SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
<P>
----------------------
<P>
FORM 8-K
<P>
----------------------
<P>
CURRENT REPORT
<P>
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
<P>
Date of Report (Date of earliest event reported):
March 9, 2000
<P>
SCOVEL MANAGEMENT INC.
<P>
(Exact Name of Registrant as Specified in Its Charter)
<P>
<TABLE>
<S> <C> <C> <C>
Delaware 000-29195 51-0395696
-------- --------- ----------
(State or Other Jurisdiction (Commission File Number) (IRS Employer Identification No.)
of Incorporation)
</TABLE>
<P>
128 APRIL ROAD, PORT MOODY, BRITISH COLUMBIA, CANADA V3H-3M5
------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
<P>
604/469-8901
<P>
(Registrant's Telephone Number, Including Area Code)
<P>
(Former Name or Former Address, if Changed
Since Last Report)
<P>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
<P>
Pursuant to an Agreement and Plan of Merger (the
"Acquisition Agreement") effective March 9, 2000, Gerald
Ghini the sole shareholder of all of the issued and
outstanding common stock of Scovel Management Inc., a
Delaware corporation (the "Company"), transferred all one
hundred percent (100%) of his outstanding shares of common
stock ("Common Stock") of Scovel Management Inc., to New
Millennium International, Inc. ("New Millennium") for
500,000 shares of $0.0001 par value common stock of New
Millennium (the "Acquisition").
<P>
The Acquisition was approved by the Board of Directors and a
majority of the shareholders of New Millenium and the
Company on March 9, 2000. The Acquisition is intended to
qualify as a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended ("IRC").
<P>
Upon effectiveness of the Acquisition, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission (the "Commission"), New
Millennium elected to become the successor issuer to Scovel
for reporting purposes under the Securities Exchange Act of
1934 (the "Act") and elects to report under the Act
effective March 9, 2000.
<P>
As of the effective date of the Acquisition Agreement,
Scovel shall assume the name of New Millennium. As of the
Effective Date, Mr. Gerald Ghini shall have resigned as an
officer and director of Scovel and New Millennium's officers
and directors will be the officers and directors of Scovel.
<P>
No subsequent changes in the officers, directors and five
percent shareholders of the Company are presently known. The
following table sets forth information regarding the
beneficial ownership of the shares of the Common Stock (the
only class of shares previously issued by the Company) at
March 9, 2000 by (i) each person known by the Company to be
the beneficial owner of more than five percent (5%) of the
Company's outstanding shares of Common Stock, (ii) each
director of the Company, (iii) the executive officers of the
Company, and (iv) by all directors and executive officers of
the Company as a group, prior to and upon completion of this
Offering. Each person named in the table, has sole voting
and investment power with respect to all shares shown as
beneficially owned by such person and can be contacted at
the address of the Company.
<P>
<TABLE>
<S> <C> <C> <C>
NAME OF SHARES OF
TITLE OF CLASS BENEFICIAL OWNER COMMON STOCK PERCENT OF CLASS
---------------------------------------------------------------------------
Common Gerald Ghini 5,000,000 100.00%
<P>
DIRECTORS AND
OFFICERS AS A
GROUP 5,000,000 100.00%
<P>
</TABLE>
<P>
The following is a biographical summary of the directors and
officers of New Millennium:
<P>
JOHN "JT" THATCH, 37, serves as Director, Chief Executive
Officer and President of New Millennium Media Inc. He brings
to the company over 15 years of entrepreneurial experience.
He has successfully founded, operated and managed his own
businesses, and limited partnerships. He brings experience
in the areas of management, retail sales and financing. J.T.
has strong ties in the business community and brings solid
leadership and integrity to the New Millennium. His
experience and enthusiasm will provide us with the ability
to expand our growth within the outdoor/indoor advertising
arena.
<P>
GERALD PARKER, 55 serves as Chairman of the Board. He has
founded several companies, and was one of the five original
founders of Inktomi Corporation (Nasdaq NMS trading symbol:
"INKT"). Gerry also serves as the President of Investment
Management of America (IMA). IMA is a leading venture
capital firm that provides funding and business strategies
to growing companies. He has been instrumental in raising
over $300 million of venture capital for companies. These
companies have a combined market valuation of over $7.5
billion. Mr. Parker's experience will bring knowledge and
stability to enable us the achieve to goals set forward in
this business plan.
<P>
ANDREW BADOLAT, 39, serves as a Director and Vice President
of Corporate Finance. He has successfully managed the
mergers of several public companies as CEO and founder of
Investment Management of America (IMA). Mr. Badolato is an
NASD registered representative and a registered principal.
He holds series 7, 24 and 63 license classifications, which
currently are in inactive status.
<P>
ANTHONY GOMES, 37, serves as a Director and Vice President
of Corporate Marketing. Mr. Gomes has over 12 years of
corporate marketing experience with fortune 100 companies.
He was the Director of Marketing at Tropicana and managed
the $1.6 billion Dole juice, twister beverage and Tropicana
Orange Juice accounts. His vision turned around the Twister
Juice franchise where sales increased 40% with profits
increasing 112%. Prior to Tropicana Mr. Gomes was the Brand
Manager of Gatorade and was instrumental in signing Michael
Jordan as their national spokesman. Tony will be very
instrumental in our national marketing strategies.
<P>
The Directors named above will serve until the next annual
meeting of the shareholders of the Company in the year 2001.
Directors will be elected for one-year terms at each annual
shareholder's meeting. Officers hold their positions at the
appointment of the Board of Directors.
<P>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
<P>
Pursuant to the Acquisition Agreement, Gerald Ghini the sole
shareholder of all of the issued and outstanding Common
Stock of the Company transferred one hundred percent (100%)
of the issued and outstanding shares of common stock (Common
Stock) of Scovel, for 500,000 shares of $0.0001 par value
common stock of the Company. In evaluating New Millennium
as a candidate for the proposed merger, Scovel used criteria
such as the value of the assets of New Millennium and its
subsidiaries, the anticipated operations and acquisitions,
material contracts, business name and reputation, quality of
management, and current and anticipated operations. Scovel
determined that the consideration for the merger was
reasonable. No material relationship exists between the
selling shareholders of Scovel or any of its affiliates, any
director or officer, or any associate of any such director
or officer of Scovel and New Millennium. The consideration
exchanged pursuant to the Acquisition Agreement was
negotiated between Scovel and New Millennium in an
arm's-length transaction. The consideration paid derived
from New Millennium's treasury stock.
<P>
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
<P>
No court or governmental agency has assumed jurisdiction
over any substantial part of the Company's business or
assets.
<P>
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
<P>
New Millennium retains its certifying accountants.
<P>
ITEM 5. OTHER EVENTS
<P>
SUCCESSOR ISSUER ELECTION. Pursuant to Rule 12g-3(a) of the
General Rules and Regulations of the Securities and Exchange
Commission, the New Millennium elected to become the
successor issuer to Scovel Management Inc. for reporting
purposes under the Securities Exchange Act of 1934 and
elects to report under the Act effective March 9, 2000.
<P>
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
<P>
No directors have resigned due to a disagreement with the
Company since the date of the last annual meeting of
shareholders.
<P>
ITEM 7. FINANCIAL STATEMENTS
<P>
The audited consolidated financial statements for the years
ending December 31, 1999 and 1998 and reviewed consolidated
financial statements for the quarter ending March 31, 2000
are filed herewith.
<P>
ITEM 8. CHANGE IN FISCAL YEAR
<P>
There has been no change in the Company's fiscal year.
<P>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
<P>
Board of Directors and Shareholders
New Millennium Media International, Inc.
(formerly Progressive Mailer Corp.)
Safety Harbor, Florida
<P>
We have reviewed the condensed balance sheets of New
Millennium Media International, Inc. (formerly Progressive
Mailer Corp.) (a development stage company) as of December
31, 1999 and March 31, 2000 and the related statements of
operations and cash flows for the quarters ended March 31,
1999 and March 31, 2000. These financial statements are the
responsibility of the Company's management.
<P>
We conducted our review in accordance with standards
established by the American Institute of Certified Public
Accountants. A review of interim financial statements
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 opnion.
<P>
Based on our review, we are not aware of any material
modifications that should be made to the accompanying
consolidated interim financial statements for them to be in
conformity with generally accepted accounting principals.
<P>
We have previously audited, conducted in accordance with
generally accepted auditing standards, the consolidated
balance sheet as of December 31, 1998 and 1999, and the
related statements of operations, stockholders' deficit and
cash flows for the years then ended (not presented herein),
and in our report dated June 1, 2000, we expressed a
qualified report because of going concern uncertainty on
those consolidated financial statements. In our opinion the
information set forth in the accompanying condensed balance
sheet as of December 31, 1999, is fairly stated in all
material respects in relation to the condensed balance sheet
from which is has been derived.
<P>
Richard J. Fuller, CPA, PA
Clearwater, Florida
<P>
June 22, 2000
<P>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
CONDENSED BALANCE SHEET
<TABLE>
<S> <C> <C>
December 31, March 31,
1999 2000
(Unaudited)
-------------------------------------------
ASSETS
Current Assets:
Cash $ 2,063 $285,081
Inventories 548,862 567,612
-------------------------------------------
Total Current Assets 550,925 852,693
-------------------------------------------
Furniture and Equipment-Net 3,964 7,216
-------------------------------------------
Other Assets
Prepaid expenses-net 417 5,271
Goodwill, net of accumulated
amortization of $22,587 and $28,234,
respectively 655,007 649,860
-------------------------------------------
Total Other Assets 655,424 655,131
-------------------------------------------
$ 1,210,313 $1,515,040
============================================
<P>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<P>
Current Liabilities
Notes payable - related $ 1,596,012 $1,611,012
Accounts payable 85,235 38,837
Accrued expenses payable 129,289 145,289
-------------------------------------------
Total Current Liabilities 1,810,536 1,795,138
-------------------------------------------
<P>
Long-term Liabilities 0 0
<P>
Stockholders' Deficit
Common stock, par value $.001; shares
authorized, 25,000,000
shares issued and outstanding,
24,099,881 and 23,079,462
respectively 24,100 23,080
Preferred stock, par value $.001; shares
authorized, 10,000,000
no shares issued and outstanding 0 0
Additional paid in capital 448,991 452,511
Common stock subscribed,
(1,382,000 shares) - 441,500
Deficit accumulated during
the development stage (1,073,314) (1,197,189)
-------------------------------------------
Total Stockholders' Deficit (600,223) (280,098)
-------------------------------------------
$ 1,210,313 $ 1,515,040
===========================================
</TABLE>
<P>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
CONDENSED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<S> <C> <C> <C>
For the For the From Inception
quarter ended quarter ended through
3/31/99 3/31/00 3/31/00
------- ------- --------
Income $ 6,911 $ - $ 59,808
Costs and Expenses:
General and administrative $ 109,106 $ 101,877 $ 1,086,504
Interest expense 23,190 16,000 139,921
Depreciation and amortization 330 5,998 30,572
-------------------------------------------------------
Total costs and expenses 132,626 123,875 1,256,997
-------------------------------------------------------
<P>
Loss from Operations (125,715) (123,875) (1,197,189)
<P>
Net Loss $ (125,715) $ (123,875) $ (1,197,189)
=======================================================
<P>
Basic Loss Per Common Share $ (0.009) $ (0.005) $ (0.052)
</TABLE>
<P>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<S> <C> <C> <C>
For the For the From Inception
quarter ended quarter ended through
3/31/99 3/31/00 3/31/00
------- ------- --------
Cash Flows from Operating Activities:
Net loss $(125,715) $(123,875) $(1,197,189)
Adjustments to reconcile
net loss to net cash used in
operating activities:
Depreciation and amortization 330 5,998 30,772
Common stock issued for services 775 - 24,838
Increase in inventories (481,916) (18,750) (567,612)
Increase in prepaid expenses - (5,000) (5,000)
Increase (decrease) in
accounts payable and accrued
expenses 532,943 (30,398) 184,126
-----------------------------------------------------
Total adjustments 52,132 (48,150) (332,876)
-----------------------------------------------------
Net Cash Used in Operating
Activities (73,583) (172,025) (1,530,065)
-----------------------------------------------------
Cash Flows from Investing Activities
Purchase of goodwill - (500) (678,094)
Purchase of fixed assets - (3,457) (14,916)
-----------------------------------------------------
Net Cash Used in Investing
Activities - (3,957) (693,010)
-----------------------------------------------------
<P>
Cash Flows from Financing Activities
Proceeds from notes
payable - Related 70,000 15,000 1,611,012
Proceeds from common
stock transactions - 444,000 897,144
-----------------------------------------------------
Net Cash provided by
Financing Activities 70,000 459,000 2,508,156
-----------------------------------------------------
<P>
Increase in cash and
cash equivalents $ (3,583) $ 283,018 $ 285,081
<P>
Cash and cash equivalents at
beginning of period $ 6,811 $ 2,063 $ 0
----------------------------------------------------
<P>
Cash and cash equivalents at
end of period $ 3,228 $ 285,081 $ 285,081
====================================================
<P>
Supplemental disclosure of cash flow information:
Cash paid during the year for interest 0 0 0
<P>
Cash paid during the year
for income taxes 0 0 0
</TABLE>
<P>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(Unaudited)
<P>
1. Organization and Basis of Presentation
---------------------------------------
<P>
New Millennium Media International, Inc. (formerly
Progressive Mailer Corp.) (NMMI or the Company) is in the
business of marketing advertising space in special
advertising display machines. The accompanying unaudited
condensed financial statements have been prepared in
accordance with generally accepted accounting principles for
interim financial information in accordance with rules and
regulations of the Securities and Exchange Commission, in
particular, Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements and should be read in conjunction with
the Company's Annual Report (Form 10-KSB) for the years
ended December 31, 1998 and 1999. In the opinion of
management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have
been included. Operating results for the quarter ended
March 31, 2000 are not necessarily indicative of the results
that may be expected for the year ending December 31, 2000.
<P>
2. Development Stage Enterprise
----------------------------
<P>
The Company is a development stage enterprise, as defined in
Financial Accounting Standards Board Statement No. 7(SFAS
No. 7). The Company is devoting substantially all of its
efforts in securing and establishing a new business, and has
engaged in limited activities in the advertising business,
but no significant revenues have been generated to date.
<P>
3. Going Concern Uncertainty
-------------------------
<P>
The Company has incurred recurring operating losses and
negative cash flows and has negative working capital. The
Company has financed itself primarily through the sale of
its stock and related party borrowings. These conditions
raise substantial doubt about the Company's ability to
continue as a going concern.
<P>
There can be no assurance that the Company will be success
in implementing its plans, or if such plans are implemented,
that the Company will be successful.
<P>
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern
and do not include any adjustments to reflect the possible
future effect on the recoverability and classification of
assets or the amount and classification of liabilities that
might result from the outcome of this uncertainty.
<P>
4. Subsequent Events
-----------------
<P>
On April 12, 2000, the Company entered into an agreement
with Investment Management of America, Inc. (a major
stockholder and financial consultant) to exchange 3,000,000
shares of Common Stock for 3,000,000 shares of Series A
Convertible Preferred Stock of the 5,000,000 shares created
under resolution of the Board of Directors of the 10,000,000
Preferred Stock. In addition, the Company has voted and
passed the increase of the number of Common Stock authorized
to 75,000,000 at a special Meeting of Stockholders on July
17, 2000. Further, the Company has secured an agreement
with a financial institution to provide an equity line of
$25,000,000.
<P>
Proforma financial information is presented for the current
interim period and corresponding prior interim period for
the Scovel Corporation merger on March 9, 2000.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
New Millennium Media International, Inc.
(formerly Progressive Mailer Corp.)
Safety Harbor, Florida
We have reviewed the pro forma adjustments reflecting the
event described in Note 1 and the application of those
adjustments to the historical amounts in the accompanying
statement of operations for the quarter ended March 31, 2000
of New Millennium Media International, Inc. (formerly
Progressive Mailer Corp.) (a development stage company).
The historical financial statements are derived from
the March 31, 2000 historical financial statements of
New Millennium Media International, Inc., which were
reviewed by us, and the audited financial statements of
December 31, 1999, which were audited by us. We have
previously audited, conducted in accordance with generally
accepted auditing standards, the consolidated balance
sheet as of December 31, 1998 and 1999 and the related
statements of operations, stockholders' deficit and cash
flows for the years then ended (not presented herein),
and in our report dated June 1, 2000, we expressed a
qualified report because of a going concern uncertainty
on those financial statements. Our review of the March 31,
2000 historical financial statements was conducted in
accordance with standards established by the
American Institute of Certified Public Accountants.
<P>
A review is substantially less in scope than an
examination, the objective of which is the expression of an
opinion on management's assumptions, the pro forma
adjustments, and the application of those adjustments to
historical information. Accordingly, we do not express such
an opinion.
<P>
The objective of this pro forma financial information
is to show what the significant effect is on the
historical information might have been had the
event described in Note 1 had occurred at an earlier
date. However, the pro forma financial statements are
not necessarily indicative of the results of
operations or related effects on financial position
that would have been attained had the above mentioned event
actually occurred earlier.
<P>
Based on our review, nothing came to our attention that
caused us to believe that management's assumptions do not
provide a reasonable bases for presenting the significant
effects directly attributable to the above mentioned
event described in Note 1, that the related pro forma
adjustments do not give appropriate effect to those
assumptions, or that the pro forma column does not
reflect the proper application of those adjustments to the
historical financial statement amounts in the statement of
operations for the quarter ended March 31, 2000.
<P>
Richard J. Fuller, CPA, PA
Clearwater, Florida
<P>
June 22, 2000
<P>
<TABLE>
<CAPTION>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
<P>
FOR THE QUARTER ENDED MARCH 31, 1999
<S> <C> <C> <C> <C> <C>
Pro Forma
From
Inception
New Millennium Scovel Pro Forma through
Historical Corporation Adjustments ProForma March 31, 1999
---------------------------------------------------------------------
Income $ 6,911 $ $ $ 6,911 $ 17,566
Costs and Expenses:
General and
administrative $ 109,106 $ $ 33 $ 109,139 $ 866,855
Interest expense 23,190 23,190 53,746
Depreciation and
amortization 330 330 1,832
--------- --------- --------- --------- ---------
<P>
Total costs and
expenses 132,626 -- 33 132,659 922,433
--------- --------- --------- --------- ---------
<P>
Loss from
Operations (125,715) -- (33) (125,748) (904,867)
<P>
Net Loss $(125,715) $ -- $ (33) $(125,748) $(904,867)
--------- --------- --------- --------- ---------
<P>
Basic and Diluted Loss Per
Common Share $ (0.009) $ (0.009) $ (0.14)
--------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
<P>
FOR THE QUARTER ENDED MARCH 31, 2000
<S> <C> <C> <C> <C> <C>
Pro Forma
From
Inception
New Millennium Scovel Pro Forma through
Historical Corporation Adjustments ProForma March 31, 1999
---------------------------------------------------------------------
Income $ $ $ $ $ 59,808
<P>
Costs and Expenses:
General and
administrative $ 101,877 $ $ 33 $ 101,910 $ 1,086,537
Interest expense 16,000 16,000 139,921
Depreciation and
amortization 5,998 5,998 30,572
----------- ----------- ----------- ----------- ---------
<P>
Total costs and
expenses 123,875 -- 33 123,908 1,257,030
----------- ----------- ----------- ----------- ----------
<P>
Loss from
Operations (123,875) -- (33) (123,908) (1,197,222)
<P>
Net Loss $ (123,875) $ -- $ (33) $ (123,908) $(1,197,222)
----------- ----------- ----------- ----------- -----------
<P>
Basic and Diluted Loss
Per Common Share $ (0.005) $ (0.005) $ (0.052)
----------- ----------- -----------
<P>
</TABLE>
<P>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTE TO THE PRO FORMA CONDENSED STATEMENT OF OPERATION
(Unaudited)
<P>
For the quarter ended March 31, 2000
<P>
1. Basis of Presentation
--------------------------
<P>
On March 9, 2000, the Company acquired 100% of the issued
and outstanding common stock of Scovel Corporation in
exchange for 500,000 shares of the Company. As part of the
merger, the Company is considered a successor issuer in
order to comply with reporting requirements implemented by
the NASDAQ stock market. This statement is based on the
transaction having taken place on January 4, 2000, the
date of Scovel Management, Inc.'s incorporation and
utilizes the reviewed historical financial statements.
The resulting pro forma statement reflects the
effect on historical financial statements.
<P>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
FINANCIAL STATEMENTS DECEMBER 31, 1998 and 1999
<P>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
<P>
Board of Directors and Shareholders
New Millennium Media International, Inc.
(formerly Progressive Mailer Corp.)
Safety Harbor, Florida
<P>
We have audited the balance sheets of New Millennium Media
International, Inc. (formerly Progressive Mailer Corp.) (a
development stage company) as of December 31, 1998 and 1999,
and the related statements of operations, stockholders'
deficit and cash flows for the years 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 Progressive Mailer Corp. as of December 31,
1997, were audited by other auditors whose report dated July
16, 1998, expressed an unqualified opinion on those
statements.
<P>
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
<P>
The Company is a development stage enterprise, as defined in
Financial Accounting Standards Board No. 7. The Company is
devoting all of its present efforts in securing and
establishing a new business, and its planned principal
operations have not commenced, and, accordingly, minimal
revenue has been derived during the organizational period.
<P>
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial
position of New Millennium Media International, Inc.
(formerly Progressive Mailer Corp.) at December 31, 1998 and
1999 and the results of its operations and its cash flows
for the years then ended, in conformity with generally
accepted accounting principles.
<P>
The accompanying financial statements 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 incurred losses for the years ended December 31,
1998 and 1999. This condition raises substantial doubt
about its ability to continue as a going concern.
Management's plans in regard to these matters are also
described in Note 5. The financial statements do not
include any adjustments that might result from the outcome
of this uncertainty.
<P>
Richard J. Fuller, CPA, PA
Clearwater, Florida
<P>
June 1, 2000
<P>
<TABLE>
<CAPTION>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
BALANCE SHEET
<S> <C> <C>
December 31, 1998 and December 31, 1999
1998 1999
------------------------------------------
ASSETS
Current Assets:
<P>
Cash $ 6,811 $ 2,063
<P>
Inventories 481,916 548,862
<P>
Total Current Assets 488,727 550,925
------------------------------------------
Furniture and Equipment
Office furniture and equipment 7,210 4,249
Less accumulated depreciation (1,319) (285)
------------------------------------------
Furniture and Equipment-Net 5,891 3,964
------------------------------------------
<P>
Other Assets
Organizational costs, net of accumulated
amortization of $383 and $583 617 417
Goodwill, net of accumulated amortization
of $22,587 0 655,007
Total Other Assets 617 655,424
$ 495,235 $ 1,210,313
===========================================
<P>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<P>
Current Liabilities
Notes payable - related $638,952 $1,596,012
Accounts payable 42,119 85,235
Accrued expenses payable 33,068 129,289
------------------------------------------
Total Current Liabilities 714,139 1,810,536
------------------------------------------
Long-term Liabilities 0 0
<P>
Stockholders' Deficit
Common stock, par value $.001; shares
authorized, 25,000,000
shares issued and outstanding, 5,310,000
and 24,099,881
respectively, 1998 and 1999 5,310 24,100
Preferred stock, par value $.001;
shares authorized, 10,000,000
no shares issued and outstanding 0 0
Additional paid in capital 403,115 448,991
Deficit accumulated during the
development stage (627,329) (1,073,314)
-------------------------------------------
Total Stockholders' Deficit (218,904) (600,223)
-------------------------------------------
$ 495,235 $ 1,210,313
===========================================
<P>
See Accompanying Notes
</TABLE>
<P>
<TABLE>
<CAPTION>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENT OF OPERATIONS
<S> <C> <C> <C>
For the For the From Inception
Year Ended Year Ended through
12/31/98 12/31/99 12/31/99
<P>
Income $10,632 $49,176 $59,808
<P>
Costs and Expenses:
General and administrative $586,998 $376,707 $984,627
Interest expense 28,539 95,382 123,921
Depreciation and amortization 1,319 23,072 24,574
Total costs and expenses 616,856 495,161 1,133,122
<P>
Loss from Operations (606,224) (445,985) (1,073,314)
<P>
Net Loss $(606,224) $(445,985) $(1,073,314)
======= ======= =========
<P>
Basic and Diluted Loss
Per Common Share $(0.15) $(0.03) $(0.08)
==== ==== ====
<P>
See Accompanying Notes.
<P>
</TABLE>
<TABLE>
<CAPTION>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENT OF STOCKHOLDERS' DEFICIT
For the Period from January 1, 1998 through December 31, 1999
<S> <C> <C> <C> <C> <C>
Deficit
Accumulated Total
Additional during the stock-
Common Stock Paid - in development holders'
Shares Amount Capital period equity
--------------------------------------------------------
Balance January 1, 1998 2,015,000 $2,015 $19,907 $(21,105) $ 817
<P>
Shares issued for cash
Pursuant to a private placement
at $.05 per share 1,725,000 1,725 84,525 86,250
<P>
Shares issued to a shareholder
as compensation for providing a
$60,000 unsecured loan 775,000 775 0 775
<P>
Shares issued for cash
Pursuant to a private placement
at $.05 per share 795,000 795 116,045 116,840
<P>
Shares issued to purchase all of
the assets of Lufam Technologies, Inc.
(Purchase made in 1998 and stock
issued in 1999) 0 0 182,638 182,638
<P>
Net loss for the period ended
December 31, 1998 (606,224) (606,224)
---------- -------- ---------- ---------- ---------
Balance, December 31, 1998 5,310,000 5,310 403,115 (627,329) (218,904)
---------- -------- ---------- ---------- ---------
Shares issued to purchase all of
the assets of Lufam Technologies, Inc.
(Purchase made in 1998 and stock
issued in 1999) 1,710,000 1,710 0 1,710
<P>
Shares issued to purchase all of
Unergi, Inc. 16,566,667 16,567 0 16,567
<P>
Shares issued for cash 2,223,214 513 45,876 46,389
<P>
Net loss for the period ended
December 31, 1999 (445,985) (445,985)
--------- ------- ---------- ---------- ---------
<P>
Balance, December 31, 1999 25,809,881 $24,100 $48,991 $(1,073,314) $(600,223)
========== ====== ======== ========== =========
See Accompanying Notes.
<P>
</TABLE>
<TABLE>
<CAPTION>
<P>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENT OF CASH FLOWS
<S> <C> <C> <C>
For the For the From Inception
Year Ended Year Ended through
12/31/98 12/31/99 12/31/99
<P>
Cash Flows from Operating Activities:
Net loss $(606,224) $(445,985) $(1,073,314)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 1,519 23,072 24,774
Common stock issued for services 775 5,891 24,838
Increase in inventories (481,916) (66,946)
(548,862)
Increase in accounts payable 42,119 43,116 85,235
Increase in accrued expenses 33,068 96,221 129,289
Total adjustments (404,435) 101,354
(284,726)
Net Cash Used in Operating Activities (1,010,659) (344,631) (1,358,040)
<P>
Cash Flows from Investing Activities
Purchase of goodwill 0 (677,594) (677,594)
Purchase of fixed assets (7,210) (4,249) (11,459)
Net Cash Used in Operating Activities (7,210) (681,843) (689,053)
<P>
Cash Flows from Financing Activities
Proceeds from notes payable - Related 638,952 957,060 1,596,012
Proceeds from common stock issued 385,728 64,666 453,144
Net Cash provided by Financing Activities 1,024,680 1,021,726 2,049,156
<P>
Increase in cash and cash equivalents $6,811 $(4,748) $2,063
<P>
Cash and cash equivalents at beginning of period$0 $6,811 $0
<P>
Cash and cash equivalents at end of period $6,811 $2,063 $2,063
===== ===== =====
Supplemental disclosure of cash flow information:
<P>
Cash paid during the year for interest 0 0 0
<P>
Cash paid during the year for income taxes 0 0 0
</TABLE>
<P>
See Accompanying Notes.
<P>
NEW MILLENNIUM MEDIA INTERNATIONAL, INC.
(FORMERLY PROGRESSIVE MAILER CORP.)
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO THE FINANCIAL STATEMENTS
December 31, 1998 and 1999
<P>
1. Organization and summary of significant accounting
policies
---------------------------------------------------
New Millennium Media International, Inc. (formerly
Progressive Mailer Corp.) (NMMI or the Company) was
incorporated under the laws of the State of Florida on
February 5, 1997. On April 30, 1998, as part of a plan or
reorganization, the Company became New Millennium Media
International, Inc., a Colorado company. On April 14, 1998,
all the assets of Lufam Technologies, Inc. were acquired in
exchange for 1,710,000 shares of the Company's $.001 par
value common stock. On August 31, 1999, pursuant to an
Agreement and Plan of merger, the Company acquired all the
issued and outstanding stock of Unergi, Inc. in exchange for
16,566,667 shares of the Company's $.001 par value common
stock. The Company is in the business of marketing
advertising space in special advertising display machines.
<P>
Development Stage Enterprise
-----------------------------
<P>
The Company is a development stage enterprise, as defined in
Financial Accounting Standards Board Statement No. 7(SFAS
No. 7). The Company is devoting substantially all of its
efforts in securing and establishing a new business, and has
engaged in limited activities in the advertising business,
but no significant revenues have been generated to date.
<P>
Basis of presentation
---------------------
<P>
The financial statements have been prepared using the
accrual method of accounting. Revenues are recognized when
earned and expenses when incurred. Fixed assets are stated
at cost. Depreciation and amortization using the straight-
line method for financial reporting purposes and accelerated
methods for income tax purposes.
<P>
The financial statements have been prepared on a going
concern basis that contemplates the realization of assets
and liquidation of liabilities in the ordinary course of
business. As shown in the accompanying financial
statements, the Company has incurred significant losses and
at December 31, 1998 and 1999, the Company has a
stockholders' deficit of $627,329 and $1,073,314
respectively.
<P>
The financial statements do not include any adjustments that
might be necessary should the Company be unable to continue
as a going concern.
<P>
Use of estimates
-----------------
<P>
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 these estimates.
<P>
Going Concern Uncertainty
--------------------------
<P>
The Company has incurred recurring operating losses and
negative cash flows and has negative working capital. The
Company has financed itself primarily through the sale of
its stock and related party borrowings. These conditions
raise substantial doubt about the Company's ability to
continue as a going concern. As noted in Note 5, the
Company has initiated several actions to generate working
capital for expected advertising growth.
<P>
There can be no assurance that the Company will be success
in implementing its plans, or if such plans are implemented,
that the Company will be successful.
<P>
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern
and do not include any adjustments to reflect the possible
future effect on the recoverability and classification of
assets or the amount and classification of liabilities that
might result from the outcome of this uncertainty.
<P>
Comprehensive Income
--------------------
<P>
Statement of Financial Accounting Standards (SFAS) No. 130,
"Reporting Comprehensive Income," establishes standards for
reporting and display of comprehensive income, its
components and accumulated balances. Comprehensive income
is defined to include all changes in equity except those
resulting from investments by owners and distributions to
owners. Among other disclosures, SFAS No. 130 requires that
all items that are required to be recognized under current
accounting standards as components of comprehensive income
be reported in a financial statement that is displayed with
the same prominence as other financial statements. The
Company does not have any assets requiring disclosure of
comprehensive income.
<P>
Segments of Business Reporting
------------------------------
<P>
Statement of Financial Accounting Standards (SFAS) No. 131,
establishes standards for the way that public companies
report information about operating segments in annual
financial statements and requires reporting of selected
information about operating segments in interim financial
statements issued to the public. It also establishes
standards for disclosures regarding products and services,
geographic areas and major customer. SFAS 131 defines
operating segments as components of a company about which
separate financial information is available that is
evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing
performance. The Company has evaluated this SFAS and does
not believe it is applicable at this time.
<P>
Intangible assets
-----------------
<P>
Organization costs are amortized using the straight-line
method over their estimated useful lives of five years and
are stated at cost less accumulated amortization. The
Company reviews for the impairment of long-lived assets and
certain identifiable intangibles annually. No such
impairment losses have been identified by the Company for
the years presented.
<P>
Under the purchase method of accounting, tangible and
identifiable intangible assets acquired and liabilities
assumed are recorded at their estimated fair values. The
excess of the purchase price, including estimated fees and
expenses related to the merger, over the net assets acquired
is classified as goodwill by the Company. The estimated
fair values and useful lives of assets acquired and
liabilities assumed are based on a preliminary valuation and
are subject to final valuation adjustments which may cause
some of the intangibles to be amortized over a shorter life
than the goodwill amortization period of 15 years
<P>
Inventories
------------
<P>
Inventories consist primarily of advertising machines
acquired substantially from one vendor. These machines are
intended to generate income from revenue for placement of
these machines at various locations and are carried at the
lower of cost (first-in, first-out) or market. Once the
machines are placed in service, depreciation is to be
recognized. No depreciation has been recognized for the
years ended 1998 and 1999 because no significant rental
activity has yet occurred.
<P>
Furniture and equipment
-----------------------
<P>
Furniture and equipment is stated at cost and depreciated
using the straight-line method, over the estimated useful
lives of five to seven years.
<P>
Advertising Costs
-----------------
<P>
The Company expenses the cost of advertising as incurred.
<P>
Income Taxes
------------
<P>
The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109 (SFAS No. 109).
Under SFAS No. 109, deferred income tax assets and
liabilities are determined based upon differences between
financial reporting and tax bases of assets and liabilities
and are measured using currently enacted tax rates. SFAS
No. 109 requires a valuation allowance to reduce the
deferred tax assets reported if, based on the weight of the
evidence, it is more likely than not that some portion or
all of the deferred tax assets will not be realized.
<P>
Basic and Diluted Loss Per Common Share
---------------------------------------
<P>
Basic loss per common share is based on the weighted average
number of shares outstanding during the period. The
computation of diluted loss per common share is similar to
basic earnings per share, except that the denominator is
increased to include the number of additional common shares
that would have been outstanding if the potentially dilutive
common shares had been issued. Diluted loss per common
share is the same as basic loss per common share.
<P>
Cash Equivalents
-----------------
<P>
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with
a maturity of three months or less to be cash equivalents.
<P>
Fair Value of Financial Instruments
-----------------------------------
<P>
All financial instruments are held for purposes other than
trading. The following methods and assumptions were used to
estimate the fair value of each financial instrument for
which it is practicable to estimate that value:
For cash, cash equivalents and notes payable, the carrying
amount is assumed to approximate fair value due to the
short-term maturities of these instruments.
<P>
Concentrations of Credit Risk
-----------------------------
<P>
Financial instruments which potentially subject the Company
to concentrations of credit risk consist principally of
cash. The Company places its cash with high quality
financial institutions. At times during the year, the
balance at any one financial institution may exceed FDIC
limits.
<P>
Also, the Company relies principally on one vendor to supply
inventory. Because the vendor is the major manufacturer of
this inventory, and located in the United Kingdom, abrupt
changes in economic conditions including scheduling and
shipping disruptions could cause a delay or have an adverse
affect on management's ability to meet rental commitments.
<P>
2. Notes Payable - Related
------------------------
<P>
The Company issued notes to related parties. These notes are
due on demand.
<TABLE>
<S> <C> <C>
1998 1999
Note due stockholder former officer at 10% interest $ 638,952 $ 641,152
secured by inventories
Notes due stockholders, non-interest bearing - 954,860
$638,952 $ 1,596,012
</TABLE>
<P>
3. Acquisition
------------
<P>
On August 31, 1999 the Company acquired all the outstanding
stock of Unergi, Inc. The acquisition was accounted for as
a purchase. Consideration for the purchase was the issuance
of 16,566,667 shares of $.001 par value stock of the
Company. The purchase price exceeded the fair value of the
net assets acquired by $677,594 which has been recorded as
goodwill. The unaudited pro forma consolidated balance
sheet at December 31, 1998 and the unaudited pro forma
consolidated statements of operations for December 31, 1998
and 1999 have been presented as if the business combinations
of New Millennium Media International, Inc. and Unergi, Inc.
had been made at the beginning of the periods presented.
The unaudited pro forma results have been prepared for
comparative purposes only and do no purport to be indicative
of the results of operations which would have actually
resulted had the combinations been in effect on January 1,
1998, or of future results of operations.
<P>
PRO FORMA COMBINED BALANCE SHEET
December 31, 1998
<TABLE>
<S> <C> <C> <C>
New Millennium Pro Forma
Historical Unergi, Inc. Adjustments Pro Forma
----------------------------------------------------------
ASSETS
<P>
Current Assets:
Cash $ 6,811 $1,691 $ $8,502
Inventories 481,916 481,916
Stock Subscription Receivable 800 (800) 0
Employee Advance 1,000 (1,000) 0
Total Current Assets 488,727 3,491 (1,800) 490,418
------------------------------------------------------------
Furniture and Equipment
Office furniture and equipment 7,210 7,210
Less accumulated depreciation (1,319) (1,319)
Furniture and Equipment-Net 5,891 5,891
<P>
Other Assets
Organizational costs, net of accumulated
amortization of $383 617 617
Total Other Assets 617 617
$495,235 $3,491 $ $496,926
======= ===== ==== =======
LIABILITIES AND STOCKHOLDERS' DEFICIT
<P>
Current Liabilities
Notes payable - related $638,952 $115,000 $ $753,952
Accounts payable 42,119 0 42,119
Accrued expenses payable 33,068 39,281 72,349
Total Current Liabilities 714,139 154,281 868,420
<P>
Long-term Liabilities 0 0
<P>
Stockholders' Deficit
Common stock, par value $.001; shares
authorized, 25,000,000 shares
issued and outstanding, 5,310,000 5,310 1,000 (1,000) 5,310
preferred stock, par value $.001; shares
authorized, 10,000,000
no shares issued and outstanding 0 0
<P>
Additional paid in capital 403,115 403,115
Deficit accumulated during the
development stage (627,329) (151,790) (800) (779,919)
Total Stockholders' Deficit (218,904) (150,790) (1,800) (371,494)
$495,235 $ 3,491 $ (1,800) $ 496,926
<P>
</TABLE>
<P>
<TABLE>
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
<P>
<S> <C> <C> <C> <C>
New Millennium Pro Forma
Historical Unergi, Inc. Adjustments Pro Forma
<P>
Income $10,632 $23 $ $10,655
<P>
Costs and Expenses:
General and administrative $586,998 $149,796 $(800) $735,994
Interest expense 28,539 2,017 30,556
Depreciation and amortization1,319 0 1,319
Total costs and expenses 616,856 151,813 (800) 767,869
Loss from Operations (606,224) (151,790) (800) (758,814)
Net Loss $(606,224) $(151,790) $(800) $(758,814)
========= ======== ===== =======
Basic and Diluted Loss Per
Common Share $(0.15) $(0.18)
====== ======
<P>
<S> <C>
Pro Forma
from inception
through
12/31/1998
<P>
Income $10,655
<P>
Costs and Expenses:
General and administrative $757,716
Interest expense 30,556
Depreciation and amortization 1,502
Total costs and expenses 789,774
Loss from Operations (779,119)
Net Loss $(779,119)
Basic and Diluted Loss Per
Common Share (0.19)
</TABLE>
<TABLE>
<CAPTION>
<P>
PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<P>
<S> <C> <C> <C> <C> <C>
Pro Forma
From Inception
New Millennium Pro Forma through
Historical Unergi, Inc. Adjustments Pro Forma 12/31/99
<P>
Income $49,176 $ 2 $ $49,178 59,833
<P>
Costs and Expenses:
General and administrative $376,707 $140,596 $ $517,303 1,275,019
Interest expense 95,382 0 95,382 125,938
Depreciation and amortization 23,072 0 23,072 24,574
Total costs and expenses 495,161 140,596 635,757 1,425,531
Loss from Operations (445,985) (140,594) (586,579) (1,365,698)
<P>
Net Loss $(445,985)$(140,594) $ $(586,579) (1,365,698)
========= ======= ======= ========= ===========
Basic and Diluted Loss
Per Common Share $(0.03) $(0.05) $(0.11)
====== ====== ======
</TABLE>
<P>
4. Income Taxes
------------
<P>
The Company has available net operating loss carryforwards
of $870,000 which expire through 2014.
<P>
After consideration of all the evidence, both positive and
negative, management has determined that a full valuation
allowance is necessary to reduce the deferred tax assets to
the amount that will more likely than not be realized.
Accordingly, components of the Company's net deferred income
taxes are as follows:
<TABLE>
<S> <C> <C>
1998 1999
Deferred tax assets:
Net operating loss carryforwards $ 570,000 $ 870,000
Valuation allowance for deferred tax asset (570,000) (870,000)
$ - $ -
</TABLE>
<P>
5. Subsequent Events
-----------------
<P>
On March 9, 2000, the Company acquired 100% of the issued
and outstanding common stock of Scovel Corporation in
exchange for 500,000 shares of the Company. As part of the
merger, the Company is considered a successor issuer in
order to comply with reporting requirements implemented by
the NASDAQ stock market. Further, the Company is securing
an agreement with a financial institution to provide an
equity line of $25,000,000. Management's intention is, in
part, to provide the necessary capital needed for the
expected growth in the advertising business.
<P>
Also, subsequent to year-end, the Company entered into a two
year operating lease, effective April 1, 2000, for its
corporate offices with rent expense of $16,094 and $16,899
annually. The lease has a renewal option and requires the
Company to pay certain common area costs.
<P>
On April 12, 2000, the Company entered into an agreement
with Investment Management of America, Inc. (a major
stockholder and financial consultant) to exchange 3,000,000
shares of Common Stock for 3,000,000 shares of Series A
Convertible Preferred Stock. In connection with this
agreement, the Company passed a resolution creating a Series
A Convertible Preferred Stock as to 5,000,000 shares of its
Preferred Stock.
<P>
In addition, the Company entered into a three year
employment agreement with its President, as amended June 1,
2000, providing for compensation of $140,000 in the first
year and $120,000 in the subsequent two years. The
President is to receive 10 percent of all issued and
outstanding Company common stock plus stock options which
shall be determined by the Board of Directors.
<P>
Index to Exhibits
<P>
2.1 Agreement and Plan of Merger by and among New
Millennium International, Inc. and Scovel
Management Inc. dated March 9, 2000.
<P>
3.1 Articles of Incorporation of Scovel Management Inc.
*
<P>
3.2 By-Laws of Scovel Management Inc. *
<P>
17.1 Resignation Letter of Gerald Ghini.
<P>
27.1. Financial Data Schedule.
<P>
* Filed with Scovel Management Inc.'s Form 10-SB on
January 27, 2000 (SEC File 000-29195)
<P>
SIGNATURES
<P>
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
<P>
Scovel Management Inc.,
a Delaware corporation
<P>
By:/s/ Gerald Ghini
---------------------------------
Gerald Ghini
President
<P>
DATED: November 16, 2000
<P>
