SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Event Requiring Report: April 6, 2000
TWISTEE TREAT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-294339 43-1796135
(State of Incorporation) (Commission (IRS Employer
File Number) Identification #)
301 Clark Street, Warrensburg, Missouri 64093
----------------------------------------
(Address of Principal Executive Offices)
(660) 747-4272
----------------------------------------
(Registrant's telephone number, including area code)
Perfection Plus, Inc.
16133 VENTURA BOULEVARD, SUITE 635
ENCINO, CALIFORNIA 91436
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(Registrant's Former Name and Address)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to a Stock Purchase Agreement (the "Agreement") effective
April 6, 2000,Twistee Treat Corporation, a Delaware corporation ("TWTE")acquired
1,150,000 outstanding shares of Perfection Plus, Inc., a Nevada corporation
("PPI"), for One Hundred Twenty Thousand ($120,000) Dollars. As a result, PPI
became a wholly-owned subsidiary of TWTE.
The Stock Purchase Agreement was approved by the unanimous consent of the
Board of Directors of TWTE on April 6, 2000.
Prior to the Agreement, TWTE 30,319,950 shares of common stock issued and
outstanding. Following the Agreement, TWTE had 30,569,950 shares of common stock
outstanding. TWTE was incorporated in the State of Missouri in 1995 and re-
incorporated in Delaware in June 25, 1997.
Upon effectiveness of the Stock Purchase Agreement, pursuant to Rule
12g-3(a) of the General Rules and Regulations of the Securities and Exchange
Commission, TWTE became the successor issuer to PPI for reporting purposes under
the Securities Exchange Act of 1934 and elects to report under the Act effective
April 6, 2000.
A copy of the Agreement is filed as an exhibit to this Form 8-K and is
incorporated in its entirety herein. The foregoing description is modified by
such reference.
(b) The following table contains information regarding the shareholdings
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of the Company's current directors and executive officers and those persons or
entities who beneficially own more than 5% of the Company's common stock:
NAME AMOUNT OF COMMON STOCK PERCENT OF COMMON STOCK
BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
Stephen Wells, 250,000 .008
President & Director
Terry D. Rapp 1,835,800 .06
Vice-President,
Secretary &
Director
Howard Hockrad 100,000 .003
Vice-President,
Treasurer
Allen Evans, 0 0
Vice-president
All directors and 2,185,800 .07
executive officers
as a group
Gourmet's Choice(2) 20,000,000 .65
Coffee Co., Inc.
8 West 38th, Fl. 9th
New York, N.Y. 10018
Calder Investments, 1,477,300 .048
Ltd., Omar Hodge Bldg.
Wickham Cay Rd.
Tortola Town, British
Virgin Islands
George Levin 1,827,300 .059
(1) Based upon 30,569,300 outstanding shares of common stock.
(2) Gourmet's Choice Coffee Co., Inc. is presently a publically traded company
on the OTCBB under the symbol "GMCH".
COMPANY'S BUSINESS AND SUBSIDIARIES The Company was incorporated in
Missouri on April 27, 1995 and reincorporated in Delaware in July 1997. The
original Twistee Treat Corporation was formed in the early 1980's as a Colorado
corporation doing business primarily in Florida. By the mid 1980's it had opened
approximately 35 company stores, but no franchise units. The original Twistee
Treat Corporation utilized the cone- shaped building and obtained certain
federal and state patents, trademarks and service marks. In 1989, the company's
original founder retired and the company filed for bankruptcy protection (U.S.
Bankruptcy Court, Middle District of Florida, Ft. Myers Division, Case No.
89-4700-9P1). On August 6, 1990, Andrew Brennan, a founder and former principal
stockholder of the Company, purchased the assets of the original Twistee Treat
Corporation from the Bankruptcy Court, including the patent, trademark and
service mark rights. Subsequently, Mr. Brennan sold 50% of such assets to Don
Matthews, owner of Soft Serve System, Inc., a Missouri corporation. In 1996,
Messrs. Matthews and Wells formed the Company, with Mr. Matthews contributing
his 50% of the assets obtained from the
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original Twistee Treat Corporation. On May 6, 1997, Mr, Brennan sold to the
Company his 50% of the assets obtained from the original Twistee Treat
Corporation. Of the approximately 35 original stores, all or nearly all are
still open as independent stores. These stores continue to use the cone-shaped
building and the name Twistee Treat but do not use any of the Company's products
and they are not affiliated with the Company. The Company is in active
negotiations to purchase a number of these stores and to bring them under the
franchise umbrella.
Company has limited operations and limited revenue and has been
developing its business plan, franchise program, preparing its franchise
circular and operating manual, operating three pilot stores, and opened and
tested two kiosk pilot units. The Company closed its three test pilot stores and
closed the two kiosk units for several months in order to evaluate the
information obtained during such test periods and to make adjustments to menus,
equipment and operating procedures. The Company then refurbished the three pilot
stores, changed the menus, ordered additional equipment and has reopened two;
one in Eustis, Florida and one in Branson West, Missouri. The Company has
recently sold the Branson West store as a franchise store to Danny Hammond LLP.
Mr. Hammond has also become a Regional Developer for Branson and Springfield,
Missouri. The Company's Eustis, Florida store recently became a franchise store.
The Company has recently licensed the rights in Canada to a group who
collectively have 37 years experience in the ice cream franchise business with
Good Humor - Breyers Ice Cream. One of the principals owned 5 franchises and
became regional franchise manager and another was national operations manager
responsible for product distribution and sales in support of 300 distribution
units across Canada. The group opened its first Twistee Treat store in July and
the Company has just shipped the group a cone-shaped building for its second
store. The group expects to open 50 stores over the next 48 months and has sold
three franchises which it expects will begin construction in the Spring of 2000.
The Company has also recently received an offer for the Southeast
region of Florida from a prospective regional developer who anticipates opening
50 stores within the next five years. In addition, the Company has signed a co-
branding agreement with the Jrecks Sub-Sandwich chain which has over 300
franchise stores. The Company is still negotiating with Jrecks over the specific
terms of the agreement and expects to have a final agreement within 30 days. The
Company has reached agreements to purchase six of the original Twistee Treat
cone buildings and expects to enter into definitive purchase agreements in the
near future. Possession of these stores will be determined when the Minimum is
raised from this Offering. The first is presently open in Central, Florida and
the second is presently open in Ft. Myers, Florida. In addition, the Company has
opened its first "express grill" in Knob Noster, Missouri and expects to open an
"In-Line Store" in Margate, Florida in the very near future. The Company has
four franchisees; one in Clermont, Florida, a second in Branson West, Missouri,
a third franchisee is currently seeking a location for a cone shaped building in
Orlando, Florida and a fourth in Eustis, Florida.
The Company has also signed a co-branding agreement with Gourmet Choice
Coffee Co., Inc. The first store opened February 21, 2000 in Warrensburg,
Missouri.
The Business: The Company offers its specialty ice cream and food products
through Company-owned stores, franchised stores, In-Line stores, Kiosk units,
mobile concession trailers and "Express Grills". The Company is designed to be a
high profile, soft-serve ice cream retail merchant. The Company believes that
there is a strong market for soft-serve ice cream, especially roadside or
curbside. A principal marketing tool of the Company is its ice cream cone shaped
building design. The 22 foot tall cone creates a strong visual image. The
building is large enough to carry the variety of products required yet
smallenough to fit in smaller areas.
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The Company believes that its products andprocess for dispensing the
product are unique. The product consists of the Company's special firm-serve
mix, formulated to be rich and creamy but with relatively low fat content. The
dispensing process produces a rich texture that is more like custard than ice
cream. Each Twistee Treat store offers six flavors, consisting of the three
basic flavors - vanilla, chocolate and strawberry - as well as three additional
flavors rotated every other week from a Company inventory of 91 flavors. The
stores also sell a variety of other food and beverage products such as donuts,
hot dogs, sodas and other "snack" type items. The kiosk units offer two to four
flavors of ice cream depending on the size of the kiosk.
In addition to the free-standing cone-shaped building, the Company
offers In-Line stores, for regional malls and strip centers, a "kiosk" program
designed to be located in convenience stores, stores, malls, food courts,
business facilities, and colleges, "Express Grills", which are larger, more
traditional fast-food restaurants, and mobile concession trailers which are
designed primarily for outdoor venues such as fairs. The Company intends to
introduce a table-top dispenser unit designed for restaurants, convenience
stores and fast- food locations. There are no assurances that the Company will
be able to successfully develop or market those products.
The Company's free-standing cone-shaped buildings are designed to
attract drive-through and walk-up customers only, as they have no indoor
seating, and primarily serve only ice cream products and soft drinks. The
Company's "In-Line" stores are designed for inclusion in existing strip malls
and consisting generally of 1600 square feet of space. They include inside
seating and have a broader menu than the Company's cone-shaped buildings,
including ice cream cakes. The Company's "Express Grills" are designed to be
more traditional, full-service fast food restaurants with very broad menus,
including steak burgers, hot dogs, etc, and can accommodate approximately 40
people in indoor seating. These are free-standing buildings, encompassing 3000
to 3500 square feet, which look like a traditional fast food restaurant, rather
than the Company's unique looking cone-shaped stores. The Company's kiosk units
are small and designed to be set up in airports, food courts and malls and offer
primarily ice cream products. Its mobile concession trailers are shaped like an
ice cream cone and give the Company a good marketing vehicle.
The Company believes that the location, layout and cone-shaped design
of its stores contribute to the success of its operations. The Company's stores
are typically located near strip shopping centers, malls, amusement centers or
other areas of population density that provide visibility, curb appeal and
accessibility. A variety of factors are considered in selecting sites for the
Company's stores, including population density, traffic patterns, area
demographics and competition. The Company's stores are configured to facilitate
a smooth flow of carry-out curbside traffic and "drive-thru" traffic.
One of the Company's primary goals is to maintain strict quality
controls over its products and stores. The Company requires that all franchised
and Company-owned stores be built in conformance with the Company's guidelines.
The Company recently sold its 50% interest in TTC Manufacturing, Inc., which
manufactures the Company's patented cone-shaped building and kiosk component
parts. The buildings and kiosks are assembled and packaged at Glasstech, Inc.'s
plant for shipment to the store site. The Company is currently pursuing other
fiberglass manufacturers who are able of producing quality parts in larger
quantities.
However, TWTE presently operates at a loss and has not received
revenues from operations sufficient to maintain its operations. TWTE has raised
funds for operations through the sale of its securities and may continue to do
so.
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PROPERTY
TWTE maintains its administrative offices at 301 Clark Street,
Warrensburg, Missouri 64093. The Company leases its own space and pays rent.
DESCRIPTION OF SECURITIES
The Company has an authorized capitalization of 200,000,000 shares of
common stock, $0.0001 par value per share and 10,000,000 authorized preferred
stock, par value $0.0001. Upon execution of this Agreement, the Company had
issued and outstanding, 30,569,300 shares of common stock.
MARKET FOR TWTE's SECURITIES
TWTE is a non-reporting publicly traded company with certain of its
securities exempt from registration under the Securities Act of 1933, as
amended, pursuant to Rule 504 of Regulation D of the General Rules and
Regulations of the Securities and Exchange Commission. TWTE's common stock is
traded on the NASD OTC Bulletin Board under the symbol "TWTE." The NASDAQ Stock
Market has implemented a change in its rules requiring all companies trading
securities on the NASD OTC Bulletin Board to become reporting companies under
the Securities Exchange Act of 1934.
MANAGEMENT
Name Age Position
Stephen B. Wells 43 President, Chief Executive
Officer and Director
Terry D. Rapp 54 Executive Vice President,
Secretary and Director
Howard Hochrad 45 Vice President and Treasurer
Alan Evans 35 Vice President
Each of the foregoing persons may be considered to be promoters of the
Company since they were the founders of the Company and have participated from
inception in the Company's business plans and affairs.
Biographies
The principal occupation of the directors and principal officers of the
Company for at least the past five years are as follows:
STEPHEN B. WELLS has been directly involved with the Company for the
last three years, first as a Regional Developer with the Company for the
Southeast Region, and more recently in his capacity as President, Chief
Executive Officer and a director of the Company. Mr. Wells was one of the three
principals involved in the revival of the Twistee Treat concept. Mr. Wells has
spent the past three years refinancing and restructuring the Company in an
effort to position it for future, unimpeded growth. He has been actively
involved with the management of the three pilot stores that the Company has
opened in Florida. Mr. Wells brings with him a strong background and experience
is sales and marketing from his role in the development of the licensing and
merchandising division of First National Film Corporation. In his capacity as
Vice President of Licensing and Merchandising from 1988 to 1992, Mr. Wells
negotiated the marketing and licensing rights for animated film characters to
domestic and foreign production and manufacturing companies. From 1992 to 1996
Mr. Wells started and developed Key Management Services, Inc., a full service
vending distribution business. In addition to his marketing background, Mr.
Wells has also been heavily involved in the commercial and retail real estate
development business. His hands on
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experience and contacts in this industry will greatly assist the Company in
developing stores across the United States. Mr. Wells received his Bachelors
degree in Political Science from the Central Missouri State in 1980.
TERRY D. RAPP has served as Executive Vice President, Secretary and a
Director of the Company since 1996. From 1994 to 1995 Mr. Rapp operated TNT
Promotions and CT Marketing, a marketing and promotions company, marketing
Snapple products and various other vending machine products. From 1990 to 1993,
Mr. Rapp was the owner and operator of JWI Supply, Inc. and Home Hardware, a
wholesale door and hardware supply company which he sold to his partner. Mr.
Rapp received his Bachelors degree in Education from the University of Kansas in
1967.
HOWARD HOCHRAD has served as Vice President and Treasurer of the Company
since 1997. Mr. Hochrad is also President and owner of Shinmaster Products, a
chemical distributor. From 1996 to 1998, Mr. Hochrad was Executive Vice
President and a 50% owner of Twistee Treat Southeast, Inc., which was the
Company's Regional Deveolper for the southeastern United States until its
purchase by the Company. For 19 years prior to joining the Company, Mr. Hochrad
worked for B.F. Goodrich Aerospace, a Fortune 125 Company, in a variety of
financial, planning, marketing and management positions. Mr. Hochrad received
his B.S. degree in Psychology from Potsdam College in 1967.
ALAN EVANS recently joined the Company as a Vice President to assist
the Company in developing the financial and operational resources required to
manage rapid growth. Mr. Evans brings direct experience in the operation and
franchising of cone shaped stores through his experience as a partner in Twistee
Treat Canada where he was responsible for developing and managing the company's
franchise sales and marketing program and operational infrastructure in support
of that company's corporate stores and franchised units. Prior to joining
Twistee Treat Canada, Mr. Evans served as Senior Vice President of operations at
MFP Technology Services, a publicly held technology leasing company with over
$800 million is assets and $400 million in annual sales. During his tenure at
MFP, Mr. Evans was instrumental in rapidly developing a retail distribution
operation capable of handling sales volumes in excess of $250 million annually,
and played a key role in the completion of corporation acquisitions totaling
over $500 million. Mr. Evans received an Honors B.Sc. for the University of
Western Ontario.
EXECUTIVE COMPENSATION
The following sets forth the aggregate cash compensation and non-cash
compensation which is to be paid by the Company during the ensuing 12 months to
each of the highest paid executive officers whose aggregate remuneration is
contemplated to exceed $100,000 and for all officers as a group:
Name of Individual or Identity of Group
Stephen Wells Chief Executive Officer $90,000(1)
All officers as a group
(4 persons) $90,000
(1)Mr. Wells' compensation is established under an employment agreement
entered into between him and the Company. None of the other officers of the
Company currently are paid any salary or other compensation. However, these
other officers will commence receiving salaries when Company revenues increase
to a sufficient level.
On December 29, 1998, the Company entered into a five (5) year
employment agreement with Stephen Wells pursuant to which Mr. Wells will serve
as the Company's Chief Executive Officer and provide the Company with his
business and professional
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services. Mr. Wells is paid a annual salary of $90,000 during the first year,
$150,000 during the second year and $175,000 during the remainder of the term of
the agreement. In addition, Mr. Wells is entitled to fringe benefits customary
for a chief executive officer including health and life insurance, participation
in any profit-sharing, pension or other retirement plans of the Company and a
company car. The agreement contains a two-year non-competition clause.
There are no agreements, plans or other arrangements between the
Company or its subsidiaries and any of its officers which would provide payment
in the event of resignation, retirement or termination of employment arising
from a change-in- control of such entity or a change in an officer's
responsibilities following any such change in control.
THE COMPANY HAS NOT BEEN AUDITED BY INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS. Although the Company is required to file audited financial
statements no later than 60 days from the date that this report is required to
be filed, no such audited financial statements have been prepared or are
available for inspection as of the date hereof. Consequently, there can be no
assurance that any representations as to the financial condition or assets of
the Company are as stated herein.
COMPETITION FROM LARGER AND MORE ESTABLISHED COMPANIES MAY HAMPER
MARKETABILITY.
The ice cream market is highly competitive and the Company faces
substantial competition in connection with the marketing and sales of its
products. Among its competitors are national companies that offer franchise ice
cream-related products such as Dairy Queen Brazier, Baskin Robbins, Breslers,
Carvel, TCBY, and Freshens as well as other numerous regional and local ice
cream companies and stores. Many of these competitors are well established and
have substantially greater financial and other resources than the Company. In
addition to the foregoing competitors which generally provide customers
free-standing ice cream stores, the Company may also be considered to be in
competition with all ice cream and other frozen desserts for discretionary food
dollars. The ability of the Company to increase its market share will be
dependent upon several factors, among which are the quality and price of its
products, advertising and the availability of sufficient capital for product
expansion. The quick-service restaurant industry also competes for certain of
the Company's potential customers. Twistee Treat stores may have to compete
against many well established, quick service restaurants, local food
establishments, supermarkets and convenience stores, many of which have greater
product and name recognition and larger financial and other resources than the
Company. The Company believes that Twistee Treat stores compete favorably in
term of taste, food quality, portions, service, convenience and value, which the
Company believes are important factors to its targeted customers.
The Company competes for qualified franchisees with a wide variety of
investment opportunities both in the fast food ice cream business and in other
industries. The Company's continues success is dependent to a substantial extent
on its reputation for providing high quality and value with respect to its
service, products and franchises, and this reputation may be affected not only
by the performance of Company-owned stores, but also by the performance of its
franchised stores over which the Company has limited operational control.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS' SHARE VALUE.
The Company's Articles of Incorporation, as amended, of TWTE authorizes the
issuance of 200,000,000 shares of common stock. The future issuance of all or
part of the remaining authorized common stock may result in substantial dilution
in the percentage of the Company's common stock held by its then existing
shareholders. Moreover, any common stock issued in the future may be valued on
an arbitrary basis by TWTE. The issuance of the Company's shares for future
services or acquisitions or other corporate actions may have the effect of
diluting the value of the shares
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held by investors, and might have an adverse effect on any trading market,
should a trading market develop for the Company's common stock.
PENNY STOCK REGULATION. Penny stocks generally are equity securities
with a price of less than $5.00 per share other than securities registered on
certain national securities exchanges or quoted on the NASDAQ Stock Market,
provided that current price and volume information with respect to transactions
in such securities is provided by the exchange or system. The Company's
securities may be subject to "penny stock rules" that impose additional sales
practice requirements on broker-dealers who sell such securities to persons
other than established customers and accredited investors (generally those with
assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000
together with their spouse). For transactions covered by these rules, the
broker-dealer must make a special suitability determination for the purchase of
such securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the "penny stock rules" require the delivery, prior
to the transaction, of a disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered representative
and current quotations for the securities. Finally, monthly statements must be
sent disclosing recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of broker-dealers
to sell the Company's securities. The foregoing required penny stock
restrictions will not apply to the Company's securities if such securities
maintain a market price of $5.00 or greater. There can be no assurance that the
price of the Company's securities will reach or maintain such a level.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable
ITEM 5. OTHER EVENTS
On March 10, 2000, the Company effectuated a Regulation D, Rule 504
offering with the intention to raise $1,000,000.
On March 28, 2000, the Company and Gourmet's Choice Coffee Co., Inc.
("GMCH"), a Nevada corporation, and TWTE entered into an agreement whereby GMCH
swapped 20,000,000 restricted shares of its common stock, par value $0.01, for
20,000,000 restricted shares of TWTE's common stock, par value $0.0001. As a
result of this transaction GMCH became the majority shareholder of the Company.
Successor Issuer Election.
Pursuant to Rule 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, upon effectiveness of the Agreement, the
Company became the successor issuer to PPI for reporting purposes under the
Securities Exchange Act of 1934 and elects to report under the Act effective
April 6, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the terms of the aforementioned Agreement, the Registrant has
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accepted the resignation of Alan Schram, the Registrant's sole Director and
Officer as of April 6, 2000, and appointed Stephen B. Wells as President and
Director of the Registrant.
ITEM 7. FINANCIAL STATEMENTS
Financial statements for Perfection Plus are filed herewith. The
Registrant will file combined, audited financial statements by amendment hereto
not later than 60 days after the date that this Current Report on Form 8-K must
be filed.
PART F/S
The Company's balance sheets as of December 31, 1999 and the related
statements of operations, stockholders' equity and cash flows for the period
June 22, 1999 (inception) to December 31, 1999, have been examined to the extent
indicated in their report by Merdinger, Fruchter, Rosen & Corso, P.C.,
independent certified accountants, and have been prepared in accordance with
generally accepted accounting principles and pursuant to Regulation S-B as
promulgated by the Securities and Exchange Commission and are included herein,
on the following pages, in response to Part F/S of this Form 10-SB.
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INDEX
PAGE
INDEPENDENT AUDITORS' REPORT F/S-1
BALANCE SHEET F/S-2
STATEMENT OF OPERATIONS F/S-3
STATEMENT OF STOCKHOLDER'S EQUITY F/S-4
STATEMENT OF CASH FLOWS F/S-5
NOTES TO FINANCIAL STATEMENT F/S-6-7
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INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS OF PERFECTION PLUS, INC.:
We have audited the accompanying balance sheet of Perfection Plus, Inc. (A
Development Stage Company) as of December 31, 1999 and the related statements of
operations, stockholder's equity and cash flows for the period from June 22,
1999 (inception) to December 31, 1999. These financials statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of Perfection Plus, Inc. as of
December 31, 1999 and the results of its operations and its cash flows for the
period from June 22, 1999 (inception) to December 31, 1999 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 of the
accompanying financial statements, the Company has no established source of
revenue, which raises substantial doubt about its ability to continue as a going
concern. Management's plan in regard to these matters is also discussed in Note
1. These financial statements do not include any adjustments that might result
from the outcome of this uncertainty.
MERDINGER, FRUCHTER ROSEN & CORSO, P.C.
Certified Public Accountants
Los Angeles, California
February 8, 2000
F/S-1
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PERFECTION PLUS, INC.
(A Development Stage Company)
BALANCE SHEET
December 31, 1999
-----------------
ASSETS
TOTAL ASSETS $ -
===============
LIABILITIES AND STOCKHOLDER'S EQUITY
TOTAL LIABILITIES -
----------------
----------------
STOCKHOLDER'S EQUITY:
Common stock, No par value;
25,000 shares authorized;
1,150 shares issued and outstanding 1,150
Deficit accumulated during the development stage (1,150)
---------------
TOTAL STOCKHOLDER'S EQUITY -
---------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ -
===============
The accompanying notes are an integral part of the financial statement.
F/S-2
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PERFECTION PLUS, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the period
from June 22, 1999
(inception) to
December 31, 1999
-----------------
REVENUE $ -
ADMINISTRATIVE EXPENSES 1,150
-----------------
NET LOSS $ (1,150)
=================
NET LOSS PER COMMON SHARE - basic and diluted $ (1.00)
=================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING - basic and diluted 1,150
=================
The accompanying notes are an integral part of the financial statement.
F/S-3
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PERFECTION PLUS, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDER'S EQUITY
Common Stock
------------------- Accumulated
Shares Amount Deficit Total
------- -------- ------------ --------
Balance, June 22, 1999 - $ - $ - $ -
Issuance of common stock for
cash on June 22, 1999 at
$1.00 per share 1,150 1,150 1,150
Net loss - - (1,150) (1,150)
------- ------ --------- --------
Balance, December 31, 1999 1,150 $1,150 $ (1,150) $ -
====== ====== ========= ========
The accompanying notes are integral part of the financial statement.
F/S-4
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PERFECTION PLUS, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period
from June 22, 1999 (inception) to December 31, 1999
-----------------
NET CASH FLOWS USED IN OPERATING ACTIVITIES:
Net Loss $ (1,150)
-----------------
NET CASH FLOWS PROVIDED FROM
FINANCING ACTIVITIES:
Issuance of common stock for cash 1,150
-----------------
Net change in cash -
Cash and cash equivalents - beginning of period -
-----------------
Cash and cash equivalents - end of period $ -
=================
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid during the year-
Interest paid $ -
=================
Income taxes paid $ -
=================
The accompanying notes are an integral part of the financial statement.
F/S-5
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PERFECTION PLUS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
--------------------
Perfection Plus, Inc. ("Company") is currently a development stage
company under the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 7. The Company was incorporated under the laws
of the State of Nevada on June 22, 1999.
Basis of Presentation
---------------------
The accompanying financial statement has been prepared in conformity
with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern. However, the Company
has no established source of revenue. This factor raises substantial
doubt about the Company's ability to continue as a going concern.
Without realization of additional capital, it would be unlikely for
the Company to continue as a going concern. The financial statement
does not include any adjustments relating to the recoverability and
classification of recorded asset amount, or amounts and classification
of liabilities that might be necessary should the Company be unable to
continue in existence. It is management's objective to seek additional
capital through a merger with an existing operating company.
Use of Estimates
----------------
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 revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
Cash and Cash Equivalents
-------------------------
The Company considers all highly liquid investments purchased with
original maturities of three months or less to be cash equivalents.
Concentration of Credit Risk
----------------------------
From time to time the Company places its cash in what it believes to
be credit-worthy financial institutions. However, cash balances exceed
FDIC insured levels at various times during the year.
F/S-6
<PAGE>
PERFECTION PLUS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1999
NOTE 1 - DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Income Taxes
------------
Income taxes are provided for based on the liability method of
accounting pursuant to SFAS No. 109, "Accounting for Income Taxes".
Deferred income taxes, if any, are recorded to reflect the tax
consequences on future years of differences between the tax bases of
assets and liabilities and their financial reporting amounts at each
year-end.
Loss Per Share
--------------
The Company presents loss per share in accordance with SFAS No. 128,
"Loss Per Share," which requires presentation of basic loss per share
("Basic LPS") and diluted loss per share ("Diluted LPS"). The
computation of basic loss per share is computed by dividing loss
available to common stockholders by the weighted average number of
outstanding common shares during the period. Diluted loss per share
gives effect to all dilutive potential common shares outstanding
during the period. The computation of diluted LPS does not assume
conversion, exercise or contingent exercise of securities that would
have an antidilutive effect on earnings.
Comprehensive Income
--------------------
SFAS No. 131, "Reporting Comprehensive Income," establishes standards
for the reporting and display of comprehensive income and its
components in the financial statements. As of December 31, 1999, the
Company has no items that represent comprehensive income and,
therefore, has not included a schedule of Comprehensive Income in the
accompanying financial statement.
Impact of Year 2000 Issue
-------------------------
As of December 31, 1999, the Company does not have any computer
systems or customers and suppliers. Therefore, the issue of the year
2000 has no effect on the Company's current activities.
NOTE 2 - RELATED PARTY TRANSACTIONS
The Company neither owns nor leases any real or personal property. The
sole officer and director of the Company provides office services
without charge. Such costs are immaterial to the financial statement
and, accordingly, have not been reflected therein. The officer and
director of the Company is involved in other business activities and
may, in the future, become involved in other business opportunities.
If a business opportunity becomes available for the Company, such
persons may face a conflict in selecting between the Company and their
other business interests. The Company has not formulated a policy for
the resolution of such conflicts.
F/S-7
<PAGE>
ITEM 8. CHANGE IN FISCAL YEAR
TWTE has a December 31 fiscal year end. The fiscal year of PPI is
December
31. The Company will file a Transitional Report on Form 10-QSB, if
required.
EXHIBITS
*2.1 Stock Purchase Agreement
between PPI and TWTE,
dated April 6, 2000.
*3.1 Articles of Incorporation of
TWTE, as amended
*3.2 By-Laws of TWTE
*24.1 Consent of accountants
*27.1 Financial Data Schedule
- -----------
*To be filed by amendment, if required.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
By /s/ Stephen B. Wells
----------------------------------
Stephen B. Wells, President
Date: April 6, 2000
-------------------
