UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
--------------------------------------------------------------------------------
(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
---------- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
---------- OF 1934
For the transition period from ____________ to ___________
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Commission File Number: 3-30387
-------
Investment Technology, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 88-0431927
---------------------------- --------------------------
(State of incorporation) (IRS Employer ID Number)
9522 Malasana Court, Las Vegas NV 89147
---------------------------------------
(Address of principal executive offices)
(702) 248-1118
--------------
(Issuer's telephone number)
5235 Island Chain Road, Las Vegas NV 89118
------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report)
--------------------------------------------------------------------------------
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X NO
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: October 7, 2000: 10,453,351
----------------------------
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
<PAGE>
Investment Technology, Inc.
Form 10-QSB for the Quarter ended September 30, 2000
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 12
Part II - Other Information
Item 1 Legal Proceedings 13
Item 2 Changes in Securities 13
Item 3 Defaults Upon Senior Securities 13
Item 4 Submission of Matters to a Vote of Security Holders 13
Item 5 Other Information 14
Item 6 Exhibits and Reports on Form 8-K 14
Signatures 14
2
<PAGE>
<TABLE>
<CAPTION>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Balance Sheets
September 30, 2000 and 1999
(Unaudited)
ASSETS
------
2000 1999
----------- -----------
<S> <C> <C>
Current assets
Cash on hand and in bank $ 37 $ --
Advances to shareholders 200,000 --
Interest receivable on advances to shareholders 16,000 --
----------- -----------
Total current assets 216,037 --
----------- -----------
Other assets
Licensing agreement, net of accumulated
amortization of $37,463 and $-0-, respectively 961,537 --
----------- -----------
TOTAL ASSETS $ 1,177,574 $ --
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities
Accounts payable - trade $ 1,587 $ --
Accrued executive compensation 96,000 --
Advances from officer 6,000 --
Note payable to shareholder 200,000 --
Interest payable on note payable to shareholder 16,000 --
----------- -----------
Total liabilities 319,587 --
----------- -----------
Commitments and contingencies
Stockholders' equity
Common stock - $0.001 par value
50,000,000 shares authorized
10,453,351 and 1,608,351 shares
issued and outstanding, respectively 10,453 1,608
Additional paid-in capital 1,229,264 143,959
Accumulated deficit (381,730) (145,567)
----------- -----------
Total stockholders' equity 857,987 --
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,177,574 $ --
=========== ===========
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Statements of Operations and Comprehensive Income
Nine and Three months ended September 30, 2000 and 1999
(Unaudited)
Nine months Nine months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net revenues $ -- $ -- $ -- $ --
----------- ----------- ----------- -----------
Operating expenses
Executive compensation 96,000 -- 96,000 --
General and administrative expenses (19,687) -- 117 --
Consulting and professional fees 86,053 -- 7,715 --
Amortization of licensing agreement 37,463 -- 24,795 --
----------- ----------- ----------- -----------
Total operating expenses 199,829 -- 128,627 --
----------- ----------- ----------- -----------
Loss from continuing operations (199,829) -- (128,627) --
Other income (expense)
Interest expense (16,051) -- (8,000) --
Interest income 16,000 -- 8,000 --
----------- ----------- ----------- -----------
Loss from continuing operations
before income taxes (199,880) -- (128,627) --
Income tax benefit (expense) -- -- -- --
----------- ----------- ----------- -----------
Net Loss from continuing operations (199,880) -- (128,627) --
----------- ----------- ----------- -----------
Discontinued operations,
net of income taxes
Income (Loss) from discontinued
operations, net of income taxes
of $(160,922) -- (839,143) -- --
Income (Loss) on disposition,
net of income taxes of
$(182,663) -- (190,781) -- --
----------- ----------- ----------- -----------
Loss from discontinued operations -- (1,029,924) -- --
----------- ----------- ----------- -----------
Net Loss (199,880) (1,029,924) (128,627) --
Other comprehensive income -- -- -- --
----------- ----------- ----------- -----------
Comprehensive Income (Loss) $ (199,880) $(1,029,924) $ (128,627) $ --
=========== =========== =========== ===========
</TABLE>
- Continued -
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Statements of Operations and Comprehensive Income
Nine and Three months ended September 30, 2000 and 1999
(Unaudited)
Nine months Nine months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
2000 1999 2000 1999
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Loss from continuing operations $ (199,880) $ -- $ (128,627) $ --
Loss from discontinued operations -- (1,029,924) -- --
------------- ------------- ------------- -------------
Net Loss $ (199,880) $ (1,029,924) $ (128,627) $ --
============= ============= ============= =============
Earnings (Loss) per weighted-average
share of common stock outstanding
From continuing operations $ (0.03) $ 0.00 $ (0.01) $ 0.00
From discontinued operations 0.00 (0.64) 0.00 (0.00)
------------- ------------- ------------- -------------
Total earnings (loss) per share $ (0.03) $ (0.64) $ (0.01) $ (0.00)
============= ============= ============= =============
Weighted-average number
of common shares outstanding 7,535,614 1,608,351 10,453,351 1,608,351
============= ============= ============= =============
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Statements of Cash Flows
Nine and Three months ended September 30, 2000 and 1999
(Unaudited)
Nine months Nine months
ended ended
September 30, September 30,
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) for the period $ (199,880) $(1,029,924)
Adjustments to reconcile net loss to net
cash provided by operating activities
Depreciation and amortization 37,463 9,810
Consulting fees paid with common stock 62,250 --
Provision for bad debts -- 977,707
Provision for income taxes -- (160,922)
Loss on disposition of operations -- 190,781
(Increase) in interest receivable on advances from shareholders (16,000) --
(Decrease) in accounts payable and other accrued liabilities (15,929) --
Increase in accrued officer compensation 96,000 --
Increase in interest payable on loans from shareholders 16,000 --
Change in net assets and liabilities of discontinued operations 11,976 29,946
----------- -----------
Net cash provided by (used in) operating activities (8,120) 17,398
----------- -----------
Cash flows from investing activities -- --
----------- -----------
Cash flows from financing activities
Advances from officer 6,000 --
Proceeds from private placement of common stock 30,000 --
Cash paid on notes payable to shareholders (37,300) --
Cash transferred in disposition of operations -- (819)
Net change in long-term liabilities of discontinued operations -- (16,735)
----------- -----------
Net cash provided by (used in) financing activities (1,300) (17,554)
----------- -----------
Increase (Decrease) in Cash (9,420) (156)
Cash at beginning of period 9,457 156
----------- -----------
Cash at end of period $ 37 $ --
=========== ===========
Supplemental disclosure of interest and income taxes paid
Interest paid for the period $ 51 $ --
=========== ===========
Income taxes paid for the period $ -- $ --
=========== ===========
Supplemental disclosure of non-cash investing and financing activities
Common stock issued to acquire licensing agreement $ 999,000 $ --
=========== ===========
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Notes to Financial Statements
Note A - Organization and Description of Business
Investment Technology, Inc. (Company) was originally incorporated as Career
Opportunities, Inc. in 1983 under the laws of the State of Oregon. The Company
changed its corporate name to Career Opportunities (Int'l), Ltd. in May 1997.
On December 15, 1997, the Company merged with and into USFC, Inc. (USFC) (a then
dormant publicly-owned Washington corporation) with the exchange of
approximately 4,993,413 shares of USFC for 100% of the issued and outstanding
shares of the Company. For accounting purposes, this transaction was treated as
a reverse merger whereby the Company was the acquiring entity for accounting
purposes while USFC was the acquiring company for legal purposes. The historical
financial statements of the Company became the restated historical financial
statements of the continuing entity. Concurrent with the merger, the resulting
entity was reincorporated in the State of Oregon and changed its corporate name
to Distance Learning Systems, Inc. (DLS).
USFC, Inc. was originally incorporated in 1968 under the laws of the State of
Washington. USFC successfully completed a public offering pursuant to a
registration exemption under Regulation A of the U. S. Securities and Exchange
Commission in January 1970.
On July 19, 1999, the Company changed its state of incorporation from Oregon to
Nevada by means of a merger with and into a Nevada corporation formed on July 2,
1999 solely for the purpose of effecting the reincorporation. The Certificate of
Incorporation and Bylaws of the Nevada corporation are the Certificate of
Incorporation and Bylaws of the surviving corporation. Such Certificate of
Incorporation changed the Company's name to Investment Technology, Inc. (ITI)
and modified the Company's capital structure to allow for the issuance of
50,000,000 shares of common stock with a par value of $0.001 per share.
For the period from 1983 through September 30, 1999, the Company was in the
business of providing educational research and analysis services to write and
publish specialized study guides for adult learners; specifically tutorial
assistance to nurses and other related persons who aspire to higher education
credentials and who can qualify for and pass examinations administered from the
Regents College program located in the State of New York.
In September 1999, DLS transferred 100% of its assets to a group of
then-controlling shareholders in exchange for the assumption of all outstanding
and contingent liabilities. As of September 30, 1999, the Company had no assets,
liabilities or operations.
During December 1999, the Company attempted to acquire an entity engaged in
providing Internet site hosting and development services. This attempted
acquisition was not successful and all efforts towards this acquisition were
abandoned as of December 31, 1999. There were no significant revenues or
expenses related to this endeavor.
With the disposition of all operations, the Company became fully dependent upon
the support of its controlling shareholders for the maintenance of its corporate
status and to provide all working capital support for the Company's behalf. The
controlling shareholders intend to continue the funding of necessary expenses to
sustain the corporate entity.
7
<PAGE>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Notes to Financial Statements - Continued
Note A - Organization and Description of Business - Continued
During interim periods, the Company follows the accounting policies set forth in
its annual audited financial statements contained in a Form 10-SB as filed with
the U. S. Securities and Exchange Commission on April 18, 2000. The information
presented herein may not include all disclosures required by generally accepted
accounting principles and the users of financial information provided for
interim periods should refer to the annual financial information and footnotes
contained in its annual audited financial statements contained elsewhere in this
document when reviewing the interim financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 2000.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Note B - Summary of Significant Accounting Policies
1. Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
Cash overdraft positions may occur from time to time due to the timing of
making bank deposits and releasing checks, in accordance with the
Company's cash management policies.
2. Licensing agreement
-------------------
The licensing agreement is amortized over a 10 year period using the
straight-line method.
3. Income taxes
------------
The Company uses the asset and liability method of accounting for income
taxes. At September 30, 2000 and 1999, respectively, the deferred tax
asset and deferred tax liability accounts, as recorded when material to
the financial statements, are entirely the result of temporary
differences. Temporary differences represent differences in the
recognition of assets and liabilities for tax and financial reporting
purposes, primarily accumulated depreciation and amortization, allowance
for doubtful accounts and vacation accruals.
8
<PAGE>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Notes to Financial Statements - Continued
Note B - Summary of Significant Accounting Policies - Continued
3. Income taxes
------------
In periods prior to June 30, 1999, the Company utilized the installment
method of reporting collections on its contracts related to the provision
of educational research and analysis services to write and publish
specialized study guides for adult learners; specifically tutorial
assistance to nurses and other related persons who aspire to higher
education credentials and who can qualify for and pass examinations
administered from the Regents College program located in the state of New
York. Accordingly, this treatment created a deferred tax liability related
to the timing of reporting the income from contracts between its financial
statements and its tax returns.
Due to the provisions of Internal Revenue Code Section 338, the Company
will have no net operating loss carryforwards available to offset
financial statement or tax return taxable income in future periods as a
result of a change in control involving 50 percentage points or more of
the issued and outstanding securities of the Company.
4. Earnings (loss) per share
-------------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of September 30, 2000 and 1999, the
Company has no outstanding warrants and options issued and outstanding.
Note C - Discontinued Operations
On September 25, 1999, the Company transferred 100% of its assets to a group of
then-controlling shareholders in exchange for the assumption of all outstanding
and contingent liabilities. As of September 30, 1999, the Company had no assets,
liabilities or operations.
The results of the Company's operations for the respective periods presented are
reported as a component of discontinued operations in the consolidated
statements of operations. Additionally, the respective gain or loss incurred on
the sale of the Company's operations are also presented separately as a
component of discontinued operations.
Summarized results of operations for the disposed operations for nine months
ended September 30, 1999 are as follows:
September 30,
1999
-------------
Net sales $ 199,002
=============
Operating income (loss) $ (1,000,065)
=============
Loss from discontinued operations $ (839,143)
=============
9
<PAGE>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Notes to Financial Statements - Continued
Note C - Discontinued Operations - Continued
During December 1999, the Company attempted to acquire an entity engaged in
providing Internet site hosting and development services. This attempted
acquisition was not successful and all efforts towards this acquisition were
abandoned as of December 31, 1999. There were no significant revenues or
expenses related to this endeavor.
Summarized results of operations for this unsuccessful effort for the month of
December 1999 is as follows
Month of
December 1999
-------------
Net sales $ 15,225
========
Operating income $(33,382)
========
Loss from discontinued operations $(33,382)
========
Note D - Advances to Shareholders
The Company has advanced certain funds to various shareholders aggregating
approximately $200,000. These advances are due on demand and bear interest at
8.0%, commencing January 1, 2000. The advances are informally collateralized by
the respective shareholder's holdings in the Company's common stock.
Note E - Advances from Officer
During the third quarter of 2000, the Company's President and Chief Executive
Officer advanced the Company approximately $6,000 for working capital to support
operations.
Note F - Note Payable to Shareholders
Notes payable to shareholders as of September 30, 2000 and 1999 consist of the
following:
2000 1999
-------- --------
Note payable to a shareholder. Interest at 8.0%,
commencing January 1, 2000. Principal and
accrued interest is repayable in monthly installments
equal to 15.0% of the net profits, if any, of the
Company. However, the note may be prepaid
at any time without penalty. Unsecured $200,000 $ -
-------- --------
$200,000 $ -
======== ========
10
<PAGE>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Notes to Financial Statements - Continued
Note G - Licencing Agreement
During the first quarter of 2000, the Company entered into negotiations with
Pharmedical Corporation, a privately- owned Nevada corporation for either the
purchase of Pharmedical by the Company or a merger of the two companies.
Pharmedical is involved in the business of manufacturing and distribution of
over-the-counter health, beauty and wellness products for the consumer market.
During the second quarter of 2000, both parties determined that it would be more
advantageous to all concerned that the Company hold an exclusive license to
market, distribute and otherwise promote the product line of Pharmedical.
Accordingly on May 12, 2000, both parties executed an exclusive marketing and
distribution agreement for a period of 50 years. In exchange for this exclusive
license agreement, the Company issued 4,995,000 shares of its restricted,
unregistered common stock. This transaction was valued at approximately
$999,000, which approximates the "fair value" of the shares issued based on the
discounted closing market price on May 12, 2000. This licensing agreement is
being amortized over a ten (10) year period using the straight-line method from
the date of the agreement.
Note H - Common Stock Transactions
In August 1999, the Company's Board of Directors approved a 1 for 4 reverse
stock split on the issued and outstanding common stock of the Company. The
issued and outstanding shares of common stock shown in the accompanying
financial statements reflect the effect of the reverse stock split as if the
reverse split had occurred as of the beginning of the first period presented in
the accompanying financial statements.
On July 7, 1998, the Company issued approximately 759,000 shares (approximately
189,750 reverse stock split shares) of restricted, unregistered common stock to
various individuals for services rendered in conjunction with the reverse merger
combination of Career Opportunities (Int'l), Ltd. and USFC, Inc. This
transaction was valued at approximately $7,590, which approximated the fair
value of the Company's stock issued and the fair value of the services rendered.
On August 13, 1999, the Company issued approximately 2,900,000 post-reverse
stock split shares to various individuals involved in providing consulting
services related to the July 1999 change in control of the Company and a
proposed merger transaction. This transaction was valued at approximately
$2,900, which approximated the fair value of the Company's stock issued and the
fair value of the services rendered.
On May 12, 2000, the Company issued an aggregate 4,995,000 shares of restricted,
unregistered common stock for an exclusive licensing agreement as previously
discussed.
In May 2000, the Company issued an aggregate 830,000 shares of restricted,
unregistered common stock to three individuals for various financial and
business consulting services. These transactions were valued at approximately
$62,250, which approximates the "fair value" of the shares issued based on the
discounted closing market price on the respective date of each transaction.
In May and September 2000, the Company sold an aggregate 120,000 shares of
restricted, unregistered common stock for gross proceeds of $30,000 under a
private placement letter utilizing the exemption from registration provisions of
Rule 504, Regulation D.
11
<PAGE>
Investment Technology, Inc.
(formerly Distance Learning Systems, Inc.)
Notes to Financial Statements - Continued
Note I - Commitments
On October 16, 2000, the Company has an consulting/employment with it's
President and Chief Executive Officer confirmed, in writing, an earlier informal
and undocumented arrangement. This agreement requires the monthly payment of
$12,000 in either cash or the equivalent free trading stock in the Company. This
agreement has no specified term or expiration date.
Note J - Subsequent Event
On October 19, 2000, the Company executed a Stock Purchase Agreement with an
individual controlling 100.0% of an unrelated entity. The Company issued 200,000
shares of the Company's restricted, unregistered common stock in exchange for
500 shares of the issued and outstanding stock of the acquired entity.
12
<PAGE>
Part I - Item 2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) General
Investment Technology, Inc. (Company) was originally incorporated as Career
Opportunities, Inc. in 1983 under the laws of the State of Oregon. The Company
changed its corporate name to Career Opportunities (Int'l), Ltd. in May 1997.
On December 15, 1997, the Company merged with and into USFC, Inc. (USFC) (a then
dormant publicly-owned Washington corporation) with the exchange of
approximately 4,993,413 shares of USFC for 100% of the issued and outstanding
shares of the Company. For accounting purposes, this transaction was treated as
a reverse merger whereby the Company was the acquiring entity for accounting
purposes while USFC was the acquiring company for legal purposes. The historical
financial statements of the Company became the restated historical financial
statements of the continuing entity. Concurrent with the merger, the resulting
entity was reincorporated in the State of Oregon and changed its corporate name
to Distance Learning Systems, Inc. (DLS).
USFC, Inc. was originally incorporated in 1968 under the laws of the State of
Washington. USFC successfully completed a public offering pursuant to a
registration exemption under Regulation A of the U. S. Securities and Exchange
Commission in January 1970.
On July 19, 1999, the Company changed its state of incorporation from Oregon to
Nevada by means of a merger with and into a Nevada corporation formed on July 2,
1999 solely for the purpose of effecting the reincorporation. The Certificate of
Incorporation and Bylaws of the Nevada corporation are the Certificate of
Incorporation and Bylaws of the surviving corporation. Such Certificate of
Incorporation changed the Company's name to Investment Technology, Inc. (ITI)
and modified the Company's capital structure to allow for the issuance of
50,000,000 shares of common stock with a par value of $0.001 per share.
For the period from 1983 through September 30, 1999, the Company was in the
business of providing educational research and analysis services to write and
publish specialized study guides for adult learners; specifically tutorial
assistance to nurses and other related persons who aspire to higher education
credentials and who can qualify for and pass examinations administered from the
Regents College program located in the State of New York.
In September 1999, DLS transferred 100% of its assets to a group of
then-controlling shareholders in exchange for the assumption of all outstanding
and contingent liabilities. As of September 30, 1999, the Company had no assets,
liabilities or operations.
13
<PAGE>
During December 1999, the Company attempted to acquire an entity engaged in
providing Internet site hosting and development services. This attempted
acquisition was not successful and all efforts towards this acquisition were
abandoned as of December 31, 1999. There were no significant revenues or
expenses related to this endeavor.
(3) Results of Operations, Liquidity and Capital Resources
With the disposition of all operations, the Company became fully dependent upon
the support of its controlling shareholders for the maintenance of its corporate
status and to provide all working capital support for the Company's behalf. The
controlling shareholders intend to continue the funding of necessary expenses to
sustain the corporate entity.
On May 12, 2000, the Company received an exclusive license to market, distribute
and otherwise promote the product line of Pharmedical for a period of 50 years.
In exchange for this exclusive license agreement, the Company issued 4,995,000
shares of its restricted, unregistered common stock. This transaction was valued
at approximately $999,000, which approximates the "fair value" of the shares
issued based on the discounted closing market price on May 12, 2000. This
licensing agreement is being amortized over a ten (10) year period using the
straight-line method from the date of the agreement.
On October 19, 2000, the Company issued 200,000 shares of restricted,
unregistered common stock in exchange for 500 shares (approximately 100.0%) of
the issued and outstanding stock of Freeland Financial Services, Inc., d/b/a
Minneapolis Financial Center, a mortgage broker located in Bloomington,
Minnesota. Freeland is engaged in the origination and immediate sale to
investors of conventional conforming and nonconforming and FHA insured mortgages
in the Greater Minneapolis/St. Paul geographic area of Minnesota.
The Company believes that the licensing agreement of the Pharmedical product
line and the operations of Freeland Financial Services, Inc. will generate
positive revenues and related cash flows to support future periods.
All expenditures during Fiscal 2000 relate to expenses necessary to support the
operations of the corporate entity. Expenses are anticipated to increase in
future periods, at the Company's level, based on the expansion of activity
related to the Pharmedical product line and the operations and management
support of Freeland Financial Services, Inc.
Part II - Other Information
Item 1 - Legal Proceedings
None
Item 2 - Changes in Securities
On May 12, 2000, the Company issued an aggregate 4,995,000 shares of restricted,
unregistered common stock for an exclusive licensing agreement. This transaction
was valued at approximately $999,000, which approximates the "fair value" of the
shares issued based on the discounted closing market price on May 12, 2000.
In May 2000, the Company issued an aggregate 830,000 shares of restricted,
unregistered common stock to three individuals for various financial and
business consulting services. These transactions were valued at approximately
$62,250, which approximates the "fair value" of the shares issued based on the
discounted closing market price on the respective date of each transaction.
In May and September 2000, the Company sold an aggregate 120,000 shares of
restricted, unregistered common stock for gross proceeds of $30,000 under a
private placement letter utilizing the exemption from registration provisions of
Rule 504, Regulation D.
14
<PAGE>
On October 19, 2000, the Company issued 200,000 shares of restricted,
unregistered common stock in exchange for 500 shares (approximately 100.0%) of
the issued and outstanding stock of Freeland Financial Services, Inc., d/b/a
Minneapolis Financial Center, a mortgage broker located in Bloomington,
Minnesota. Freeland is engaged in the origination and immediate sale to
investors of conventional conforming and nonconforming and FHA insured mortgages
in the Greater Minneapolis/St. Paul geographic area of Minnesota.
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule
Reports on Form 8-K - None
--------------------------------------------------------------------------------
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Investment Technology, Inc.
October 7 , 2000 /s/ Thomas D. Vidmar
------- --------------------------------
Thomas D. Vidmar
President, Director and
Chief Financial Officer
15
