SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period ended: September 30, 2000
Commission file number 0-28847
WTAA INTERNATIONAL, INC.
-------------------
(Exact name of small business issuer as specified in its charter)
Florida 65-0260846
-------- ----------
(State or other jurisdiction of (I.R.S. Employer incorporation
or organization) Identification No.)
1027 S. Rainbow Blvd., Unit #391, Las Vegas, NV 89145
---------------------------------------------------
Address of principal executive offices)
(702) 341-6622
---------------
(Issuer's telephone number)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
--
As of September 30, 2000, 13,627,011 shares of common stock were outstanding.
Transitional Small Business Disclosure Format: Yes No X
--
<PAGE>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
REPORT AND FINANCIAL STATEMENTS
September 30, 2000
(Stated in US Dollars)
(Unaudited)
<PAGE>
+
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements.
For financial information, please see the financial statements and the
notes thereto, attached hereto and incorporated herein by this reference.
The financial statements have been prepared by WTAA International, Inc.
without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted as allowed by such rules
and regulations, and management believes that the disclosures are adequate to
make the information presented not misleading. These financial statements
include all of the adjustments which, in the opinion of management, are
necessary to a fair presentation of financial position and results of
operations. All such adjustments are of a normal and recurring nature. These
financial statements should be read in conjunction with the audited financial
statements at December 31, 1999, included in the Company's Form 10KSB.
<PAGE>
WTAA International, Inc.
(formerly Canadian Cool Clear WTAA, Inc.)
Notes to the Financial Statements
September 30, 2000 - Page 13
(Stated in U.S. dollars)
(Unaudited)
---------
TERRY AMISANO LTD. AMISANO HANSON
KEVIN HANSON, C.A. Chartered Accountants
INDEPENDENT ACCOUNTANTS' REPORT
To the Stockholders,
WTAA International, Inc.
(formerly Canadian Cool Clear WTAA, Inc.).
We have reviewed the accompanying balance sheet of WTAA International, Inc. as
of September 30, 2000, and the statements of operations, stockholders' equity
and cash flows for the nine month period then ended. These financial statements
are the responsibility of the company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
We previously audited in accordance with generally accepted auditing standards,
the company's balance sheet as of December 31, 1999 (presented herein), and the
related statements of operations, stockholders' equity and cash flows for the
year then ended (not presented herein). In our report dated May 16, 2000 we
expressed an unqualified opinion on those financial statements. In our opinion,
the information set forth in the accompanying balance sheet information as of
December 31, 1999, is fairly stated in all material respects in relation to the
balance sheet from which it has been derived. The comparative figures for the
nine months ended September 30, 1999 were prepared by management and were
neither audited nor reviewed, and accordingly, we do not express an opinion or
any other form of assurance on them.
Vancouver, Canada AMISANO HANSON"
November 15, 2000 Chartered Accountants
Telephone: (604) 689-0188
Facsimile: (604) 689-9773
E-MAIL: [email protected]
Suite 604 - 750 West Pender Street, Vancouver, BC, Canada, V6C 2T7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
------------- ------------------------------------------------------------------
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2000
- ----------------------------------------------------------
The Company had no revenues for this period in 2000 versus revenues of $37,676
for the comparable period in 1999. The cost of sales for 2000 was $826 compared
to $38,829 for the same period in 1999. General and administrative expenses for
2000 were $88,471 compared to $199,077 for 1999. The net loss for the three
month period in 2000 was ($89,471) or ($0.01) per share compared to a loss of
($200,230) in 1999 or ($0.02) per share.
RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2000
COMPARED TO THE SAME PERIOD IN 1999
-------------------------------------------------------------------
The Company had revenues of $34,249 for the nine months ended September 30, 2000
compared to revenues of $40,608 in the same period in 1000. the cost of sales
for 2000 was $47,167 compared to a cost of sales of $46,761 in 1999. General and
administrative expenses in 2000 were $315,568 compared to $476,513 in 1999. The
net loss for the nine month period in 2000 was ($378,486) or ($0.03) per share
compared to a loss of ($482,666) or ($0.05) per share in 1999.
The Company losses will continue until business and profitable operations are
achieved. While the Company is seeking capital sources for investment, there is
no assurance that capital sources can be found.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
As of September 30, 2000 the company had $40,614 in cash . Current liabilities
were $451,995. The Company will be forced to make private placements of stock or
borrow funds in order to fund continuance of operations. There are no assurances
as to the ability of the Company to make such placements or such borrowing.
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
BALANCE SHEETS
September 30, 2000 and December 31, 1999
(Stated in US Dollars)
(Unaudited)
<S> <C> <C>
September 30, December 31,
ASSETS 2000 1999
------ ---- ----
Current
Cash $ 682 $ 21,808
Accounts receivable 3,527 9,257
Inventory 21,405 31,262
Prepaid expenses - 1,264
Royalty advances - Note 5 15,000 35,000
-------- --------
40,614 98,591
Royalty advances - Note 5 200,000 -
Deferred finance charges - 8,636
Deposit on investment - Note 3 205,000 205,000
Organisation cost - Note 2 190,700 -
-------- --------
$ 636,314 $ 312,227
======== ========
LIABILITIES
Current
Accounts payable $ 450,645 $ 134,157
Due to related party 1,350 1,350
-------- --------
451,995 135,507
Promissory notes payable - 191,800
-------- --------
451,995 327,307
-------- --------
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock - Note 4 12,768 9,473
Additional paid-in capital 1,240,691 668,601
Shares subscribed - 47,500
-------- --------
1,253,459 725,574
-------- --------
Preferred stock - Note 4 300 300
Additional paid-in capital 2,700 2,700
-------- --------
3,000 3,000
-------- --------
Deficit ( 1,072,140) ( 743,654)
-------- --------
184,319 ( 15,080)
-------- --------
$ 636,314 $ 312,227
======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
STATEMENTS OF OPERATIONS
for the nine months ended September 30, 2000 and 1999
(Stated in US Dollars)
(Unaudited)
Three months ended September 30, Nine months ended September 30,
-------------------------------- -------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $ - $ 37,676 $ 34,249 $ 40,608
Cost of goods sold ( 826) ( 38,829) ( 47,167) ( 46,761)
------------ ------------ ------------ ------------
( 1826) ( 1,153) ( 12,918) ( 6,153)
General and Administrative Expenses
- Schedule I ( 88,471) ( 199,077) ( 315,568) ( 476,513)
------------ ------------ ------------ ------------
Net loss $ ( 89,297) $ ( 200,230) $ ( 328,486) $ ( 482,666)
============ ============ ============ ============
Basic loss per share $ ( 0.01) $ ( 0.02) $ ( 0.03) $ ( 0.05)
============ ============ ============ ============
Weighted average shares outstanding 11,909,074 9,428,535 11,909,074 9,428,535
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the period from December 31, 1991 to September 30, 2000
(Stated in US Dollars)
(Unaudited)
<S> <C> <C> <C> <C> <C>
Additional
Paid -in Deficit
Common Stock - Note 4 Shares Amount Capital Accumulated Total
------------ ------ ------ ------- ----------- -----
Balance, December 31, 1991, 1992
and 1993 - $ - $ - $ - $ -
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,
1996 and 1997 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, December 31, 1998
- as previously reported 1,000,000 1,000 4,000 ( 6,675) ( 1,675)
Prior period adjustment for legal
fees - - - ( 31,766) ( 31,766)
---------- ---------- ---------- ---------- -----------
Balance, December 31, 1998
- as restated 1,000,000 1,000 4,000 ( 38,441) ( 33,441)
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:
Share subscription - at $0.203 738,916 739 149,261 - 150,000
Share subscription - at $1.50 33 49,967 - 50,000
Less: issue costs ( 2,500) ( 2,500)
For shares re-priced to market 110,000 - - - -
For services rendered - at $0.001 100,000 100 - - 100
For settlement of promissory notes
payable - at $0.136 1,508,214 1,508 203,609 - 205,117
- at $0.200 915,156 915 182,116 - 183,031
Less: issue costs - - ( 10,363) - ( 10,363)
Net loss for the period - - - ( 328,486) ( 328,486)
----------- ---------- ---------- ----------- -----------
Balance, September 30, 2000 13,627,011 $ 12,768 $ 1,240,691 $ (1,072,140) $ 181,319
=========== ========== ========== ============ ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC. Continued
(formerly Canadian Cool Clear WTAA, Inc.)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
for the period from December 31, 1991 to September 30, 2000
(Stated in US Dollars)
(Unaudited)
Additional
Paid -in Deficit
Shares Amount Capital Accumulated Total
------ ------ ------- ----------- -----
<S> <C> <C> <C> <C> <C>
Common 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 and
September 30, 2000 33,333 $ - $ 47,500 $ - $ 47,500
======== ========= ========= =========== =========
Preferred Stock
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 and
September 30, 2000 300,000 $ 300 $ 2,700 $ - $ 3,000
========= ========= ========= =========== =========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
STATEMENTS OF CASH FLOWS
for the nine months ended September 30, 2000 and 1999
(Unaudited)
(Stated in US Dollars)
<S> <C> <C>
2000 1999
---- ----
Cash Flow from Operating Activities
Net loss for the period $ ( 328,486) $ ( 482,666)
Add item not using cash
Amortization 17,572 -
----------- --------------
( 310,914) ( 482,666)
Adjustment to reconcile net loss to net cash used
in operations
Accounts receivable 5,730 ( 30,433)
Inventory 9,857 11,929
Prepaid expenses 1,264 ( 425)
Royalty advances - ( 11,897)
Accounts payable 256,488 ( 66,182)
----------- --------------
Net cash used in operating activities ( 37,575) ( 579,674)
----------- --------------
Cash Flow Provided by Investing Activities
Purchase of organization cost ( 146,000) -
Royalty advances ( 180,000) -
Deposit on investment - ( 205,000)
----------- --------------
Net cash used in investing activities ( 326,000) ( 205,000)
----------- --------------
Cash Flow Provided by Financing Activities
Proceeds from promissory notes payable 180,000 191,800
Issuance of common shares 162,449 678,474
Deferred finance charges - ( 10,000)
----------- --------------
Net cash provided by financing activities 342,449 860,274
----------- --------------
Net increase (decrease) in cash during the period ( 21,126) 75,600
Cash , beginning of period 21,808 -
----------- --------------
Cash and bank overdraft, end of period $ 682 $ 75,600
=========== ==============
Non-cash Transactions - Note 6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
WTAA INTERNATIONAL, INC. Schedule I
(formerly Canadian Cool Clear WTAA, Inc.)
SCHEDULE OF GENERAL AND ADMINISTRATIVE EXPENSES
for the nine months ended September 30, 2000 and 1999
(Stated in US Dollars)
(Unaudited)
Three months ended September 30, Nine months ended September 30,
-------------------------------- -------------------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accounting and audit fees $ 2,000 $ - $ 11,877 $ -
Advertising 2,201 11,134 13,958 30,295
Amortization 11,300 - 17,572 -
Bad debts - - 4,128 -
Bank charges and interest 806 5,259 15,554 8,969
Consulting - 72,354 37,564 124,446
Courier 639 9,779 6,667 14,208
Directors' fees 500 - 3,600 -
Dues and subscriptions - 429 1,122 2,246
Insurance 201 1,453 839 1,789
Investor relations 39,000 16,064 67,495 39,978
Legal fees 1,907 11,398 35,083 30,800
License fees - - - 54
Office and general 585 4,024 11,789 19,481
Rent 2,209 7,431 15,193 20,856
Telephone 8,175 9,194 24,429 28,297
Travel and entertainment 16,988 16,708 32,075 58,446
Wages and benefits 1,960 33,850 16,623 96,648
-------- -------- ------- -------
$ 88,471 $ 199,077 $ 315,568 $ 476,513
======== ======== ======= =======
</TABLE>
<PAGE>
WTAA INTERNATIONAL, INC.
(formerly Canadian Cool Clear WTAA, Inc.)
NOTES TO THE FINANCIAL STATEMENTS
September 30, 2000
(Stated in U.S. Dollars)
(Unaudited)
Note 1 Interim Reporting
-----------------
While the information presented in the accompanying interim nine
months financial statements is unaudited (except as indicated in
the Independent Accountants' Report), it includes all adjustments
which are, in the opinion of management, necessary to present
fairly the financial position, results of operations and cash
flows for the interim periods presented. All adjustments are of a
normal recurring nature. It is suggested that these interim
financial statements be read in conjunction with the company's
December 31, 1999 annual financial statements.
Note 2 Acquisition of Tempus, Inc.
--------------------------
By an agreement dated May 11, 2000, the company acquired 100% of
Tempus, Inc. ("Tempus"), an inactive Wyoming reporting corporation
for total consideration of $206,000. This acquisition was
accounted for by the purchase method of accounting. The company
completed a plan of merger whereby the company was merged with
Tempus and the separate existence of Tempus ceased and the company
continued as the surviving corporation and retained the name "WTAA
International, Inc.".
The effect of these transactions is to record organization costs
of $206,000, being the excess of the cost of the purchase of
Tempus over the fair market value of the assets of Tempus. The
organisation cost represents the value of the reporting company
status and is being amortized over 5 years on a straight line
basis.
Note 3 Deposit on Investment
--------------------
By letters of intent dated October 19, 2000, the company agreed to
acquire 3 companies in the bottled water business for total
consideration of $4,680,000. This consideration is to be paid by
the payment of $4,180,000 on or before December 15, 2000 ($240,000
paid, of which $205,000 was paid prior to September 30, 2000 and
$35,000 was paid subsequent to September 30, 2000) and promissory
notes of $500,000 due, as to $100,000, January 31, 2001, and as to
$400,000, March 31, 2001. The promissory notes are unsecured and
bear interest at 8% per annum. Closing of these agreements can be
extended for one thirty day extension for a total of $31,000. In
addition, subject to a valuation being completed, the purchase
price may be adjusted. If the purchase price is adjusted, then the
consideration to be paid will be adjusted accordingly. If an
increase in the purchase price is determined, the increase will be
paid by the issuance of common shares of the company.
Note 4 Capital Stock - Note 7
-------------
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
<PAGE>
Note 4 Capital Stock - Note 7 - (cont'd)
-------------
b) Commitments:
Share Purchase Options
The following common share purchase options were outstanding
at September 30, 2000, granting the holders thereof the right
to purchase one common share for each option held as follows.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Number Exercise Expiry
of Options Price Per Share Date
---------- --------------- ----
Directors 800,000 $0.50 December 31, 2004
1,700,000 $0.20 May 30, 2005
Employees 150,000 $0.50 December 31, 2004
--------- -----
2,650,000
========= =====
</TABLE>
Share Purchase Warrants
The following common share purchase warrants were outstanding
at September 30, 2000, entitling the holders thereof the right
to purchase one common share for each warrant held as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Number of Exercise Expiry
Warrants Price Per Warrant Date
-------- ----------------- ----
71,428 $0.85 December 31, 2000
1,508,214 $0.17 July 31, 2001
457,578 $0.25 May 31, 2002
--------- -----
2,037,220
========= =====
</TABLE>
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 September 30, 2000, these performance levels
have not been achieved.
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>
Note 5 Commitments - Note 4
-----------
i) 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
ii) 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.
iii)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.
iv) 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.
<PAGE>
Note 5 Commitments - Note 4 - (cont'd)
-----------
iv) - (cont'd)
The company guarantees minimum total royalty payments of
$120,000, inclusive of the advances, due upon expiration or
earlier termination of the agreement. The company is
negotiating the extension of the January 31, 2000 and July 31,
2000 $30,000 payments.
v) 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 (paid).
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 September 30, 2001
10,000 No later than September 30, 2001
10,000 No later than December 31, 2001
The company is negotiating the extension of the June 30, 2000
and September 30, 2000 $10,000 payments.
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 September 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.
<PAGE>
Note 5 Commitments - Note 4 - (cont'd)
-----------
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.
vi) 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 (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 (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.
<PAGE>
Note 5 Commitments - Note 4 - (cont'd)
-----------
c) The Flintstones in Viva Rock Vegas
i) Guarantee fee - $20,000 payable as follows:
- $15,000 due upon execution of the schedule (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.
d) Rocky and Bullwinkle and Friends
i) Guarantee fee - $25,000 payable as follows:
- $20,000 due upon execution of the schedule (paid); and
- $5,000 on or before September 30, 2002
ii) Royalty rate - 5% of wholesale price standard
iii) License term - Expiring September 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 (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.
Note 6 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 nine months ended September 30, 2000, the following
transaction has been excluded from the statement of cash flows:
- the company issued a total of 2,423,370 common shares upon the
settlement of $388,148 of promissory notes payable.
- the company accrued $60,000 in respect to organization costs.
<PAGE>
Note 7 Subsequent Events - Note 3
-----------------
a) On October 12, 2000 the company issued 200,000 common shares
at $0.30 per share in respect to the settlement of accounts
payable outstanding at September 30, 2000 for organisation
costs regarding the Tempus acquisition (Note 2).
b) On October 13, 2000 a former employee of the company filed a
complaint in the State of Nevada claiming that he should be
paid compensation of up to $1,000,000 plus other unspecified
damages and costs. The company has determined that the claim
is without foundation or merit and that it would be successful
in defense of this claim. Any settlement of this claim would
be accounted for in the year of settlement.
c) By a subscription agreement dated November 15, 2000 the
company has agreed to issue 1,375,000 units at $0.24 per unit.
Each unit will consist of one common share and one share
purchase warrant entitling the holder thereof the right to
acquire 1,375,000 common shares at $0.24 per share until
November 15, 2001.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
------------- ------------------------------------------------------------------
RESULTS OF OPERATIONS FOR THE QUARTER ENDED SEPTEMBER 30, 2000
- ----------------------------------------------------------
The Company had no revenues for this period in 2000 versus revenues of $37,676
for the comparable period in 1999. The cost of sales for 2000 was $826 compared
to $38,829 for the same period in 1999. General and administrative expenses for
2000 were $88,471 compared to $199,077 for 1999. The net loss for the three
month period in 2000 was ($89,471) or ($0.01) per share compared to a loss of
($200,230) in 1999 or ($0.02) per share.
RESULTS OF OPERATIONS FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2000
COMPARED TO THE SAME PERIOD IN 1999
-------------------------------------------------------------------
The Company had revenues of $34,249 for the nine months ended September 30, 2000
compared to revenues of $40,608 in the same period in 1000. the cost of sales
for 2000 was $47,167 compared to a cost of sales of $46,761 in 1999. General and
administrative expenses in 2000 were $315,568 compared to $476,513 in 1999. The
net loss for the nine month period in 2000 was ($378,486) or ($0.03) per share
compared to a loss of ($482,666) or ($0.05) per share in 1999.
The Company losses will continue until business and profitable operations are
achieved. While the Company is seeking capital sources for investment, there is
no assurance that capital sources can be found.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
As of September 30, 2000 the company had $40,614 in cash . Current liabilities
were $451,995. The Company will be forced to make private placements of stock or
borrow funds in order to fund continuance of operations. There are no assurances
as to the ability of the Company to make such placements or such borrowing.
<PAGE>
PART II--OTHER INFORMATION
Item 1. Legal Proceedings.
- --------------------------
There are no pending legal proceedings, and the Company is not aware of any
threatened legal proceedings, to which the Company is a party or to which its
property is subject.
Item 2. Changes in Securities.
- ------------------------------
(a) There have been no material modifications in any of the instruments
defining the rights of the holders of any of the Company's registered
securities.
(b) None of the rights evidenced by any class of the Company's
registered securities have been materially limited or qualified by the issuance
or modification of any other class of the Company's securities.
Item 3. Defaults Upon Senior Securities.
- ----------------------------------------
(Not applicable)
Item 4. Submission of Matters to a Vote of Security Holders.
- ------------------------------------------------------------
(Not applicable)
Item 5. Other Information.
- --------------------------
See 8K filed June 12, 2000 and 8K filed July 12, 2000.
Item 6. Exhibits and Reports on Form 8-K.
- -----------------------------------------
(a) Exhibits
No exhibits as set forth in Regulation SB, are considered necessary for
this filing.
(b) Reports on Form 8-K
8k dated July 12, 2000
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, as amended, the registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
WTAA INTERNATIONAL, INC.
Date: November 20, 2000
/s/Randy Larson
------------------
Randy Larson, President
