SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K12(g)3
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report: May 19, 2000
Tempus, Inc.
--------------
(Exact name of registrant as specified in its charter)
WTAA International, Inc.
-------------------------------
(New name of corporation post-merger)
Wyoming 000-28847 83-0321934
-------------- ----------- -------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.
incorporation pre-merger)
pre-merger)
Florida 65-0260846
---------------- ------------- ------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.
incorporation post-merger)
post-merger)
1027 South Rainbow Blvd., Unit #391, Las Vegas, Nevada 89145
----------------------------------------------------------
(NEW ADDRESS)
214 South Center Street, Casper, Wyoming 82601
------------------------------------------------------
(FORMER ADDRESS)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (702) 341-6622
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On May 12, 2000, WTAA International, Inc. entered into a Share Purchase
Agreement with shareholders of Tempus, Inc. in which WTAA International, Inc.
acquired for $.01 per share, 1,230,000 shares outstanding (100%) of the
Registrant for purpose of accomplishing a Merger of WTAA International, Inc. and
Tempus, Inc. WTAA International, Inc. and Tempus, Inc. completed a merger with
WTAA International, Inc. being the surviving company pursuant to a Plan of
Merger.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
None.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
None.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
From December 1996 to April 30, 1998, Mr. Barry L. Friedman, Certified Public
Accountant, produced the Company's financial statements. There have been no
disagreements between management and Mr. Friedman. Mr. David Coffey, Certified
Public Accountant, produced the Company's audited financial statements for
fiscal 1998. There are no disagreements with Mr. Coffey. Amisano and Hanson, of
Vancouver, British Columbia, were engaged to perform the Audits of the Financial
Statements for 1999.
ITEM 5. OTHER EVENTS
WTAA International, Inc. (the "Company") was incorporated in the State of
Florida on April 19, 1991, under the name of Aarden-Bryn Enterprises, Inc. The
Company became a foreign Registrant in the State of Nevada on December 24, 1998,
when the Company became qualified to transact business in the State of Nevada.
Since its incorporation, the Company has changed its name several times. On
August 27, 1998 the Company changed its name to Corbett's Cool Clear Water,
Inc., on August 31, 1998, to Corbett's Cool Clear Water, Inc., on October 26,
1998 to Canadian Cool Clear Water, Inc, on February 11, 1999 to Canadian Cool
Clear Wtaa, Inc. and finally to its current name, WTAA International, Inc. on
September 24, 1999.
In July of 1998, the Board of Directors of the Company decided to examine
opportunities in the bottled water industry. For the next six months Management
conducted research into the bottled water industry. By the end of 1998, a
business plan had been developed and 1999 became a year where operations were
commenced.
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<PAGE>
OFFICES
The Company has offices in Las Vegas, Nevada; Phoenix, Arizona and Vancouver,
British Columbia.
BUSINESS OF THE ISSUER
The Company has undertaken a business plan that will see it entering the growing
bottled water industry. While the Company intends to focus initially on the
small package (under 16 oz) bottle segment, the Company intends to also enter
the home and office large bottle (5 gallon) and custom bottling segments.
THE INDUSTRY
Bottled water represents the fastest growing segment of the beverage industry.
The impetus for such growth appears to be a perception that municipal water
sources are unsafe and growing interest by consumers in healthy lifestyles. In
the 1997, consumption of bottled waters averaged 8.7 gallons per year per person
in the United States. While American consumption is increasing, it pales in
comparison to the annual European average of 31.5 gallons per person. By the
year 2002, North American consumption is projected to double resulting in market
worth $5 billion annually.
At the present time, the North American bottled water industry is dominated by a
limited number of multi-national corporations that in 1997 accounted for more
than 60% of all bottled water sales. The balance of the market consists of
numerous small regional companies.
In regard to product, spring water (water coming from a single identified
source) makes up the largest segment. Purified water (water obtained from any
number of sources and the purified) is a growing segment that has attracted the
attention of major beverage players such as Coke and Pepsi. The final product
segment is the sparkling or carbonated spring water segments. This segment is
dominated by Perrier and San Pellegrino and tends to be concentrated in the
restaurant sector in large urban centers.
DISTRIBUTION METHODS
The Company plans to utilize the expertise of the existing broker/distributor
network to gain penetration into retail situations. The Company will work
closely developing its relationships with brokers who provide support for the
major distributors.
PROPRIETARY RIGHTS
The Company has no other patents, licenses, trademarks, franchises, concessions,
royalty agreements or labor contracts other than the following:
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<TABLE>
<CAPTION>
LICENSES
The Company holds license agreements granting the Company exclusive right to
manufacture, distribute and market bottled water products in the United States
and Canada utilizing certain trademarked images. The following table provides a
summary of the Company's licenses:
<S> <C> <C> <C> <C>
------------------------------------ ---------------- ----------------- ------------------- -----------------
License Term of License Royalty Rate Guaranteed Fee Advance Royalty
Payable by the Payable by the Payable by the
Company Company Company
------------------------------------ ---------------- ----------------- ------------------- -----------------
Hollywood Chamber of Commerce
"Hollywood Sign" 3 Years 4.0- 6.0% $70,000 $10,000
"Walk of Fame"
------------------------------------ ---------------- ----------------- ------------------- -----------------
Universal Studios Licensing
"Woody Woodpecker" 2 Years 6.0% $30,000 $25,000
"Universal Monsters" 3 Years 6.0% $25,000 $20,000
"The Flintstones in Viva Rock Vegas" 1 Year 5.0% $20,000 $15,000
"Rocky & Bullwinkle" 2.5 Years 5.0% $25,000 $20,000
------------------------------------ ---------------- ----------------- ------------------- -----------------
Scholtzsky's Inc. Ongoing $0.48 per case 0 0
------------------------------------ ---------------- ----------------- ------------------- -----------------
Sony Pictures Consumer Products
"Dawson's Creek" 2 Years 6.5% $120,000 $90,000
------------------------------------ ---------------- ----------------- ------------------- -----------------
Class of 2000, Inc.
"Class of 2000" 2 Years 6.0% 0 0
------------------------------------ ---------------- ----------------- ------------------- -----------------
</TABLE>
EMPLOYEES
As of May 12, 2000, the Company had two employees. While the Company expects to
hire additional employees in the coming year, there are no definite plans at the
present time to increase staffing.
REPORTS TO SECURITY HOLDERS
The Company intends to become a reporting company and will deliver an annual
report to security holders of record. The annual report will include audited
financial statements. The Company is responsible for timely filing of annual and
quarterly reports with the Securities and Exchange Commission.
DESCRIPTION OF PROPERTY
BUSINESS OFFICES
The Company's principal business office is located at 8260 East Raintree Drive,
Unit 106, Scottsdale, Arizona, 85260. The Company pays annual rent in the amount
of $6,540. The Company has no other interests in real estate.
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<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of each person who is known to the Company to be the
beneficial owner of more than 5% of the Company's common stock as of May 12,
2000. The term "beneficial ownership," as defined by applicable federal
securities laws, includes shares that may be acquired within 60 days upon the
exercise of options, warrants and other rights. This information is based upon
information that has been received from and on behalf of the named individuals.
Unless otherwise noted below, the persons named in the table have sole voting
and sole investment powers with respect to each of the shares reported as
beneficially owned by such person:
<S> <C> <C> <C>
-------------------------------- -------------------- ---------------------------- -------------------------
NAME AND ADDRESS OF BENEFICIAL TITLE OF CLASS AMOUNT AND NATURE OF PERCENT OF CLASS (2)
OWNER BENEFICIAL OWNERSHIP (1)
-------------------------------- -------------------- ---------------------------- -------------------------
McKay, Wm R. Common 4,950,000 shares 29.8%
727-666 Leg In Boot Square
Vancouver, BC V5Z 4B4 Preferred 200,000 shares 66.7%
-------------------------------- -------------------- ---------------------------- -------------------------
Larson, Randy Common 2,260,000 shares 17.3%
961 Maywood Avenue
Port Coquitlam, BC V3B 4X7 Preferred 100,000 shares 33.3%
-------------------------------- -------------------- ---------------------------- -------------------------
(1) Under Rule 13(d) of the Exchange Act, shares not outstanding but subject to
options, warrants, rights or conversion privileges pursuant to which such shares
may be acquired in the next 60 days are deemed to be outstanding for the purpose
of computing the percentage of outstanding shares owned by persons having such
rights, but are not deemed outstanding for the purpose of computing the
percentage for any other person.
The total number of shares reported for each of Mssrs. McKay and Larson
represent their actual common share holdings, plus the common shares they
would receive if they converted their preferred shares, plus the common
shares they would acquire under their management options. The Percent of
Class has been calculated for each person, using this expanded share total,
divided into the current common share total of 10,388,059 plus the
converted preferred shares and exercised management options.
(2) A total of 300,000 preferred shares have been issued and paid for, within a
total authorized 500,000 preferred shares. Each preferred share is convertible
to the common stock of the Company on the basis of one preferred share for ten
common shares.
(3) As of June 7, 2000, there were 13,660,347 common shares outstanding. Unless
otherwise noted, the security ownership disclosed is of record and beneficial.
</TABLE>
<TABLE>
<CAPTION>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of each officer and director, and of all directors and
executive officers as a group as of June 7, 2000.
<S> <C> <C> <C>
------------------------------------ ---------------- ---------------------------- -------------------------
Name and Address of Beneficial Title of Class Amount and Nature of Percent of Class
Owner Beneficial Ownership
------------------------------------ ---------------- ---------------------------- -------------------------
McKay, Wm R. Common 4,950,000 shares 29.8%
727-666 Leg In Boot Square
Vancouver, BC V5Z 4B4 Preferred 200,000 shares 66.7%
------------------------------------ ---------------- ---------------------------- -------------------------
Larson, Randy Common 2,650,000 shares 17.3%
961 Maywood Avenue
Port Coquitlam, BC V3B 4X7 Preferred 100,000 shares 33.3%
------------------------------------ ---------------- ---------------------------- -------------------------
Nickolas, Steve Common 400,000 shares 2.5%
15550 North Frank Lloyd
Wright Blvd., Unit #1092
Scottsdale, AZ 85260
------------------------------------ ---------------- ---------------------------- -------------------------
Weinstein, Dr. C.J. Common 500,000 shares 3.6%
P.O. Box 115
1 Big Sur, CA 93920
------------------------------------ ---------------- ---------------------------- -------------------------
Mueller, Robert Common 600,000 shares 4.2%
451 Pemberton Way
Austin, TX 78737
------------------------------------ ---------------- ---------------------------- -------------------------
There are no arrangements that may result in a change in control of the Company.
</TABLE>
5
<PAGE>
DESCRIPTION OF SECURITIES
COMMON STOCK
The Company's Articles of Incorporation provide that the Company is authorized
to issue 50,000,000 shares of common stock with a par value of $0.001 per share.
As of June 7, 2000, 13,660,347 shares were issued and outstanding.
Each holder of record of the Company's common stock is entitled to one vote per
share in the election of the Company's directors and all other matters submitted
to the Company's stockholders for a vote. Holders of the Company's common stock
are also entitled to share pro rata in all dividends when, as, and if declared
by the Board of Directors from funds legally available therefore, and to share
pro rata in all assets available for distribution to the Company's stockholders
upon liquidation or dissolution, subject in both cases to any preference that
may be applicable to any outstanding preferred stock. There are no preemptive
rights to subscribe to any of the Company's securities, and no conversion rights
or sinking fund provisions applicable to the common stock.
Neither the Company's articles of incorporation nor its bylaws provide for
cumulative voting. Accordingly, persons who own or control a majority of the
shares outstanding may elect all of the Company's directors, and persons owning
less than a majority could be foreclosed from electing any.
PREFERRED STOCK - CLASS "A"
The Company's Articles of Incorporation provide that the Company is authorized
to issue 500,000 shares of preferred stock with a par value of $0.01 per share.
As of June 7, 2000, 300,000 shares were issued and outstanding.
The preferred shares are convertible at the option of the holder at any time up
until 5:00 pm Pacific Standard Time on January 31, 2004 into common shares of
the Company on the basis of ten common shares for each preferred share. The
preferred shares are not entitled to receive a fixed dividend or attend, receive
notice, or vote at any meeting of shareholders of the Company. The preferred
shares are not redeemable by the Company. In the event of liquidation,
dissolution or winding-up of the Company, the holders of the preferred shares
shall have preference over the holders of common shares. Subject to such legal
limitations, the holders of the preferred shares shall be entitled to receive an
amount equal to $1.00 per share. After payment of such amount, the holders of
the preferred shares will not be entitled to any further amounts. If the
property of the Company is insufficient to pay in full the amount due on all the
preferred shares, then the preferred shareholders will be entitled to share pro
rata in all assets available for distribution to the Company's stockholders upon
liquidation or dissolution.
There are no preemptive rights to subscribe to any of the Company's securities
and no sinking fund provisions applicable to the common stock.
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DEBT SECURITIES
As of May 31, 2000, the Company had no outstanding debt securities.
(1) On January 20, 1999 the Company issued 200,000 Class A preferred shares in
the capital of the Company to Mr. McKay, an officer and director of the
Company. The Class A preferred shares may be converted into common shares
of the Company at the option of the holder on or before January 31, 2004 at
convertible on the basis of one preferred share for ten common shares.
(2) On January 20, 1999 the Company issued 100,000 Class A preferred shares in
the capital of the Company to Mr. Larson, an officer and director of the
Company. The Class A preferred shares may be converted into common shares
of the Company at the option of the holder on or before January 31, 2004 at
convertible on the basis of one preferred share for ten common shares.
(3) In July 1999, Dewan Shipping S.A. advanced a loan of $191,800 to finance,
operations. This loan is convertible into WTAA common shares at a 20%
discount to the ten day average trading price prior to the date Dewan
elects to convert. On May 30, 2000, Dewan elected to convert, resulting in
the issuance of 1,508,216 common shares being issued, plus a like number of
share purchase warrants.
(4) On September 21, 1999, the Company also issued 100,000 warrants to Canpar
Industries permitting Canpar Industries to purchase one common share in the
Company for each warrant at an exercise prices of $0.70. As of March 31,
2000, none of the warrants had been exercised.
(5) On December 14, 1999, the Company also issued 71,428 warrants to Jonan
Enterprises permitting Jonan Enterprises to purchase one common share in
the Company for each warrant at an exercise price of $0.85. As of March 31,
2000, none of the warrants had been exercises.
(6) On March 16, 2000, Caldren Consulting Ltd provided a loan totaling $180,000
to fund operations, which loan was convertible at the option of the lender
to the common shares of the company, based on the market price at the date
the lender elects in writing to convert. Caldren Consulting did elect to
convert that loan, which resulted in the issuance of 915,156 common shares.
MARKET PRICE OF THE COMMON STOCK AND OTHER SHAREHOLDER MATTERS
<TABLE>
<CAPTION>
MARKET INFORMATION
As of May 8, 1998 the Company has been quoted on the National Association of
Securities Dealers, Inc.'s "OTC Bulletin Board" under the trading symbol "WTAA".
HIGH AND LOW SALES PRICES FOR EACH QUARTER WITHIN THE LAST TWO FISCAL YEARS*
<S> <C> <C> <C> <C>
----------------------- --------------------- -------------------- --------------------- --------------------
PERIOD MARCH 31ST JUNE 30TH SEPTEMBER 30TH DECEMBER 31ST
(Quarter Ended)
----------------------- --------------------- -------------------- --------------------- --------------------
1998:
Low Price ($) No Price No Price 0.09 0.09
High Price ($) No Price No Price 0.09 0.375
----------------------- --------------------- -------------------- --------------------- --------------------
1999:
Low Price ($) 0.375 1.25 0.50 0.43
High Price ($) 3.25 2.18 2.25 1.00
----------------------- --------------------- -------------------- --------------------- --------------------
* The quotations reflect inter-dealer prices, without mark-up, mark-down
or commission and may not represent actual transactions.
7
</TABLE>
<PAGE>
HOLDERS
As of June 7, 2000, the number of record holders of the Company's common stock
is 33. It is unknown how many are held in "street name."
DIVIDENDS
The Company has never paid cash dividends on its common or preferred stock and
does not intend to do so in the foreseeable future. The Company currently
intends to retain any earnings for the operation and expansion of its business.
LEGAL PROCEEDINGS
As of June 7, 2000, only one known lawsuit or claim has been made against the
Company.
1. Starbase-1 Coffee Company, Inc. v. WTAA International, Inc. (U.S. District
Court of Nevada): in 1999, the Company entered into an agency agreement with
Starbase-1 Coffee Company, Inc. ("Starbase") granting the Company the exclusive
right to the manufacture, distribution and marketing of bottled water products
using licensed images from the Star Trek television series. Starbase alleges
that the Company has breached the agency agreement and seeks to terminate the
agency agreement and unspecified damages. The Company has filed an answer and
counterclaim alleging that Starbase has breached the agency agreement by
engaging another firm to produce bottled water products bearing the Star Trek
images and seeks a court order requiring Starbase to cooperate with the Company
in the manufacture, distribution and marketing of the Star Trek-branded bottled
water products throughout Canada and the United States.
<TABLE>
<CAPTION>
RECENT SALES OF UNREGISTERED SECURITIES
During the last three years, the Company has issued and/or sold the following
unregistered securities. Such transactions were exempt from registration by
virtue of the private placement exemptions provided by Section 4(2) and/or Rule
504 of Regulation D promulgated under the Securities Act of 1933. Such
transactions were also exempt from registration by virtue of the fact that they
did not involve a public offering of securities and occurred outside of the
United States.
<S> <C> <C> <C> <C> <C>
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Name of Shareholder Exemption Class of Shares Number of Date of Price Per Share
Relied Upon Shares Issue (Cash)
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Wm. McKay Rule 504 Common 2,000,000 01/06/1999 $0.001
------------------------- --------------- ---------------------- ------------ ------------- -----------------
R. Larson Rule 504 Common 1,000,000 01/06/1999 $0.001
------------------------- --------------- ---------------------- ------------ ------------- -----------------
V. Campbell Rule 504 Common 825,000 01/06/1999 $0.001
------------------------- --------------- ---------------------- ------------ ------------- -----------------
M. Martin Rule 504 Common 875,000 01/06/1999 $0.001
------------------------- --------------- ---------------------- ------------ ------------- -----------------
C. Milaire Rule 504 Common 800,000 01/06/1999 $0.001
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Sarah Jane Ltd. Rule 504 Common 800,000 01/06/1999 $0.001
------------------------- --------------- ---------------------- ------------ ------------- -----------------
P. Zgraggen Rule 504 Common 825,000 01/06/1999 $0.001
------------------------- --------------- ---------------------- ------------ ------------- -----------------
U. Reiter Rule 504 Common 875,000 01/06/1999 $0.001
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Wm. McKay (1) Rule 504 Preferred 200,000 01/20/1999 $0.01
------------------------- --------------- ---------------------- ------------ ------------- -----------------
R. Larson (2) Rule 504 Preferred 100,000 01/20/1999 $0.01
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Shaben World Enterprises Rule 504 Common 22,000 01/22/1999 $3.00
------------------------- --------------- ---------------------- ------------ ------------- -----------------
P. Meredith Rule 504 Common 4,000 04/07/1999 $1.25
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Exeter Mgmt & Holdings Rule 504 Common 96,979 04/29/1999 $1.25
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Canpar Industries Rule 504 Common 55,556 05/05/1999 $1.35
------------------------- --------------- ---------------------- ------------ ------------- -----------------
R. Mueller Rule 504 Common 33,333 07/26/1999 $1.50
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Canpar Industries (3) Rule 504 Common 583,333 09/21/1999 $0.60
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Jonan Enterprises (4) Rule 504 Common 142,857 12/14/1999 $0.70
------------------------- --------------- ---------------------- ------------ ------------- -----------------
New Oriental Investment Rule 504 Common 738,916 05/09/2000 $0.203
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Dewan Shipping S.A. Rule 504 Common 1,508,216 05/30/2000 $0.136
------------------------- --------------- ---------------------- ------------ ------------- -----------------
Caldren Consultants Ltd. Rule 504 Common 915,156 05/31/2000 $0.20
------------------------- --------------- ---------------------- ------------ ------------- -----------------
</TABLE>
There have been no other shares issued by the Company since June 7, 2000.
8
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INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Articles of Incorporation and By-laws of the Company states that no director
or officer of the Company shall be personally liable to the Company or its
shareholders for damages for breach of any duty owed to the Company or its
shareholders. Additionally, the Company has the power to indemnify the officers
and directors of the Company against any contingency or peril as may be
determined to be in the best interests of the Company. The Company has the power
to procure such insurance polices for the benefit of its officers and directors
at the Company's expense.
ITEM 6. RESIGNATION AND APPOINTMENT OF OFFICERS AND DIRECTORS
The following table identifies the Company's directors, executive officers and
certain other key employees as of June 7, 2000. Directors are elected at the
Company's annual meeting of stockholders and hold office until their successors
are elected and qualified. The Company's officers are appointed by the Board of
Directors and serve at the pleasure of the Board. The date of the Company's 1999
Annual General Meeting of Stockholders has not yet been set.
NAME POSITION(S) HELD TERM AS DIRECTOR EXPIRES
Wm. R. McKay (P.Eng.) Chairman/CEO 2000
Randy Larson Director/President/CFO/ 2000
Robert Mueller Director 2000
Dr. C.J. Weinstein Director 2000
Steve Nikolas Consultant -
WM. R. MCKAY (P.ENG.), 65, is a petroleum-engineering graduate from the
University of Oklahoma. Mr. McKay has served as a board member to a number of
organizations including the BC Science and Research, Westac Transportation
Advisory Council, the Calgary Stampeders Football Club, the Canadian Football
League, and Discovery Park. Since 1991, Mr. McKay has been the Chairman and CEO
of Jupiter Capital Ventures Inc., a Vancouver-based corporate finance company.
He has been the Chairman and CEO of the Company since January of 1999.
RANDY LARSON, 40, graduated with an honours degree in finance and economics from
the University of British Columbia. From 1984 to 1996, Mr. Larson was a manager
with the Hongkong Bank of Canada. Since 1996, Mr. Larson has ran his own
financial management company - 3D Financial Management Ltd and served as a
Director and Vice-President of Jupiter Capital Ventures Inc., a Vancouver-based
private corporate finance company. He has been the CFO, Secretary, Treasurer and
a Director of the Company since 1998.
ROBERT MUELLER, 59, is an engineering graduate from Purdue University. He also
has Juris Doctor Law degree from Capital University, Columbus, Ohio. After
careers in law and real estate development, in 1993 Mr. Mueller was a founder of
California Bottling Corp. or Roseville, California. In addition to being a
Director and President of California Bottling Company, Inc., Mr. Mueller is also
the Chairman and CEO of Water Source One a national marketer for major retailers
of bottled water products such as Wal-Mart, K-Mart and Albertson's. Mr. Mueller
is also Vice-President of the California Water Association and a member of the
International Bottled Water Association.
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DR. C.J. WEINSTEIN, 74, is the founder of the Image Institute of Monterey,
California an executive development and team building organization. Dr.
Weinstein has been a director of the Company since 1999.
STEVE NICKOLAS, 44, is a graduate of Claremont Colleges in Southern California.
Mr. Nickolas has 24 years' experience in the beverage industry, including 15
years where he owned his own bottling companies. Mr. Nickolas has extensive
experience in both home and office bottled water sales and is knowledgeable of
distribution and marketing methods of the bottled water industry. Mr. Nickolas
served as the Company's Chief Marketing Officer from February 15, 1999 to
February 15, 2000. The Company is currently negotiating a renewal of Mr.
Nickolas' contract and in the interim he is performing the same functions as he
previously did as the Chief Marketing Officer. Mr. Nickolas declared personal
bankruptcy in 1997.
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION
The following table sets forth compensation paid or accrued by the Company for
the period ending December 31, 1999, to the Company's officers, directors, and
other key employees.
<S> <C> <C> <C> <C> <C> <C>
----------------------- ------ ---------- -------- --------------- --------------------------------------- ----------------
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
----------------------- ------ ---------- -------- --------------- ------------ ---------------- --------- ----------------
Name & Principal Year Salary Bonus Other Annual Restricted Securities Under- LTIP All Other Compensation
Position ($) ($) Compensation Stock lying Options/ Payouts ($)
($) Award(s) SARs (#) ($)
------------------------------------------------------------------------------------------------------------------------------------
Wm. R. McKay 1998 0 0 0 0 0 0 0
Chairman/CEO 1999 0 0 0 0 0 0 0
----------------------- ------ ---------- -------- --------------- ------------ ---------------- --------- ----------------
Randy Larson 1998 0 0 0 0 0 0 0
CFO, Director 1999 0 0 0 0 0 0 0
----------------------- ------ ---------- -------- --------------- ------------ ---------------- --------- ----------------
Steve Nickolas 1999 102,342 0 0 0 0 437,500 0
Chief Marketing Officer
----------------------- ------ ---------- -------- --------------- ------------ ---------------- --------- ----------------
Dr. C.J. Weinstein 1998 0 0 0 0 0 0 0
Director 1999 0 0 6,000 50,000 0 0 0
----------------------- ------ ---------- -------- --------------- ------------ ---------------- --------- ----------------
Robert Mueller 1998 0 0 0 0 0 0 0
Director 1999 0 0 0 0 0 0 0
----------------------- ------ ---------- -------- --------------- ------------ ---------------- --------- ----------------
</TABLE>
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1 Restricted stock awards during the fiscal year ended December 31, 1999,
included the following:
May 7, 1999 Steve Nickolas 250,000 Common Value: $1.75 per share
The shares issued to Mr. Nickolas are to be vested and earned based on a
performance review to be conducted by the Board of Directors by February 15,
2000. As of March 31, 2000, the performance review had not yet been agreed to
and, accordingly, the stock has not vested and has been recorded in the
foregoing table of executive compensation under the "LTIP Payouts" column.
December 20, 1999 Dr. C.J. Weinstein 100,000 Common Value: $0.50 per share
These shares are already vested to Dr. Weinstein.
February 23, 2000 Robert Mueller 100,000 Common Value: $0.55 per share
These shares were issued after the year-end for fiscal 1999 and, accordingly,
are not included in the foregoing table of executive compensation.
SUMMARY OF INDIVIDUAL OPTIONS GRANTED AND OUTSTANDING TO JUNE 7, 2000.
In December 1999, the Company granted options to purchase 350,000 common shares
of the Company's stock to Mr. McKay for management services provided to the
Company. Such options are exercisable at $0.50 per share at any time up until
December 31, 2004.
In December 1999, the Company granted options to purchase 250,000 common shares
of the Company's stock to Mr. Larson for management services provided to the
Company. Such options are exercisable at $0.50 per share up until December 31,
2004.
In December 1999, the Company granted options to purchase 150,000 common shares
of the Company's stock to Mr. Nickolas for services provided to the Company.
Such options are exercisable at $0.50 per share up until December 31, 2004.
In December 1999, the Company granted options to purchase 100,000 common shares
of the Company's stock to Dr. C.J. Weinstein for his services as a director of
the Company. Such options are exercisable at $0.50 per share up until December
31, 2004.
In December 1999, the Company granted options to purchase 100,000 common shares
of the Company's stock to Mr. C.J. Mueller for his services as a director of the
Company. Such options are exercisable at $0.50 per share December 31, 2004.
In May 2000, the Company granted options to purchase 600,000 common shares of
the Company's stock to Mr. McKay for management services provided to the
Company. Such options are exercisable at $0.20 per share at any time up until
December 31, 2004.
In May 2000, the Company granted options to purchase 400,000 common shares of
the Company's stock to Mr. Larson for management services provided to the
Company. Such options are exercisable at $0.20 per share up until December 31,
2004.
11
<PAGE>
In May 2000, the Company granted options to purchase 300,000 common shares of
the Company's stock to Dr. C.J. Weinstein for his services as a director of the
Company. Such options are exercisable at $0.20 per share up until December 31,
2004.
In May 2000, the Company granted options to purchase 400,000 common shares of
the Company's stock to Mr. Mueller for his services as a director of the
Company. Such options are exercisable at $0.20 per share December 31, 2004.
<TABLE>
<CAPTION>
AGGREGATE FISCAL YEAR-END OPTION/SAR VALUES
<S> <C> <C> <C> <C>
----------------------- --------------------- -------------------- --------------------- --------------------
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARS at
Options/SARS at FY-END Dec. 31/99
Value Realized FY-End Dec. 31/99
Name Shares Granted ($)
----------------------- --------------------- -------------------- --------------------- --------------------
Wm. R. McKay 0 0 350,000 0
----------------------- --------------------- -------------------- --------------------- --------------------
Randy Larson 0 0 250,000 0
----------------------- --------------------- -------------------- --------------------- --------------------
Steve Nickolas 0 0 150,000 0
----------------------- --------------------- -------------------- --------------------- --------------------
Dr. C.J. Weinstein 0 0 100,000 0
----------------------- --------------------- -------------------- --------------------- --------------------
Robert Mueller 0 0 100,000 0
----------------------- --------------------- -------------------- --------------------- --------------------
LONG-TERM INCENTIVE PLANS - AWARDS IN THE LAST FISCAL YEAR
----------------------- ------------------ ------------------- ----------------- -------------- -------------
Name Number of Performance or Threshold Target Maximum
Shares, Units or Other Period ($ or #) ($ or #) ($ or #)
Other Rights Until Maturation
or Payout
----------------------- ------------------ ------------------- ----------------- -------------- -------------
Wm. R. McKay N/A N/A N/A N/A N/A
----------------------- ------------------ ------------------- ----------------- -------------- -------------
Randy Larson N/A N/A N/A N/A N/A
----------------------- ------------------ ------------------- ----------------- -------------- -------------
Steve Nickolas (1) 250,000 Performance N/A 250,000 N/A
Review by Board
----------------------- ------------------ ------------------- ----------------- -------------- -------------
Dr. C.J. Weinstein N/A N/A N/A N/A N/A
----------------------- ------------------ ------------------- ----------------- -------------- -------------
Robert Mueller N/A N/A N/A N/A N/A
----------------------- ------------------ ------------------- ----------------- -------------- -------------
(1) On May 7, 1999, the Company issued 250,000 restricted common shares to Mr.
Nickolas. At the time of the issuance, the market value of the Company's common
shares was $1.75 per share. The shares were to be earned and vest upon a
satisfactory performance review of Mr. Nickolas on February 15, 2000. As of
March 31, 2000, the performance review had not been completed due to the
inability of Mr. Nickolas and the Board to come to agreement as to the terms of
the performance review. Accordingly, these restricted common shares have not
vested in Mr. Nickolas and have been record as Long-Term Incentive Plans.
</TABLE>
12
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIALS, & EXHIBITS
Financial Statements -
Audited Financial Statements of WTAA International, Inc. for 12/31/99 and
12/31/98
Consolidated Pro Forma Financial Statements of WTAA International, Inc. as
of 12/31/99 and 3/31/2000
Exhibits - 3.1 Articles of Incorporation of WTAA International, Inc.
3.2 Bylaws of WTAA International, Inc.
10.1 Plan of Merger
10.2 Articles of Merger
13
<PAGE>
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 thereunto duly authorized.
Date: June 7, 2000 WTAA International, Inc.
By: /s/William McKay
--------------------------
President
14
<PAGE>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
REPORT AND FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in US Dollars)
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholders,
WTAA International, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
We have audited the accompanying balance sheet of WTAA International, Inc.
(formerly Canadian Cool Clear WTAA, Inc.), as at December 31, 1999 and the
statements of operations, stockholders' equity and cash flows for the year then
ended. 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. The financial statements of WTAA International,
Inc. as of December 31, 1998 and 1997 were audited by other auditors whose
reports dated July 6, 1999 and May 1, 1998, respectively, expressed an
unqualified opinion on those statements.
We conducted our audit in accordance with United States generally accepted
auditing standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance 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, these financial statements present fairly, in all material
respects, the financial position of WTAA International, Inc. as at December 31,
1999 and the results of its operations and cash flows for the year then ended,
in accordance with generally accepted accounting principles in the United
States.
The accompanying financial statements referred to above have been prepared
assuming that the company will continue as a going concern. As discussed in Note
1 to the financial statements, the company has suffered recurring losses from
operations and has a net capital deficiency that raise substantial doubt that
the company will be able to continue as a going concern. The company is
dependent on its ability to raise capital from shareholders or other sources to
sustain operations. Management plans in regard to these matters are also
described in Note 1. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Amisano Hanson
"Amisano Hanson"
Chartered Accountants
Vancouver, Canada
May 16, 2000, except as to Note 12 (ii) which is as of
May 17, 2000 and as to Notes 12 (vii), (viii) and (ix)
which are as of May 31, 2000.
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
BALANCE SHEETS
December 31, 1999 and 1998
(Stated in US Dollars)
(Restated
- Note 13)
ASSETS 1999 1998
------ ---- ----
Current
<S> <C> <C>
Cash $ 21,808 $ -
Accounts receivable 9,257 -
Inventory 31,262 -
Prepaid expenses 1,264 -
Royalty advances 35,000 -
---------------- ---------------
98,591 -
Deferred finance charges (net of accumulated amortization of $1,364) 8,636 -
Deposit on investment - Note 3 205,000 -
---------------- ---------------
$ 312,227 $ -
================ ===============
LIABILITIES
Current
Accounts payable - Note 6 $ 134,157 $ 32,091
Due to related party - Note 6 1,350 1,350
---------------- ---------------
135,507 33,441
Promissory notes payable - Notes 4 and 12 191,800 -
---------------- ---------------
327,307 33,441
---------------- ---------------
STOCKHOLDERS' DEFICIENCY
Common stock - Notes 4, 5, 6 and 12 9,473 1,000
Additional paid-in capital 668,601 4,000
Shares subscribed - Note 5 47,500 -
---------------- ---------------
725,574 5,000
---------------- ---------------
Preferred stock - Notes 5 and 6 300 -
Additional paid-in capital 2,700 -
---------------- ---------------
3,000 -
---------------- ---------------
Deficit ( 743,654) ( 38,441)
---------------- ---------------
( 15,080) ( 33,441)
---------------- ---------------
$ 312,227 $ -
================ ===============
Nature and Continuance of Operations - Note 1 Commitments - Notes 4, 5 and 11
Contingency - Note 11 (b) Subsequent Events - Note 12
</TABLE>
APPROVED BY THE DIRECTORS:
, Director , Director
------------------------ --------------------------
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
STATEMENTS OF OPERATIONS
for the years ended December 31, 1999, 1998 and 1997
(Stated in US Dollars)
(Restated
- Note 13)
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Sales $ 134,302 $ - $ -
Cost of goods sold 145,623 - -
------------------ ------------------ ------------------
( 11,321) - -
------------------ ------------------ ------------------
General and Administrative Expenses
Accounting and audit fees 13,480 - -
Advertising 34,367 - -
Amortization of deferred finance charges 1,364 - -
Bad debts 5,307 - -
Bank charges and interest 16,768 - -
Consulting fees 106,381 - -
Courier 11,268 - -
Director's fee - Note 6 6,100 - -
Dues and subscriptions 3,571 - -
Insurance 950 - -
Investor relations - Note 6 63,864 - -
Legal fees 42,614 33,441 -
License fees - Note 11 21,897 - -
Office and general 26,780 - -
Printing 3,586 - -
Rent 28,890 - -
Telephone 37,627 - -
Travel and entertainment 94,613 - -
Wages and benefits 123,491 - -
------------------ ------------------ ------------------
642,918 33,441 -
------------------ ------------------ ------------------
Loss before other item ( 654,239) ( 33,441)
Inventory write-down 50,974 - -
================== ================== ==================
Net loss for the year $ ( 705,213) $ ( 33,441) $ -
================== ================== ==================
Loss per share $ ( 0.08) $ ( 0.03) $ ( 0.00)
================== ================== ==================
Weighted average number of shares
outstanding 8,744,894 1,000,000 1,000,000
================== ================== ==================
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the years ended December 31, 1999, 1998 and 1997
(Stated in US Dollars)
Additional
Paid -in Deficit
Common Stock - Notes 6 and 12 Shares Amount Capital Accumulated Total
------------ ------ ------ ------- ----------- -----
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1991, 1992
Issued for services rendered 10,000 10 4,990 - 5,000
Net loss for the year - - - ( 5,000) ( 5,000)
----------- ----------- ------------ ------------ ------------
Balance, December 31, 1994, 1995,
Forward stock split, 100 for 1 990,000 990 ( 990) - -
Net loss for the year - - - ( 1,675) ( 1,675)
----------- ----------- ------------ ------------ ------------
Balance, December 31, 1998
- as previously reported 1,000,000 1,000 4,000 ( 6,675) ( 1,675)
Prior period adjustment for legal - - - - -
----------- ----------- ------------ ------------ ------------
Balance, December 31, 1998 Issued for cash:
Private placement - at $0.001 8,000,000 8,000 - - 8,000
Share subscriptions - at $0.60 583,333 583 349,417 - 350,000
- at $0.70 142,857 143 99,857 - 100,000
- at $1.25 100,979 101 126,123 - 126,224
- at $1.35 55,556 56 74,944 - 75,000
- at $3.00 22,000 22 65,978 - 66,000
For services rendered 350,000 350 - - 350
Less: finder's fee - ( 782) ( 51,718) - ( 52,500)
Net loss for the year - - - ( 705,213) ( 705,213)
----------- ----------- ------------ ------------ ------------
Balance, December 31, 1999 10,254,725 $ 9,473 $ 668,601 $ ( 743,654) $ ( 65,580)
=========== =========== ============ ============ ============
Shares Subscribed
Shares subscribed - at $1.50 33,333 $ 33 $ 49,967 $ 50,000
Less: finders fees - ( 33) ( 2,467) 2,500
----------- ----------- ------------ ------------ ------------
Balance, December 31, 1999 33,333 $ - $ 47,500 $ 47,500
=========== =========== ============ ============ ============
Preferred Stock - Note 6
---------------
Balance, December 31, 1998 - $ - $ - $ -
Issued for cash during the year
Share subscriptions - at $0.01 300,000 300 2,700 3,000
----------- ----------- ------------ ------------ ------------
Balance, December 31, 1999 300,000 $ 300 $ 2,700 $ 3,000
=========== =========== ============ ============ ============
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
STATEMENTS OF CASH FLOWS
for the years ended December 31, 1999, 1998 and 1997
(Stated in US Dollars)
(Restated
- Note 13)
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Cash Flow from Operating Activities
Net loss for the year $ ( 705,213) $ ( 33,441) $ -
Add items not using cash
Amortization of deferred finance charges 1,364 - -
Consulting fees, wages and benefits - Note 14 350 - -
Inventory write-down 50,974 - -
------------------- ---------------- ------------------
( 652,525) ( 33,441) -
Adjustment to reconcile net loss to net cash used
Accounts receivable ( 9,257) - -
Inventory ( 82,236) - -
Prepaid expenses ( 1,264) - -
Royalty advances ( 35,000) - -
Accounts payable 102,066 32,091 -
Due to related parties - 1,350 -
------------------- ---------------- ------------------
Net cash used in operating activities ( 678,216) - -
------------------- ---------------- ------------------
Cash Flow Used in Investing Activity
Deposit on investment ( 205,000) - -
------------------- ---------------- ------------------
Net cash used in investing activity ( 205,000) - -
------------------- ---------------- ------------------
Cash Flow Provided by Financing Activities
Proceeds from promissory notes payable 191,800 - -
Increase in deferred finance charges ( 10,000) - -
Issuance of common shares 725,224 - -
Issuance of preferred shares 3,000 - -
Payment of finder's fee ( 52,500) - -
Shares subscribed 47,500 - -
------------------- ---------------- ------------------
Net cash provided by financing activities 905,024 - -
------------------- ---------------- ------------------
Net increase in cash during the year 21,808 - -
Cash, beginning of year - - -
------------------- ---------------- ------------------
Cash, end of year $ 21,808 $ - $ -
=================== ================ ==================
Non-cash Transactions - Note 14
</TABLE>
SEE ACCOMPANYING NOTES
<PAGE>
WTAA International, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 13
(Stated in U.S. dollars)
----------------------
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1999 and 1998
(Stated in U.S. Dollars)
----------------------
Note 1 Nature and Continuance of Operations
The company's principle business activities are the manufacturing,
distributing and marketing of bottled water products in the United
States and Canada.
These financial statements have been prepared on a going concern
basis. The company has a working capital deficiency of $36,916 as
at December 31, 1999 and has accumulated a deficit of $743,654
since inception. Its ability to continue as a going concern is
dependent upon the ability of the company to generate profitable
operations and /or obtain necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. The outcome of these matters cannot
be predicted, with any certainty, at this time. The company
historically satisfies its capital needs primarily by issuing
equity securities. In addition, the company intends to expand its
revenue through continued marketing plans. These financial
statements do not include any adjustments to the amounts and
classification of assets and liabilities that may be necessary
should the company be unable to continue as a going concern.
Note 2 Summary of Significant Accounting Policies
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in the
United States. Because a precise determination of many assets and
liabilities is dependent upon future events, the preparation of
financial statements for a period necessarily involved the use of
estimates, which have been made using careful judgement. Actual
results may differ from these estimates.
The financial statements, in management's opinion, have been
properly prepared within reasonable limits of materiality and
within the framework of the significant accounting policies
summarized below:
Organization
WTAA International, Inc. was incorporated in the State of Florida
on April 17, 1991, under the name of Aarden-Bryn Enterprises, Inc.
The company became a foreign registrant in the State of Florida on
December 24, 1998. On December 24, 1998 the company became
qualified to transact business in the State of Nevada.
On August 27, 1998 the company changed its name to Corbetts Clear
Cool Water, Inc., on September 1, 1998 to Corbetts Cool Clear
Water, Inc., on October 27, 1998 to Canadian Cool Clear Water,
Inc., on February 11, 1999 to Canadian Cool Clear WTAA, Inc., and
finally to WTAA International, Inc. on September 24, 1999.
Inventory
Inventory is valued at the lower of cost or market by management.
Cost is determined by the first-in first-out method.
Royalty Advances
Royalty advances are capitalized and charged to income based on
the applicable royalty rate on the related unit sales. Upon
termination of the license, the balance of the royalty advance is
written-off.
License Fees
License fees are capitalized and amortized on the straight-line
basis over the term of the license. Upon termination of a license,
the net carrying amount is written-off.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 2 Summary of Significant Accounting Policies - (cont'd)
------------------------------------------
Deferred Finance Charges
The company capitalizes all fees incurred with respect to
obtaining financing. These charges are deducted from common stock
if they related to the issuance of shares of the company or if
related to the issuance of a debt instrument, they are amortized
on a straight-line basis over the term of the related debt
instrument.
Foreign Currency Translation
Foreign currency transactions are translated into U.S. dollars,
the functional and reporting currency, by the use of the exchange
rate in effect at the date of the transaction, in accordance with
Statement of Financial Accounting Standards No. 52, " Foreign
Currency Translation." At each balance sheet date, recorded
balances that are denominated in a currency other than US dollars
are adjusted to reflect the current exchange rate.
Income taxes
The company uses the liability method of accounting for income
taxes pursuant to Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes."
Stock Based Compensation
The company has elected to account for stock-based compensation
following APBO No. 25, "Accounting for Stock Issued to Employees"
and to provide the disclosures required under SFAS No. 123,
"Accounting for Stock Based Compensation" (Note 5).
Basic Loss per Share
The company reports basic loss per share in accordance with
Statement of Financial Accounting Standards No. 128, "Earnings Per
Share". Basic loss per share is computed using the weighted
average number of shares outstanding during the year. Diluted loss
per share has not been provided, as it would be anti-dilutive.
Fair Market Value of Financial Instruments
The carrying values of cash, accounts receivable, accounts payable
and due to related party approximate fair value because of the
short maturity of those instruments. The fair value of promissory
notes payable are also assumed to approximate their carrying
amounts.
Note 3 Deposit on Investment- Note 6
---------------------
By an undated agreement, the company paid $100,000 for an option
to purchase 100% of the common shares of California Bottling
Company, Inc. ("CBC"), a company with a common director. In
consideration of the transfer of the shares, the company shall pay
$3,571,671 and issue common shares with a value of $1,896,436,
valued at one-half of the sum of:
1. the average closing price for the 10 business days immediately
prior to the date of this agreement; and
2. the average closing price for the 10 business days immediately
prior to the closing, October 22, 1999 provided that the
maximum effective price of the shares shall not exceed $1.50
per share.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 3 Investment- Note 6 - (cont'd)
----------
The company also advanced a total of CBC $105,000 as extension
fees. As at January 15, 2000, the option expired. The company has
maintained ongoing discussions with CBC to establish a new
agreement. CBC is holding the $205,000 as a deposit against the
future purchase of CBC.
Note 4 Promissory Notes Payable - Notes 5 and 12
------------------------
The promissory notes are unsecured, bear interest at 8% per annum
and are due in full with interest on July 31, 2001.
The promissory notes payable plus accrued interest may be
converted into common shares of the company at any time. The
exercise price will be determined on the date of receipt of the
written notice to convert (the "Conversion Date") based on a 20%
discount to the average closing price for the ten days prior to
conversion. Such conversion will carry a warrant to purchase
additional common shares with an exercise price set at the closing
share price on the conversion date and exercisable with one-year
thereof.
Note 5 Capital Stock - Notes 4 and 12
-------------
a) Authorized:
50,000,000 common shares with a par value of $0.001 per share
500,000 non-voting, non-cumulative, non-redeemable
preferred shares with a par value of $0.001 per
share
b) Commitments:
Stock Based Compensation
Presented below is a summary of the stock option activity for
the years shown (for purposes of the stock-based compensation
calculation, options cancelled subsequent to December 31, 1999
are not included).
<TABLE>
<CAPTION>
Number of Weighted Average
Stock Options Exercise Price
<S> <C> <C>
Balance, beginning 1991 to 1998 - -
Granted 1999 950,000 $0.50
------- -----
Balance, December 31, 1999 950,000 $0.50
======= =====
</TABLE>
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 5 Capital Stock - Notes 4 and 12 - (cont'd)
-------------
b) Commitments: - (cont'd)
Stock Based Compensation
The company granted stock options at exercise prices equal to
the fair market value of the company's stock at the date of
the grant. Pursuant to APBO No. 25, no compensation expense is
recognized in this circumstance. Under SFAS No. 123, if the
company elects to follow APBO No. 25, it is required to
present pro-forma information as to the effect on income and
earnings per share as if the company had accounted for its
employee stock options under the fair value method of that
statement. Had compensation cost been determined based on the
fair value at the grant dates for those options issued to
directors and employees, the company's net loss and loss per
share would have been increased to the pro-forma amounts
indicated below:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C> <C>
Loss As reported $ 705,213 $ 33,441 $ -
Pro-forma $ 1,204,785 $ 33,441 $ -
Loss per share As reported $ 0.08 $ 0.03 $ -
Pro-forma $ 0.14 $ 0.03 $ -
</TABLE>
Pro-forma diluted loss per share has not been presented
because the conversion of stock options would have an
anti-dilutive effect.
The weighted average fair value at date of grant of the
options granted were as follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Weighted average fair value $ 0.53 $ - $ -
Total options granted 950,000 - -
Total fair value of all options granted $ 499,572 $ - $ -
</TABLE>
The fair value of each option grant was estimated on the date
of the grant using the Black-Scholes option-pricing model with
the following assumptions:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Expected dividend yield 0.0% - -
Expected volatility 232% - -
Risk-free interest rate 6.33% - -
Expected term in years 5 - -
</TABLE>
Preferred Share Conversion
The holders of preferred shares have the option to convert
300,000 preferred shares into common shares of the company on
the basis of one preferred share for ten common shares. These
options expire January 31, 2004.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 5 Capital Stock - Notes 4 and 12 - (cont'd)
-------------
b) Commitments: - (cont'd)
Share Purchase Options
The following common share purchase options were outstanding
at December 31, 1999, granting the holders thereof the right
to purchase one common share for each option held as follows.
<TABLE>
<CAPTION>
Number Exercise Expiry
of Options Price Per Share Date
---------- --------------- ------
<S> <C> <C> <C>
Directors 800,000 $0.50 December 31, 2004
Employees 180,000 $0.50 December 31, 2004
Consultants 200,000 $0.75 December 31, 2000
60,000 $1.00 December 31, 2000
---------
1,240,000
=========
</TABLE>
Share Purchase Warrants
The following common share purchase warrants were outstanding
at December 31, 1999, entitling the holders thereof the right
to purchase one common share for each warrant held as follows:
<TABLE>
<CAPTION>
Number of Exercise Expiry
Warrants Price Per Warrant Date
-------- ----------------- ----
<S> <C> <C> <C>
100,000 $0.70 September 21, 2000
71,428 $0.85 December 31, 2000
-------
171,428
=======
</TABLE>
Convertible Promissory Notes
Note 4
Restricted Common Stock
Included in common stock are a total of 350,000 shares issued
to a director and employee, of which ownership does not vest
to these individuals until certain performance levels are
achieved. As at December 31, 1999, these performance levels
have not been achieved.
Shares Subscribed
On July 26, 1999, a director of the company paid $50,000 to
the company as subscriptions for 33,333 common shares at $1.50
per share pursuant to a share subscription agreement. The
company paid a finders fee of $2,500 in connection with this
financing.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 6 Related Party Transactions - Notes 3, 4, 5 and 12
--------------------------
The company has incurred costs with directors and companies with
common directors as follows:
1999 1998 1997
---- ---- ----
Director's fee $ 6,100 $ - $ -
Investor relations 1,500 - -
---------- ------- --------
$ 7,600 $ - $ -
========== ======= ========
Due to related party, a director of the company, is unsecured,
non-interest bearing and has no specific terms for repayment.
During the year ended December 31, 1999, the company:
- issued 100,000 common shares to a director of the company at
$0.001 for services rendered as a director's fee for $100.
- issued 300,000 preferred shares pursuant to share subscription
agreements at $0.01 per share to directors of the company.
Accounts payable included $2,276 (1998: $Nil; 1997: $Nil) due to a
company with common directors for unpaid expense reimbursements.
Note 7 Deferred Tax Assets
The Financial Accounting Standards Board issued Statement Number
109 in Accounting for Income Taxes ("FAS 109") which is effective
for fiscal years beginning after December 15, 1992. FAS 109
requires the use of the asset and liability method of accounting
of income taxes. Under the assets and liability method of FAS 109,
deferred tax assets and liabilities are recognized for the future
tax consequences attributable to temporary differences between the
financial statements carrying amounts of existing assets and
liabilities and loss carryforwards and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or
settled.
The following table summarizes the significant components of the
company's deferred tax assets:
Total
Deferred Tax Assets
Net operating loss carryforward $ 743,600
--------------
Gross deferred tax assets $ 371,800
Valuation allowance for deferred tax asset ( 371,800)
--------------
$ -
==============
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 7 Deferred Tax Assets - (cont'd)
-------------------
The amount taken into income as deferred tax assets must reflect
that portion of the income tax loss carryforwards, which is likely
to be realized from future operations. The company has chosen to
provide an allowance of 100% against all available income tax loss
carryforwards, regardless of their time of expiry.
Note 8 Income Taxes
No provision for income taxes has been provided in these financial
statements due to the net loss. At December 31, 1999, the company
has net operating loss carryforwards, which expire commencing in
2014 totalling approximately $743,600. The potential tax benefit
of these losses, if any, has not been recorded in the financial
statements.
Note 9 Uncertainty Due to the Year 2000 Issue
The Year 2000 Issue arises because many computerized systems use
two digits rather than four to identify a year. Date-sensitive
systems may recognize the year 2000 as 1900 or some other date,
resulting in errors when information using the year 2000 date is
processed. In addition, similar problems may arise in some systems
which use certain dates in 1999 to represent something other than
a date. Although the change in date has occurred, it is not
possible to conclude that all aspects of the Year 2000 Issue that
may affect the company, including those related to customers,
suppliers or other third parties, have been fully resolved.
Note 10 New Accounting Standards
In April 1998, the Accounting Standards Executive committee issued
SOP 98-5, "Reporting on the cost of start-up activities". This
statement is effective for fiscal years beginning after December
15, 1998. Adopting this standard does not have a material impact
on the company's financial position, results of operations or cash
flows.
In June 1998, the Financial Accounting Standards board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities," which standardized the accounting for derivative
instruments. SFAS is effective for all fiscal quarters of all
fiscal years beginning after June 15, 1999. Adopting this standard
will not have a significant impact on the company's financial
positions, results of operations or cash flows.
In December 1999, the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 101, "Revenue Recognition in
Financial Statements." Adopting this Bulletin does not have a
significant impact on the company's financial position, results of
operations or cash flows.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 11 Commitments - Notes 4 and 5
-----------
a) By an agreement dated May 4, 1999, the company was granted the
right to the use of a Trademark for bottled water and other
selected products in the United States and Canada for a term
of three years commencing May 4, 1999. Consideration for this
right was as follows:
- an up-front non-refundable cash amount of $6,897
(CDN$10,000) (paid);
- issuance of 25,000 restricted common shares of the company
(issued and cancelled); and
- a promissory note in the amount of $15,000 payable on June
30, 1999 (paid).
Royalties will be paid on the following basis:
- $0.20 per case of water sold under the Renoir brand name,
where the company sells between 100,000 cases and 249,999
cases in the calendar year
- $0.25 per case of water sold under the Renoir brand name
where the company sells 250,000 cases or more in the
calendar year.
The minimum royalty per year will be as follows:
- $30,000 in year one of the agreement or $15,000 per semi-
annual period
- $50,000 per year in years two and three of the agreement
and thereafter if the agreement is extended or renewed.
The management of the company has abandoned this agreement. As
a result, $21,897 of license fees relating to this agreement
has been charged to income.
b) By an agreement dated March 1, 1999, the company engaged an
agent to provide promotional assistance and secure the
endorsements of specified athletes.
The term of this agreement is to December 31, 2003 and shall
automatically extend to December 31, 2006 unless either party
serves written notice of their intent to conclude this
agreement by October 1, 2003.
The company will compensate the agent as follows:
- pay an amount equal to 6% of the company's net sale
proceeds from certain products in the United States and
Canada for each calendar year
Pay royalty compensation as follows:
- not less than $25,000 for the partial year 1999, $50,000
for year 2000, $100,000 for year 2001 and $150,000 for
year 2002 and each additional year during the term of this
agreement
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 11 Commitments - Notes 4 and 5 - (cont'd)
-----------
c) By an agreement dated June 15, 1999, the company was appointed
an exclusive agent for the manufacturing and marketing of all
Star Trek bottled water products in North America and
throughout the world. The term of the agreement was three
years.
A royalty of 12.5% of all net sales on the first $1,000,000
and then 15.0% of all net sales in excess of $1,000,000 was
payable.
The company has been named defendant in a legal action
alleging breach of contract and misrepresentation. Legal
counsel to the company is unable to assess the company's
potential liability, if any, resulting from this action. Any
settlement will be reflected as a charge to income in the year
of the settlement. The company has counter-claimed against the
plaintiff for breach of contract.
d) By an agreement dated March 19, 1999, the company was granted
the non-exclusive, non-assignable right to use certain logos
in the manufacture and sale of bottled water in the United
States and Canada. The term of this agreement is two years
terminating December 31, 2001.
The royalty payable is 6.0% of the net sales of the licensed
products bearing the logos.
e) By an agreement dated October 1, 1999, the company was granted
the exclusive right to the use of a Trademark to market
bottled water in the United States and Canada for a term of 27
months expiring December 31, 2001.
The royalty rate is 6.5% of net sales. The company must also
expend at least $25,000 for marketing during the term of the
agreement.
The company is required to make the following advance royalty
payments:
- $30,000 upon execution of the agreement (paid)
- $30,000 on or before January 31, 2000; and
- $30,000 on or before July 31 2000.
The company guarantees minimum total royalty payments of
$120,000, inclusive of the advances, due upon expiration or
earlier termination of the agreement.
f) By an agreement dated December 17, 1999, the company acquired
the exclusive right to manufacture, distribute and market
bottled water products in the United States and Canada for a
term of three years expiring December 31, 2002.
The company agrees to pay $10,000 as a non-refundable,
recoupable advance guarantee against royalties earned through
January 31, 2001, payable as follows:
- $5,000 upon execution of the agreement (paid); and
- $5,000 to be paid no later than January 31, 2000.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 11 Commitments - Notes 4 and 5 - (cont'd)
-----------
f) (cont'd)
To pay an additional minimum guarantee of $70,000 through the
period ending December 31, 2001 as follows, if unearned in
royalties:
Minimum
Guarantee Due
Amounts Date
------- ----
$ 10,000 No later than June 30, 2000
10,000 No later than September 30, 2000
10,000 No later than December 31, 2000
10,000 No later than April 30, 2001
10,000 No later than June 30, 2001
10,000 No later than September 30, 2001
10,000 No later than December 31, 2001
The company shall recover, within the three year term of this
agreement, the advanced royalty payment by offsetting
royalties earned against said advances until the advances are
recouped and shall thereafter make royalty payments on a
quarterly basis as set forth herein.
Exclusivity shall only extend to the agreement through year 1,
(2000) if all guarantee payments in the amount of $20,000 are
paid no later than June 30, 2000 or gross sales of licensed
products exceed $250,000 whichever is sooner.
Exclusivity shall only extend to the agreement through years
two and three if gross sales of licensed products for each
preceding year exceeds $500,000.
The company agrees to pay royalties for each unit of the
licensed products as follows:
Royalty Rate Contract Year
------------ -------------
4% of the "Net Wholesale Price" 2000
6% of the "Net Wholesale Price" 2001
7% of the "Net Wholesale Price" 2002
This agreement will automatically be extended for an
additional 1 year term with an additional annual guarantee of
$50,000 payable as follows:
- $25,000 due on January 1, of said renewal year; and
- $25,000 due on June 1, of said renewal year at the royalty
rate of 7% of the "Standard Net Price". Exclusivity will
continue if gross sales exceed $700,000 per year during
said renewal year.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 12 Subsequent Events - Notes 5 and 6
-----------------
Subsequent to December 31, 1999:
i) The company entered into an agreement to acquire the exclusive
non-transferable, non-assignable right to manufacture,
distribute and market bottled water products in the Unites
States and Canada using certain Trademark images as follows:
a) Woody Woodpecker and Friends
i) Guarantee fee - $30,000 payable as follows:
- $25,000 due upon execution of the schedule
(subsequently paid); and
- $5,000 due on or before December 31, 2001.
ii) Royalty rate - 6% of wholesale price standard
iii) License term - expiring December 31, 2001
iv) Marketing commitment - the company is to spend a
minimum 7.5% of actual sales of the licensed product
during the license term toward marketing programs.
b) Universal Studios Monsters
i) Guarantee fee - $25,000 payable as follows:
- $20,000 due upon execution of the schedule
(subsequently paid); and
- $5,000 due on or before December 31, 2002.
ii) Royalty rate - 6% of wholesale price standard
iii) License term - expiring December 31, 2002
iv) Marketing commitment - the company is to spend a
minimum 7.5% of actual sales of the licensed product
during the license term toward marketing programs.
c) The Flintstones in Viva Rock Vegas
i) Guarantee fee - $20,000 payable as follows:
- $15,000 due upon execution of the schedule
(subsequently paid); and
- $5,000 due on or before December 31, 2000.
ii) Royalty rate - 5% of wholesale price standard
iii) License term - expiring December 31, 2000
iv) Marketing commitment - the company is to spend a
minimum 7.5% of actual sales of the licensed product
during the license term toward marketing programs.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 12 Subsequent Events - Notes 5 and 6 - (cont'd)
-----------------
d) Rocky and Bullwinkle and Friends
i) Guarantee fee - $25,000 payable as follows:
- $25,000 due upon execution of the schedule
(subsequently paid); and
- $5,000 on or before June 30, 2000
ii) Royalty rate - 5% of wholesale price standard
iii) License term - Expiring June 30, 2002
iv) Marketing commitment - the company is to spend a
minimum 7.5% of actual sales of the licensed product
during the license term toward marketing programs.
e) Woody Woodpecker, as used in conjunction with the Team
Gordon Licensing Program
i) Guarantee fee - $30,000 payable as follows:
- $15,000 due upon execution of the schedule
(subsequently paid); and
- $15,000 on or before December 31, 2001
ii) Royalty rate - 6.5%
iii) License term - Expiring December 31, 2001
iv) Marketing commitment - the company is to spend a
minimum 7.5% of actual sales of the licensed articles
during the license term toward marketing programs.
ii) The company allotted an additional 110,000 common shares in
respect to the 22,000 common shares previously issued during
the year ended December 31, 1999, so as to adjust the
effective purchase price to $0.50 per share from $3.00 per
share, with the objective of being more consistent with the
market at the time of original issuance.
iii)The company entered into an agreement to acquire 630,000
common shares, representing 51% of the issued and outstanding
shares of Tempus, Inc. ("Tempus") for cash consideration of
$6,300.
In addition, on or before three days after the closing, the
company shall purchase the remaining 600,000 issued and
outstanding shares of Tempus, (49%) for $0.01 per share from
the participating sellers who join this agreement.
By plan of merger dated May 13, 2000, the company shall be
merged with Tempus and the separate existence of Tempus shall
cease and the company shall continue as the surviving
corporation and retain the name "WTAA International, Inc.".
iv) The company issued 100,000 common shares to a director of the
company at $0.001 for services rendered as a directors fee for
$100.
v) The company issued 738,916 common shares, pursuant to a share
subscription agreement at $0.203 per share for total proceeds
of $150,000.
<PAGE>
WTAA Internationl, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
December 31, 1999 and 1998 - Page 2
(Stated in U.S. dollars)
----------------------
Note 12 Subsequent Events - Notes 5 and 6 - (cont'd)
-----------------
vi) The company received loan proceeds of $180,000 by way of
promissory notes which are unsecured, bear interest at 8% per
annum and are due December 31, 2000. The lenders have the
right to convert the principal and accrued interest into
common shares at an exercise price based on a 20% discount to
the closing market price on the date of conversion. Upon
conversion, the holders will also receive share purchase
warrants entitling the holders thereof the right to purchase
additional common shares with an exercise price set at
the closing share price on the conversion date and exercisable
within two years thereof. The number of share purchase
warrants will be based on one-half of the common shares
obtained under the share conversion (Note 12 (vii)).
vii) The company received a notice of intent to convert the
promissory notes issued subsequent to December 31, 1999 along
with accrued interest into common shares of the company. The
company issued 915,156 common shares at $0.20 per share
(balance outstanding at date of conversion-$183,031). Pursuant
to the terms of conversion, 457,578 share purchase warrants
were issued. Each warrant entitles the holder thereof the
right to purchase one common share of the company at $0.25 per
share until May 31, 2002 (Note 12 (vi)).
viii) The company received a notice of intent to convert the
promissory notes outstanding as at December 31, 1999 along
with the accrued interest into common shares of the company.
The company issued 1,508,214 common shares at $0.136 per share
(balance outstanding at date of conversion-$205,117). Pursuant
to the terms of conversion, 1,508,214 share purchase warrants
were issued. Each warrant entitles the holder thereof the
right to purchase one common share of the company at $0.17 per
share until July 31, 2001.
xi) The company granted 1,700,000 directors and employees share
purchase options entitling the holders thereof the right to
purchase one common share for each option held at $0.20 per
share until May 30, 2005. In addition, the company cancelled
30,000 employees share purchase options and 260,000
consultants share purchase options.
Note 13 Prior Period Change
The company determined that accounts payable at December 31, 1998
was understated by $31,766 due to accrued legal fees not recorded.
These fees related to the year ended December 31, 1998.
Consequently, accounts payable at December 31, 1998, legal fees
for the year ended December 31, 1998 and deficit accumulated
during the development stage as at December 31, 1998 were restated
to reflect this adjustment.
Note 14 Non-cash Transactions
Investing and financing activities that do not have a direct
impact on cash flows are excluded from the cash flow statement.
During the year ended December 31, 1999, the following transaction
has been excluded from the statement of cash flows:
- the company issued a total of 350,000 common shares to a
director and employee for services rendered.
<PAGE>
<TABLE>
<CAPTION>
W T A A INTERNATIONAL/TEMPUS, INC PRO FORMA
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED BALANCE SHEET FOR THE QUARTER ENDED MARCH 31,
ASSETS 2000 1999
<S> <C> <C>
Current Assets
Cash $ (160) $ (11,019)
Accounts Receivable 29,740 (300)
Inventory 30,712
Prepaid Expenses 905
Royalty Advances 165,000
--------------- -------------
Total Current Assets 226,196 (11,319)
Other Assets
Deferred finance charges (net of accum amort) 8,328 -
Acquisitions 205,000 -
Operating Expense Advances - 50,299
--------------- -------------
Total Other Assets 213,328 50,299
---------------
-------------
TOTAL ASSETS $ 439,524 $ 38,981
=============== =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities
Accounts Payable 230,079 $ 119,086
Tax Liabilities (2,246) $ (582)
Due to related party 41,619 1,350
--------------- -------------
Total Current Liabilities 269,451 119,854
Long Term Liabilities
Promissory notes payable 371,800 -
Stockholder's Equity
Common stock - Notes 4, 5, 6 and 12 10,312 9,022
Additional paid-in capital 853,062 69,978
Preferred stock - Notes 5 and 6 300 300
Additional paid-in capital 2,700 2,700
Deficit (1,068,101) (162,873)
--------------- -------------
Total Stockholder's Equity (201,727) (80,873)
--------------- -------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 439,524 $ 38,981
=============== =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
W T A A INTERNATIONAL/TEMPUS, INC. PRO FORMA
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
FOR THE QUARTER ENDED MARCH 31,
2000 1999
--------------- ---------------
<S> <C> <C>
Sales $ 39,344 $ -
Cost of goods sold 49,758 300
--------------- ---------------
(10,414) (300)
General and Administrative Expenses
Accounting and audit fees - -
Advertising 14,146 10,107
Amortization of deferred finance charges 308 -
Bad debts 2,491 -
Bank charges and interest 8,527 2,878
Consulting fees 10,464 9,286
Courier 111,348 1,753
Director's fee - Note 6 3,100 -
Dues and subscriptions 1,000 1,284
Insurance 360 310
Investor relations - Note 6
Legal fees 47,159 13,398
License fees - Note 11 54
Office and general 4,020 6,973
Printing
Rent 8,181 8,287
Telephone 9,472 9,822
Travel and entertainment 10,837 20,025
Wages and benefits 82,619 39,956
--------------- ---------------
314,032 124,132
Net loss for the quarter (324,446) (124,432)
Loss per share (0.03) (0.12)
--------------- ---------------
Weighted Average Common Shares 10,690,850 1,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL/TEMPUS, INC. PRO FORMA
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENT OF CASH FLOWS
FOR THE QUARTER ENDED MARCH 31,
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (324,446) $ (33,441)
Add items not using cash
Amortization of deferred finance charges 308 -
Consulting fees, wages and benefits - Note 14 - -
Inventory write-down - -
--------------- --------------
(324,138) (33,441)
Adjustments to reconcile net loss to net cash used
in operations
Accounts receivable (20,483) -
Inventory 550 -
Prepaid expenses 359 -
Royalty advances (130,000) -
Accounts payable 95,922 32,091
Tax liabilities (2,246)
Due to related parties 40,269 1,350
--------------- --------------
Net cash used in operating activities (339,767) -
---------------
Cash Flow Used in Investing Activity
Deposit on investment - -
--------------- --------------
Cash Flow Provided by Financing Activities
Proceeds from promissory notes payable 180,000 -
Increase in deferred finance charges - -
Issuance of common shares 137,800 -
Issuance of preferred shares - -
Payment of finder's fee - -
Shares subscribed - -
--------------- --------------
Net cash provided by financing activities 317,800 -
Net increase (decrease) in cash during the quarter (21,967) -
Cash, beginning of period 21,808 -
Cash, end of period $ (159) $ -
=============== ==============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL/TEMPUS, INC. PRO FORMA
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
For the years ended December 31, 1999, 1998 and 1997
Common Common Paid in Accumulated Stockholder's
No./shares $ Amount Capital Deficit Equity
------------- ------------ ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance December 31, 1993 - - - -
Issued for services rendered 10,000 10 4,990 5,000
Net loss for the year (5,000) (5,000)
-------------------------------------------------------------------------------
Balance at March 31, 1998 10,000 $ 10 $ 4,990 $ (5,000) $ -
Forward stock split 100 for 1 990,000 990 (990) -
Net loss for the year (1,675) (1,675)
-------------------------------------------------------------------------------
Balance at December 31, 1998 1,000,000 $ 1,000 $ 4,000 $ (6,675) $ (1,675)
Prior period adjustment for legal fees(Note 13) (31,766) (31,766)
Issued for cash: -
Private placement - at $ 0.001 8,000,000 8,000 8,000
Share subscriptions - at $ 0.60 583,333 583 349,417 350,000
- at $ 0.70 142,857 143 99,857 100,000
- at $ 1.25 100,979 101 126,123 126,224
- at $ 1.35 55,556 56 74,944 75,000
- at $ 3.00 22,000 22 65,978 66,000
For services rendered 350,000 350 350
Less: finder's fee - (782) (51,718) (52,500)
Net loss for the year - (705,213) (705,213)
-------------------------------------------------------------------------------
Balance December 31, 1999 10,254,725 9,473 668,601 (743,654) (65,580)
Issued for cash
Subscribed shares issued 33,333 47,500 47,500
Private placement - at $ 0.203 738,916 739 149,261 150,000
Merger with Tempus, Inc. (12,300) (12,300)
For services rendered 100,000 100 100
Net loss for the quarter $ (324,446) (324,446)
-------------------------------------------------------------------------------
Balance at March 31, 2000 11,126,974 10,312 853,062 (1,068,100) (204,726)
</TABLE>
Note: For purposes of this consolidation and proforma the results of a private
placement and the acquisition of Tempus, Inc. are shown as if they had taken
effect as of the end of the fiscal quarter, or March 31, 2000. The actual
transaction occurred in May of 2000.
