------------------
<S> <C>
3.1 Certificate of Incorporation of Tyconda Minerals Corp., dated December
24, 1969
3.2 Agreement of Merger of Tyconda Minerals Corporation (Nevada) with and
into Tyconda Minerals Corp.(Delaware) dated December 30, 1969
3.3 Certificate of Amendment of Certificate of Incorporation, changing
corporate name to Hy-Poll Technology, Inc. dated October 28, 1983.
3.4 Reorganization Agreement, dated August 10, 1995
3.5 Certificate of Amendment of Certificate of Incorporation of Hy-Poll
Technology, Inc., changing corporate name to Universal Turf, Inc.,
dated September 21, 1995.
3.6 Certificate of Amendment of Certificate of Incorporation, changing
corporate name to Universal Media Holdings, Inc. dated November 8,
1999.
3.7 By-Laws of Universal Turf, Inc.
10.1 Indemnification Agreement with Michael S. Krome
10.2 Indemnification Agreement with James E. Neebling
10.3 Indemnification Agreement with James W. Zimbler
21.1 Subsidiaries of Registrant
23.1 Consent of Auditors
27 Financial Data Schedule
</TABLE>
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
Office
Universal Media Holdings, Inc. ("we", "us" or "the Company") currently maintains
its principal office at 10 Industrial Road, Carlstadt, New Jersey 07726, where
its telephone number is (201) 804-8500 and its facsimile number is (201) 804-
8585. On February 14, 2000 ,we have recently entered into an agreement with
E-Trans Logistics, Inc. (E-Trans"), under which E-Trans became a wholly owned
subsidiary of United Media Holdings, Inc. Our new office is located at the
E-Trans facility at 10 Industrial Way, Carlstadt, New Jersey, where there are
offices and a warehouse.
Organization/Historical Background
The Company was originally incorporated in Delaware as Tyconda Minerals Corp. in
December of, 1969. On February 11, 1970, the Tyconda Minerals Corp. (Delaware)
merged with Tyconda Minerals Corporation (Nevada), with Tyconda Minerals Corp.
(Delaware) as the surviving corporation. On November 2, 1983, the Company filed
a Certificate of Amendment to its Certificate of Incorporation changing its
corporate name to Hy-Poll Technology, Inc. That Certificate of Amendment also
changed the capital structure of the corporation from an authorization to issue
5,000,000 shares of Common Stock with a par value of $.01 per share, to an
authorization to issue 200,000,000 shares of Common Stock with a par value of
$.0001 per share.
On December 21, 1995, the Company amended its Certificate of Incorporation
changing its corporate name to Universal Turf, Inc. The Company amended its
Certificate of Incorporation again on November 8, 1999, changing its corporate
name to Universal Media Holdings, Inc. ("UMH").
Business- Corporate Structure
As Universal Turf, Inc., our business was based on the marketing, installation
and maintenance of synthetic surface material for sports and recreational
fields. While that business has been profitable, we have changed our primary
business direction to the entertainment and Internet industries.
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On February 14, 2000, we entered into an agreement with E-Trans-Logistics, Inc.
("E-Trans") whereby we purchased all issued and outstanding shares or Common
Stock of E-Trans with Universal Media Holding, Inc. Common Stock. E-trans, now
our wholly owned subsidiary, is a trucking, transport and logistics company
having its offices and warehouse in Carlstadt, New Jersey. Since logistics and
transportation will be the focus of our business, we plan to rename the Company
E-Trans Logistics, Inc. sometime during the second quarter of 2000.
Business Operations
General Business Plan of UMH
Our business plan covers (i)the logistics field, (ii) the synthetic grass (turf)
business, and (iii)certain areas of the entertainment field. Because E-Trans,
our subsidiary, has a profitable and expanding business, we have made the
business of E-Trans our primary focus. We are in the process of moving our
office operations to their Carlstadt New Jersey location.
Logistics business
E-Trans (formerly Gerard Express, Inc.) is transport and trucking company with a
forty year history. As a general commodities carrier, it transports materials
and goods in the areas of Philadelphia, New Jersey, Connecticut and New York
metropolitan areas. E-Trans is able to service other markets through strategic
business alliances which it has formed with several like business in different
geographic regions. Presently, through these alliances, E-Trans is able to cover
Ohio, Virginia, Florida, Georgia, and will soon be covering the West Coast
The E-Trans strategic plan consists of the following:
a. Corporate positioning
b. Marketing/Sales
c. Operations/Services
d. Technology
e. Strategic Alliances
f. Acquisitions
Each segment of the plan outlines the specific investment, return on investment
and implementation needed to institute the plan.
Corporate Positioning
E-Trans is structured as a personalized logistics company with multiple
capabilities. The logistics and transport field is highly competitive on a
worldwide level, and Management believes that E-Trans is well equipped to
compete in the international marketplace. E-Trans is able to offer many of same
services offered by much larger logistics and trucking companies at a
competitive or greatly reduced cost to the customer.
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Our strategic plan to position E-Trans in the marketplace includes careful
staffing and thorough training of our personnel. E-Trans is on a course of
updating its customer accessibility and use by implementing the newest
technologies, and we intend to continue in that direction. A new systems
technology called "SHIP EGIS", which will be ready for installation during the
second quarter of 2000, will provide E-Trans with the ability to communicate
with its customers electronically, thereby optimizing routing and rapid
information exchange. (The "SHIP EGIS" system is actually scheduled for
installation in late April, 2000.) E-Trans will also rely on a marketing
campaign which will include direct mail, telemarketing and commissioned sales.
It is the intention of Management to encourage all levels of personnel,
particularly the senior management of E-Trans, participating in the building of
transportation organizations and industry associations and shipper-carrier
relationships.
Acquisitions
E-Trans is currently in negotiations with 3 small carriers with sales ranging
from 1.5 million to 6 million in revenue. Its objective is to acquire companies
that meet the following criteria.
a. A break-even to marginal profitability
b. A well positioned geographically (should be strategically
located, in the opinion of Management)
c. Minimal Assets
d. Ability to integrate into current infrastructure
Strategic Alliances
E-Trans intends to establish strategic alliances with competitors, not asset
based logistics providers, and shippers. It is Management's opinion that these
alliances will encourage a favorable market share impact in our core area.
E-Trans has recently completed its "Gateway Alliance" which immediately opened
lanes to the Midwest, West Coast, and Southern U.S. E-Trans is currently in
negotiations with other alliances in the following areas:
Air Freight Services
Major Third Party Logistics provider
Major Railroad
Steamship Line
Shippers
Improvements in Accessibility
Management believes that to be competitive in this industry, it is necessary to
upgrade the level of communication and accessibility. A new system that we will
be employing addresses that objective. The system, called SHIPEGIS will provide
the following:
Visual Mobile Communication
Visual Scheduling and Dispatch
Visual Job Tracking
Visual Mapping and Plotting
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Visual Customer Order Information
The "SHIP EGIS" system is scheduled to be integrated with the NEXTEL Radio
system in late May. This will allow for data transfer between central dispatch
and the E-Trans drivers.
Operations/Services
E-Trans will offer services in multiple transportation sectors which promote
multiple levels of services.
E-Trans menu includes:
Regional Truck Load
Tri-State LTL
Gateway Service LTL Alliance
Texas
Chicago
Florida
California
New England
Pennsylvania/Ohio
Consolidation Services
Warehousing
Pier Container Transfer
Expedited Freight
Each service will have a specific operating and financial model. The "SHIP EGIS"
routing software will assist in minimizing cost and improving equipment
utilization.
Synthetic grass (turf) business
We distribute synthetic grass surfaces for use in school fields, public and
private sports fields, and the like. We are the sole distributor and part equity
owner of Sportsfields Turf International, Inc., and as such, we offer synthetic
surfaces to the public and private sectors. In the public sector, the entity
specifies its required standards for minimum performance, and various
manufacturers and distributors respond with a bid. The public entity bases its
decision on a combination of factors, but most often, the award or contract goes
to the lowest bidder. The private sector does not follow a formal bid process.
Typically, potential purchasers review price quotations or literature and
negotiate with providers of synthetic grass.
We have entered into a Letter of Intent to sell this business to Elmar Holdings,
Inc., for stock.
Entertainment and media business
We were briefly engaged in the entertainment industry. As of the date of this
Registration Statement, an agreement that was executed between us and Fortune
Media has been rescinded.
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Competition
There are large numbers of competitors in the trucking and logistics business.
They range from the very small companies with one, two or a small number of
trucks to the very large, with hundreds of vehicles.
Number of Employees for UMH
<TABLE>
<CAPTION>
Department/Job Function Number of Employees
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<S> <C>
Executives 3
Support Staff 1
---
Total 4
</TABLE>
Number of Employees for E-Trans
<TABLE>
<CAPTION>
Department/Job Function Number of Employees
----------------------- -------------------
<S> <C>
Executives 2
Support Staff 2
Drivers/Warehouseman/Mechanics 20
---
Total 24
</TABLE>
Cautionary Factors That May Affect Future Results
We undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any future disclosures we make on related subjects
in our 10-QSB, 8-KSB, and 10-KSB reports to the SEC.
We provide the following cautionary discussion of risks, uncertainties and
possible inaccurate assumptions relevant to our business and our products. These
are factors that we think could cause our actual results to differ materially
from expected results. Other factors besides those listed here could adversely
affect us.
Limited Operating History. Although we were organized in 1969, we have
redirected the focus of the company, and as a result, we have not yet been
profitable. Accordingly, investors should consider us to be essentially a new,
developing company. As a new, developing company, our operations are subject to
all of the risks inherent in the establishment of a new business enterprise,
including the lack of significant operating history. There can be no assurance
that our future operations will be profitable. Revenues and profits, if any,
will depend upon various factors, including our ability to finance mortgage
loans, secure mortgage loan applications, process mortgages, and generally do
business in a sufficient volume to provide sufficient cash margins
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to cover our operating costs. Our securing of sufficient capital is crucial.
Without sufficient capital we cannot meet our projected goals or accomplish our
business plans; and such failure could have a material adverse affect on us and
the value and price of our publicly traded securities.
Liquidity and Working Capital Risks; Need for Additional Capital to Finance
Growth and Capital Requirements. We will seek additional funds and seek to raise
additional capital from public or private equity or debt sources to: (i) provide
working capital to meet our general and administrative costs until net revenues
make the business self-sustaining; (ii) exploit and expand such acquisitions. We
cannot give assurance that we will be able to raise any such capital on terms
acceptable to us or at all. Such financing may be upon terms that are dilutive
or potentially dilutive to our stockholders. If alternative sources of financing
are required, but are insufficient or unavailable, we will be required to modify
our growth and operating plans in accordance with the extent of available
funding.
Limitation of Liability and Indemnification of Officers and Directors. Our
officers and directors are required to exercise good faith and high integrity in
the management of Company affairs. Our Articles of Incorporation provide,
however, that the officers and directors shall have no liability to the
shareholders for losses sustained or liabilities incurred which arise from any
transaction in their respective managerial capacities unless they violated it in
good faith, engaged in intentional misconduct or knowingly violated the law,
approved an improper dividend or stock repurchase, or derived an improper
benefit from the transaction. As a result, a purchaser of the shares may have a
more limited right to action than he would have had if such provision were not
present. Our Articles and By-Laws also provide for the indemnification by the
Company of the officers and directors against any losses or liabilities they may
incur as a result of the manner in which they operate the Company's business or
conduct the internal affairs, provided that in connection with these activities
they act in good faith and in a manner which they reasonably believe to be in,
or not opposed to, the best interests of the Company, and their conduct does not
constitute gross negligence, misconduct or breach of fiduciary obligations. To
further implement the permitted indemnification, we have entered into Indemnity
Agreements with our current officers and directors and we will provide similar
agreements for future officers and directors.
Dependence on Key Personnel. Our future success will depend largely on the
efforts and abilities of our management, including especially Messrs. Zimbler,
Krome and Neebling. The loss of any of them or the inability to attract
additional, experienced management personnel could have a substantial adverse
affect on the Company; we have not obtained "key man" insurance policies on any
of our management and do not expect to obtain it on any of our future management
personnel, as employed. Our ability to implement our strategies depends upon our
ability to attract highly talented managerial personnel. There can be no
assurance that we will attract and retain such employees in the future. The
inability to hire and/or loss of key management or technical personnel could
materially and adversely affect our business, results of operations and
financial condition.
Government Regulation. Our business is subject to government regulation. (e.g.,
occupational safety and health acts, workmen's compensation statutes,
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unemployment insurance legislation, income tax and social security laws and
regulations, environmental laws and regulations, consumer safety laws and
regulations, etc.) as well as to governmental laws and regulations applicable to
small public companies and their capital formation efforts. Although we will
make every effort to comply with applicable laws and regulations, we can provide
no assurance of our ability to do so, nor can we predict the effect of those
regulations on our proposed business activities.
Anticipated Operating Losses. Assuming that we can obtain the financing to make
acquisitions and exploit them, we most likely will continue to suffer operating
losses until we can achieve a sufficient volume of mortgage loans to cover our
operating costs.
Competition. The logistics and transport industry is very competitive. Also,
entertainment industry is extremely competitive. We compete with other companies
that have greater technical expertise, financial resources and marketing
capabilities than us, and we may not be able to overcome competitive
disadvantages.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis should be read in conjunction with the
financial statements of the Company and summary of selected financial data for
United Media Holdings, Inc. as shown below. This discussion should not be
construed to imply that the results discussed herein will necessarily continue
into the future, or that any conclusion reached herein will necessarily be
indicative of actual operating results in the future. Such discussion represents
only the best present assessment of the management of the Company.
Overview
As indicated prior, the company's efforts have been redirected from the
synthetic grass business to that of transportation. Thus, the decline in
operational activities of the company is a result of this reduction in the its
efforts in the selling of synthetic grass surfaces and its acquisition of
E-Translogitics subsequent to the year end of the company.
Results of Operations
1999 Compared with 1998
Total revenues decreased to $241,207 from $1,753,096 as a result of the company
reducing its efforts from in the sale of synthetic grass surfaces, its primary
business during this period. Accordingly, the cost of revenues dropped from
$1,735,786 to $337,680 due to the decline in sales. General and Administrative
expenses only declined from $241,599 to $211,103 due to the fixed nature of
these items. The company has taken steps to reduce these expenses currently.
Also, during the year the company disposed of most of it fixed assets resulting
in a loss of $15,729.
Liquidity and Capital Resources
September 30, 1999 the company had cash and equivalents of $1012. Its cash
requirements for the next twelve months is $1,000,000, which the company
believes it can raise through financing secured by accounts receivables of its
acquisition, E-Translogistics and financing E-Translogistics has in place. Of
the $1,000,000, $550,000 is intended for the purchase of small logistic
companies with the remainder for working capital purposes including settling
debts with existing creditors. The company has no plans to purchase or sell
significant equipment or to increase personnel, except in conjunction with the
above acquisitions that have not yet be identified. Additionally the Company
intends to continue with its policies of selling off the transportation assets
and enter into short term arrangements with outside contractors
Plan of Operations
Our plan of operations for the next twelve months involves the expansion of the
transportation and logistics operations of the E-Trans-Logistics, Inc.
subsidiary. Our plan is threefold:
1. Build and expand the existing logistics operation through traditional
methods of acquiring.
2. Acquire additional companies in the logistics and web-servicing business.
3. Institute a web related services which we will provide for our customers.
It is our intention to merge the subsidiary, E-Trans Logistics, Inc., with
and into Universal Media Holdings, Inc. and to rename the surviving
corporation E-Trans Logistics, Inc.
Cash Requirements Our cash requirement for the next twelve months is $1,000,000,
which we believe we can raise through receivables and financing already in
place. These funds will be allocated as follows:
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<TABLE>
<S> <C>
Research and development of e-commerce: $ 200,000
Acquisition of small logistics companies and e-commerce website based
businesses: $ 550,000
General and Administrative: $ 150,000
Working Capital: $ 100,000
----------
$1,000,000
</TABLE>
During the next twelve months, we have no plans to purchase or sell significant
equipment. Nor do we plan to increase personnel by adding employees
Fiscal Condition for Prior 2 Years
Prior to 1999, our turf related operations was our main business.
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Selected Summary Financial Data of UMH (formerly Universal Turf, Inc.)
<TABLE>
<CAPTION>
YEAR ENDED: YEAR
----------------------- --------------
<S> <C> <C>
DEC. 31, DEC 31, DEC. 31
1997 1998 1999
</TABLE>
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ITEM 3. DESCRIPTION OF PROPERTY
Offices
The Executive Office is Nesconset. Operations are currently conducted out of 60
Brunswick Avenue, Edison, New Jersey. The space consists of office space and
warehouse space consisting of approximately 1,000 square feet. The Company also
uses the parking yard to park trailers. The building is shared with National
Expedite, Inc. The rent for the Company is $2,500.00 per month.
The executive offices consist of approximately 600 square feet, and include
three offices. The annual rent for 2000 is $7,200. The lease lasts for another
two years after October 1, 2000, with rent increases of $600, per annum for the
last two years.
The Company expects that the space for its executive office is sufficient for
its needs for the next twelve months. The space for its E-Trans Logistics
operations is expected to be sufficient for the next twelve months, unless the
Company makes a significant acquisition.
Warehouse
Our warehouse space is approximately 70,800 square feet and will be used for
storage and the loading of the trailers as well as mechanical repairs. Presently
it contains the following equipment; tools and other mechanical equipment, and
the necessary equipment to run a warehouse. All other equipment needed for our
operations is leased on an as needed basis in the following manner: Leasing of
trailers and tractors.
We anticipate that the office and warehouse space is adequate for the next
twelve months.
Real Estate Investments
At the present time, we have no intention or any interest in making investments
in real estate (except for our own offices). Therefore, we have no policy with
respect to any investments in real estate or interests in real estate,
investments in real estate mortgages, and securities of or interests in persons
primarily engaged in real estate activities.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT PRINCIPAL SHAREHOLDERS
The following table sets forth, as of 3/16/00 regarding the beneficial ownership
of shares of our Common Stock by each person known by us to own five percent or
more of the outstanding shares of Common Stock, by each of our Officers, by each
of our Directors, and by our Officers and Directors as a group. As of 3/16/00,
there were 12,059,346 shares issued and outstanding of record.
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<TABLE>
<CAPTION>
SHARES OF PERCENTAGE
NAME & ADDRESS OF COMMON AS OF 3/16/00(1)
BENEFICIAL OWNERS STOCK
----------------- --------- ----------------
<S> <C> <C>
Michael Krome -0-(2) -0-
8 Teak Court
Lake Grove, NY 11755
James Neebling 2,257,000 18.7
18 Perrine Circle
Perrineville, NJ 08535
Zimvestments 2,657,000 22.0
1 Diane Court
Nesconset, NY 11767
James W. Zimbler -0- -0-
1 Diane Court
Nesconset, NY
All Executive Officers and
Directors as a group (3 persons) 4,914,000(2) 40.7
</TABLE>
- - - - - - - - - - - - - - - - - - - - - - - - - - -
(1) Based upon 12,059,346 shares issued and outstanding on 3/16/00.
(2) Does not include 427,500 shares of Common Stock owned by Two Plus Twins
Consulting, Inc., a company owned by Mr. Krome's wife.
(2) Includes Mr. Zimbler's indirect ownership of 2,657,000 shares owned by
Zimvestments, Inc. of which Mr. Zimbler is an officer and director.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
Directors and Executive Officers of Universal Media Holdings, Inc.(formerly
Universal Turf, Inc.)
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Michael Krome 39 Director/Vice-
President/Secretary/Treasurer
James Zimbler 35 Chairman of the Board of Directors/CEO
James Neebling 37 Director/President
</TABLE>
Michael Krome is a Vice President, Secretary, Treasurer and a Director of our
Company. He is an attorney and has managed his own law practice, Michael S.
Krome, P.C., since 1991. Mr. Krome was named to the Board of Directors on
November 4, 1999, and has provided corporate and legal services to our Company.
From February of 1999 through November of 1999, Mr Krome was the Vice President,
Secretary and a Director of Fortune Media, Inc. Although he ceased to be an
officer of Fortune Media, Inc. In November of 1999, he continues to be a
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Director of that company. Mr. Krome is a graduate of the University at Albany in
Albany New York with a Bachelors Degree, and he received his J.D. from the
Bengamin N. Cordozo School of Law in 1990. Mr. Krome was admitted to the N.Y.S.
Bar in February of 1991.
James Zimbler is our C.E.O. and a Director, serving in this capacity since
November 4, 1999. He came to our Company as a result of our Purchase Agreement
with E-Trans Logistics, Inc., where he served as C.E.O. since December of 1995.
In December 1998, Mr. Zimbler was also named Chairman of the Board of Directors
of IntermediaNet, Inc, a public company that has been recently renamed "Fortune
Media, Inc." In February of 1999, he ceased to be an officer of that company,
but continues to be a director. From December of 1996 through November of 1998,
Mr. Zimbler was President and Chief Operating Officer for Total Freight
Solutions America, Inc. (T.F.S. America, Inc.) There, he managed the day to day
operations of company. Mr. Zimbler was employed by Packaging Plus Services,
Inc. from August of 1994 through December of 1996. Mr. Zimbler attended Suffolk
Community College from 1983 through 1985 where he majored in Business
Administration.
James Neebling is President and a Director, being first named to the Board of
Directors on November 4, 1999. Also, Mr. Neebling is the President of National
Expedite, Inc., a transportation and logistics company which he founded in 1996.
National Expedite has grown from a regional provider to a national
transportation company, having contracts with several Fortune 100 companies.
>From 1995 to present, Mr. Neebling continues to be an employee of Novacare
Employee Services (formerly H.R. Logic, Inc.) an employment and equipment
leasing company. In 1992, Mr. Neebling formed Systems Logistics, Inc., a
company which specialized in fulfillment and warehousing for primarily Fortune
100 clients. Systems Logistics, Inc. was purchased by U.S. Delivery Systems, a
public company, in 1994. Mr. Neebling remained with U.S. Delivery Systems as an
officer of the company, assisting the company through the transition period. He
ceased to be an officer and employee in 1996, but provided consulting services
for the U.S. Delivery Systems through late 1997. From 1992 to 1996, Mr.
Neebling was President of National Dedication Fleet, Inc. Mr. Neebling
attended Glassboro State College.
ITEM 6. EXECUTIVE COMPENSATION
Compensation of Directors
Currently, our Directors are not compensated for their services, although their
expenses are reimbursed.
Compensation of Management
<TABLE>
<CAPTION>
Title 1999 1998 1997
----- ---- ---- ----
<S> <C> <C> <C> <C>
Michael Krome Vice President, -0- -0- -0-
Secretary and Treasurer
James Zimbler Chief Executive -0- -0- -0-
Officer
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C>
James E. Neebling President -0- -0- -0-
</TABLE>
None of the named persons has received stock options or other such non-cash
compensation. No one has received an annual compensation package of $100,000 or
more.
Employment Agreements
Presently, we have not entered into any employment agreements with anyone
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 14, 2000, we entered into an agreement with E-Trans-Logistics, Inc.
("E-Trans") whereby we purchased all issued and outstanding shares or Common
Stock of E-Trans with Universal Media Holding, Inc. Common Stock. E-trans, now
our wholly owned subsidiary, is a trucking, transport and logistics company
having its offices and warehouse in Carlstadt, New Jersey.
ITEM 8. DESCRIPTION OF SECURITIES
Our capital structure consists of shares of Preferred Stock with a par value of
$.01 per share, and Common Stock, with a par value of $.0001 per share. The
authorized classes, and the amount or number of each which are authorized and
outstanding as of the date of this Memorandum, are as follows:
<TABLE>
<CAPTION>
AUTHORIZED OUTSTANDING
---------- -----------
<S> <C> <C>
Common Stock 200,000,000 12,059,356
</TABLE>
Common Stock
The authorized common equity of the Company consists of 200,000,000 shares of
Common Stock, with a $.001 par value, of which 12,059,356 shares of Common Stock
are issued and outstanding. Shareholders (i) have general ratable rights to
dividends from funds legally available therefor, when, as and if declared by the
Board of Directors; (ii) are entitled to share ratably in all assets of the
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Company available for distribution to shareholders upon liquidation, dissolution
or winding up of the affairs of the Company; (iii) do not have preemptive,
subscription or conversion rights, nor are there any redemption or sinking fund
provisions applicable thereto; and (iv) are entitled to one vote per share on
all matters on which shareholders may vote at all shareholder meetings. All
shares of Common Stock now outstanding are fully paid and nonassessable and all
shares of Common Stock to be sold in this offering will be fully paid and
nonassessable when issued.
The Common Stock does not have cumulative voting rights, which means that the
holders of more than fifty percent of the Common Stock voting for election of
directors can elect one hundred percent of the directors of the Company if they
choose to do so. The Company, which has had no earnings, has not paid any
dividends on its Common Stock and it is not anticipated that any dividends will
be paid in the foreseeable future. Dividends upon Preferred shares must have
been paid in full for all past dividend periods before distribution can be made
to the holders of Common Stock. In the event of a voluntary or involuntary
liquidation, all assets and funds of the Company remaining after payments to the
holders of Preferred Stock will be divided and distributed among the holders of
Common Stock according to their respective shares.
PART II
ITEM 1.MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS
The Company's Common Stock is traded on the NASDAQ Bulletin Board under the
symbol "UVTFD" now "UVTF." To maintain that listing, we must become a
fully-reporting company to the SEC under the Securities Exchange Act of 1934 on
or before May 3, 2000. We anticipate accomplishing such filing by April 3,2000
Based on that time line, the filing will be effective on or about May 26, 2000.
We fully intend to respond to any and all comments quickly in an effort to clear
comments prior to May 3, 2000.
Our initial market maker was authorized to commence the trading of our stock on
the OTC Bulletin Board on ______, 1998, but actual trading began on
approximately _____________. The range of our prices since then is:
<TABLE>
<CAPTION>
Quarter High Bid Low Bid
------- -------- -------
<S> <C> <C>
2000
1st Qtr. '00 0.625 0.43.7
</TABLE>
<TABLE>
<CAPTION>
Quarter High Bid Low Bid
------- -------- -------
<S> <C> <C>
1999
1st Qtr. '99 0.02 0.009
2nd Qtr. '99 0.025 0.01
3rd Qtr, '99 0.02 0.009
4th Qtr '99 1.5875 0.007
</TABLE>
17
<PAGE> 18
<TABLE>
<CAPTION>
Quarter High Bid Low Bid
------- -------- -------
<S> <C> <C>
1998
1st Qtr '98 0.16 0.04
2nd Qtr '98 0.07 0.035
3rd Qtr '98 0.065 0.01
4th Qtr '98 0.04 0.005
</TABLE>
The forgoing quotations reflect inter-dealer prices, without retail mark-up,
mark-down, or commission and may not represent actual transactions.
On March 31,2000, the closing prices of the Company's Common Stock were $.625
Bid and $1.03 Asked, as quoted on the NASDAQ Bulletin Board.
Dividend Policy
We have not had any earnings or profits and have not paid any dividends. Our
proposed operations are capital intensive and we need working capital. Therefore
we will be required to reinvest any future earnings in the Company's operations.
Our Board of Directors has no present intention of declaring any cash dividends,
as we expect to re-invest all profits in the business for additional working
capital for continuity and growth. The declaration and payment of dividends in
the future will be determined by our Board of Directors considering the
conditions then existing, including the Company's earnings, financial condition,
capital requirements, and other factors.
ITEM 2. LEGAL PROCEEDINGS
We are not engaged in any pending legal proceedings. We are not aware of any
legal proceedings pending, threatened or contemplated, against any of our
officers and directors, respectively, in their capacities as such.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
We selected Aaron Stein, C.P.A. as our independent auditor and accountant. We
have included our audited financial statements for the calendar years ended 1998
and 1999. We have made this filing in reliance upon the authority of that firm
as expert in auditing and accounting. There have been no changes in, nor have
there been disagreements with our independent auditors.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
We were incorporated on December 29, 1969 under the name Tyconda Minerals Corp.
In October of 1993, we changed our name to Hy-Poll Technology, Inc. ("Hy-Poll").
In August of 1995, Hy-Poll acquired all of the issued and outstanding shares of
the Company's Common Stock (the "Reorganization") in a tax-free, stock-for-stock
exchange under Section 351(a)1(B) of the Internal Revenue Code. Pursuant to the
terms of the Reorganization, Hy-Poll issued 10,000,000 shares of Hy-Poll common
stock for all the issued and outstanding shares of the Company's Common Stock.
This issuance was considered exempt under Section 4(2) of the Securities Act.
18
<PAGE> 19
In August of 1997, we issued 250,000 shares to Jean Lampert, Susan Lampert and
Michael H. Ference as compensation for legal services valued at $13,775.75. This
issuance was considered exempt under Section 4(2) of the Securities Act.
On May 7, 1997, we authorized the issuance of 1,336,000 shares of our Common
Stock to Robert Narozanick, sole shareholder of Athletic Surfaces International,
Inc. (ASI) for all of the issued and outstanding shares of ASI in a tax free
reorganization pursuant to Section 368(a)1(B) of the Internal Revenue Code. This
issuance was considered exempt under Section 4(2) of the Securities Act.
In June of 1997, Messrs DiGeronimo, Lombardi and Naraznick were issued 60,000
shares of our Common Stock in exchange for their installation services. This
issuances were considered exempt under Section 4(2) of the Securities Act.
In July of 1997, we issued 500,000 shares of our Common Stock to West Market
Industries, Inc. In exchange for financial and public relations services. This
issuance was considered exempt under Section 4(2) of the Securities Act.
In December of 1997, the holders of Convertible Debentures exercised the
conversion privilege as to a total for $150,000 in principal plus accrued
interest thereon, and we issued a total of 375,000 shares of our Common Stock.
These issuances were considered exempt by reason of Sections 3(a)(9) and 4(2) of
the Securities Act.
In March of 1998, we issued 7,500,000 shares of Common Stock to Messrs David
Dinallo, Perry DiPiaszza, Joseph Lombardi and Joseph DiGeronimo in lieu of
salary and for services rendered. We also issued 4,500,000 shares of Common
Stock to Nancy Murphy in two private placements; the first being 4,000,000
shares at a price of $0.01 per share, and the other 500,000 shares at a price of
$.02 per share. We consider these issuances to be exempt under Section 4(2) of
the Securities Act.
In April of 1998, we issued 100,000 shares of Common Stock to John B. Lowy, P.C.
in exchange for legal services and pursuant to a Rule 504 Offering under
Regulation D of the Securities Act. This issuance was considered exempt under
Section 3(b) of the Securities Act and Rule 504 of Regulation D promulgated
thereunder, as well as under Section 4(2) of the Securities Act.
In June of 1998, we offered 2,682,000 shares of Common Stock to 15 persons
pursuant to Rule 504 of Regulation D at an offering price of $.05 per share. The
total proceeds from the sale of those shares was $134,000. This issuance was
considered exempt under Section 3(b) of the Securities Act and Rule 504 of
Regulation D promulgated thereunder.
Also in June of 1998, we issued 175,000 shares of Common Stock to Marc Son and
Parallax Group, Inc. in exchange for services previously rendered, and 200,000
shares of Common Stock to Messrs. Andrew Governale and Frank Solimando is
settlement of a judgement against Universal Turf, Inc. in the amount of $22,672
plus interest thereon. These issuances were considered exempt under Section 4(2)
of the Securities Act.
In August of 1998, we issued 1,100,000 shares of Common Stock to certain persons
in settlement of a debt with MRG, Inc. (600,000) and for construction services
rendered by Bella Vista Industries (500,000). We consider these issuances to be
exempt under Section 4(2) of the Securities Act.
19
<PAGE> 20
Also in August of 1998, we offered 7,520,251 shares of Common Stock to 24
persons pursuant to Rule 504 of Regulation D, 1,170,000 at an offering price of
$.05 per share with proceeds of $58,500, and the remaining 6,350,251 shares in
exchange for services, broken down as follows: 333,333 shares in exchange for
legal services; 2,000,000 shares in exchange for consulting services, and
4,4,016,918 in settlement of various outstanding debts for services previously
rendered to the Company (the total issuance valued at $317,513, or $.05 per
share). This issuance was considered exempt under Section 3(b) of the Securities
Act and Rule 504 of Regulation D promulgated thereunder, as well as under
Section 4(2) of the Securities Act.
In October of 1998, an additional 144,000 shares were issued pursuant to Rule
504 of Regulation D is exchange for services (issuance valued at $7,200, or $.05
per share). This issuance was considered exempt by reasons of Rule 504 of
Regulation D, and under Section 4(2) of the Securities Act.
In December of 1998, 500,000 shares were issued to Joseph Lombardi in exchange
for services previously rendered as Director of Sales. This issuance was
considered exempt under Rule 701 of the Securities Act.
On November 3, 1999, the Board of Directors unanimously consented to reverse
spit our issued and outstanding stock on a 1 for 200 basis (1:200). The Board
decided to perform this stock split in anticipation of our then agreement with
Fortune Media, Inc.
In November of 1999, we issued 900,000 shares (post split) to 3 entities for
consulting services valued at $90,000,pursuant to a Rule 504 Offering, as
promulgated under Regulation D. These issuances were considered exempt under
Section 3(b) of the Securities Act and Rule 504 of Regulation D, as well as
under Section 4(2) of the Securities Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Delaware Corporation Law
Section 145 of the Delaware Laws (8 Del. C. 1953, Section 145; 56 Del. Laws, c.
50) contains provisions authorizing indemnification by the Company of directors,
officers, employees or agents against certain liabilities and expenses which
they may incur as directors, officers, employees or agents of the Company or of
certain other entities. Section 145(c) provides for mandatory indemnification,
including attorney's fees, if the director, officer, employee or agent has been
successful on the merits or otherwise in defense of any action, suit or
proceeding or in defense of any claim, issue or matter therein. Section 145(f)
provides that such indemnification may include payment by the Company of
expenses incurred in defending a civil or criminal action or proceeding in
advance of the final disposition of such action or proceeding upon receipt of an
undertaking by the person indemnified to repay such payment if he shall be
ultimately found not to be entitled to indemnification under the Section.
Indemnification may be provided even though the person to be indemnified is no
longer a director, officer, employee or agent of the Company or such other
entities. Section 145(g) authorizes the Company to obtain insurance on behalf of
any such director, officer employee or agent against liabilities, whether or not
the Company would have the power to indemnify such person against such
liabilities under section 145(g).
20
<PAGE> 21
Under Section 145(f) the indemnification and advancement of expenses provided
pursuant to Sections 145(e) and 145(i) are not exclusive, and subject to certain
conditions, the Company may make other or further indemnification or advancement
of expenses of any of its directors, officers, employees or agents. Because
neither the Articles of Incorporation, as amended, nor the By-Laws of our
Company otherwise provide, notwithstanding the failure of the Company to provide
indemnification and despite a contrary determination by the Board of Directors
or its shareholders in a specific case, a director, officer, employee or agent
of the Company who is or was a party to a proceeding may apply to a court of
competent jurisdiction for indemnification or advancement of expenses or both,
and the court may order indemnification and advancement of expenses, including
expenses incurred in seeking court-ordered indemnification or advancement of
expenses if it determines that the petitioner is entitled to mandatory
indemnification pursuant to Section 145(c) because he has been successful on the
merits, or because the Company has the power to indemnify on a discretionary
basis pursuant to Section 145(a) or because the court determines that the
petitioner is fairly and reasonably entitled indemnification or advancement of
expenses or both in view of all the relevant circumstances.
Articles of Incorporation and By-Laws
Our Articles of Incorporation and By-Laws empower us to indemnify current or
former directors, officers, employees or agents of the Company or persons
serving by request of the Company in such capacities in any other enterprise or
persons who have served by the request of the Company is such capacities in any
other enterprise to the full extent permitted by the laws of the State of
Delaware.
Officers and Directors Liability Insurance
At present, we do not maintain Officers and Directors Liability Insurance and,
because of the anticipated cost of such insurance, we have no present plans to
obtain such insurance.
Indemnity Agreements
In order to induce and encourage highly experienced capable persons to serve as
directors and officers, we have entered into an Indemnity Agreement with each
director and officer presently serving us and will provide the same agreement to
future directors and officers as well as certain agents and employees. The
Agreement provides that we shall indemnify the director and /or officer, or
other person, when he or she is a party to, or threatened to be made a party to,
a proceeding by, or in the name of, we. Expenses incurred by the indemnified
person in any proceeding are to be paid to the fullest extent permitted by
applicable law. The Agreement may at some time require us to pay out funds which
might otherwise be utilized to further our business objectives, thereby reducing
our ability to carry out our projected business plans.
Sec Position on Indemnification for Security Act Liability
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that is the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933, as amended, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
21
<PAGE> 22
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action, suite
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: April 3, 2000
Universal Media Holdings, Inc.
/s/ James Neebling
-------------------------------------------
James Neebling, President
/s/ Michael Krome
-------------------------------------------
Michael Krome, Vice President, Secretary
/s/ James Zimbler
-------------------------------------------
James Zimbler, Chief Executive Officer
22
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
AUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
REPORT OF INDEPENDENT AUDITOR 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statements of Operations 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5
NOTES TO THE FINANCIAL STATEMENTS 6
</TABLE>
<PAGE>
AARON STEIN
CERTIFIED PUBLIC ACCOUNTANT
REPORT OF INDEPENDENT AUDITOR
To the Board of directors and stockholders of Universal Media Holdings, Inc.
I have audited the accompanying balance sheet of Universal Media Holdings, Inc.
as of September 30, 1999, and the related statements of operations,
stockholders' equity, and cash flows for each of the two years ended September
30, 1999 and 1998. These financial statements are the responsibility of the
Corporation's management. My responsibility is to express an opinion of these
financial statements based on my audit.
I conducted my 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, such financial statements present fairly, in all material
respects, the financial position of Universal Media Holdings, Inc. as of
September 30, 1999 and the results of their operations and their cash flows for
each of the two years ended September 30, 1999 and 1998 in conformity with
generally accepted accounting principles.
/s/ AARON STEIN
------------
April 3, 2000
534 WILLOW AVENUE - PO BOX 315 - CEDARHURST, NY - 11516
PHONE: 516.569.0520
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,012
---------
$ 1,012
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 348,645
Accrued payroll taxes 19,465
------------
Total Current Liabilities $ 368,110
Stockholders' Equity
Preferred Stock, No par value
2,000,000 shares authorized, 0 shares issued -
Common stock, $.001 par value
200,000,000 shares authorized, 12,059,356 issued
and outstanding 12,059
Additional-paid-in-capital 2,007,679
Retained earnings (2,386,836)
------------
Total Stockholders' Equity (367,098)
---------
$ 1,012
=========
</TABLE>
The notes are an integral part of these financial statements.
2
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
1999 1998
---- ----
<S> <C> <C>
REVENUES EARNED $ 241,207 $ 1,753,096
COST OF REVENUES EARNED 337,680 1,735,786
------------ ------------
GROSS (LOSS) PROFIT (96,473) 17,310
GENERAL AND ADMINISTRATIVE EXPENSES 211,103 241,599
------------ ------------
OPERATING LOSS (307,576) (224,289)
OTHER EXPENSES
Interest expense (669) (2,091)
Loss on disposal of fixed assets (15,729)
------------ ------------
Total other expenses (16,398) (2,091)
------------ ------------
LOSS BEFORE PROVISION FOR
INCOME TAXES (323,974) (226,380)
INCOME TAX EXPENSE -- --
------------ ------------
NET LOSS $ (323,974) $ (226,380)
============ ============
EARNINGS PER SHARE
BASIC $ (0.03) $ (0.02)
============ ============
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING
BASIC 12,059,356 12,059,356
============ ============
</TABLE>
The notes are an integral part of these financial statements.
3
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional-
Preferred Stock Common Stock Paid-in- Retained
Shares Amount Shares Amount Capital Earnings Total
------ ------ ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at September 30, 1997 - $ - 11,936,375 $ 2,112 $1,717,626 $(1,836,482) $(116,744)
Convertible debentures exercised - - 1,875 - - - -
Issuance of common stock - - 117,886 9,947 290,053 - 300,000
Net Loss - - - - - (226,380) (226,380)
--- ---- ----------- --------- ----------- ------------ ----------
Balance at September 30, 1998 - - 12,056,136 12,059 2,007,679 (2,062,862) (43,124)
Issuance of common stock - - 3,220 - - - -
Net Loss - - - - - (323,974) (323,974)
--- ---- ----------- --------- ----------- ------------ ----------
Balance at September 30, 1999 - $ - 12,059,356 $ 12,059 $2,007,679 $(2,386,836) $(367,098)
=== ==== =========== ========= =========== ============ ==========
</TABLE>
The notes are an integral part of these financial statements.
4
<PAGE> 29
UNIVERSAL MEDIA HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED SEPTEMBER 30,
1999 1998
---- ----
<S> <C> <C>
NET LOSS $(323,974) $(226,380)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization 2,500 12,560
Loss on disposal of fixed assets 15,729
Changes in:
Accounts receivables 691,789 (691,789)
Other assets -- 16,350
Accounts payable and accrued expenses (300,832) 525,706
--------- ---------
Cash used in operating activities 85,212 (363,553)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in bank overdraft (84,200) 63,553
Proceeds from issuance of common stock 300,000
--------- ---------
Cash provided by financing activities (84,200) 363,553
--------- ---------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 1,012 --
CASH AND CASH EQUIVALENTS, beginning -- --
--------- ---------
CASH AND CASH EQUIVALENTS, ending $ 1,012 $ --
========= =========
ADDITIONAL SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION
Interest paid $ 669 $ 2,091
========= =========
Income taxes paid $ -- $ --
========= =========
</TABLE>
The notes are an integral part of these financial statements.
5
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ORGANIZATION, NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Universal Media Holdings, Inc. ("the Company") was originally incorporated in
Delaware as Tyconda Minerals Corp. in December of, 1969. In February 1970, the
Company merged leaving Tyconda Minerals Corp. as the surviving corporation. In
November 1983 the Company filed a Certificate of Amendment to its Certificate of
Incorporation changing its corporate name to Hy-Poll Technology, Inc. That
amendment also changed the capital structure of the corporation from an
authorization to issue 5,000,000 shares of Common Stock with a par value of $.01
per share, to an authorization to issue 200,000,000 shares of Common Stock with
a par value of $.0001 per share.
In August of 1995, Hy-Poll acquired all of the issued and outstanding shares of
the Company's Common Stock. On December 21, 1995 the Company amended its
Certificate of Incorporation changing its corporate name to Universal Turf, Inc.
The Company then amended the name again on November 8, 1999, changing its
corporate name to Universal Media Holdings, Inc.
On February 14, 2000, the Company has recently entered into an agreement with
E-Trans Logistics, Inc. ("E-Trans"), formerly know as Gerard, under which
E-Trans became a wholly owned subsidiary of United Media Holdings, Inc.
NATURE OF OPERATIONS
As Universal Turf, Inc., the Company was based on the marketing, installation
and maintenance of synthetic surface material for sports and recreational fields
mainly in the Northeast section of the United States. The Company's business
plan now covers (i) the logistics field, which plans to be the major
concentration, (ii) the synthetic grass (turf) business, and (iii) certain areas
of the entertainment and Internet fields.
SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN FINANCIAL STATEMENTS - Management uses estimates and
assumptions in preparing these financial statements in accordance with generally
accepted accounting principles. Those estimates and assumptions affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities, and the reported revenues and expenses. Actual results could
vary from the estimates that were used.
CASH AND CASH EQUIVALENTS - For purposes of reporting cash flows, the Company
considers all cash accounts, which are not subject to withdrawal restrictions or
penalties, as cash and cash equivalents in the accompanying balance sheet.
6
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
ORGANIZATIONAL COSTS - Organizational costs are stated net of accumulated
amortization. Amortization is computed using the straight-line method over the
estimated useful lives of the assets. Total amortization in 1999 and 1998
totaled $2,500 and $500, respectively.
FIXED ASSETS - For assets sold or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts and any related gain or
loss is reflected in income for the period. Depreciation is computed using the
straight-line method over the estimated useful lives of the assets. Depreciation
in 1999 and 1998 totaled $0 and $12,060, respectively.
REVENUE AND COST RECOGNITION - Revenues for the years 1999 and 1998 are
generated mainly from the turf business, in which revenues are recognized as
product is delivered to the customers or installed for the customers, net of
applicable discounts and allowances. Revenues earned from services is recognized
ratably over the contractual period or as the services are performed.
ADVERTISING COSTS - Advertising costs are charged to operations when incurred.
Advertising expenses for 1999 and 1998 were $0 and $12,786, respectively.
INCOME TAXES - The provision for income taxes are computed based on the pretax
loss included in the Statement of Income. The asset and liability approach is
used to recognize deferred tax assets and liabilities for the expected future
tax consequences of temporary differences between the carrying amounts and the
tax bases of assets and liabilities.
EARNINGS PER COMMON SHARE - Basic loss per common share is computed using the
weighted average number of common shares outstanding during the year. Earnings
per share amounts have been adjusted for all years presented to reflect the
one-for-two hundred split of the Company's common shares effective November 3,
1999.
NOTE 2 - STOCKHOLDERS' EQUITY
STOCK SPLIT - On November 3, 1999, the Company consented to a one-for-two
hundred reverse stock split of its common stock. Stockholders' equity has been
restated to give retroactive recognition to the reverse stock split in prior
periods.
PREFERRED STOCK - 2,000,000 shares of Preferred Stock authorized are
undesignated as to preferences, privileges and restrictions. As the shares are
issued, the Board of Directors must establish a "series" of the shares to be
issued and designate the preferences, privileges and restrictions applicable to
that series. To date, the Board of Directors has not designated or issued any
series of Preferred Stock.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
Included in the accounts payable is approximately $80,500 which represent
judgements brought against the company. These judgements are related to unpaid
invoices.
7
<PAGE>
UNIVERSAL MEDIA HOLDINGS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - SUBSEQUENT EVENT
On February 14, 2000, the Company entered into an agreement with E-Trans
Logistics, Inc. ("E-Trans"), a trucking, transport and logistics company, under
which E-Trans became a wholly owned subsidiary of Universal Media Holdings, Inc.
The new office is located at the E-Trans facility, where there are offices and a
warehouse. Sometime during the second quarter of 2000, the Company plans to
rename itself to E-Trans Logistics, Inc.
8
