<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1999
Commission File Number 0-29292
INTERNET MULTI-MEDIA CORPORATION
--------------------------------
(Exact Name of Small Business Issuer as specified in its charter)
Nevada 87-0431096
- - - - ---------------------------- --------------------------
(State or other jurisdiction (IRS Employer File Number)
of incorporation)
2533 North Carson Street, Suite 3358, Carson City, Nevada 89706
- - - - --------------------------------------------------------- -------------------
(Address of principal executive offices) (Zip Code)
(702) 841-4779
--------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common stock, par value $.001
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the proceding twelve months (or for such shorter perion that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days. Yes [ ] No [X]
Indicate by check mark if disclosure of delinquent filers in Response to Item
405 of Regulation S-B is not contained in this form, and np disclosure will
becontained to the best of Registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. Yes [X] No [ ]
As of March 7, 2000, 25,390,747 shares of the Registrant's common stockwere
outstanding. For the period ended December 31, 1999 Registrant had zero revenue.
As of December 31, 1999 the estimated market value of registrant's common stock
was $6,500,000.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
Documents incorporated by reference: None
<PAGE> 2
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Internet Multi-Media Corporation (the "Company" or the "Registrant") is
a Nevada Corporation. The principal business address is 2533 North Carson
Street, Suite 3358, Carson City, Nevada, 89706. It's telephone number is (702)
841-4779.
The Company was originally incorporated as Yellow Jacket Corp. under
the laws of the State of Utah on November 25, 1985. Effective October 31, 1993
the Company merged with Waco Holding Company ("Waco") a newly formed Nevada
Corporation. Waco was initially incorporated in Nevada as Yellow Jacket Corp.
but changed its name to Waco. At the time of the Merger the only asset of Waco
was an option to purchase certain rights to a mining concession in Mexico known
as the Santa Rita Mine. On October 31, 1994 the Company changed its name to
Millenia Corporation.
The Company entered into a Plan and Agreement of Merger dated March 17,
1998 with NN Acquisition Corp. and Naturally Niagara Beverage Corporation; which
became effective June 1, 1998. The Company acquired the exclusive licence to
produce and market various related spring water beverage products. On January
25, 2000 the Company changed its name to Internet Multi-Media Corporation.
The Company is in the development stage because it has only just
commenced planned principal operations in attempting to search for and develop
or acquire a business opportunity. The Company is minimally capitalized. The
Company has not engaged in any substantial business activity over a sustained
period of time and thus cannot be said to have a successful operating history.
The Company has not been subject to any bankruptcy, receivership or similar
proceedings.
ACTIVITIES
During 1999, the Company's business activities involved the search for
investment opportunities in diverse industries.
RECENT DEVELOPMENT
On February 24, 2000 the Company entered into a letter of of intent to
acquire SMC Soundmusic.Com Corporation ("SMC"). This letter of intent is subject
to certain terms and conditions, including, but not limited to :
a) The execution of a formal share exchange agreement within 10
days (this 10 day limit was extended indefinately by all
parties in order to obtain a valuation of SMC). This valuation
should be complete by the end of April, 2000;
b) To the issuance of an unknown amount of shares of the Company
to the current owners of SMC and to a finder;
c) The payment of $200,000 to SMC; and
d) The appointment of a majority of directors of the Company by
SMC.
<PAGE> 3
SMC is an online music and advertising company in the development
stage, specializing in the promotion and distribution of music using music
compression technology, including MP3. SMC is currently in discussions with
several artists to be represented on the site on a non-exclusive basis. The site
can be found on the internet at www.soundmusic.com. SCM is newly organized and
has not yet achieved a profitable level of operations.
REGULATION AND TAXATION
Any securities that the Company issues in exchange for the stock of a
target acquisition will be "restricted securities" within the meaning of the
Securities Act of 1933 (the "1933 Act"). If the target shareholders desired to
resell these restricted shares, they could not do so unless a registration
statement covering these shares has been declared effective by the SEC or an
exemption from registration, such as Rule 144, is available. In some
circumstances, however, as a negotiated element of an acquisition, the Company
may agree to register such securities either at the time the transaction is
consummated, under certain conditions, or at specified time thereafter.
Securities registration is an expensive and time-consuming process.
The Investment Company Act of 1940 defines an "investment company" as
an issuer that is or holds itself out as being engaged primarily in the business
of investing, reinvesting or trading of securities. While the Company does not
intend to engage in such activities, the Company could become subject to
regulation under the Investment Company Act of 1940 in the event the Company
obtains and continues to hold a minority interest in a number of development
stage enterprises. The Company could be expected to incur significant
registration and compliance costs if required to register under the Investment
Company Act of 1940. Accordingly, management will continue to review the
Company's activities from time to time with a view toward reducing the
likelihood that the Company could be classified as an "investment company".
The Company intends to structure a merger or acquisition in such a
manner as to minimize federal and state tax consequences to the Company and to
any target company.
COMPETITION
The Company is an insignificant participant among firms that engage in
business combinations with, or financing of, development stage enterprises.
There are many established management and financial consulting companies and
venture capital firms which have significantly greater financial and personnel
resources, technical expertise and experience than the Company. In view of the
Company's limited financial resources and management availability, the Company
will continue to be at a significant competitive disadvantage vis-a-vis the
Company's competitors.
EMPLOYEES
The Company's presently does not have any employees, although its
President and sole officer, Michael Waldkirch, served in 1999 as CFO, Secretary
and Vice-President on an "as needed" basis. The Company plans to hire employees
in the future but has formulated no definite plans at this point.
<PAGE> 4
ITEM 2. PROPERTIES
The Company maintains its corporate office at 2533 North Carson Street,
Suite 3358, in Carson City, Nevada. The lease for these offices is $2,700 per
annum. The Company also has a working arrangement with Mr. Waldkirch, its sole
officer, to use office space, telephone and secretarial services on a gratis
basis.
ITEM 3. LEGAL PROCEEDINGS
No legal proceedings of a material nature to which the Company is a
party were pending during the reporting period, and the Company knows of no
legal proceedings of a material nature pending or threatened or judgments
entered against any director or officer of the Company in his capacity as such.
<PAGE> 5
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters weremitted to a vote of security holders in 1999.
ITEM 5. MARKET COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company's shares of Common Stock are currently traded on the NASDAQ
Bulletin Board under the symbol IIMC. During 1999 and until February 8, 2000,
the Company traded under the symbols MNIA and MNIAE.OB.
The reported high and low bid prices for the Common Stock are shown
below for each quarter during the last two complete fiscal years. The figures
for 1998 are incomplete since the was not an active trading market for the
Company's Common Shares and only random bids and offers were listed. The
quotations reflect inter-dealer prices and do not reflect retail mark-ups,
mark-downs or commissions. These prices may not reflect actual sales. These
figures are from the Bloomberg Professional site.
<TABLE>
<CAPTION>
Period High Low
- - - - ---------------------------------------------
<S> <C> <C>
1998
First Quarter (Unknown) (Unknown)
Second Quarter (Unknown) (Unknown)
Third Quarter (Unknown) 0.47
Fourth Quarter 0.75 0.11
1999
First Quarter 0.27 0.05
Second Quarter 0.69 0.09
Third Quarter 0.20 0.04
Fourth Quarter 0.40 0.04
</TABLE>
As of March 7, 2000, there were 1,020 stockholders of record.
No dividends have been declared on the Company's stock. Nor does the
Company foresee any dividends being declared in the near future since the
Company has had no earnings to date.
<PAGE> 6
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements under this Item and elsewhere in this Form 10-KSB
and in the the exhibits to this Form 10-KSB are not historical facts but
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include, but are not
limited to: statements relating to potential growth or to potential increases in
revenues and net income through previous, potential or possible mergers;
acquisitions; license agreements; share exchanges; and joint ventures. These
statements often can be identified by the use of terms such as "may", "will",
"expect", "anticipate", "estimate", "should", "could", "plans", "believes",
"potential", or "continuing", or the negative of these terms. Such
forward-looking statements speak only as of the date made and may involve both
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Although the Company believes that
the expectations reflected in such forward-looking statements are reasonable,
the Company cannot guarantee future results, levels of activity, performance,
achievements or events. Moreover, neither the Company nor any other person
assumes responsibility for the accuracy or completeness of such statements. The
Company disclaims any responsibility to revise any forward-looking statements to
reflect events or circumstances after the date of such statement or to reflect
the occurrence of anticipated or unanticipated events.
PLAN OF OPERATION - GENERAL
The Company continues to seek other business opportunities in addition
to the anticipated acquisition of SMC. At this time, the company has no other
plan, proposal, agreement, understanding or arrangement to acquire or merge with
any specific business or company, and the Company has not identified any
specific business or company for investigation and evaluation. With the
exception of SMC, no promoter of the Company has entered into any material
contracts with any other company with respect to any acquisition of that
Company. The Company will not restrict its search to any specific business,
industry or geographical location, and the Company may participate in a business
venture of virtually any kind or nature. The discussion for the proposed
business under this caption and throughout this document is purposefully general
and is not meant to be restrictive of the company's virtually unlimited
discretion to search for and enter into potential business opportunities.
The Company intends to obtain funds in one or more private placements
to finance the operation of any acquired business. Persons purchasing securities
in these placements and other shareholders will likely not have the opportunity
to participate in the decision relating to any acquisition. The Company's
proposed business is sometimes referred to
<PAGE> 7
as a "blind pool" because any investors will entrust their investment monies to
the Company's management before they have a chance to analyze any ultimate use
to which their money may be put. Consequently, the Company's potential success
is heavily dependent on the company's management, which will have virtually
unlimited discretion in searching for and entering into a business opportunity.
There can be no assurance that the Company will be able to raise any funds in
private placement. In any private placement, management may purchase shares on
the same terms as offered in the private placement. (See "Item 9, Directors,
Executive Officers, Promoters and Control Persons").
The Company may seek a business opportunity with a firm that only
recently commenced operations, or a developing company in need of additional
funds for expansion into new products or markets, or an established company
seeking a public vehicle. In some instances, a business opportunity may involve
the acquisition or merger with a corporation which does not need substantial
additional cash but which desires to establish a public trading market for its
common stock. The Company may purchase assets and establish wholly owned
subsidiaries in various business or purchase existing businesses as
subsidiaries.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Because of general
economic conditions, rapid technological advances being made in some industries,
and shortages of available capital, management believes that there are numerous
firms seeking the benefits of a publicly traded corporation. Such perceived
benefits of a publicly traded corporation may include facilitating or improving
the terms on which additional equity financing may be sought, providing
liquidity for the principals of a business, creating a means for providing
incentive stock options or similar benefits to key employees, providing
liquidity (subject to restrictions of applicable statues)for all shareholders,
and other factors. Potentially available business opportunities may occur in
many different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such business
opportunities extremely difficult and complex.
As is customary in the industry, the Company may pay a finder's fee for
locating an acquisition prospect. If any such fee is paid, it will be approved
by the Company's Board of Directors and will be in accordance with the industry
standards. Such fees are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved. Such fees are
typically in the range of 5% on a $1,000,000 transaction rateably down to 1% in
a $4,000,000 transaction. Management had adopted a policy that such a finder's
fee or real estate brokerage fee could, in certain circumstances, be paid to any
employee, officer, director or 5% shareholder of the Company, if such person
plays a material role in bringing a transaction to the Company and if securities
counsel to the Company determines that the payment of any such finder's fee is
not in violation of federal or state securities law.
The Company has not formulated any policy regarding the use of
consultants or outside advisors, but does not anticipate that it will use the
services of such persons.
The Company has, and will continue to have, insufficient capital with
which to provide the owners of business opportunities with any significant cash
or other assets. However, management believes the Company will offer owners of
business opportunities the opportunity to acquire a controlling ownership
interest in a public company at substantially less cost than is required to
conduct an initial public offering. The owners of the business opportunities
will,
<PAGE> 8
however, incur significant post-merger or acquisition registration costs in the
event they wish to register a portion of their shares for subsequent sale. The
Company will also incur significant legal and accounting costs in connection
with the acquisition of a business opportunity including the costs of preparing
post-effective amendments, Forms 8-K, agreements and related reports and
documents. However, the officers and directors of the Company have not conducted
market research and are not aware of statistical data which would support the
perceived benefits of a merger or acquisition transaction for the owners of a
business opportunity.
The Company does not intend to make any loans to any prospective merger
or acquisition candidates or unaffiliated third parties.
SOURCES OF OPPORTUNITY
The Company anticipates that business opportunities for possible
acquisition will be referred by various sources, including its officers and
directors, professional advisors, securities broker-dealers, venture
capitalists, member of the financial community, and others who may present
unsolicited proposals. The Company will seek a potential business opportunity
from all known sources, but will rely principally on personal contracts of its
officers and directors as well as indirect associations between them and other
business and professional people. It is not presently anticipated that the
Company will engage professional firms specializing in business acquisitions or
reorganizations.
The sole officer and director of the Company is currently employed in
other positions and will devote only a portion of his time to the business
affairs of the Company, until such time as an acquisition has been determined to
be highly favorable, at which time he expects to spend full time in
investigating and closing any acquisition. In addition, in the face of competing
demands for his time, the sole officer and director may grant priority to his
full-time positions rather than to the Company.
<PAGE> 9
EVALUATION OF OPPORTUNITY
The analysis of new business opportunities will be undertaken by or
under the supervision of the officers and directors of the Company. Management
intends to concentrate on identifying prospective business opportunities that
may be brought to its attention through present associations with management.
In analyzing prospective business opportunities, management will
consider such matters as the available technical, financing and managerial
resources; working capital and other financial requirements; history of
operation, if any; prospects for the future; present and expected competition;
the quality and experience of management services which may be available and the
depth of that management; the potential for further research, development or
exploration; specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the potential for profit; the
perceived public recognition or acceptance of products, services or trades; name
identification; and other relevant factors. Officers and directors of each
Company will meet personally with management and key personnel of the firm
sponsoring the business opportunity as part of their investigation. To the
extent possible, the company intends to utilize written reports and personal
investigation to evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be
obtained.
It may be anticipated that any opportunity in which the Company
participates will present certain risks. Many of these risks cannot be
adequately identified prior to selection of the specific opportunity, and the
Company's shareholders must, therefore, depend on the ability of management to
identify and evaluate such risk. In the case of some of the opportunities
available to the Company, it may be anticipated that the promoters thereof have
been unable to develop a going concern or that such business is in its
development stage in that it has not generated significant revenues from its
principal business activities prior to the Company's participation. There is a
risk even after the Company's participation in the activity and the related
expenditure of the Company's funds, that the combined enterprises will still be
unable to become a going concern or advance beyond the development stage. Many
of the opportunities may involve new and untested products, processes, or market
strategies that may not succeed. The Company and, therefore, its shareholders
will assume such risks.
The Company will not restrict its search for any specific kind of
business, but may acquire a venture that is in its preliminary or development
stage, which is already in operation, or in essentially any stage of its
corporate life. It is currently impossible to predict the status of any business
in which the Company may become engaged, in that such business may need
additional capital, may merely desire to have its shares publicly traded, or may
seek other perceived advantages which the Company may offer.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business acquisition, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, franchise or licensing agreement with another corporation or entity. It
may also purchase stock or assets of an existing business. On the consummation
of a transaction, it is possible that the present management and shareholders
off the Company will not be in control of the Company. In
<PAGE> 10
addition, a majority or all of the Company's officers and directors may, as part
of the terms of the acquisition transaction, resign and be replaced by new
officers and directors without a vote of the Company's shareholders.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance on exemptions from registration under applicable
Federal and State securities laws. In some circumstances, however, as negotiated
element of this transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain conditions, or
at specified time thereafter. The issuance of substantial additional securities
and their potential sale into a trading market in the Company's Common Stock may
have a depressive effect on such market. While the actual terms of a transaction
to which the Company may be a party cannot be predicted, it may expected that
the parties to the business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the acquisition in a so-called
"tax free" reorganization under Sections 368(a)(1) or 351 of the Internal
Revenue Code of 1986, as amended (the "Code"). In order to obtain tax-free
treatment under the code, it may be necessary for the owners of the acquired
business to own 80% or more of the voting stock of the surviving entity. In such
event, the shareholders of the Company, including past and current investors,
would retain less than 20% of the issued and outstanding shares of the surviving
entity, which could result in significant dilution in the equity of such
shareholders.
As part of the Company's investigation, officers and directors of the
Company will meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis or verification of
certain information provided, check reference of management and key personnel,
and take other reasonable investigative measures, to the extent of the Company's
limited financial resources and management expertise. The manner in which each
Company participates in an opportunity will depend on the nature of the
opportunity, the respective needs and desires of the Company and other parties,
the management of the opportunity, and the relative negotiating strength of the
Company and such other management.
With respect to any mergers or acquisitions, negotiations with target
company management will be expected to focus on the percentage of the Company
that target company shareholders would acquire in exchange for their
shareholdings in the target company. Depending upon, among other things, the
target company's assets and liabilities, the Company's shareholders will in all
likelihood hold a lesser percentage ownership interest in the Company following
any merger or acquisition. The percentage ownership may be subject to
significant reduction in the event that the Company acquires a target company
with substantial assets. Any merger or acquisition effected by the Company can
be expected to have a significant dilutive effect on the percentage of shares
held by the Company's then shareholders, including past and current investors.
The Company will not have sufficient funds (unless it is able to raise
funds in a private placement) to undertake any significant development,
marketing and manufacturing of any products that may be acquired. Accordingly,
following the acquisition of any such product, the Company will, in all
likelihood, be required to either seek debt or equity financing or obtain
funding from third parties, in exchange for which the Company would probably be
required to give up a substantial portion of its interest in any acquired
product. There is no assurance that
<PAGE> 11
the Company will be able either to obtain additional financing or interest third
parties in providing funding for the further development, marketing and
manufacturing of any products acquired.
The principal criteria for evaluating acquisitions which the Company
may engage in will be the amount of investment required by the Company, the
degree of risk to the Company, the potential return on investment to the
Company, the Company's expertise in each situation and the expertise and
reliability of the acquiree in any such situation.
It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys
and others. If a decision were made not to participate in a specific business
opportunity the costs therefore incurred in the related investigation would not
be recoverable. Furthermore, even if an agreement is reached for the
participation in a specific business opportunity, the failure to consummate that
transaction may result in the loss of the Company of the related costs incurred.
Management believes that the Company may be able to benefit from the
use of "leverage" in the acquisition of a business opportunity. Leveraging a
transaction involves the acquisition of a business through incurring significant
indebtedness for a large percentage of the purchase price for that business.
Through a leveraged transaction, the Company would be required to use less of
its available funds for acquiring the business opportunity and, therefore, could
commit those funds to the operations of the business opportunity, to acquisition
of other business opportunities or to other activities. The borrowing involved
in a leveraged transaction will ordinarily be secured by the assets of the
business opportunity to be acquired. If the business opportunity acquired is not
able to generate sufficient revenues to make payments on the debt incurred by
the Company to acquire that business opportunity, the lender would be able to
exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that the Company must commit to
acquiring a business opportunity, may correspondingly increase the risk of loss
to the Company. During periods when interest rates are relatively high, the
benefits of leveraging are not as great as during periods of lower interest
rates because the investment in the business opportunity held on a leveraged
basis will only be profitable if it generates sufficient revenues to cover the
related debt and other costs of the financing. Lenders from which the Company
may obtain funds for purposes of a leveraged buy-out may impose restrictions on
the future borrowing, distribution, and operating policies of the Company. It is
not possible at this time to predict the restrictions, if any, which lenders may
impose or the impact thereof on the Company.
COMPETITION
The Company is an insignificant participant among firms that engage in
business combinations with, or financing of, development stage enterprises.
There are many established management and financial consulting companies and
venture capital firms which have significantly greater financial and personnel
resources, technical expertise and experience than the Company. In view of the
Company's limited financial resources and management availability, the Company
will continue to be at a significant competitive disadvantage vis-a-vis the
Company's competitors.
<PAGE> 12
EMPLOYEES
The Company presently does not have any employees. The Company plans to
hire employees in the future but has formulated no definite plans at this point.
LIQUIDITY AND CAPITAL RESOURCES
As of the end of the reporting period, the Company had no material cash
or cash equivalents. There was no significant change in working capital during
this fiscal year.
As of April 14, 2000, the date of this Form 10-KSB, there are no plans,
proposals, arrangements, or understandings with respect to the sale or issuance
of additional securities of the Company, other than the issuance of common stock
to SMC and a finder, as described in Part I of this Form 10-KSB. The Company
plans to examine the feasibility of a public offering to expand its operations.
No definitive plans currently exist for a public offering at this time.
Management feels that the Company has inadequate working capital to
pursue most of its business opportunities other than to effect an acquisition
with third parties. The Company's capital requirements for the foreseeable
future will be supplied through internally generated profits, if any, and
borrowings.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA.
<PAGE> 13
MILLENIA CORPORATION
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
MARVIN N. WINICK, B.SC.,
CHARTERED ACCOUNTANT
<PAGE> 14
MARVIN N. WINICK, B.SC.,
CHARTERED ACCOUNTANT
- - - - --------------------------------------------------------------------------------
16 JULIA STREET
THORNHILL, ONTARIO
L3T4R9
TEL NO. (905) 731-0189
FAX NO. (905) 764-3049
AUDITOR'S REPORT
To the Shareholders of
Millenia Corporation
- - - - --------------------------------------------------------------------------------
I have audited the consolidated balance sheet of Millenia Corporation as at
December 31, 1999 and the consolidated statements of operations, stockholders'
equity, deficit and cash flows for the year then ended. These financial
statements are the responsibility of the company's management. My responsibility
is to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform an audit to obtain reasonable
assurance whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.
In my opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at December 31, 1999 and the
results of its operations and its cash flows for the year then ended in
accordance with generally accepted accounting principles.
M. Winick
Thornhill, Ontario
April 7, 2000.
<PAGE> 15
MILLENIA CORPORATION
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
ASSETS
CURRENT
Cash $ 890 $ 890
Accounts receivable -- 309,173
- - - - --------------------------------------------------------------------------------
890 310,063
INVESTMENTS(NOTE 13) 1 1
OTHER
Goodwill -- --
- - - - --------------------------------------------------------------------------------
$ 891 $310,064
- - - - --------------------------------------------------------------------------------
</TABLE>
<PAGE> 16
MILLENIA CORPORATION
CONSOLIDATED BALANCE SHEET
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
LIABILITIES
CURRENT
Accounts payable and accrued charges $ 81,039 $ 96,039
Accounts payable - stockholder 1,442 1,442
- - - - --------------------------------------------------------------------------------
82,481 97,481
- - - - --------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
SHARE CAPITAL
Preferred Stock, $.001 par value, 10,000,000
shares authorized, Common Stock, $.001 par value,
100,000,000 shares authorized, 25,382,247 shares
issued(24,380,400 - December 31, 1998) 19,210 18,208
Capital in excess of par value 6,803,185 6,803,185
Discount on common stock (98,290) (97,288)
- - - - --------------------------------------------------------------------------------
6,724,105 6,724,105
DEFICIT (6,805,695) (6,511,522)
- - - - --------------------------------------------------------------------------------
(81,590) 212,583
- - - - --------------------------------------------------------------------------------
$ 891 $ 310,064
- - - - --------------------------------------------------------------------------------
</TABLE>
<PAGE> 17
MILLENIA CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
CASH FLOWS PROVIDED(USED) IN OPERATING
ACTIVITIES
Net loss for the year $(294,173) $(2,758,858)
Items not involving a current outlay of cash
Deferred development costs -- 1,282,500
Writedown of investments -- 657,424
Goodwill -- 332,500
- - - - --------------------------------------------------------------------------------
(294,173) (486,434)
Net change in the following:
Accounts receivable 309,173 (309,173)
Accounts payable (15,000) 96,039
- - - - --------------------------------------------------------------------------------
-- (699,568)
- - - - --------------------------------------------------------------------------------
INVESTING ACTIVITIES
Acquisition of wholly owned subsidiary -- 699,568
- - - - --------------------------------------------------------------------------------
CHANGE IN CASH DURING THE PERIOD -- --
CASH - BEGINNING OF PERIOD 890 890
- - - - --------------------------------------------------------------------------------
CASH - END OF PERIOD $ 890 $ 890
- - - - --------------------------------------------------------------------------------
</TABLE>
<PAGE> 18
MILLENIA CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
- - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
REVENUE $ -- $ 273,903
COST OF SALES -- 176,315
- - - - --------------------------------------------------------------------------------
GROSS MARGIN -- 97,588
- - - - --------------------------------------------------------------------------------
EXPENSES
Salaries -- 275,000
Administrative expenses -- 89,307
Advertising and promotion -- 78,976
Professional fees -- 55,788
Telephone -- 24,676
Office and general -- 17,138
Travel and entertainment -- 15,870
Transfer agent fees -- 12,173
Rent -- 10,590
Insurance -- 3,267
Bank charges -- 1,237
- - - - --------------------------------------------------------------------------------
-- 584,022
- - - - --------------------------------------------------------------------------------
LOSS BEFORE UNUSUAL ITEMS -- (486,434)
- - - - --------------------------------------------------------------------------------
UNUSUAL ITEMS
Write-off of deferred development costs -- (1,282,500)
Writedown of investments (309,173) (657,424)
Reductions in accounts payable 15,000 --
Write-off of goodwill -- (332,500)
- - - - --------------------------------------------------------------------------------
(294,173) (2,272,424)
- - - - --------------------------------------------------------------------------------
NET LOSS FOR THE YEAR $ (294,173) $(2,758,858)
- - - - --------------------------------------------------------------------------------
</TABLE>
<PAGE> 19
MILLENIA CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION (NOVEMBER 25, 1985)
TO DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT ON
CAPITAL IN SALE OF
COMMON STOCK EXCESS OF COMMON ACCUMULATED
SHARES AMOUNT PAR VALUE STOCK DEFICIT
---------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance - November 25, 1985 -- $ -- $ -- $ -- $ --
Net income - period ended January 31,
1986 -- -- -- -- --
- - - - ---------------------------------------------------------------------------------------------------------------------------
-- -- -- -- --
Issuance of shares to officers, directors,
and another person for cash 5,400,000 5,400 9,600
Net loss - period ended September 30,
1986 -- -- -- -- (4,000)
- - - - ---------------------------------------------------------------------------------------------------------------------------
5,400,000 5,400 9,600 -- (4,000)
Net loss - period ended January 31, 1987 -- -- -- -- (1,506)
- - - - ---------------------------------------------------------------------------------------------------------------------------
5,400,000 5,400 9,600 -- (5,506)
Issuance of shares of common stock upon
completion of stock offering, March 1987 15,000,000 15,000 135,000 -- --
Stock offering costs -- -- (22,807) -- --
Net loss - period ended December 31,
1987 -- -- -- -- (135,380)
- - - - ---------------------------------------------------------------------------------------------------------------------------
20,400,000 20,400 121,793 -- (140,886)
Net loss - year ended December 31, 1988 -- -- -- -- (1,007)
Net loss - year ended December 31, 1989 -- -- -- -- (100)
Net loss - year ended December 31, 1990 -- -- -- -- (100)
Net loss - year ended December 31, 1991 (100)
Net loss - year ended December 31, 1992 -- -- -- -- --
- - - - ---------------------------------------------------------------------------------------------------------------------------
20,400,000 20,400 121,793 -- (142,193)
</TABLE>
<PAGE> 20
MILLENIA CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION (NOVEMBER 25, 1985)
TO DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT ON
CAPITAL IN SALE OF
COMMON STOCK EXCESS OF COMMON ACCUMULATED
SHARES AMOUNT PAR VALUE STOCK DEFICIT
---------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Forward 20,400,000 20,400 121,793 -- (142,193)
Shares issued to officer for services and
expenses at par value September 15, 1993 10,000,000 10,000 -- -- --
Discount of above to market value (7,000) --
Shares issued in business combination,
October 31, 1993 91,200,000 91,200 (90,288)
1 for 200 reverse stock split and change in
par value October 31, 1993 (120,992,000) (115,520) 115,520
Net loss - year ended December 31, 1993 -- -- -- -- (3,000)
- - - - -------------------------------------------------------------------------------------------------------------------------
608,000 6,080 237,313 (97,288) (145,193)
Change of par value from $.01 to $.001,
October 1994 -- (5,472) 5,472
Net loss - period ended November 30,
1994 -- -- -- -- (1,464)
Net loss - period ended January 5, 1996 1,000,000 1,000 -- -- (1,000)
- - - - -------------------------------------------------------------------------------------------------------------------------
1,608,000 1,608 242,785 (97,288) (147,657)
Issuance of Regulation S common stock 20,000,000 -- -- -- --
Net loss - period ended October 31, 1996 -- -- -- -- --
Net loss - period ended January 31, 1997 -- -- -- -- --
- - - - -------------------------------------------------------------------------------------------------------------------------
21,608,000 1,608 242,785 (97,288) (147,657)
Shares issued to officer for services and
expenses at par value February 1997 2,000,000 2,000 -- -- --
Return of Regulation S stock (20,000,000) -- -- -- --
Net loss - period ended July 31, 1997 -- -- -- -- (2,000)
- - - - -------------------------------------------------------------------------------------------------------------------------
BALANCE - JULY 31, 1997 3,608,000 3,608 242,785 (97,288) (149,657)
- - - - -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 21
MILLENIA CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FROM THE DATE OF INCEPTION (NOVEMBER 25, 1985)
TO DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DISCOUNT ON
CAPITAL IN SALE OF
COMMON STOCK EXCESS OF COMMON ACCUMULATED
SHARES AMOUNT PAR VALUE STOCK DEFICIT
---------- -------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Forward 3,608,000 3,608 242,785 (97,288) (149,657)
1 for 20 reverse split of common stock (3,427,600) -- -- -- --
Shares issued to officer for services rendered 5,000,000 5,000 -- -- --
Net loss - period ended December 31, 1997 -- -- -- -- (5,000)
- - - - -------------------------------------------------------------------------------------------------------------------------------
BALANCE - DECEMBER 31, 1997 5,180,400 $ 8,608 $ 242,785 $(97,288) $ (154,657)
Acquisition of Naturally Niagara Beverage
Corporation - 100% 19,200,000 9,600 6,560,400 -- (3,598,007)
Net loss - year ended December 31, 1998 -- -- -- -- (2,758,858)
- - - - -------------------------------------------------------------------------------------------------------------------------------
BALANCE - DECEMBER 31, 1998 24,380,400 $18,208 $6,803,185 $(97,288) $(6,511,522)
- - - - -------------------------------------------------------------------------------------------------------------------------------
Stock option exercised by director 900,000 900 -- (900) --
Minority shareholder in subsidiary
converted stock in subsidiary for company
stock 101,847 102 -- (102) --
Net loss - year ended December 31, 1999 -- -- -- -- (294,173)
- - - - -------------------------------------------------------------------------------------------------------------------------------
BALANCE - DECEMBER 31, 1999 25,382,247 $19,210 $6,803,185 $(98,290) $(6,805,695)
- - - - -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 22
MILLENIA CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND DIVIDEND POLICY
The Company was incorporated under the laws of the State of
Utah on November 25, 1985 and initially elected a fiscal year
end of January 31. The Company changed its year end to
December 31 starting in 1987. The Company is in the
development stage because it has not commenced planned
principal operations in attempting to search for and develop
or acquire a business opportunity. It sold its common stock to
the public through a public offering. The Company has, at
present time, not paid any dividends and any dividends that
may be paid in the future will depend upon the financial
requirements of the company and other relevant factors. As a
result of the Business Combination is that the Company's
corporate domicile has become Nevada. On October 31, 1994 the
Company changed its name to Millenia Corporation.
LOSS PER SHARE
The computation of loss per share of common stock is based
upon the weighted average number of shares outstanding during
the periods presented.
In February 1997 the Financial Accounting Standards Board
issued a new statement titled "Earnings Per Share" ('FAS
128"). The new statement is effective for both interim and
annual periods ending after December 15, 1997. FAS 128
replaces the presentation of primary and fully diluted
earnings per share with the presentation of basic and diluted
earnings per share. The Company has determined that the
adoption of FAS 128 would have no impact on the financial
statements.
CASH EQUIVALENTS
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.
CONSOLIDATED FINANCIAL STATEMENTS
The Company has adopted the pooling of interest method of
accounting for its 100% acquisition of Naturally Niagara
Beverage Corporation.
INVESTMENTS
Investments which represent interests in companies for which
the company would be deemed not to assert voting control have
been accounted for by the cost method and are increased by
advances and decreased by withdrawals or dividends received.
If the value of such investments has been impaired, the
Company follows the policy of writing them down.
<PAGE> 23
MILLENIA CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
2. CERTAIN COMMON STOCK TRANSACTIONS
Prior to March 31, 1987, the Company completed a public
offering whereby 15,000,000 ($150,000) pre-reverse split
shares of its previously authorized but unissued common stock
were sold to the public at $.01 per share pursuant to an
exemption from registration under federal law pursuant to
Subsection 3(b) of the Securities Act of 1933, Regulation D.
Rule 504. The public offering was, however, registered with
the Utah Securities Division pursuant to U.C.A. Section 61 - 1
- 10. Net proceeds to the Company after deducting costs of the
offering of $22,807 amounted to $127,193. On September 15,
1993 the board of directors of the Company authorized the
issuance of 10,000,000 shares (50,000 post reverse split) of
stock at par value ($.001 per share) to Arnold S. Grundvig,
Jr. for services rendered on behalf of the Company with
respect to the change of domicile, for taking over the
responsibility as president of Yellow Jacket Corp. prior to
the merger and for paying costs associated with the merger of
the Company with Waco Holding Company. The above par value of
the shares, $10,000, was discounted $7,000 to arrive at a
value for the above at $3,000.
3. RELATED PARTY TRANSACTIONS
The Company entered into an oral arrangement whereby it
utilized office space and clerical services for $500 per
month, through March, 1987. This arrangement was entered into
with a privately-held corporation which was an affiliate of a
substantial shareholder of the Company. Effective April 1,
1987, the Company entered into a sublease agreement for office
space for a period of one year with an affiliated company.
Rent for the above was $7,617 in 1987. No rent has been paid
since this period as the Company is currently using office
space provided by an officer and shareholder on a rent-free
basis.
4. EXTRAORDINARY ITEM
On September 10, 1987, the board of directors authorized the
acquisition of Vantage Resources, Inc. a California
corporation through the proposed issuance of 147,266,667 of
pre-reverse split shares of common stock of the Company. "1
connection with the acquisition, the officers and directors of
the Company were to resign in favor of the officers and
directors of the Vantage. Funds of the Company after costs
associated with the merger were delivered to the president of
Vantage. However, the completion of the documents, and the
issuance of the shares was never completed and the
resignations never formally accepted under the Agreement. Due
to the above, the Board of Directors voted to rescind the
reorganization agreement on September 15, 1987. The costs
associated with the unsuccessful merger and the funds
transferred totaled $114,000. This amount has been treated as
an extraordinary loss item on the financial statements for the
period ended December31, 1987.
<PAGE> 24
MILLENIA CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
5. BUSINESS COMBINATION
Effective October 31, 1993 the Company merged with Waco
Holding Company (Waco) a newly formed Nevada Corporation in a
business combination accounted for as a purchase using
historical cost values. Waco was initially incorporated in
Nevada as Yellow Jacket Corp. but changed its name to Waco at
the time of the Merger. At the time of the merger the only
asset of Waco was an option to purchase certain rights to a
mining concession in Mexico known as the Santa Rita Mine. Waco
obtained the option from Barclay Financial Corporation and its
president. The option had a historical cost of $912. Waco was
acquired by issuing 91,200,000 shares (456,000 post reverse
split) of Company common stock at a par value of $.001. The
shares were discounted to arrive at the historical cost of
$912. Immediately after the merger Waco became the sole
surviving corporation. Waco has had no business operations or
activity and is considered a development stage company and at
November 17, 1993 had been in existence for one month. At the
time of the merger the authorized preferred stock was
discontinued. None of the previous preferred stock had been
issued by the Company. Prior to November 30, 1994 the option
expired without being exercised and was written off.
6. GOING CONCERN
The Company has experienced losses of $6,806,695 through
December 31, 1999 and has no working capital. In light of this
circumstance, the ability of the Company to continue as a
going concern is substantially in doubt. The financial
statements do not include any adjustments that might result
from the outcome of this uncertainty.
Management plans are to seek enough working capital to
continue the existence of the Company and to seek a business
combination with a viable business entity that can provide
business operations and working capital. Management believe
their plans will provide the corporation with the ability to
continue in existence. An officer and stockholder has loaned
money to the Company to maintain its current filings with the
State of Nevada and to pay other expenses.
7. ACQUISITION OF WHOLLY-OWNED SUBSIDIARY
On April 30, 1998, the Company acquired 100% of the
outstanding shares of Naturally Niagara Beverage Corporation.
The purchase price of the acquisition was 2 shares of Millenia
common stock for each share of Naturally Niagara common stock
outstanding at that time. Naturally Niagara Beverage
Corporation is a Delaware corporation involved in the
distribution of various related spring water beverage products
through its acquisition of interests in various companies
involved in the spring water business.
<PAGE> 25
MILLENIA CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
8. COMMON STOCK REVERSE SPLIT
On October 31, 1993, the Board of Directors authorized a 200
for 1 reverse stock split, thereby decreasing the number of
issued and outstanding shares of common stock to 608,000. At
the same time the par value of the Company was set at $.01 per
share. The above caused capital in excess of par value to
increase by $115,520. All references in the accompanying
financial statements to the number of common shares and per
share amounts through November 30, 1994 have been restated to
reflect the stock split.
9. REVISED ARTICLES OF INCORPORATION
On October 31, 1994 the shareholders approved changing the
name of the Company to Millenia Corporation and adopted
restated and amended Articles of Incorporation of the Company.
The Corporation is now authorized to issue a total of
50,000,000 shares, consisting of 10,000,000 shares of
preferred stock, par value $.001 per share and 40,000,000
shares of common stock, par value $.001 per share. The
Preferred Stock may be issued from time to time in one or more
series as determined by the board of directors. The board will
also determine dividend rights, preference rights in voluntary
or involuntary corporate liquidation and convertibility. The
change in par value from $.01 to $.001 per share caused
capital in excess of par value to increase by $5,472. Ml
references to common stock par value dollar amounts and per
share amounts through October 31, 1996 have been restated to
affect the change in par value.
10. ISSUANCE OF ADDITIONAL COMMON STOCK
In December 1994, 1,000,000 of common shares with a par value
of $.001 or $1,000 was issued to Mr. Al Tarallo, the chief
executive officer and a director of the company in
consideration for expenses incurred on behalf of the company
for which he was paid for by stock in lieu of cash.
Additionally in March 1997, Mr. Tarallo received an additional
2,000,000 common shares for additional expenses paid for
during the period.
11. ISSUANCE OF REGULATION S COMMON STOCK
As previously mentioned in the notes the Company has an option
to purchase a mine in Mexico known as the Santa Rita Mine. The
Company has issued 20,000,000 shares of common stock under
Regulation S of the Securities Act in order to raise the
required funds to acquire and put the mine into production.
<PAGE> 26
MILLENIA CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
12. REVERSE STOCK SPLIT AND AMENDMENT OF AUTHORIZED CAPITAL
On November 29, 1997, the Board of Directors authorized that
the common shares of the Company be reverse split 1 common
share for every 20 common shares. At that meeting the Board
further agreed to increase the authorized capital of the
Corporation from 2,500,000 shares to 100,000,000 shares with a
par value of $.001.
13. ISSUANCE OF ADDITIONAL COMMON STOCK
In November 1997, 5,000,000 of common shares with a par value
of $.001 or $5,000 was issued to Mr. Al Tarallo, the chief
executive officer and a director of the company in
consideration for his management salary for which he was paid
for by stock in lieu of cash.
In June 1998, 19,200,000 shares of restricted common stock was
issued to the shareholders of Naturally Niagara Beverage
Corporation in order to complete the acquisition of the
Company's 100% interest in Naturally Niagara. 2 shares of
Millenia stock was issued for every share of stock of
Naturally Niagara outstanding and issued at that time.
During the year ended December 31, 1999 the Company issued
900,000 of restricted common stock as result of the exercising
of a stock option by one of the directors. Additionally101,847
of common stock was issued to minority shareholders in one of
the subsidiaries in exchange for the shareholders interest in
the subsidiary. Both transactions did not have any monetary
value.
14. INVESTMENTS
Investments consist of the following:
<TABLE>
<S> <C>
Springerville Pure Mountain Water Company $ 70,500
Tahoe Mist, Inc. 250,000
Tahoe Mist 5 Gallon 50,000
Ferndale Vineyards, Inc. 151,925
Reson Acquisition Corp 135,000
---------
657,425
Less: Writedown to estimated net realizable value (657,424)
---------
$ 1
=========
</TABLE>
<PAGE> 27
MILLENIA CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
14. INVESTMENTS(CONTINUED)
SPRINGERVILLE PURE MOUNTAIN WATER COMPANY
This is a joint venture with two other companies with
Naturally Niagara holding 45% of the joint venture
Springerville holding 45% and Southwest Management Inc.
holding 10%. Naturally Niagara's commitment to the joint
venture is $150,000 in cash. As of December 31,1998 the
Company has contributed $70,000 to the joint venture. As
result of the company's inability to fund its commitment for
cash, it has been agreed upon that the interest of the Company
be reduced to 10%. The joint venture was created to put up a
plant and a bottling facility on 10 acres of land in the
Northern Arizona mountains approximately 212 miles north east
of Phoenix. The water from our well has been tested by the
state authorities and has passed as a truly pure source of
water. As of the date of this financial statement, there has
been no financial information released on the joint venture in
order to determine if there is any impairment in value of the
above noted investment.
TAHOE MIST INC.
The Company has purchased 12.25% of Tahoe Mist Inc., a
bottling facility located in Carson City, Nevada for $250,000.
The Company has a further option to purchase up to 49% of the
facility over the next two years for an additional $750,000.
Tahoe Mist has on its property a natural free flowing spring
whose source comes from Lake Tahoe through the Sierra Nevada
mountains, and carbon 14 testing indicates that it takes
12,000 years for the water to surface on the Tahoe Mist
property. The natural spring has a flow rate of 800,000
gallons per day, and comes to the surface at a temperature of
120 degrees, it is the only natural "lot spring" of its kind
in the world.
As of the date of this financial statement there has been no
financial information released on the Company in order to
determine if there is any impairment in value of the above
noted investment.
TAHOE MIST 5 GALLON
The Company has entered into a letter of intent to purchase
49% of the Tahoe Mist 5 gallon business. This business
provides the 5 gallon jugs of water plus the water cooler to
residential homes and businesses in the Carson City - Reno
area of Nevada. The purchase price is $100,000 of which
$50,000 has been paid to date.
<PAGE> 28
MILLENIA CORPORATION
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 1999
- - - - --------------------------------------------------------------------------------
14. INVESTMENTS(CONTINUED)
FERNDALE VINEYARDS INC.
The Company entered into an agreement on November 30, 1997 to
acquire 100% of the issued and outstanding shares of Ferndale
Vineyards Inc. Ferndale is the original developer of the
non-alcoholic line of drinks under the tradename "Champanade".
The purchase price is $2,100,000 Canadian Dollars or
approximately $1,470,000 in US Dollars. The purchase price is
payable as follows; $225,000 upon the execution of the
agreement of purchase and sale, $25,000 June 30, 1998, $50,000
December 31, 1998, June 30, 1999, December 31, 1999, June 30,
2000, December 31, 2000 and June 30, 2001 interest free. The
remainder of the purchase price is paid by 100,000 shares of
Naturally Niagara shares valued at the greater of $2.00 US per
share or 80% of the price of the stock upon the Company going
public and the difference in a debenture that is interest free
for the first four years then is payable over 10 years
amortised over 25 years with a balloon payment due at the end
of the tenth year at the lessor of 7.5% interest and the prime
interest rate charged by the banks.
The company has not met its obligation to acquire the total
interest in Ferndale. As result the Company now maintains a
10% interest in Ferndale until such time as it meets it
obligation to acquire the balance of Ferndale.
RESON ACQUISITION CORPORATION
Reson Acquisition Corporation, a Delaware Corporation was
formed in October 3, 1996. The Company has acquired an
interest in Irtys Oil, Inc. a company formed to identify
untapped petroleum reserves. Irtys Oil has acquired certain
joint venture interests for oil and gas exploration in
Kazakhstan. Millenia has acquired 67,500 common shares at $
2.00 per share.
<PAGE> 29
ITEM 8. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
In connection with audits of the two most recent fiscal years and the
interim periods, no disagreements exist with any former accountant on any matter
of accounting principles or practices, financial statement disclosure, or
auditing scope of procedure, which disagreements if not resolved to the
satisfaction of the former accountant would have caused him to make reference in
connection with his report to the subject matter of the disagreement(s).
The principal accountant's reports on the financial statements for any
of the last two years contained no adverse opinion or a disclaimer of opinion
nor was qualified as to uncertainty, audit scope, or accounting principles
except for the "going concern" qualification.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
DIRECTORS AND SOLE EXECUTIVE OFFICER
The members of the Board of Directors of the Company serve until the
next annual meeting of stockholders, or until their successors have been
elected. The officers serve at the pleasure of the Board of Directors. There are
no family relationships among the Company's officers and directors.
Information as to the directors and sole executive officer of the Company is as
follows:
<PAGE> 30
<TABLE>
<CAPTION>
NAME AGE POSITION HELD
- - - - ---- --- -------------
<S> <C> <C>
MICHAEL WALDKIRCH 30 President, Chief Financial Officer,
Secretary and Director
</TABLE>
THE BOARD OF DIRECTORS:
Pursuant to the Letter Agreement ("Letter of Intent") between the
Company and SMC, SMC has the right to name three directors to the Company's
Board of Directors. SMC has designated the following three individuals as its
nominees. These persons assumed their duties with the Company immediately upon
the signing of the Letter of Intent on February 24, 2000:
<TABLE>
<CAPTION>
NAME AGE POSITION HELD
- - - - ---- --- -------------
<S> <C> <C>
Cornelia E. Patterson 39 Director
Michael B. Doodson 40 Director
Kelly Kampen 25 Director
</TABLE>
BIOGRAPHICAL INFORMATION
MICHAEL WALDKIRCH
Mr. Waldkirch has served as a director of the Company since June 21,
1999, as Chief Financial Officer and Secretary since November 23, 1999 and as
President since February 27, 2000. Michael Waldkirch, a Certified Accountant,
graduated from the University of British Columbia with a bachelors degree in
Economics in 1992. Mr. Waldkirch is current a partner in Michael N. Waldkirch,
Certified General Accountant, a Vancouver based accounting and financial
services firm specializing in real estate, technology and venture capital based
businesses.
CORNELIA E. PATTERSON
Ms. Patterson received a Bachelor of Education from Queens University
in 1988. In addition to serving as a director of the Company, she is currently a
director of SMC. Prior to 1998, Ms. Patterson was employed by InterUnion
Financial Corporation. From 1996 to 1998 she was employed by Cornerstone Equity
Corporation and from 1998 to 1999 she was employed by Starquest Capital
Corporation. All three of these entities are financial services firms.
MICHAEL B. DOODSON
Mr. Doodson is currently the president and a director of SMC, a
position he has held since early this year. From 1992 until 1996 he served as
senior manager of Okanagen Skeena Group, Inc. From 1996 until 1999 he was a
consultant to Kootenay Broadcasters, Ltd. and during 1999 he was employed as
vice president of sales and marketing for AudioMonster.com.
<PAGE> 31
KELLY KAMPEN
From 1996 until 1997 Mr. Kampen was employed by Keene Consulting, Ltd.,
an internet services firm. He was a computer consultant to Boeing Aerospace from
1997 until 1998 and was a principal of Net Glyph, Inc. during 1997. From 1998 to
the present he has served as the president and CEO of two privately-held
corporations - OpenMatrix, Inc. and Interclick, Inc., these two corporations
collect demographic data from subscribers for internet advertising.
CONFLICTS OF INTEREST
Certain conflicts of interest now exist and will continue to exist
between the Company and its sole officer and its directorss, due to the fact
that each has other business interests to which he devotes his primary
attention. Each officer and director may continue to do so notwithstanding the
fact that management time should be devoted to the business of the Company.
Certain conflicts of interest may exist between the Company and its
management, and conflicts may develop in the future. The Company has not
established policies or procedures for the resolution of current or potential
conflicts of interest between the Company, its officers and directors or
affiliated entities. There can be no assurance that management will resolve all
conflicts of interest in favor of the Company, and failure by management to
conduct the Company's business in the Company's best interest may result in
liability to the management. The officers and directors are accountable to the
Company as fiduciaries, which means that they are required to exercise good
faith and integrity in handling the Company's affairs. Shareholders who believe
that the Company has been harmed by failure of an officer or director to
appropriately resolve any conflict of interest may, subject to applicable rule
of civil procedure, be able to bring a class action or derivative suit to
enforce their rights and the Company's rights.
The Company has no arrangement, understanding or intention to enter
into any transaction for participating in any business opportunity with any
officer, director, or principal shareholder or with any firm or business
organization with which such persons are affiliated, whether by reason of stock
onership, position as an officer or director, or otherwise, except for the
acquisition of SMC.
ITEM 10. EXECUTIVE COMPENSATION
No compensation is paid or is anticipated to be paid by the Company. It
is possible that upon an acquisition some compensation may be paid to
management. On acquisition of a business opportunity, current management may
resign and be replaced by persons associated with the business opportunity
acquired, particularly if the Company participates in a business opportunity by
effecting a reorganization, merger or consolidation. If any member of current
management remains after effecting a business opportunity acquisition, that
member's time commitment will likely be adjusted based on the nature and method
of the acquisition and location of the business which cannot be predicted.
Compensation of management will be determined by the new board of directors, and
shareholders of the Company will not have the opportunity to vote upon or
approve such compensation.
<PAGE> 32
Directors currently receive no compensation for their duties as
directors. The Company has no retirement, pension, profit-sharing, stock option,
insurance or other similar programs.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following tables set forth information relating to the beneficial
ownership of Company common stock by those persons beneficially holding more
than 5% of the Company's common stock, by directors and executive officers, and
by all of the Company's directors and executive officers as a group. As of April
14, 2000, the date of this Form 10-KSB there were 25,390,747 Common Shares
issued and outstanding.
(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS AMOUNT AND NATURE PERCENTAGE OF
CLASS OF OF OUTSTANDING
BENEFICIAL OWNER BENEFICIAL
OWNERSHIP
<S> <C> <C> <C>
Common Stock Park View 1,800,000 Shares 07.09%
Enterprises, Inc. Record and Beneficial
Common Stock Sandy Winick 1,855,000 Shares 07.31%
3266 Yonge Street, Record and Beneficial
Suite 1203, Toronto,
Ontario, Canada
M4N3P6
</TABLE>
(B) SECURITY OWNERSHIP OF MANAGEMENT:
<TABLE>
<CAPTION>
TITLE OF CLASS NAME AND ADDRESS AMOUNT AND NATURE PERCENTAGE OF
OF BENEFICIAL OWNER OF BENEFICIAL OUTSTANDING
OWNERSHIP
<S> <C> <C> <C>
Common Stock MichaelWaldkirch 15,000 Shares Record 00.06%
2538 North Carson and Beneficial
Street, Carson City,
Nevada 89706
Common Stock Cornelia Patterson 0 Shares 00.00%
2538 North Carson
Street, Carson City,
Nevada 89706
Common Stock Michael Doodson 0 Shares 00.00%
2538 North Carson
Street, Carson City,
Nevada 89706
</TABLE>
<PAGE> 33
<TABLE>
<S> <C> <C> <C>
Common Stock Kelly Kampen 0 Shares 00.00%
2538 North Carson
Street, Carson City,
Nevada 89706
Common Stock All Officers and 15,000 Shares Record 00.06%
Directors as a Group and Beneficial
(four persons)
</TABLE>
(C) CHANGES IN CONTROL:
There are currently no arrangements known to management that may result
in a change in control of the Company with the exception of the SCM acquisition
that has allowed SCM to appoint three of the Company's four directors. This
gives SCM effective control of the Company's Board of Directors and the ability
to act on behalf of the Company.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
During the past five years there have been no filing of petitions under
the federal bankruptcy laws by or against a business of which any officer or
director was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
During the past five years no officer or director has been convicted in
a criminal proceeding or been subject to a pending criminal proceeding
(excluding traffic violations and other minor offenses);
During the past five years no officer or director has been subject to
any order, judgment, or decree. not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; and
During the past five years no officer or director has been found by any
court of competent jurisdiction (in a civil action), the SEC or the Commodities
Futures Trading Commission to have violated a federal or state securities or
commodities law, and the judgment has not been reversed, suspended or vacated.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act") requires the Company's directors and officers and any person who owns ten
percent or more of the Company's equity securities to file reports of ownership
in the Company's securities with the SEC. Directors, officers and ten percent or
greater shareholders are required by SEC regulation to furnish the Company with
copies of all Section 16(a) report filings.
<PAGE> 34
The Company believes that during the period from December 31, 1998
through February 8, 2000 (the date the Company became required to file reports
with the SEC) there were no filing requirements applicable to its officers or
directors because the Company was not required to file such reports. The Company
is not aware of any ten percent or greater shareholders.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No transactions required to be disclosed by Item 404 of Regulation S-B
have occured during the last two years and there are no such proposed
transactions.
PART IV
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
Regulation S-B
Exhibit DESCRIPTION
Number
<S> <C>
(2) Letter Agreement ("Letter of Intent") between the Company and
SMC.*
(3)(i)(a) Restated and Amended Articles of Incorporation dated
November 3, 1994.**
(3)(i)(b) Certificate of Amendment to Articles of Incorporation dated
November 29, 1997.**
(3)(i)(c) Certificate of Reinstatement dated January 25, 2000,**
(3)(ii)(a) ByLaws.**
(21) Subsidiaries of the Registrant.
(27) Financial Data Schedule.
(99)(a) Press release dated February 24, 2000.*
</TABLE>
* Incorporated by reference from the Form 8-K Current Report as filed with the
Securities and Exchange Commission on February 29, 2000.
** Incorporated by reference from the Form 10SB12(g) as filed with the
Securities and Exchange Commission on February 2, 2000.
<PAGE> 35
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this to be signed on its behalf by the
undersigned, thereto duly authorized.
INTERNET MULTI-MEDIA CORPORATION
Dated: April 14, 2000 By: Michael Waldkirch, President
-------------- ---------------------------------------
Michael Waldkirch, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Dated: April 14, 2000 By: Michael Waldkirch, President
-------------- ---------------------------------------
Michael Waldkirch, President, CEO, CFO,
Secretary and Director.
Dated: April 14, 2000 By: Michael Doodson, Director
-------------- ---------------------------------------
Michael Doodson, Director
Dated: April 14, 2000 By: Cornelia Patterson, Director
-------------- ---------------------------------------
Cornelia Patterson, Director
Dated: April 14, 2000 By: Kelly Kampen, Director
-------------- ---------------------------------------
Kelly Kampen, Director
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
Name of Subsidiary: State of Organization: Names under which
Subsidiary does
business:
- - - - -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Naturally Niagara Beverage Corporation Delaware Naturally Niagara Beverage Corporation
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF INTERNET MULTI-MEDIA CORPORATION FOR THE YEAR ENDED
DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 890
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1
<DEPRECIATION> 0
<TOTAL-ASSETS> 891
<CURRENT-LIABILITIES> 82,481
<BONDS> 0
0
0
<COMMON> 19,210
<OTHER-SE> 6,704,895
<TOTAL-LIABILITY-AND-EQUITY> 891
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (294,173)
<CHANGES> 0
<NET-INCOME> (294,173)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
