<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
(Date of Earliest Event Reported)
June 30, 2000
Date of Report
ISEMPLOYMENT.COM, INC.
-------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Wyoming 86-0970152
--------------------------------- -----------------------------------
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
000-28611
------------------------
(Commission File Number)
213-380 Pelissier Street
Windsor, Ontario N9A 6W8
Canada
--------------------------------------------------------------------------------
(Address of principal executive offices (zip code))
(519) 258-8318
--------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Magical Marketing, Inc.
10130 E. Winding Trail
Tucson, Arizona 85749
--------------------------------------------------------------------------------
(Former Name and Former Address)
<PAGE> 2
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to a Plan of Merger dated June 30, 2000, the shareholders of
Magical Marketing, Inc., a Wyoming corporation ("Magical" or the "Company"),
acquired all of the issued and outstanding capital stock of ISEmployment.com,
Inc. ("ISEmployment.com") from the shareholders of ISEmployment.com in a share
exchange for an aggregate of 400,000 shares of Magical's common stock, par value
$0.001 per share (the "Share Exchange"), resulting in a change of control of the
Registrant. Pursuant to the plan, the Registrant's then officers and directors
resigned and were replaced by new management as set forth below. There were two
shareholders of ISEmployment.com immediately prior to the Share Exchange. They
were Frank Ulakovich and Scott Murray who each held 1,000,000 shares of common
stock. As a result of the Share Exchange, 100% of the outstanding capital stock
of ISEmployment.com is owned by Magical and ISEmployment.com ceased to exist.
Magical has also changed its name to ISEmployment.com, Inc. and has elected a
new board of directors. Prior to the Share Exchange, Magical had 1,000,000
shares of common stock issued and outstanding. Following the Share Exchange,
Magical has 600,000 shares of common stock issued and outstanding. As part of
the transaction, Daniel L. Hodges' 800,000 common shares of Magical were
purchased for $200,000 and then cancelled. A copy of the Plan is filed as an
exhibit to this Form 8-K and is incorporated in its entirety herein. The
foregoing description is modified by such reference.
(b) The following table contains information regarding the shareholdings
of the Company's current directors and executive officers and those persons or
entities who beneficially own more than 5% of the Company's common stock based
on 600,000 shares issued and outstanding after the Share Exchange.:
<TABLE>
<CAPTION>
Amount of Common Stock Beneficially Owned Percent of Common Stock Beneficially Owned (1)
----------------------------------------- ----------------------------------------------
Directors and Officers
<S> <C> <C>
Frank Ulakovich 200,000 33%
Scott Murray 200,000 33%
</TABLE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration provided by the parties pursuant to the Plan of
Merger was negotiated between Magical's largest shareholder, Daniel L. Hodges,
and the former ISEmployment.com shareholders. In evaluating the Share Exchange
transaction, Daniel L. Hodges used criteria such as the value of the assets of
ISEmployment.com, ISEmployment.com's ability to compete in its markets and the
current and anticipated business operations of ISEmployment.com.
ISEmployment.com considered the value of Magical's status as a publicly
reporting company and its ability to succeed to the reporting status of Magical.
BUSINESS
ISEmployment.com is a development stage company which will provide
on-line human resources and recruiting services for the Information Systems
industry. ISEmployment.com's website and on-line service is anticipated to be
operational by the third quarter of 2000. ISEmployment.com's on-line human
2
<PAGE> 3
resources and recruiting services specifically addresses the tight labor market
in the United States for Information System Professionals and also provides a
cost effective mechanism for employers to access the relative abundance of
qualified foreign candidates. This service is different from the job and resume
posting sites currently available on the Internet by providing a virtual human
resources center and a virtual recruitment and selection system. The system also
contains an advance module that simplifies the hiring of foreign workers.
ISEmployment.com's site is a virtual human resource site designed to
automate the recruiting and selections process. Our site requires the candidates
to input their personal information, which includes name, address, location
preference, wage expectancy and job position sought. A candidate is required to
detail his or her hardware and software experience, showing both years
experience as well as age of experience. This information is gathered by a
precise technical application, a project resume and a section which allows the
candidates to "paste" their version of their resume (candidates' resumes will be
searched using a "keyword" search application). The candidate will then be
required to complete a soft skill evaluation section of the database. This
section will allow the potential employer a brief insight into the candidate's
personality. The system will then ask the candidate to input three work related
references, that will be verified by ISEmployment.com's human resources
assistants. Once completed, the reference checks will be available for potential
employees to view on-line. If applicable, the candidate will be asked to fill
out the immigration questionnaires that will be presented as a form letter once
the process is complete. The pre-immigration screen will cover questions related
to inadmissibility issues, such as prior arrests, convictions and refused entry
into the United States. This visa assistance is only for TN (NAFTA) visas only.
If the candidate requires additional information or immigration assistance, they
will be linked automatically to approved immigration lawyers. Once the data is
entered into the database, one of ISEmployment.com's human resources assistants
will contact the candidate to check for truth and accuracy. Once this is
completed, the information becomes active in the database and the applicant will
be allowed to modify the application as time goes on. The system will
automatically e-mail each candidate every fifteen days, requesting their status
and availability.
An employer interested in the site is requested to complete a site
registration set up questionnaire and is issued a password. Once the set up is
complete, the employer will be asked to complete the profile section, which will
provide background information for candidates to use prior to an interview. When
the employer is ready to search the database, they will be prompted by the
system to log in using their assigned password. Once accepted, the employer will
then be allowed to input the skill set(s) that they are seeking along with the
years of experience required. The employer will then initiate the search query
and the system will produce a list of candidates, their skills that match the
query, along with the percentile rank of the match of skills to the query. The
output at this point will not offer personal information, references or
candidate qualifiers. The employer will only see the skill set synopsis, which
consist of the educational history, project resume, the candidates' personal
resume and soft skill evaluation. Once the employer selects the candidate(s)
that they wish to interview, their account automatically gets debited for each
selection. The employer is notified of the charge and the contact information
for each candidate is then given. Along with the contact information, the system
will allow the employer access to each candidate's audio/video clip and
reference checks.
ISEmployment.com will also offer a "hr tools" section which will allow
registered users access to chat sessions and human resource links. The chat
sessions will run at posted intervals and will offer free advice on current
human resource issues, including such issues as immigration, recruiting and
relocation. Each chat session will be headed by an accredited professional in
the field. The "hr tools" will offer the candidate numerous help pages like the
dos and don'ts of interviews, salary calculators and relocation information.
3
<PAGE> 4
RISK FACTORS
An investment in our stock involves a high degree of risk. The achievement of
our business objectives is subject to a number of market and other factors
beyond our control, and our future prospects are speculative.
If we make any forward-looking statements or assumptions concerning our future
business activities, revenues, profits or financial condition, or if we make any
forward-looking statements concerning our industry, the economy, technological
changes or our competitors, you should recognize that our predictions and
assumptions are subject to a great deal of uncertainty. Actual results could
differ materially from our predictions and assumptions, particularly given the
highly speculative nature of our business and that of other Internet-related
businesses in our industry. If our predictions prove to be too optimistic, the
value of our business could be adversely impacted and our shareholders will
probably lose money.
Our shareholders could find that there is nobody willing to purchase their
shares when they want to sell, and it is possible that our shareholders could
lose their entire investment in our stock.
Our stock should only be purchased by speculators who understand the high level
of risk that a purchase of our stock entails and who are willing and able if
necessary to hold our stock for an extended period of time, or indefinitely, and
to risk the loss of their entire investment in our stock. If you are a suitable
investor for ISEmployment.com, you should fully understand the following
material risk factors:
If the Internet provides not to be a viable commercial marketplace, it could
have a material adverse effect on our business.
We expect a substantial portion of our future revenue to come from the continued
development of our products and services to be distributed over the Internet.
The business use of the Internet is still in its infancy, and it is possible
that the Internet may not prove to be a viable commercial marketplace. Known
issues in this regard include inadequate development of Internet infrastructure
to date, competing technology, delays in the development of new standards and
protocols required to handle increased Internet activity, and the possibility of
significant government regulation (locally, nationally and internationally).
Moreover, concerns over the security of Internet transactions and the privacy of
users may inhibit the growth of the Internet, particularly as a means of
conducting commercial transactions. To the extent that our activities involve
the storage and transmission of proprietary information, such as credit card
numbers, security breaches could expose us to a risk of loss or litigation and
possible liability. We cannot assure you that contractual provisions attempting
to limit our liability in such areas will be adequately implemented or
enforceable, or that other parties will accept such contractual provisions as
part of our agreements.
We have no fully resolved some other critical issues concerning our use of the
Internet, including reliability, cost, ease of deployment, administration and
quality of service. This may affect our ability to maintain our business, expand
product marketing, improve communications and increase business efficiencies.
If we do not successfully develop new and enhanced Internet services and
products, our revenues could be adversely impacted.
Business on the Internet is characterized by:
- rapid technological change;
- frequent changes in user requirements and preferences;
- frequent new product and service introductions embodying new processes
and technologies; and
- evolving industry standards and practices that could render our
information delivery practices obsolete.
Our success will depend partly on our ability to improve our existing services,
develop new product offerings, use Web technology to enhance our existing
product offerings, extend our market reach, and respond to technological
advances, emerging industry standards and competitive offerings. We cannot
assure you that we will be successful in these endeavors.
Evolving Internet technology and standards increase the risk that system
interruptions will occur. Our Internet operations are also vulnerable to
interruption by fire, power loss, telecommunications failure and other events
beyond our control. System interruptions that result in the unavailability of
our Web site, or slower response times for users, could reduce the fees we
collect from consumers and businesses using our database information products
over the Internet.
ISEmploymnet.com has no operating history or any revenues or earnings from
operations.
ISEmployment.com has no significant assets or financial resources.
ISEmployment.com has operated at a loss to date and will, in all likelihood,
continue to have operating expenses without corresponding revenues.
An investment in our common stock may be very illiquid, and we have never paid
cash dividends.
Although our shares are not traded on any exchange or bulletin board and there
is currently no broadly followed "established trading market" for our shares,
and we cannot assure you that any such market will ever develop or be
maintained. The absence of an active trading market would reduce the liquidity
of an investment in our shares.
Any market price for our shares is likely to be very volatile, and numerous
factors beyond our control may have a significant adverse effect on prices.
We have never paid cash dividends on our capital stock and do not anticipate
paying any cash dividends for the foreseeable future.
COMPETITION
The market for online recruiting services is relatively new, intensely
competitive and rapidly evolving. There are minimal barriers to entry, and
current and new competitors can launch new web sits and add content at
relatively low costs within relatively short time periods. We expect competition
to persist and intensify and the number of competitors to increase significantly
in the future. We compete against other online recruiting services, such as
Monster.com, Headhunter.net, Career Path and Career Mosaic, as well as corporate
Internet sites, and not-for-profit web sites operated by individuals,
educational institutions and governments. In addition to this online
competition, we compete against a variety of companies that provide similar
content through one or more media, such as classified advertising, radio and
television. Many of our current and potential competitors, including those
mentioned above, have significantly greater financial, technical and marketing
resources, longer operating histories, better name recognition and more
experience that we do. Many of our competitors also have established
relationships with employers, recruiters and other job posters.
To compete successfully, we must continue to attract more employers,
recruiters and job seekers, and generate fees. The competitive factors
attracting employers, recruiters and job seekers to our web site include the
quality of presentation and the relevance, timeliness, depth and breadth of
recruiting information and services offered on, and the ease of use of, our web
site. Our competitors' services may be sufficiently attractive to employers,
recruiters and job seekers to dissuade them from using our web site. If we are
unable to attract a significant number of employers, recruiters and job seekers
to our web site, our business, financial condition and results of operation will
suffer.
THE MARKET
The emergence of the Internet and the growth in its use has made it an
attractive medium for online recruiting. We believe online recruiting is
superior to traditional means of recruiting and job searching because it is
interactive, easily accessible, timely and more cost-effective. As Internet
usage becomes more widespread, we expect companies from a broad range of
industries to increase their online recruiting efforts. As the online recruiting
market matures, we believe that employers and recruiters will increasingly
utilize those online recruiting services that enable them to access a large
number of job seekers and exercise a high degree of control over the exposure of
their job opportunities. We believe our product and services will positions us
to take advantage of this market opportunity.
GROWTH STRATEGY
ISEmployment.com's objective is to be one of the leading providers of
online recruiting services to employers and recruiters, especially within the
information systems niche of that field. The industry is currently served by a
small number of on-line systems that are interactively passive and have limited
capability. In contrast, ISEmployment.com's system is an advanced search engine
with a unique immigration function that will allow employers to access
additional qualified candidates. In addition to providing an advance search
engine, the key elements of ISEmployment.com's strategy are the following:
INCREASE AWARENESS OF ISEMPLOYMENT.COM. We plan to increase awareness of
the ISEmployment.com brand through an aggressive marketing campaign that
combines a combination of online and traditional advertising, direct marketing
and strategic relationships.
4
<PAGE> 5
AGGRESSIVELY BUILD AND EXPAND OUR SALES FORCE. We plan to rapidly expand
our direct sales and telephone sales efforts by developing and then adding to
our existing sales force and by opening additional sales offices in key
metropolitan areas to further penetrate these markets.
PROMOTE AND ENHANCE WEB SITE FUNCTIONALITY. We intend to make the process
of posting and searching job opportunities on our web site easier and faster by
increasing the usability and functionality of our web site. With the re-launch
of our web site planned for July 2000 we expect to create this ease of use for
our customers.
DEVELOP STRATEGIC RELATIONSHIPS. We will enter into and evaluate
strategic relationships as a means to increase traffic to our web site, enhance
visibility of job opportunities, increase awareness of the ISEmployment.com
brand, and provide marketing and cross-promotional opportunities. We will also
continue to use our relationship with ITR and its ability to accentuate
ISEmployment.com's business model and presence on the Internet.
ACQUISITIONS OF COMPLEMENTARY BUSINESSES OR TECHNOLOGIES. We will explore
acquisition and investment opportunities if we believe they will enable us to
accelerate our growth plan, add new content, develop new technologies or
penetrate new markets. We will also pursue others within our niche market that
may desire to become part of the ISEmployment.com brand.
GOVERNMENT REGULATION
There are an increasing number of laws and regulations pertaining to the
Internet, including laws or regulations relating to user privacy, liability for
information retrieved from or transmitted over the Internet, online content
regulation, user privacy and domain name registration. Moreover, the
applicability to the Internet of existing laws governing issues such as
intellectual property ownership and infringement, copyright, patent, trademark,
trade secrets, obscenity, libel, employment and personal privacy is uncertain
and developing. We may become subject to burdensome government regulation, which
may add additional costs to operating our business on the Internet or decrease
demand for our services.
PRIVACY CONCERNS. Government agencies are considering adopting
regulations regarding the collection and use of personal identifying information
obtained from individuals when accessing web sites. While we have implemented
and intend to implement additional programs designed to enhance the protection
of the privacy of its users, these programs may not conform to any regulations
adopted by these agencies. In addition, these regulatory and enforcement efforts
may adversely affect our ability to collect demographic and personal information
from users, which could have an adverse effect on our ability to provide
advertisers with demographic information. The European Union has adopted a
directive that imposes restrictions on the collection and use of personal data.
The directive could impose restrictions that are more stringent than current
Internet privacy standards in the United States. The directive may adversely
affect the activities of businesses that engage in data collection from users in
European Union member countries.
DOMAIN NAMES. Domain names are the user's Internet "addresses." The
current system for registering, allocating and managing domain names has been
the subject of litigation and of proposed regulatory reform. Although we have
registered "ISEmployment.com" as a domain name, third parties may bring claims
for infringement against us for the use of their trademark. There can be no
assurance that our domain name will not lose its value, or that we will not have
to obtain entirely new domain names in addition to or in lieu of our current
domain names if reform efforts result in a restructuring in the current system.
5
<PAGE> 6
JURISDICTIONS. Due to the global nature of the Internet, it is possible
that, although our transmissions over the Internet originate primarily in
Windsor, the governments of other states and foreign countries might attempt to
regulate our business activities. In addition, because our service is available
over the Internet in multiple states and foreign countries, these jurisdictions
may require us to qualify to do business as a foreign corporation in each of
these states or foreign countries, which could subject us to taxes and other
regulations.
EMPLOYEES
ISEmployment.com currently has 2 employees. ISEmployment.com relies
heavily on its current officers in operating its business.
PROPERTY
ISEmployment.com's principal executive offices are located in 2400 square
feet at 213-380 Pelissier Street, Windsor, Ontario, Canada. The Company leases
the executive offices for $20,000 a year from Mr. Murray, President of the
Company. Management believes that the terms of this lease are as favorable as
those that the Company could obtain from an unaffiliated party. The Company has
recently entered into a lease to rent additional office space of 4100 square
feet at 2405 Ouellette Avenue, Windsor, Ontario, Canada, beginning in June. The
new lease will cost $51,200 per year.
LITIGATION
There is no outstanding material litigation in which the Company is
involved and the Company is unaware of any threatened actions or claims against
it.
DESCRIPTION OF SECURITIES
The Company has an authorized capitalization of 100,000,000 shares of
common stock, $.001 par value per share ("Common Stock").
COMMON STOCK
Following the Share Exchange, there were 600,000 shares of the Company's
Common Stock issued and outstanding. The holders of the Company's common stock
are entitled to one non-cumulative vote for each share held of record on all
matters submitted to a vote of shareholders. The holders of common stock are
entitled to receive ratably any dividends that are declared by the Company's
Board of Directors out of funds legally available therefor and are entitled to
share ratably in all of the assets of the Company available for distribution to
holders of Common Stock upon liquidation, dissolution or winding up of the
affairs of the Company. Holders of Company's Common Stock have no preemptive,
subscription or conversion rights and there are no redemption or sinking fund
provisions or rights applicable thereto.
6
<PAGE> 7
TRANSFER AGENT
The transfer agent for the Company's Common Stock is Holladay Stock
Transfer Company, 2939 North 67th Place, Scottsdale, Arizona 85251.
DIVIDEND; MARKET FOR THE COMPANY'S SECURITIES
During the last two years, no dividends have been paid on the Company's
stock and the Company does not anticipate paying any cash dividends in the
foreseeable future. Although it is the Company's intention to utilize all
available funds for the development of the Company's business, no restrictions
are in place which would limit or restrict the ability of the Company to pay
dividends.
There is no public market for the Company's Common Stock. The Company's
Common Stock may be traded in over-the-counter market in the near future,
however, there can be no assurance of when or as to price at which the trading
in Company's Common Stock will occur.
MANAGEMENT
Information as to the directors and officers of the Company is as follow:
Scott Murray has served as a director of ISEmployment.com, Inc. since its
inception and became Co-Chief Executive Officer at that time. Mr. Murray has
served as President of International Technical Recruiting (ITR), a traditional
recruitment and placement firm that represents many Fortune 500 companies from
1995 through the first quarter of 2000. Mr. Murray was a Co-Founder of ITR,
which was established in the year 1995. Mr. Murray has also assumed the role of
Chief Financial Officer of the Company until a suitable replacement can be
found. Mr. Murray is a co-founder of the Company. Mr. Murray will share part of
his responsibilities with his Co-Chief Executive Officer Mr. Ulakovich; these
responsibilities include strategic planning, quality control and management of
the Company's personnel. Mr. Murray serves Chairman of the Society of
Manufacturing Engineers and holds a seat on the Regional Committee for the
Society of Manufacturing Engineers.
Frank Ulakovich has served as a Chairman of the Board of
ISEmployment.com, Inc. since its inception and became Co-Chief Executive Officer
at that time. Mr. Ulakovich has served as Vice-President Technical Recruiting of
International Technical Recruiting (ITR), a traditional recruitment and
placement firm that represents many Fortune 500 companies from 1995 through the
first quarter of 2000. Mr. Murray directed the operations and expansion of ITR's
technical division with the assistance and guidance of Mr. Murray. Mr. Murray
was a Co-Founder of ITR, which was established in the year 1995. Mr. Ulakovich
will share part of his responsibilities with his Co-Chief Executive Officer Mr.
Murray; these responsibilities include strategic planning, quality control and
management of the Company's personnel. Mr. Ulakovich is a former President of
the Canadian Information Processing Society. Mr. Ulakovich was a professor of
Information Systems at Saint Clair College.
<TABLE>
<CAPTION>
Name Age Position
---- --- ---------
<S> <C> <C>
Scott F. Murray 30 President, Co-CEO and Treasurer
Frank Ulakovich 29 Chairman of the Board, Co-CEO and Secretary
</TABLE>
7
<PAGE> 8
EXECUTIVE COMPENSATION
Scott F. Murray and Frank Ulakovich each receives $48,000 a year each in
salary. They do not receive any other benefits. It is anticipated that in the
future senior management will be provided additional benefits comparable for
their industry.
RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND RELATED TRANSACTIONS
Except for the lease between Mr. Murray and the Company for the Company's
executive offices described above in Property, no member of the management,
officers, or directors is or has a direct or indirect interest in a material
transaction or contract with the Company.
INDEBTEDNESS OF MANAGEMENT
No member of the management, officers, or directors is or has been
indebted to the Company. No director or officer is personally liable for the
repayment of amounts of any financing received by the Company.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Wyoming law authorizes a Wyoming corporation to indemnify its officers
and directors against claims or liabilities arising out of such person's conduct
as officers or directors if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
Company. The Articles of Incorporation provide for indemnification of the
directors of the Company. In addition, the Bylaws of the Company provide for
indemnification of the directors, officers, employees or agents of the Company.
In general, these provision provide for indemnification in instances when such
persons acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements are set forth below.
8
<PAGE> 9
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Financial Statements
As of April 30, 2000 and
The Period from March 7, 2000
(Date of Inception) to April 30, 2000
F-1
<PAGE> 10
INDEPENDENT AUDITOR'S REPORT
Board of Directors
ISEmployment.com, Inc.
We have audited the accompanying balance sheet of ISEmployment.com, Inc.
(A Development Stage Company) as of April 30, 2000, and the related statements
of operations, stockholders' deficit, and cash flows for the period from March
7, 2000 (date of inception) to April 30, 2000. 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 ISEmployment.com,
Inc. as of April 30, 2000, and the results of its operations and its cash flows
for the period from March 7, 2000 (date of inception) to April 30, 2000 in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 2, the
Company has a cumulative loss of $152,909 and limited cash resources with which
to carry out management's plans. These conditions raise substantial doubt about
its ability to continue as a going concern. Management's plans regarding these
matters are also described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Levitz, Zacks & Ciceric
San Diego, California
June 20, 2000
F-2
<PAGE> 11
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Balance Sheet
April 30, 2000
<TABLE>
<CAPTION>
ASSETS
Current Assets:
<S> <C>
Cash $ 2,037
---------
Total current assets 2,037
Deposits 8,442
---------
Total assets $ 10,479
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable $ 10,200
Advances payable
42,147
141,041
Loans payable ---------
Total current liabilities 163,388
---------
Stockholders' Deficit:
Common stock; $.0001 par value; 10,000,000 shares
authorized; 2,000,000 shares issued and outstanding 200
Receivable for common stock (200)
Deficit accumulated during the development stage (152,909)
---------
Total stockholders' deficit (152,909)
---------
Total liabilities and stockholders' deficit $ 10,479
=========
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE> 12
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Statement of Operations
Period from March 7, 2000
(Date of Inception) to April 30, 2000
<TABLE>
<CAPTION>
<S> <C>
System development costs $ 140,136
General and administrative costs 12,773
----------
Loss before income taxes 152,909
Income taxes -0-
----------
Net loss $ 152,909
==========
$ .08
Basic and diluted loss per share ==========
2,000,000
Weighted average basic and diluted shares outstanding ==========
</TABLE>
See accompanying notes to financial statements
F-4
<PAGE> 13
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Statement of Stockholders' Deficit
Period from March 7, 2000
(Date of Inception) to April 30, 2000
<TABLE>
<CAPTION>
Receivable
for
Common Stock
-------------- Common Total
Date Shares Amount Stock Deficit Retained
------------- ------------- ------------ ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Sale of stock for receivable March 7, 2000 2,000,000 $ 200 $(200) $ -0- $ -0-
Net loss for the period
from March 7, 2000 to
April 30, 2000 (152,909) (152,909)
---------- ------ -------- -------- --------
Balance, April 30, 2000 2,000,000 $ 200 $ (200) $(152,909) $(152,909)
========== ====== ======== ========= =========
</TABLE>
See accompanying notes to financial statements
F-5
<PAGE> 14
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Statement of Cash Flows
Period from March 7, 2000
(Date of Inception) to April 30, 2000
<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss
$(152,909)
Adjustments to reconcile net loss to net cash used in operating activities:
System development expenses incurred by assumption of
a related party loan 96,555
System development expenses incurred by assumption of
advances payable 42,147
Increase in deposits (8,442)
Increase in accounts payable 10,200
--------
Net cash used in operating activities (12,449)
--------
Cash flows from financing activities:
Proceeds from loans payable 111,041
Repayment of a related party loan (96,555)
--------
Net cash provided by financing activities 14,486
--------
Increase in cash 2,037
Cash at March 7, 2000 (date of inception) -0-
--------
Cash at April 30, 2000 $ 2,037
========
</TABLE>
Supplemental disclosure of non-cash investing and financing activities:
-------------------------------------------------------------------------------
The Company incurred system development expenses by assuming a loan payable
in conjunction with the development of the concept, programming, data base
and web site that are intended to be used by the Company.
-------------------------------------------------------------------------------
See accompanying notes to financial statements
F-6
<PAGE> 15
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 1. THE COMPANY AND A SUMMARY OF ITS
SIGNIFICANT ACCOUNTING POLICIES
ISEmployment.com, Inc. (the Company), a Delaware corporation, has
been in the development stage since its formation on March 7, 2000.
It is primarily engaged in raising capital and developing an on-line
human resources and recruiting service for the information systems
industry.
Prior to the Company's inception, individuals who became the
Company's stockholders (the Company's founders) and an entity they
controlled incurred costs in the development of the concept, data
base, software and web site intended for the Company's operations.
Management anticipates that subsequent to April 30, 2000, these
parties will transfer the rights to the data base, software, web
site and other related intangible assets to the Company in exchange
for common stock. The Company will record the transfer at the
transferors' historical cost basis of the assets.
Revenue Recognition
Revenue from providing services to customers will be recognized when
the services are rendered.
Capitalization of Internal-Use Software Costs
During the preliminary project stage, the Company expenses internal
and external costs it incurs, or assumes from related parties, to
develop internal-use software. During the application development
project stage the Company capitalizes such costs and will amortize
them on the straight-line method over their expected useful lives.
Start-Up Costs
The Company expenses organization and start-up costs as incurred.
F-7
<PAGE> 16
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 1. THE COMPANY AND A SUMMARY OF ITS
SIGNIFICANT ACCOUNTING POLICIES (continued)
Income Taxes
Deferred taxes are provided on a liability method whereby deferred
tax assets are recognized for deductible temporary differences and
deferred tax liabilities are recognized for taxable temporary
differences. Temporary differences are the differences between the
reported amount of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in
the opinion of management, it is more likely than not that some
portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of
changes in tax laws and rates on the date of enactment.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
New Accounting Pronouncements
The Company does not expect the adoption of any issued, but not yet
effective, accounting pronouncements to have a material effect, if
any, on its financial position or results of operations.
F-8
<PAGE> 17
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 2. GOING CONCERN UNCERTAINTY
As shown in the financial statements, the Company has a cumulative
loss of $152,909 and $2,037 of cash at April 30, 2000. The Company
currently has no sales. Accounts payable and future commitments
exceed the Company's cash balance. These factors, among others,
raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans to address these issues include
transferring to the Company, in exchange for common stock, the
rights to the concept, data base, software, web site and other
intangible assets intended for the Company's operations. In order to
continue as a going concern, develop and commercialize its
technology and, ultimately, achieve a profitable level of
operations, the Company will need, among other things, additional
capital resources and financing. Management's plans to obtain such
resources for the Company include (1) raising additional capital
through sales of common stock, the proceeds of which would be used
to perfect the Company's technology and services and satisfy
immediate operating needs; and (2) using common stock to pay for
consulting and professional services. Management has been in
discussion with various financial resources in securing a firm
commitment on financing, but as of the date of the financials no
firm commitments have been entered into. In addition, management
expects to seek other potential joint venture partners or merger
candidates that would provide financial, technical and/or marketing
resources to enable the Company to realize the potential value of
its technology. However, management cannot provide any assurances
that the Company will be successful in accomplishing any of its
plans.
The ability of the Company to continue as a going concern is
dependent upon its ability to successfully accomplish the plans
described in the preceding paragraph and eventually secure other
sources of financing and attain profitable operations. The
accompanying financial statements do not include any adjustments
that might be necessary should the Company be unable to continue as
a going concern.
Subsequent to April 30, 2000, the Company has raised $73,725 of
additional financing (Note 10). The Company also has plans to become
publicly trading through a merger.
F-9
<PAGE> 18
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 3. ADVANCES PAYABLE
The Company incurred system development expenses, consisting
primarily of salaries for the Company's founders, by assuming
advances made to the Company's founders and an entity related
through common ownership. These advances were made prior to the
Company's formation. The advances are non-interest bearing and due
on demand.
Note 4. LOANS PAYABLE
The Company's loans payable of $111,041 at April 30, 2000, are due
and payable once the Company becomes publicly traded on the NASDAQ
OTC market. Payment of the balance is to be made by issuing shares
of Company common stock at a price of $.85 per share for a total of
130,635 shares. The loans are non-interest bearing.
Note 5. RECEIVABLE FOR COMMON STOCK
On March 7, 2000, the Company issued 2,000,000 shares of common
stock in exchange for $200 in receivables. The receivables are
non-interest bearing and due on demand. The receivables are carried
in the balance sheet as a reduction to the corresponding common
stock.
Note 6. INCOME TAXES
The Company's provision for income taxes consists of the following:
<TABLE>
<S> <C>
Currently payable $ -0-
Deferred taxes 52,000
Valuation allowance (52,000)
---------
$ -0-
=========
</TABLE>
F-10
<PAGE> 19
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 6. INCOME TAXES (continued)
Income tax at the federal statutory rate is reconciled to the
Company's actual income tax provision as follows:
<TABLE>
<S> <C>
Federal income tax benefit at statutory rate 34 %
Valuation allowance (34)%
-------
0 %
=======
</TABLE>
The Company's total deferred tax assets at April 30, 2000, consist
of $52,000 associated with start-up costs capitalized for income tax
purposes offset by a $52,000 valuation allowance. The valuation
allowance will be evaluated each year considering evidence about
whether the asset will be realized.
Note 7. LOSS PER SHARE
Basic loss per share is calculated by dividing the net loss to the
common shareholders by the weighted average number of shares
outstanding for the period. Diluted loss per share reflects the
potential dilution of securities that could share in earnings of an
entity such as convertible debt, stock options and warrants. Diluted
loss per share is the same as basic loss per share as all contracts
to issue shares were anti-dilutive.
Note 8. RELATED PARTY TRANSACTIONS
The Company incurred system development expenses, consisting
primarily of salaries for the Company's founders, by assuming a loan
payable to a stockholder's parent in the amount of $96,555. These
funds were borrowed by the stockholder and an entity related to the
Company through common ownership. The funds were expended prior to
the Company's formation by these parties in conjunction with the
development of the concept, programming, data base and web site that
are intended to be used by the Company. The loan was repaid by the
Company prior to April 30, 2000. Since its formation, the Company
has utilized office facilities provided to it at no expense by the
stockholders.
F-11
<PAGE> 20
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Notes to Financial Statements
Period from March 7, 2000
(Date of Inception) to April 30, 2000
Note 9. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash and accounts payable approximates fair
value due to their short term nature. The fair value of the loans
payable and advances payable are not determinable because quoted
market prices are not available and the cost of obtaining an
independent valuation is excessive.
Note 10. SUBSEQUENT EVENTS
Lease Agreement
The Company entered into a five year lease for office facilities in
Windsor, Ontario effective June 1, 2000. The lease calls for rent of
$66,000 (Canadian) per year or approximately $42,000 (U.S.) at
current exchange rates.
Financing
Subsequent to April 30, 2000, the Company raised additional funds of
$73,725 through loans payable in common shares totaling 86,735.
Note 11. YEAR 2000 CONVERSION (UNAUDITED)
The Company recognizes the need to ensure its operations will not be
adversely impacted by the year 2000 software failures.
The Company's accounting software and certain other applications
used in its operations were purchased from outside vendors.
Management believes that these applications are Year 2000 compliant.
As a result, management of the Company does not believe that the
Year 2000 issue will have an adverse impact on its financial
statements or on its operations.
F-12
<PAGE> 21
(b) Pro Forma financials are set forth below.
9
<PAGE> 22
ISEMPLOYMENT.COM, INC.
(Formerly known as Magical Marketing, Inc.)
Unaudited Pro-Forma Balance Sheet
April 30, 2000
<TABLE>
<CAPTION>
Magical ISEmploy- Pro-Forma
Marketing ment.com
Adjustments
Historical Historical (Note 2) Combined
--------------- --------------- -------------- -----------
Current Assets:
<S> <C> <C> <C>
Cash $ $ 2,037 $ 2,037
----------- ----------- -----------
Total current assets 2,037 2,037
Deposits 8,442 8,442
----------- ----------- -----------
Total assets $ $ 10,479 $ 10,479
=========== =========== ===========
Current Liabilities:
Accounts payable $ $ 10,200 $ 10,200
Advances payable 42,147 42,147
Loans payable 111,041 111,041
----------- ----------- -----------
Total current liabilities 163,388 163,388
----------- ----------- -----------
Stockholders' Deficit:
Common stock 1,000 200 $ (600) 600
Paid-in capital 955 (1,355) (400)
Receivable for common stock (200) (200)
Deficit accumulated during
the development stage (1,955) (152,909) 1,955 (152,909)
----------- ----------- ---------- -----------
Total stockholders' deficit (152,909) -0- (152,909)
----------- ----------- ---------- -----------
Total liabilities and
stockholders' deficit $ $ 10,479 $ -0- $ 10,479
=========== =========== ========== ===========
</TABLE>
9
<PAGE> 23
ISEMPLOYMENT.COM, INC.
(Formerly known as Magical Marketing, Inc.)
Unaudited Pro-Forma Statement of Operations
Four Months Ended April 30, 2000
<TABLE>
<CAPTION>
Magical ISEmploy- Pro-Forma
Marketing ment.com
Adjustments
Historical Historical (Note 2) Combined
--------------- --------------- -------------- ----------
<S> <C> <C> <C>
Systems development costs $ $ 140,136 $ 140,136
General and administrative costs 12,773 12,773
----------- ----------- -----------
Loss before income taxes 152,909 152,909
Income taxes
----------- ----------- -----------
Net loss $ $ 152,909 $ 152,909
=========== =========== ===========
Basic and diluted loss per share $ $ .08 $ .25
=========== ============= =============
</TABLE>
<PAGE> 24
ISEMPLOYMENT.COM, INC.
(Formerly known as Magical Marketing, Inc.)
Notes to Unaudited Pro-Forma Balance Sheet
and Statement of Operations
Note 1. ACQUISITION AND GENERAL
On June 30, 2000, ISEmployment.com, Inc. (ISEmployment), a Delaware
corporation, and Magical Marketing, Inc. (Magical Marketing), a
Wyoming corporation, merged with Magical Marketing as the surviving
corporation. Magical Marketing issued 400,000 shares of its common
stock for all 2,000,000 outstanding shares of ISEmployment. As part
of the merger transaction, 800,000 shares of Magical Marketing common
stock were purchased and retired and Magical Marketing changed its
name to ISEmployment.com, Inc.
Note 2. PRO-FORMA BALANCE SHEET AND STATEMENT OF OPERATIONS
ISEmployment was not incorporated until March 7, 2000 and did not
begin its development stage activities until April 28, 2000.
Accordingly, pro-forma information for the year ended December 31,
1999, and the quarter ended March 31, 2000 is the historical
information presented by Magical Marketing: The accompanying
unaudited pro-forma balance sheet and statement of operations is
presented as of April 30, 2000 and for the four months then ended as
if the merger occurred on March 7, 2000, the date of formation of
ISEmployment.
Since Magical Marketing has no assets and minimal activity, the
merger is accounted for as a reverse acquisition.
<PAGE> 25
(c) The Exhibits to this Report are listed in the Exhibit Index set
forth below.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ISEMPLOYMENT.COM, INC.
By: /s/ Scott Murray
----------------------------
Scott Murray
President and CEO
July 14, 2000
10
<PAGE> 26
EXHIBIT INDEX
2.1 Plan of Merger between ISEmployment.com, Inc. and the shareholders of
Magical Marketing, Inc., dated June 30, 2000
3.1 Articles of Incorporation of ISEmployment.com, Inc. (Incorporated by
reference from Registrant's exhibits 3.1 and 3.2 to the Registration of
Securities on Form 10-SB, filed December 22, 1999)
3.2 By-Laws of ISEmployment.com, Inc. (Incorporated by reference from
Registrant's exhibit 3.3 to the Registration of Securities on Form
10-SB, filed December 22, 1999)
