United States Securities and Exchange Commission
450 Fifth Street, NW
Washington, DC 20549
RE: MONTT INTERNATIONAL CORPORATION
Dear Sir:
Transmitted herewith please find the Form 10-SB for the above referenced
registrant. A hard copy will be provided to the staff examiner assigned to this
file upon request. Please address all questions to the undersigned at my offices
located at 130 William St., Suite 807, New York, NY 10038 or at (212) 349-0124.
Very truly yours,
/s/Jay Hait
Jay Hait
<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
Montt International Corporation
-----------------------------------------------------
(Exact name of Registrant as specified in its charter)
New York 223 68 1014
------------------------------------- -------------------------------------
(State or other jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
305 West 50th St., Suite 2k, New York, NY 10019
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(Address of Principal Executive offices)
Issuer's Telephone Number: 212 258 2520
---------------
Securities to be registered pursuant to section 12(b) of the Act:
-----------------------------------------------------------------
None
Securities to be registered pursuant to section 12(g) of the Act:
-----------------------------------------------------------------
Common Stock, par value 0.001
(Title of Class)
DOCUMENTS INCORPORATED BY REFERENCE: See the Exhibit Index attached hereto.
<PAGE>
Montt International Corporation
Form 10-SB
TABLE OF CONTENTS
PART I Page
Item 1. Description of Business 3
Item 2. Management's Discussion and Analysis or Plan of
Operation 16
Item 3. Description of Property 19
Item 4. Security Ownership of Certain Beneficial Owners
and Management 19
Item 5. Directors, Executive Officers, Promoters and
Control Persons 20
Item 6. Executive Compensation 21
Item 7. Certain Relationships and Related Transactions 22
Item 8. Description of Securities 23
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters 26
Item 2. Legal Proceedings 26
Item 3. Changes in and Disagreements with Accountants 27
Item 4. Recent Sales of Unregistered Securities 27
Item 5. Indemnification of Directors and Officers 35
PART F/S Financial Statements 36
PART III
Item 1. Index to Exhibits 68
2
<PAGE>
This Registration Statement contains forward-looking statements which
involve risks and uncertainties. When used in this Registration Statement, the
words "believes," "anticipates," "expects" and other such similar expressions
are intended to identify such forward-looking statements. Actual results of the
Company (as defined below) may differ significantly from the results discussed
in the forward-looking statements. Factors that might cause such a difference
include, but are not limited to, those discussed in "Item 1. - Description of
Business - Risk Factors." Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date hereof. The
Company undertakes no obligation to publicly release the results of any
revisions to these forward-looking statements which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
An investment in Montt International Corporation (the "Company") is highly
speculative and involves a high degree of risk. Prospective investors should
consider the risk factors involved in an investment in the Company, including
the following: (a) that the Company is a development stage company that has a
limited operating history, (b) the Company has not generated a profit, (c) there
is intense competition in the industry in which the Company operates and (d) the
uncertainty of future funding. Prospective investors should carefully read each
section of this registration statement which contain these and other risk
factors.
PART I.
- - -------
ITEM 1. DESCRIPTION OF BUSINESS
ORGANIZATION AND CHARTER AMENDMENTS
Montt International Corporation (the "Company"), was formed under the laws
of the State of New York on April 18, 1996 under the name Soup Nutsy
Corporation. The Company was authorized to issue 200 shares of common stock, no
par value per share. On July 24, 1997, the Company amended its certificate of
incorporation changing the number of common shares authorized to 20,000,000
shares of common stock, $.001 par value each share and 5,000,000 shares of
preferred stock, $.001 par value each share. On
On December 3, 1998, pursuant to an agreement whereby all of the assets and
all of the debts of the Company were assumed by Xenylic Xyris, Inc. the Company
amended its certificate of incorporation to change its name to The Leonard
Swindbourne The Second Acquisition Corp. On June 30, 1999, Stock Exchange
Agreement with Mont Granitos, SA ("Mont"), a Brazilian corporation, the Company
amended the certificate of incorporation changing its name to Montt
International Corporation
3
<PAGE>
MATERIAL CHANGES IN CONTROL SINCE INCEPTION AND RELATED BUSINESS HISTORY
On October 29, 1998, the Company entered into a related party transaction
with the former management of the Company for the transfer of all the Company's
assets to Xenylic Xyris, Inc. in consideration for the assumption of all the
Company's liabilities as of that date.
As part of the transaction Kumar Hathiramani and Surindar Aggarwal each
transferred 3,375,000 shares each to Roger Fidler and Jay Hait on October 29,
1998.
On April 30, 1999 the Company issued 11,000,000 shares of common stock in
consideration for all the assets of Mont Granitos SA ("Mont"). This transaction
gave majority control of the Company to previous shareholders of Mont.
BUSINESS OF THE COMPANY
Montt International Corporation, Inc. ("Montt" or the "Company") was
incorporated on April 18, 1996 under the name Soup Nutsy Corp.. Soup Nutsy Corp.
changed its name to Leonard Swindbourne II Acquisition Corp. on December 3, 1998
after a change in control and the divestiture of its operating assets. The
Company had originally operated a soup restaurant in New York City. When the
Company acquired Mont Granitos, S.A., a Brazilian granite mining company, on
April 30, 1999, the Company changed its name to Montt International Corporation
by amending its certificate of incorporation effective on June 30, 1999. The
Company maintains a United States office at New York, 305 West 50th Street,
Suite 2K, New York, New York 10019. The Company's mining operations are managed
through its Brazilian subsidiary's office in Forteleza, in the State of Ceara in
Brazil.
OPERATIONS
Montt owns, through its wholly owned Brazilian subsidiary, Mont
Granitos, S.A., eight granite properties in northeastern Brazil. These
properties hold more than 1.3 million cubic meters of granite of varying colors.
As presently envisioned by the Company, these granite reserves will provide
overall mine life of at least thirteen years.
During the time period from July 1, 1998 through June, 1999, the
Company leased four deposits to Minevale-Mineracao Vale do Acarau Ltda., a
company in which the controlling shareholder of Montt also holds an interest.
The Company has entered into a sales agreement ("Kyogo Group Contract")
covering about 15% of the estimated reserves of the Company with a Japanese
architectural firm, Kashiwabara Token Kyogo Group, for $122,483,700. This
Agreement provides that sales may begin any time within a seven year period
commencing upon the execution of the agreement, May 3, 1998, and that sales may
be terminated upon six months written notice by either party.
The primary business operation of the Company at the date of this From
10SB is the search for financing for equipment and working capital to allow for
the exploitation of the eight properties. The can be no assurance that such
financing will be obtained. In the absence of such financing the Company would
be continuing to utilize old equipment of limited quantity which has hampered,
and will continue to hamper, production of granite blocks.
The material produced by the Company are granite blocks which are shipped to the
purchaser, or the purchaser's subcontractor, and then cut by local vendors to
the final shape and size needed for installation by others.
DESCRIPTION OF THE PRODUCT
Granite is a natural product It is formed from liquid magma, the molten
rock still found at the core of the planet, which is pushed toward the surface
to form a substance approaching the hardness and durability of diamond. Granite
owes its hardness and density to the fact that it has been solidified deep
within the earth, under extreme pressure. Over the eons, seismic activity has
changed the crust of the planet, forcing veins of granite to the surface.
Glaciers scraped off layers of dirt, sand and rock to expose granite formations.
Typically revealed by outcrops, these deposits have been discovered on every
continent. Unfortunately, most of these granite formations have been badly
fractured by subsequent ice ages and volcanic activity, making them unsuitable
for commercial uses. Only a few deposits remained unaffected as solid "nuggets"
of massive granite rock, making them potentially suitable for quarrying.
To be commercially viable, a solid massive granite rock deposit must
contain an attractive crystal structure and be free of imperfections. It must
also be accessible, and be located in a manner that is free from other resource
and land use conflicts. It must be in reasonable proximity to transportation and
manufacturing infrastructure. It must be located in a jurisdiction with recourse
to commercial and civil law process, and one that supports development of the
resource. And finally, it must be located in close access to domestic and export
market opportunities. The Company's granite quarries meet all these criteria.
4
<PAGE>
The process of manufacturing granite products begins at the quarry. The
principal quarry product sold by the Company is granite blocks, the raw material
of the granite industry. Granite differs from deposit to deposit by color, grade
and/or quality. These blocks are extracted from the Company's quarries in
various sizes through a drilling, blasting and wire sawing process in the
quarry. The range of block sizes is large, but most processing generally require
minimum dimensions of height, width and length to maximize the efficiency of
their block sawing equipment in meeting the required dimensions of the finished
product. Granite blocks are normally sold in heights from 2'6" to 5', widths of
3' to 5', and lengths from 7' to 10'. These blocks weigh from 20 to 30 tons.
Once free of the rock face, blocks are transported by truck or barge to a stone
processing plant. Some quarry operators do not produce finished products -- but
sell their blocks to foreign or domestic stone producers.
Most of the world's granite processing plants and manufacturing
technology is located in Europe. Italy is regarded as the world leader in the
production of granite and marble products, with a tradition that goes back to
the days of the Romans.
Regardless of location, granite block processing has changed
dramatically over the past decade. Contemporary plants are automated
manufacturing facilities, designed to create a daily quota of finished products.
In many ways, a stone processing plant could be compared with a sawmill. Large
quarry blocks of known dimension are passed through various diamond bladed saws
to produce slabs or tiles of varying thickness. Other automated machinery
polishes the cut material to the required finish.
Polished slabs are cut to size for use as exterior and interior facing
of buildings. Slabs are also sold in large sheets -- similar to 4 x 8 sheets of
other construction material. Re-manufacturers utilize the material for custom
work in their particular trade areas, where slabs are converted into kitchen and
bath countertops, and other specialized products.
Granite tiles can be manufactured and packaged for distribution
worldwide in a granite processing plant. Tiles are used for floor and wall
coverings, and can come in a variety of colors and textures. Recent innovations
in granite processing technology can make the cost of granite tiles more
competitive with synthetic alternatives.
Granite is the hardest of all building stones with a very dense grain,
making it virtually impervious to stain and uniquely applicable for any interior
use. If polished, its high-gloss finish will endure even in harsh environments.
These characteristics are ideal for use in the construction and design
industries. Granite also can be provided with a variety of other finishes and,
when combined with the vast spectrum of colors available, provide design options
surpassing any other type of stone. Granites may contain other minerals
providing patterned movement or they may be quarried with consistent grains and
little movement.
Granite is part of the sector of construction stone materials which also
includes marble and slate.
MISSI : The granite commercially known as Missi contains a degree of
variability in its visual aspect, thus a number of commercial sub-types are
identified. The most promising ones are the pink ("ROSA), the almond-brown
("AMENDOA') and the yellow ("AMARELO') variations.
Production of Missi will be adjusted to market demand and the quarrying
method adopted is flexible enough to handle that. Therefore, a combination of
the mining methods benching and selective mining are used.
Due to the local conditions, the quarry averages a mining recovery rate
of 30%. The extension of road and access construction is 5 km. The front-end
loader and bulldozer do handling of extracted materials (both waste and blocks).
The acceptable blocks are then stored at the block storage area prior to their
loading and transport by truck to Fortaleza.
MERUOCA CLASSICO: Production of Meruoca Classico is based on contour
mining, with standard pit design afterwards. Quarry development starts from the
outcrops and follows the available granite orebody using multiple benches. This
ensures the required flexibility and mine safety in production. The mining face
is regularly adjusted to the best fault pattern orientation and to the required
production requirements.
The mining recovery expected for Meruoca Classico is 40%. The extension
of road and access construction is 4 km. The quarry design is complemented with
a maintenance yard, block storage yard, waste dump and general office and
maintenance building facilities.The front-end loader and bulldozer do handling
of extracted materials (both waste and blocks). The acceptable blocks are then
stored at the block storage area prior to their loading and transport by truck
to Fortaleza.
VERDE MERUOCA: Production of Verde Meruoca is based on contour mining,
with standard pit design afterwards. Quarry development starts from the outcrops
and follows the available granite orebody using multiple benches. This will
ensure the required flexibility and mine safety in production. The mining face
is regularly adjusted to the best fault pattern orientation and to the required
production requirements.
5
<PAGE>
The mining recovery expected for Verde Meruoca averages 40%. The
extension of road and access construction is 3 km. The quarry design is
complemented with a maintenance yard, block storage yard, waste dump and general
office and maintenance building facilities. Once the vertical panels are
isolated, they are overthrown to their sides using the front-end loader,
hydraulic jacks and crane. There, the panels are cut into commercial-size blocks
using mechanical induced cuts. The front-end loader and bulldozer do handling of
extracted materials (both waste and blocks). All acceptable blocks are then
stored at the block storage area prior to their loading and transport by truck
to Fortaleza.
ROSA IRACEMA: This quarry has different sites, and due to different
quarrying conditions at each site, the block utilization average at each level
will be different. The values expected are 50%, 95%,and 95% respectively.
Overall mining recovery is estimated to be 60% for this granite. The extension
of road and access construction is 12 km.
CINZA PRATA: Production of Cinza Prata will be based on the existing
quarry site , however, there are a number of other adjacent sites not yet
developed. Due do the relative low value of Cinza Prata, it is not expected that
more than one site will be in production at a particular time. The extension of
road and access construction is 3 km.
Using historical records for Cinza Prata since 1994, a mining recovery
of 60% is expected. Once the vertical panels are isolated, they are overthrown
with the front-end loader, hydraulic jacks and crane. The panels are then cut
into commercial-size blocks using mechanical-induced cuts. The front-end loader
and bulldozer do handling of extracted materials (both waste and blocks). All
acceptable blocks are then stored at the block storage area prior to their
loading and transport by truck to Fortaleza.
VERDE PANTANAL: This granite has a peculiar aspect given by mineralized
veins.. The mining method chosen is contour mining. Mining recovery is expected
to be 35%. The extension of road and access construction is 18 km.
Once the vertical panels are isolated, they are overthrown with the
front-end loader, hydraulic jacks and crane. The panels are then cut into
commercial-size blocks using mechanical-induced cuts. The front-end loader and
bulldozer do handling of extracted materials (both waste and blocks). All
acceptable blocks are then stored at the block storage area prior to their
loading and transport by truck to Fortaleza.
CASABLANCA: Granite Casablanca has a peculiar esthetical pattern brought by
the biotite layers, which makes it extremely attractive due to its color and
pattern. Mining recovery is expected to average 37%. The extension of road and
access construction is 18 km.
The mining method used is contour mining in multiple benches from the
outcrops. This enables a high flexibility in production and ensures a relief in
the "in-situ" stress state, which in turn may allow for a higher mining recovery
than the expected average. Once the vertical panels are isolated, they are
overthrown with the front-end loader, hydraulic jacks and crane. The panels are
then cut into commercial-size blocks using mechanical-induced cuts. The
front-end loader and bulldozer do handling of extracted materials (both waste
and blocks). All acceptable blocks are then stored at the block storage area
prior to their loading and transport by truck to Fortaleza.
PRETO REDENCAO: Production of Preto Redencao is based on the open-pit
mining method. A mining recovery of 60% is expected. Most of the cuts in the
quarry to use diamond wire technology, ensuring low costs and high productivity.
The extension of road and access construction is 8 km.
The quarry design is complemented with a maintenance yard, block
storage yard, waste dump and general office and maintenance building facilities.
The front-end loader and bulldozer do handling of extracted materials
(both waste and blocks). All acceptable blocks are then stored at the block
storage area prior to their loading and transport by truck to Fortaleza.
6
<PAGE>
Mining Methods and Technology
- ------------------------------ -------------------------------------------------
Equipment Technology
Mining Methods and
Technology Mining
-------------------------------------------------
-------------- --------------- ------------------
Granite Explosives Induced Cut Diamond Wire
- ------------------------------ -------------- --------------- ------------------
- ------------------------------ -------------- --------------- ------------------
MISSI X X
- ------------------------------ -------------- --------------- ------------------
- ------------------------------ -------------- --------------- ------------------
MERUOCA CLASSICO X X X
- ------------------------------ -------------- --------------- ------------------
- ------------------------------ -------------- --------------- ------------------
VERDE MERUOCA X X X
- ------------------------------ -------------- --------------- ------------------
- ------------------------------ -------------- --------------- ------------------
ROSA IRACEMA X X X
- ------------------------------ -------------- --------------- ------------------
- ------------------------------ -------------- --------------- ------------------
CINZA PRATA X X X
- ------------------------------ -------------- --------------- ------------------
- ------------------------------ -------------- --------------- ------------------
VERDE PANTANAL X X X
- ------------------------------ -------------- --------------- ------------------
- ------------------------------ -------------- --------------- ------------------
CASABLANCA X X X
- ------------------------------ -------------- --------------- ------------------
- ------------------------------ -------------- --------------- ------------------
BLACK CEARA X X
- ------------------------------ -------------- --------------- ------------------
MONTs Granite Resources
- -------------------------------------------------------------------
Granite Indicated (m3)
- -------------------------------------------------------------------
------------------------------
MISSI 114,401,200
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------------------------------
MERUOCA CLASSICO 60,177,000
- -------------------------------------------------------------------
------------------------------
VERDE MERUOCA 2,666,000
- -------------------------------------------------------------------
------------------------------
ROSA IRACEMA 10,012,163
- -------------------------------------------------------------------
------------------------------
CINZA PRATA 696,368
- -------------------------------------------------------------------
------------------------------
VERDE PANTANAL 2,763,000
- -------------------------------------------------------------------
------------------------------
CASABLANCA 829,336,552
- -------------------------------------------------------------------
------------------------------
BLACK CEARA 36,788,000
- -------------------------------------------------------------------
7
<PAGE>
DESCRIPTION OF THE INDUSTRY
A. CONSTRUCTION STONE- MARKET PRICES
The number of firms involved in the production of granite blocks for
internal consumption in Brazil is considerably small. This relatively small
group of block producers has a significant degree of influence on the final
price of the blocks and derived products. Another important factor in the market
price for granite is the ability of the producer to form a differentiated price
for certain products. Construction stone are unique materials according to their
origin and their individual characteristics both physical and esthetical,
allowing for specific demand and price for some products. Competition between
different products is imperfect, and it tends to decrease the more specialized a
product is.
On the other hand, granite products considered to be common tend to
have a smaller impact on the market, and are normally associated with an
oligopoly or homogeneous market. Although each individual producer has a certain
ability to influence the market price, the combined effect of (1) the reduced
number of producers; and (2) the low degree of differentiation between products,
tends to diminish the actual influence of an individual producer on the market
price. With a more intense degree of differentiation and more intense uniqueness
of a certain product, the producer has more power to influence the prices, in
some circumstances reaching an intensively differentiated oligopoly, very close
to a monopoly.
For international exports, the influence of local producers is
significantly reduced. The production scale it is usually very small compared to
international production levels and the end-user has a number of suppliers
located in different countries, enabling access to a large set of independently
produced and sold products. It is known that granite blocks that meet the
current market demand - color, movement - have easier penetration and higher
prices in general.
B. SUPPLY AND DEMAND STRUCTURE
The majority of the demand for granite stones is in civil construction
with approximately 80% of the total. Due to its particular features of hardness
and low maintenance requirements, most applications (70%) are related to
interior and exterior building facing. The remaining general applications are
for wall plating, and for the arts and funerary industry. Supply inventories
differ on a country-to-country and region-to-region basis. In general, most of
the products considered to be common are distributed to internal markets. The
penetration of more valuable products depends on the local construction industry
trends and, to a lesser degree, the competition from alternate building
products.
Traditionally, construction stones, particularly granite and marble are
perceived to be high quality, high-end products and therefore, associated with
high prices. A significant change on this perception is being brought about by
recent changes in the market, related to higher supply levels, larger production
scale and lower costs associated with the use of modern technologies for both
production and processing. The lower prices connected with these changes are
helping to increase the demand steadily.
World-wide production of construction stone blocks (run-of-mine) feeds
a significant processing industry, that have to supply approximately 463 million
square meters a year of finished products. The capital immobilized in the
construction stone industry worldwide is equivalent to US$ 12 billion, with an
average US$ 1.2 billion required yearly for equipment maintenance and
replacement. The industry includes more than 40,000 companies, ranging from
small- to medium-size, with a work force of approximately 1.5 million people,
from extraction at the quarry to final processing.
8
<PAGE>
C. WORLD WIDE PRODUCTION
Worldwide production has increased significantly in the period 1926 to 1995,
with an average annual rate of 4.7%. From 1986, this rate has increased to a
level of 7% yearly, considerably higher than the average global economy growth.
Within the construction stone industry, granite is the sector with the highest
production increase rate, above marbles and slates. The main reasons for this
growth in the production levels are:
o Gradual decrease in the prices of the final products;
o Attractive relation capital/product price for new projects;
o The industrial activity related to construction stones is perceived to be
advantageous for regional economic growth in developing countries;
o Wide distribution of production centers;
o Better acceptance of the product features of hardness and esthetical values
o Significant improvements in the technology for production, processing and
setting up the construction stones against alternate products.
Currently, 80 countries produce and export granite, with 30 of them producing
more than 100,000 tons/year. Europe is the most important producer, responsible
for 55% of the worldwide production. However, in recent years the European
participation has been decreasing steadily due to the production expansion of
other regions, in particular, countries such as China, India and Brazil. From
1989 to 1995, the worldwide market share of these three countries has increased
from 10% to 29%.
Table 16 shows historical data of the worldwide production of construction
stones from 1926 to 1995.
<TABLE>
<CAPTION>
Table 16: Historical Data of Worldwide Construction Stone Production
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Year MARBLE GRANITE SLATE TOTAL
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
1,000 t % 1,000 t % 1,000 t % 1.000 t %
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
1926 1175 65.6 175 9.8 440 24.6 1,790 100
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
1976 13,600 76.4 3,400 19.1 800 4.5 17,800 100
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
1956 13,130 60.5 7,385 34.0 1,195 5.5 21,710 100
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
1991 19,170 59.2 11,370 35.7 1,660 5.1 32,400 100
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
1993 20,400 60.0 11,900 35.0 1,700 5.0 34,000 100
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
1994 21,000 57.5 13,500 37.0 2,000 5.5 36,500 100
- ------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------
1995 24,550 57.5 15,900 37.4 2,150 5.1 42,500 100
- ------------------------------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
D. WORLDWIDE DEMAND
During 1995, worldwide consumption for granite was approximately 463 X 10^6 m2 a
year of finished products. Twelve countries are responsible for 72% of the
global consumption, with particular participation of Japan, Taiwan and Germany
as the main importers that are not producers. Table 18 illustrates the current
applications demand for granite.
<TABLE>
<CAPTION>
Table 18 Consumption of Granite - 1995
- ---------------------------------------------------------------------------------------------------------------------------------
Item Italy Germ. France Greece Spain Japan China Taiwan Korea India USA Brazil Total
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Block 8,000 700 1,100 1,750 4,200 550 7,250 250 1,400 3,250 1,300 1,950 42,500
Production
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Block Imports 1,959 452 278 7 368 875 118 887 204 19 64 2 7,420
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Block Total 9,959 1,152 1,376 1,757 4,568 1,425 7,368 1,117 1,604 3,269 1,364 1,952 49,920
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Block Exports 766 240 80 51 668 2 737 17 122 1,131 87 620 7,420
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Processed 9,193 912 1,296 1,706 3,900 1,423 6,631 1,100 1,482 2,138 1,277 1,332 42,500
Material
- ---------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Processing 3,769 374 531 699 1,600 583 2,719 451 608 877 524 546 17,425
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Finished 85 1,774 468 1 114 1,298 164 88 73 1 856 9 8,153
Prod. Imports
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Finished 5,509 2,312 1,233 1,008 2,414 2,138 4,076 737 947 1,262 1,609 795 33,228
Prod Total
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Finished 2,625 92 106 144 846 1 1,656 42 94 199 50 62 8,153
Prod. Exports
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Internal 53,350 41,070 20,850 15,984 29,000 39,530 44,770 12,860 15,780 19,670 28,840 13,650 462,500
Consumption
(m2)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
From 1989 to 1995, the global commercialization in volume of construction stone
has increased 62.2%, equivalent to 8.4% yearly (excluding slates). Granite in
raw had a cumulative change of 41.3%, equivalent to an average change of 5.9%
yearly.
Exports of block are carried out through contracts between importers and
producers. Importer representatives usually visit the quarries and choose the
required blocks on-site. Sometimes the contracts are signed with exclusivity
rights. Many companies have international partners that are in charge of global
marketing and commercialization.
The main importers of granite during 1995 were Japan, Italy, Germany, Taiwan,
USA, France and Belgium, with 62% of the global imports. Singapore, Hong Kong
and Taiwan are the countries with the highest increase in the imports during
1989 to 1995.
E. CONSTRUCTION STONE MARKETING
The granite industry has a complex distribution structure, due to the
presence of a wide range of materials, with different prices, looks and
availability.
In general, blocks are carefully selected, normally on-site, and their
commercialization is done via pre-established channels and, sometimes through
re-sellers.
The emphasis on specific features of each product is important, and
this is reflected by a carefully process of selecting an appropriate name for a
specific product. Marketing of the product and its name is done via brochures
and catalogues, and through advertisements in specialized magazines and other
publications. Polished samples are also normally available. It is becoming
popular to associate a particular product with a famous building or construction
(such as shopping centers, museums, etc.).
11
<PAGE>
RISK FACTORS
Development Stage Company; No Operating History
The Company was incorporated December 2,1996 and is still in its
development stage. The Company's operations are subject to all the risks
inherent in the establishment of a new business enterprise. The likelihood of
the success of the Company must be considered in light of the problems,
expenses, complications, and delays frequently encountered in connection with
the formation of a new business, the development of new markets for its
products, and the competitive and regulatory environment in which the Company
operates in. Unanticipated expenses, delays, and other problems such as setbacks
in product extraction, in market acceptance, and in sales and marketing are
frequently encountered in establishing a new business. Such problems, if
experienced, could adversely affect the Company to a material degree.
Company May Require Additional Financing
To fulfill its revenue and earnings objectives, the Company may need to
seek additional funding through public or private financing and may, when
attractive sources of capital become available, elect to obtain capital in
anticipation of such needs. However, no assurance can be given that additional
funds which may be required will be available, if at all, on acceptable terms.
The Company has made no arrangements to obtain future additional financing. If
additional funds are required, the Company's inability to raise such funds will
adversely affect its operations. To the extent that additional funds are
obtained by the sale of equity securities, the stockholders may sustain
significant dilution.
Company May Not be Able to Manage Expansion
The Company believes that the funds secured from the successful completion
of this Offering will allow the Company to significantly increase the output of
the Company's granite deposits. This, the Company believes, will allow for
significant growth relative to past extractive capacity of the ranite deposits.
However, this proposed expansion will subject the Company to increased
operational and marketing costs relative to the costs that were incurred by the
predecessor owners of the granite deposits. In order to manage this growth, the
Company must also improve and expand the hiring, training, and management of new
employees. There can be no assurance that the Company will be able to manage
these changes sufficiently, which may adversely affect the Company to a material
degree. There can be no assurance that the Company will succeed in any of its
expansion plans, and even if expansion does occur there can be no assurance that
this expansion will be profitable.
Dependence on Key Members of Management
The successful operation of the business depends substantially on the
expertise and know-how of its current management personnel. In particular the
Company's president, Francisco Demontie Mendes Aragao, has played a substantial
role in the development and management of the Company, and the Company believes
his services will be crucial for the successful management of its expansion
plans. The Company has recently entered into an employment agreement with Mr.
Mendes. However, if his employment terminates, or if he is unable to perform his
duties, the Company will be substantially affected.
12
<PAGE>
Hazards Associated with Company Operations
The Company's operations are subject to certain hazards and liability risks
faced by all such businesses within the extractive industries, such as potential
health hazards to workers and enviromental damage and/or accidents. While the
Company or the predecessor owners of the granite deposits have never experienced
such hazards, the occurrence of such hazards could materially affect the
Company's operations.
Dependence on a Single Customer
The Company has signed a long-term supply contract with the Kashiwabara
Token Kyogo Group in Japan. Although the Company is not aware of any adverse
developments concerning this customer, the Company would suffer substantial
material adverse effects if for any reason the Kashiwabara Token Kogyo Group
terminated its business relationship with the Company.
Geography
The Company expects that in the initial years of its planned expansion, a
large proportion of its sales will be targeted to the Asian market. As a result,
negative economic or market changes within Asia may have an adverse effect on
the Company's business.
Company has not Paid Dividends
Since its inception, the Company has not paid any cash dividends on the
Common Stock. Any declaration of dividends in the future will be at the
discretion of the Board of Directors and will depend upon, among other things,
earnings, the operating and financial condition of the Company, capital
expenditure requirements, and general business conditions. There are no
restrictions currently in effect which preclude the Company from paying
dividends, but the Company currently intends to retain any earnings in the
foreseeable future to finance the growth and development of the business.
Therefore, the Company does not presently intend to pay dividends, and it is not
likely that any dividends will be paid in the foreseeable future. See
"Description of Securities - Common Stock" and "Dividend Policy."
Restrictions on Transfer; Registration of Common Stock
This offering has been structured as a private placement of the Common
Stock of the Company which will be followed immediately by a business
combination between the Company and an existing Public Company that has no
substantial assets, liabilities or business operations. This offering is
expected to close contemporaneously with the proposed business combination. In
connection with the proposed business combination, all stockholders of the
Company, including the investors who purchase the Common Stock offered hereby,
will exchange their shares of the Company's Common Stock for newly-issued shares
of the Public Company's common stock.The Common Stock will be subject to
substantial restrictions on transfer under the Act and the provisions of state
laws regulating securities. In general, an investor will not be able to sell,
transfer, pledge or dispose of his Common Stock without first registering such
shares under the Act and applicable state securities laws, unless an exemption
from registration is available. Accordingly, an investor must be willing to bear
the economic risk of his investment for an indefinite period of time. Within six
months after the completion of this offering, the Company intends to file a
registration statement under the Act for the registration of the Common Stock
offered hereby. While there can be no assurances respecting the time that may
required to complete the registration process and receive an order of
effectiveness from the SEC, the Company will use all reasonable efforts to have
such registration statement declared effective as soon as practicable and to
maintain the effectiveness of the registration statement for a period of at
least 12 months. Upon receipt of an order of effectiveness, the purchasers of
the Common Stock offered hereby will have the right to sell 50% of the shares of
Common Stock purchased in this offering. An additional 25% of the shares of
Common Stock purchased in this offering will be eligible for resale three months
after the effectiveness of the registration statement and the remaining 25% of
the shares of Common Stock purchased in this offering will be eligible for
resale six months after the effectiveness of the registration statement.
13
<PAGE>
Competitive Industry
The exploration, extraction, and distribution of granite blocks is highly
competitive and requires substantial capital. The Company competes with and will
compete with, numerous international, national, and regional companies, many of
which have significanlty larger operations and greater financial, marketing, and
other resources than the Company which mayh give such competitors competitive
advantages, including economies of scale and scope. No assurances can be given
that the Company will be able to compete effectively in any market in which it
conducts or may sales.
Effects of an Economic Downturn in Brazil
While the Company is focusing its efforts on exporting its granite outside
of Brazil, it will still have domestic sales with a high concentration in the
construction industry. it In the event that economic conditions in Brazil
experiences a significant downturn, such as a recession, or there occurs a
significant increase in the rate of inflation, there is likely to be an adverse
effect upon the market for granite in Brazil.
Enforceability of Foreign Judgments
Substantially all of the assets of the Company are located in Brazil. In
addition, the officers of and some of the Directors of the Company reside in
Brazil and substantially all of the assets of such persons are located in
Brazil. As a result, it may not be possible for investors to enforce judgments
resulting from violations of any law applicable to the offer and sale of Common
Stock outside of Brazil against such persons. A judgment against the Company
obtained outside of Brazil would be enforceable in Brazil against the Company
and its officers and Directors, without reconsideration of the merits, upon
confirmation of that judgrnent by the Brazilian Federal Supreme Court. That
confirmation will occur if the foreign judgment (a) fulfills all formalities
required for its enforceability under the laws of the country where the foreign
judgment is granted, (b) is issued by a competent court after personal service
of process upon the Company, its officers, or Directors, (c) is not subject to
appeal, (d) is authenticated by a Brazilian consular office in the country where
the foreign judgment is issued and (e) is not against Brazilian public policy.
Notwithstanding the foregoing, no assurance can be given that the confirmation
process described above can be conducted in a timely manner. No assurance can be
given that applicable Central Bank consent would be granted for remittance of
the monetary judgment in foreign currency outside of Brazil.
Exchange Controls and Restrictions
Brazilian law provides that, whenever there is a serious imbalance in
Brazil's balance of payments or serious reasons to foresee such imbalance, the
Brazilian Government may, for a limited period of time, impose restrictions on
the remittance to foreign investors of the proceeds of their investments or for
the remittance of dividends. While there are currently no such restrictions in
effect, there can be no assurance that Brazilian Government will not in the
future impose restrictive foreign exchange regulations that would have the
effect of preventing or restricting the Company's ability to remit dividend
payments.
Tax Exemption
Current Brazilian law exempts all export product from all state, federal,
and value-added taxes. The Company's growth plans are oriented towards the
export market. While the Company will not rely on the tax exemptions in order to
achieve profitability and a meaningful return on equity, any change in the tax
exempt status may result in a decline in the Company's after-tax earnings
MINING RISKS AND INSURANCE
The Company's operations may be affected by risks and hazards generally
associated with the mining industry, including fires, cave-ins, rock bursts,
flooding, industrial accidents, mechanical or electrical failures, and unusual
or unexpected rock formations. Such risks could result in damage to, or
destruction of, mineral properties or producing facilities, personal injury,
environmental damage, delays in mining, monetary losses and possible legal
liability. Although the Company maintains insurance at levels consistent with
its historical experience and industry practice, no assurance can be given that
such insurance will continue to be available at economically feasible premiums.
Insurance for environmental risks (including potential for pollution or other
hazards as a result of the disposal of waste products occurring from production)
is not generally available to the Company or to other companies within the
industry.
14
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS FOR THE YEARS ENDING DECEMBER 31, 1997 AND 1998 AND FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1998 AND 1999.
The following discussion relates to the results of the Company's operations
to date, and our financial condition:
This prospectus contains forward looking statements relating to the
Company's future economic performance, plans and objectives of management for
future operations, projections of revenue mix and other financial items that are
based on the beliefs of, as well as assumptions made by and information
currently known to, management. The words "expects, intends, believes,
anticipates, may, could, should" and similar expressions and variations thereof
are intended to identify forward-looking statements. The cautionary statements
set forth in this section are intended to emphasize that actual results may
differ materially from those contained in any forward looking statement.
The Company was formed on April 18, 1996, under the laws of the State of
New York to engage in any lawful act or activity for which corporations may be
organized under the business corporation law of the State of New York. The
Company was formed under the name of Soup Nutsy Corporation and operated a soup
restaurant in New York City until April, 1998 when the Company ceased its
operations. On October 29, 1998, the Company reached an agreement with the
former management of Soup Nutsy Corp. to transfer the Company's assets in
consideration for the assumption of certain liabilities. For the period from
October 30, 1998 until April 30, 1999, the Company remained dormant until the
Company entered into a Stock Exchange Agreement with Mont Granitos, SA ("Mont"),
a Brazilian corporation and is engaged in the mining of granite from eight
deposits in the state of Ceara to which it owns exploration rights. The Company
is in the organization stage which consists of development of the moneral
deposits and acquisition of equipment for the moning of the granite. Once mining
operations begin, the granite will be exported to international markets.
Development stage activities.
The following discussion relates to the results of the Company's operations
to date, and the Company's financial condition:
For the next 12 months, the Company plans to devote the majority of its
efforts to (i) developing its mineral reserves of granite obtaining new
customers for its products by continuing its marketing efforts (ii) enhancing
its production facilities for inventory, and (iii) pursuing and finding a
management team to continue the process of completing its marketing goals and to
market limited quantities of granite. The Company anticipates that its results
of operations may fluctuate for the foreseeable future due to several factors,
including whether and when new production facilities are brought on line ,
market acceptance of current or new production, competitive pressures on
pricing. Operating results would also be adversely affected by a downturn in the
market for granite. Because the Company is continuing to increase its operating
expenses for personnel and other general and administrative expenses, the
Company's operating results would be adversely affected if its sales did not
correspondingly increase. The Company's limited operating history makes accurate
prediction of future operating results difficult or impossible. Although the
Company has experienced growth in recent years, there can be no assurance that,
in the future, the Company will sustain revenue growth or remain profitable on a
quarterly or annual basis or that its growth will be consistent with predictions
made by securities analysts.
The Company has been a development stage enterprise since its date of
inception in 1996 to September 30, 1999. During this period, management had
devoted the majority of its efforts to obtaining new customers for its products,
enhancing its production facilities and mineral reserves for inventory, pursuing
and finding a management team to continue the process of completing its
marketing goals, marketing limited quantities of the granite, and obtaining
sufficient working capital through loans and equity through a private placement
offering. These activities were funded by the Company's management and an
investment from the United States parent upon the date of acquisition of
$950,000.
15
<PAGE>
Results of operations.
Results of Operations for the nine months ended September 30, 1999 as
compared to the nine months ended September 30, 1998.
For the nine months ended September 30, 1999, the Company generated net
sales of $130,481 as compared to $71,485 for the nine months ended September 30,
1998 representing an increase of $58,996. The Company's cost of goods sold for
the nine months ended September 30, 1999 was $61,713 as compared to $62,140 for
the nine months ended September 30, 1998. The Company's gross profit on sales
was $68,767 for the nine months ended September 30, 1999 as compared to $9,343
for the nine months ended September 30, 1998. The increase in gross profit is
the result of the Company acquiring and placing into operation production
equipment.
The Company's general and administrative costs aggregated approximately
$799,483 for the nine months ended September 30, 1999 as compared to $7,512 for
the nine months ended September 30, 1998 representing an increase of $791,971.
This increase represents compensation of $264,149; professional services of
$20,165; office and computer expenses of $14,024 and financial consulting
expenses 493,633.
Liquidity and capital resources.
The Company's liquidity is negative by $65,184. The Company's cash balance
at December 31, 1998 was $1,998 and has increased to $13,746 at September 30,
1999 through the process of developing profits from the sale of limited
quantities of granite and the payment of $950,000 to the Brazilian subsidiary
upon the acquisition and loans to the Company by the principal shareholders
aggregating $32,499.
The Company expended an aggregate of $698,535 for operations, reduced
Company loan payable to related party by $19,381; purchased property
improvements of $321,959; equipment of $411,272. In April 1999, the Company
received payment from the sale of the $950,000 outstanding Note Receivable that
was written off as of December 31, 1998 and received capital contributions of
$533,033 from Brazilians principals.
Income tax: As of September 30, 1999, the Company had a tax loss carry-forward
of $639,944. The Company's ability to utilize its tax credit carry-forwards in
future years will be subject to an annual limitation pursuant
16
<PAGE>
to the "Change in Ownership Rules" under Section 382 of the Internal Revenue
Code of 1986, as amended. However, any annual limitation is not expected to have
a material adverse effect on the Company's ability to utilize its tax credit
carry-forwards.
The Company expects its capital requirements to increase over the next
several years as it continues to develop its business, increase sales and
administration infrastructure and embark on developing in-house business
capabilities and facilities. The Company's future liquidity and capital funding
requirements will depend on numerous factors, including the extent to which the
Company's present management can fund the continued capital requirements, the
costs and timing of expansion of sales, marketing activities, facilities
expansion needs, and competition in the business entered into.
17
<PAGE>
Item 3. DESCRIPTION OF PROPERTY
The Company occupies office space on a month to month basis at 156 Main
Street, Hackensack, New Jersey at $250 per month.
The Company's has 4,400 sq. ft of adminstrative office space in Brazil
located at AvSargento Herminio, 2329 Caixa Postal 3407-Bairro Antonio Bezerra,
Fortaleza, Ceara, Brazil 60.356.970. The Company pays $1,666 per month for this
space, pursuant to a two year contract which will end in September, 2001.
The Company has the mining rights to the following eight granite quarries
in Brazil - Preto Redencao (DNPM 800.746/96), Rosa Iracema (DNPM 800.536/94),
Verde Meruoca (DNPM 800.192/84) Meruoca Classico (DNPM 800.114/84), Missi (DNPM
800.104/87 and 800.106/87), Verde Pantanal (DNPM 800.773/86 and 800.774/86),
Cinza Prata (DNPM 800.317/89. 800.491/89, and 800.492/89), and Casa Blanca (DNPM
800.387/91 and 800.000/92).
18
<PAGE>
Item 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding the beneficial ownership of Common Stock as of September 30, 1999, by
(i) each Director of the Company, (ii) each executive officer of the Company,
(iii) all directors and executive officers as a group, and (iv) each person
known to the Company to be the beneficial owner of more than 5% of its
outstanding shares of Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
Shares Beneficially Owned
-------------------------
Percentage
Directors and Executive Officers Shares Held Owned (1)
- - -------------------------------- ----------- ---------
<S> <C> <C>
Francisco Mendes Aragao 10,000,000 75.75%
AvSargento Herminio,
2329 Caixa Postal 3407
Bairro Antonio Bezerra,
Fortaleza, Ceara, Brazil
Francisco Das Chagas Tabosa 0 0
AvSargento Herminio,
2329 Caixa Postal 3407
Bairro Antonio Bezerra,
Fortaleza, Ceara, Brazil
Francisco De Assis Furlani 0 0
AvSargento Herminio,
2329 Caixa Postal 3407
Bairro Antonio Bezerra,
Fortaleza, Ceara, Brazil
Francisco Jocele Ribeiro 0 0
AvSargento Herminio,
2329 Caixa Postal 3407
Bairro Antonio Bezerra,
Fortaleza, Ceara, Brazil
Jay Hait(2)
318 Briarcliffe Rd.
Teaneck, NJ 07666 122,500 0.01%
Roger Fidler(2)
400 Grove St.
Glen Rock, NJ 07470 122,500 0.01%
As a group 10,000,000 75.77%
(6 persons)
<FN>
(1) Percentage of ownership is based on 13,200,850 shares of Common Stock
issued and outstanding as of September 30, 1999.
(2) Messrs. Hait and Fidler have not been acting as directors or officers of
the Company since the Company's purchase of Mont on April 30, 1999.
</FN>
</TABLE>
19
<PAGE>
Item 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The Board of Directors of the Company is comprised of only one class of
director. Each director is elected to hold office until the next annual meeting
of shareholders and until his successor has been elected and qualified.
Officers are elected annually by the Board of Directors and hold office until
successors are duly elected and qualified. The following is a brief account of
the business experience of each director and executive officer of the Company.
Joshua and Abraham Shainberg are brothers.
The position(s) held by each Officer and Director of the Company are shown
on the following table. Each Director has held office since February 10, 1994
and will serve for one year or until the next annual meeting of the Company's
Shareholders and until a successor is elected and has qualified. The Company is
presently trying to find a third director.
<TABLE>
<CAPTION>
Age Position
<S> <C> <C>
Francisco Demontie Mendes Aragao 48 President, Director
Francisco Das Chagas Tabosa 44 Director
Francisco De Assis Furlani 36 Director
Francisco Jocele Ribeiro 57 Treasurer, Director,
and Secretary
</TABLE>
Francisco Demontie Mendes Aragao
Francisco Demontie Mendes Aragao is President and a director of the
Company, and has been since the Company acquired Mont on April 30, 1999. Mr.
Mendes has been in the granite field since the 1970s, and started and worked for
Mont in 1977.
Francisco Das Chagas Tabosa
Francisco Das Chagas Tabosa is the Company's Quarry Manager, and has been a
Director of the Company since the Company acquired Mont on April 30, 1999. Mr
Tabosa has been with the Company for 14 years, all of which have been spent in
working the technical side of the quarries. Mr. Tabosa was trained as an
Engineer , receiving an engineering degree from the Universidade Estadual Vale
do Acarau in 1980
Francisco De Assis Furlani
Francisco De Assis Furlani is the Company's production manager, and has
been a Director of the Company since the Company acquired Mont on April 30,
1999. Mr. Furlani has worked as production manager for the Company's finishing
plant for 7 years. Prior to that, he worked for Construtora Odebrecht S.A., a
large Brazilian construction company, as a production manager, and for the State
of Ceara as an operations manager. Mr. Furlani was trained as an Engineer ,
receiving an engineering degree from the Universidade Federal de Pernanmbuco in
1976.
Francisco Jocele Ribeiro
Francisco Jocele Ribeiro is the Company's Treasurer, Secretary, and has
been a Director of the Company since the Company acquired Mont on April 30,
1999. Mr. Ribeiro has been the financial director of the Company's finishing
plant for 5 years. Prior to that he worked for Banco do Brasil for over 20
years. Mr. Ribeiro received degrees from the Universidade Estadual Vale do
Acarau in accounting (1976) and operations engineering (1980).
20
<PAGE>
Item 6. EXECUTIVE COMPENSATION
The following table sets forth the compensation paid during the fiscal year
ended December 31, 1998, to the Company's Chief Executive Officer and each of
the Company's officers and directors. No person received compensation equal to
or exceeding $100,000 in fiscal 1998 and no bonuses were awarded during fiscal
1998.
<TABLE>
<CAPTION>
Annual Compensation Awards Payouts
------------------------------ ------------------------- ---------
Other All
Annual Restricted Securities Other
compen- Stock Underlying LTIP Compen-
sation Award(s) Options/SAR Payouts sation
Name and Principal Position Year Salary ($) Bonus ($) ($) ($) (#) ($) ($)
- - ---------- ---- ---------- --------- ------- ----------- ------------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Francisco Mendes Aragao 1998 -60,000- -0-
Francisco Das Chagas Tabosa 1998 -36,000- -0-
Francisco De Assis Furlani 1998 -36,000- -0-
Francisco Jocele Ribeiro 1998 -36,000- -0-
Roger L. Fidler(2) 1998 -0- -0-
Jay J. Hait(2) 1998 -0- -0-
<FN>
(1) No Board of Directors' fees have been paid.
(2) Messrs. Fidler and Hait each received 3,375,000 shares of the Company's
common stock on October 29, 1998 from previous management of the Company as
part of the transaction wherein all of the Company's debt and assets were
transferred to Xenylic Xyris, Inc. These shares were exchanged leaving
Messrs. Fidler and Hait with 125,000 restricted shares each as part of the
transaction wherein Mont was purchased on April 30, 1999. Of those shares,
Messrs. Fidler and Hait each contributed 2,500 shares in settlement of s
lawsuit, leaving both Mr. Fidler and Mr. Hait holding 12,500 shares each of
the Company's common stock.
</FN>
</TABLE>
21
<PAGE>
Item 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTIONS WITH MANAGEMENT AND OTHERS
On October 29, 1998, the Company entered into a related party transaction
with the former management of the Company for the transfer of all the Company's
assets to Xenylic Xyris, Inc. in consideration for the assumption of all the
Company's liabilities as of that date.
As part of the transaction the former management of the Company transferred
3,375,000 shares each to Roger Fidler and Jay Hait and resigned their offices
with the Company.
This effectively changed the managerial control of the Company to Roger
Fidler, who had accepted the position as President and sole director of the
Company.
CERTAIN BUSINESS RELATIONSHIPS
The Company has balances receivable and payable fro the renting of four
mining deposits in the period from July 1, 1998 to June, 1999, with the company
Minevale - Mineracao Vale do Acarau Ltda. in which the conrolling shareholder of
the Company holds an interest.
Accounts payable as of September 30, 1999, refers to exploration costs of
mining properties paid by Minevale - - Mineracao Vale do Acarau Ltda.., IMARF -
Granitos e Mineracao S.A. and INBRASMA - Industria Brasileira de Marmores S.A.
in which the controlinbg shareholder of the Company holds an interest.
22
<PAGE>
Item 8. DESCRIPTION OF SECURITIES
The Company's authorized capital consists of 20,000,000 shares of common
stock, $.001 par value each share and 5,000,000 shares of preferred stock, $.001
par value each share. As of September 30, 1999, there were 13,200,850 shares of
Common Stock and no shares of Preferred Stock issued and outstanding. Each
holder of record of Common Stock is entitled to one vote for each share held on
all matters properly submitted to the shareholders for their vote. Cumulative
voting is not authorized by the Articles of Incorporation.
Holders of outstanding Common Stock are entitled to those dividends
declared by the Board of Directors out of legally available funds, and, in the
event of liquidation, dissolution or winding up of the affairs of the Company,
holders are entitled to receive ratably the net assets of the Company available
to the shareholders. Holders of outstanding Common Stock have no preemptive,
conversion or redemptive rights. All of the issued and outstanding shares of
Common Stock are, and all unissued shares of Class A Common Stock when offered
and sold will be, duly authorized, validly issued, fully paid and
non-assessable. To the extent that additional shares of Common Stock are issued,
the relative interests of the then existing shareholders may be diluted.
DIVIDEND POLICY
Holders of Common Stock are entitled to dividends in the discretion of the
Board of Directors and payment thereof will depend upon, among other things, the
Company's earnings, its capital requirements and its overall financial
condition. The Company has not paid any cash dividends on its Common Stock since
inception and intends to follow a policy of retaining any earnings to finance
the development and growth of its business. Accordingly, it does not anticipate
the payment of cash dividends in the foreseeable future.
TRANSFER AGENT
The Company uses Jersey Stock Transfer Company to act as its transfer
agent for its Common Stock. The Company acts as transfer agent for all of its
other securities.
INTEREST OF NAMED EXPERTS AND COUNSEL
The financial statements of the Company at December 31, 1998, included in
this Disclosure Statement, have been audited by Thomas P. Monahan, P.C. as
indicated in their report with respect thereto and are included herein in
reliance upon authority of said firm as experts in giving said reports.
23
<PAGE>
PART II
- - -------
Item 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
Market for Common Stock
The Company's Common Stock is quoted on the OTC Bulletin Board under the
symbol "MNTT" since the second quarter of 1999. Prior to that, the Company's
Common Stock was quoted on the OTC Bulletin Board under the symbol "SOOP" as of
the second quarter of 1998. The following table sets forth the high and low bid
prices as reported by the National Association of Securities Dealers (NASD) for
the periods ending September 30, 1999 and prior. These quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commissions, and may
not reflect actual transactions. As of September 30, 1999 there were 61
shareholders of Common Stock.
<TABLE>
<CAPTION>
High Low
----- ----
MNTT
1999
- ------
<S> <C> <C>
Fourth Quarter $ 2.03 $0.21
Third Quarter 5.87 0.50
Second Quarter 5.00 1.50
SOOP
1999
- ------
Second Quarter 0.08 0.03
First Quarter 0.04 0.04
1998
- - ----
Fourth Quarter 0.06 0.03
Third Quarter 0.50 0.03
Second Quarter 1.87 0.03
</TABLE>
Dividends
The Company has never declared or paid any cash dividends on its capital
stock. The Company currently intends to retain all available funds and any
future earnings of its business for use in the operation of its business and
does not anticipate paying any cash dividends in the foreseeable future. The
declaration, payment and amount of future dividends, if any, will depend upon
the future earnings, results of operations, financial position and capital
requirements of the Company, among other factors, and will be at the sole
discretion of the Board of Directors.
24
<PAGE>
Item 2. LEGAL PROCEEDINGS
The are no material legal proceedings pending or, to the Company's
knowledge, threatened against the Company.
Item 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There have been no changes in, and no disagreements with, the Company's
public accountants.
Item 4. RECENT SALES OF UNREGISTERED SECURITIES
All share issuance's take into consideration a forward split of 7,500 to 1
on July 24, 1997 and a 5 to 1 forward split on May 22, 1998.
On April 18, 1996, the Company sold an aggregate of 7,500,000 shares of
common stock to Prakash T. Melwani, Surinder Aggarwal and Kamal Ramani and Kumar
Hathiramani for an aggregate consideration of $250,000 in leasehold
improvements, office and restaurant equipment and organization expense of $300
or $.033 per share.
As of July 31, 1997, the Company sold pursuant to a private placement under
"Rule 504" of the Securities Act of 1933, as amended ("Rule 504"), an aggregate
of 1,000,000 shares of common stock for an aggregate consideration of $2,000 or
$.002 per share.
As of September 30, 1997, the Company sold pursuant to a private placement
under Rule 504 an aggregate of 285,000 shares of common stock for an aggregate
consideration of $5,700 or $.002 per share.
As of October 31, 1997, the Company sold pursuant to a private placement
under Rule 504 an aggregate of 300,000 shares of common stock for an aggregate
consideration of $600 or $.002 per share.
In May, 1998, the Company sold to an individual, pursuant to a private
placement under Rule 504 1,000,000 shares of common stock (the "Shares") for an
aggregate consideration of $1,000,000 or $1.00 per share consisting of the
payment of an aggregate of $50,000 in cash and and a $950,000 Note dated May,
1998
25
<PAGE>
In April, 1999 the Company authorized a 100 to 1 reverse split restating
the number of shares of common stock outstanding from 10,085,000 to 100,850.
In April, 1999, pursuant to the antidilution terms of a $950,000 Note an
additional 1,900,000 shares of common stock were issued without further
consideration.
In May, 1999, the Company issued pursuant to Section 4(2) an aggregate of
200,000 shares of common stock in consideration of financial consulting expenses
aggregating $16,000 or $0.08 per share, taking into consideration the risk of a
holding period, the restricted stock was valued at one-half market price.
On April 30, 1999, the Company paid $950,000 and issued 11,000,000 shares
of restricked common stock in consideration for all the issued and outstanding
shares of common stock of Mont.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws, grants indemnification to the Company's officers and
directors, present and former, for expenses incurred by them in connection with
any proceeding that they are involved in by reason of their being or having been
an officer or director of the Company. The person being indemnified must have
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Company.
Insofar as indemnification for liability arising under the Securities Act
may be permitted to directors or officers the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in the opinion of
the Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director or officer of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director or officer in connection with the securities being registered, the
Company will, unless in the opinion of its legal counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
26
<PAGE>
PART F/S
FINANCIAL STATEMENTS.
Attached are audited financial statements for the Company for the period
ended December 31, 1998, and unaudited statement for the nine-month period
ending September 30, 1999. The following financial statements are attached to
this report and filed as a part thereof.
Period Ended December 31, 1998
1) Report of Independent Certified Public Accountants
2) Balance Sheet
3) Statement of Operations
4) Statement of Changes in Stockholders' Equity
5) Statement of Cash Flows
6) Notes to Financial Statements
Period Ended September 30, 1999
1) Balance Sheet
3) Statement of Operations
4) Statement of Changes in Stockholders' Equity
5) Statement of Cash Flows
6) Notes to Financial Statements
<PAGE>
THOMAS P. MONAHAN
CERTIFIED PUBLIC ACCOUNTANT
208 LEXINGTON AVENUE
PATERSON, NEW JERSEY 07502
(973) 790-8775
Fax (973) 790-8845
To The Board of Directors and Shareholders
of The Leonard Swindbourne The Second Acquisition Corp.
(formerly Soup Nutsey Corp.) (a development stage company)
I have audited the accompanying balance sheet of The Leonard Swindbourne The
Second Acquisition Corp. (a development stage company) as of December 31, 1998
and the related statements of operations, cash flows and shareholders' equity
for the year ended December 31, 1997 and 1998. 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 the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Leonard Swindbourne The
Second Acquisition Corp. (a development stage company) as of December 31, 1998
and the results of its operations, shareholders equity and cash flows for the
year ended December 31, 1997 and 1998 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that
Fullcomm, Inc. (a development stage company) will continue as a going concern.
As more fully described in Note 2, the Company has incurred operating losses
since the date of reorganization and requires additional capital to continue
operations. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans as to these matters are
described in Note 2. The financial statements do not include any adjustments to
reflect the possible effects on the recoverability and classification of assets
or the amounts and classifications of liabilities that may result from the
possible inability of The Leonard Swindbourne The Second Acquisition Corp. (a
development stage company) to continue as a going concern.
/s/Thomas P. Monahan
Thomas P. Monahan, CPA
March 15, 1999
Paterson, New Jersey
<PAGE>
<TABLE>
<CAPTION>
THE LEONARD SWINDBOURNE THE SECOND ACQUISITION CORP.
(formerly Soup Nutsey Corp.)
(a development stage company)
BALANCE SHEET
DECEMBER 31, 1998
Assets
Current assets
<S> <C>
Cash $-0-
Stock subscription receivable (Note 4) -0-
---
Total current assets -0-
Total assets $-0-
Liabilities and Stockholders' Equity
Current liabilities
Accrued expenses $1,500
Total liabilities $1,500
Stockholders' equity
Common Stock authorized 20,000,000 shares, $.001 par value each. 10,085 At
December 31, 1998, there are 10,085,000 shares outstanding .
Additional paid in capital 939,515
Retained earnings deficit (951,500)
Total stockholders' equity (1,500)
Total liabilities and stockholders' equity $-0-
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE LEONARD SWINDBOURNE THE SECOND ACQUISITION CORP.
(formerly Soup Nutsey Corp.)
(a development stage company)
STATEMENT OF OPERATIONS
December 31, December 31, 1998
1997
<S> <C> <C>
Revenue $-0- $-0-
Costs of goods sold -0- -0-
Gross profit -0- -0-
Operations:
General and administrative -0- 951,500
Depreciation and amortization -0- -0-
Total expense -0- 951,500
Loss from operations
Net income (loss) $-0- $(951,500)
==== ==========
Net income (loss) per share -basic $(0.00) (0.17)
Weighted Average Number of shares outstanding-basic 4,583,333 4,583,333
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE LEONARD SWINDBOURNE THE SECOND ACQUISITION CORP.
(formerly Soup Nutsy Corp.)
(a development stage company)
STATEMENT OF STOCKHOLDERS EQUITY
Additional Retained
Common Stock Common Stock paid in earnings deficit
Date capital Total
- ---- ------- -----
<S> <C> <C> <C> <C> <C>
Initial issuance of shares in 200 $250,300 $250,300
consideration for an aggegate for
contribution of assets on 4-18-1996
Net loss $(22,537) $(22,537)
------- --------- ---------
Balance December 31, 1996 200 250,300 (22,537) 227,763
Forward split of shares by a ratio of 1,500,000 $1,500 $248,800 $(22,537) $227,763
7,500 to 1 on 7-24-1997
Sale of shares through private placement 200,000 $200 $1,800 $2,000
at $.001 per share 7-31-1997
Sale of shares through private placement 57,000 $57 $5,643 5,700
at $0.10 per share in 10-1-1997
Sale of shares through private placement 60,000 $60 $540 600
at $0.01 per share on 10-29-1997
Net loss (88,280) (88,280)
------- -------- --------
____
Balances December 31, 1997 1,817,000 $1,817 $256,783 $(110,817) $147,783
Balances
Forward split in a ratio of 5 to 1 on 9,085,000 $9,085 $249,515 (110,817) $147,783
May 22, 1998
Sale of shares through private placement 1,000,000 1,000 49,000 50,000
for $1.00 per share (Note 4)
Net loss as of October 31, 1998 (197,783) (197,783)
Transfer of assets on October 31, 1998 (308,600) 308,600 -0-
Net loss (1,500) (1,500)
------- -------
Balance December 31, 1998 10,085,000 $10,085 $(10,085) $(1,500) $(1,500)
=========== ======== ========= ======== ========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
See accompanying notes to financial statements
F1
THE LEONARD SWINDBOURNE THE SECOND ACQUISITION CORP.
(formerly Soup Nutsy Corp.)
(a development stage company)
STATEMENT OF CASH FLOWS
December 31, 1997 December 31,
1998
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $-0- $951,500
Adjustments to reconcile net loss to cash used in operating activities
Depreciation -0-
Adjustments to reconcile net loss to cash used in operating activities
Accrued liabilities 1,500
TOTAL CASH FLOWS FROM OPERATIONS -0- (950,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock-net of offering expenses 950,000
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 950,000
CASH FLOWS FROM INVESTING ACTIVITIES
Transfer of assets (28,800)
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (28,800)
NET INCREASE (DECREASE) IN CASH (28,800)
CASH BALANCE BEGINNING OF PERIOD 28,800
------
CASH BALANCE END OF PERIOD $-0- $-0-
==== ====
</TABLE>
<PAGE>
THE LEONARD SWINDBOURNE THE SECOND ACQUISITION CORP.
(formerly Soup Nutsy Corp.)
(a development stage company)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
Note 1 - Formation of Company and Issuance of Common Stock
a. Formation and Description of the Company
The Leonard Swindbourne The Second Acquisition Corp. (the "Company"), was
formed under the laws of the State of New York on April 18, 1996 under Soup
Nutsy Corporation. The Company was authorized to issue 200 shares of common
stock, no par value per share. On July 24, 1997, the Company amended its
certificate of incorporation changing the number of common shares authorized to
20,000,000 shares of common stock, $.001 par value each share and 5,000,000
shares of preferred stock, $.001 par value each share. On December 3, 1998, the
Company amended its certificate of incorporation to change its name to The
Leonard Swindbourne The Second Acquisition Corp.
b. Description of Company
On April 30, 1999, the Company
The Company is a development stage company that is without a business purpose as
of December 31, 1998 and is in the process of seeking a viable business
opportunity. On October 29, 1998, the Company reached an agreement with the
former management of Soup Nutsy Corp. to transfer the Company's assets in
consideration for the assumption of certain liabilities.
c. Issuance of Shares of Common Stock
All share issuance's take into consideration a forward split of 7,500 to 1
on July 24, 1997 and a 5 to 1 forward split on May 22, 1998.
On April 18, 1996, the Company sold an aggregate of 7,500,000 shares of
common stock to Prakash T. Melwani, Surinder Aggarwal and Kamal Ramani and Kumar
Hathiramani for an aggregate consideration of $250,000 in leasehold
improvements, office and restaurant equipment and organization expense of $300
or $.033 per share.
As of July 31, 1997, the Company sold pursuant to a private placement under
"Rule 504" of the Securities Act of 1933, as amended ("Rule 504"), an aggregate
of 1,000,000 shares of common stock for an aggregate consideration of $2,000 or
$.002 per share.
As of September 30, 1997, the Company sold pursuant to a private placement
under Rule 504 an aggregate of 285,000 shares of common stock for an aggregate
consideration of $5,700 or $.002 per share.
As of October 31, 1997, the Company sold pursuant to a private placement
under Rule 504 an aggregate of 300,000 shares of common stock for an aggregate
consideration of $600 or $.002 per share.
In May, 1998, the Company sold pursuant to a private placement under
Rule 504 1,000,000 shares of common stock for an aggregate consideration of
$1,000,000 or $1.00 per share. The shares of common stock were purchased
partially with cash aggregating $50,000 and a Note receivable in the amount of
$950,000 due on demand.
In May, 1998, the Company sold to an individual, pursuant to a private
placement under Rule 504 1,000,000 shares of common stock (the "Shares") for an
aggregate consideration of $1,000,000 or $1.00 per share. The shares of common
stock were purchased partially with cash aggregating $50,000 and a Note
receivable in the amount of $950,000 ("$950,000 Note").
Note 2-Summary of Significant Accounting Policies
a. Basis of Financial Statement Presentation
The accompanying unaudited financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Company
incurred net losses of $1,500 for the period from reorganization, October 29,
1998, to September 30, 1999. These factors indicate that the Company's
continuation as a going concern is dependent upon its ability to obtain adequate
financing. The Company will be relying upon the resources of management to
provide the necessary working capital to sustain the Company's existence until a
viable business opportunity can be located. The Company will require substantial
additional funds to finance its business activities on an ongoing basis and will
have a continuing long-term need to obtain additional financing once a viable
business opportunity is found.
The unaudited financial statements presented at September 30, 1999 consist
of the balance sheet as at September 30, 1999 and the statements of operations,
cash flows and stockholders equity for the nine months ended September 30, 1999.
b. Cash and Cash Equivalents
Cash and Cash Equivalents - Temporary investments with a maturity of less
than three months when purchased are treated as cash
c. Loss Per Share:
Basic loss per common share is computed by dividing the loss by the
weighted average number of common shares outstanding during the period. For the
year ended, December 31, 1998, there were no dilutive securities outstanding.
d. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Note 3 - Transfer of Assets
On October 29, 1998, the Company entered into a related party
transaction with the former management of the Company for the transfer of all
the Company's assets to Xenylic Xyris, Inc. in consideration for the assumption
of all the Company's liabilities as of that date.
The transaction has been accounted for as a transfer and is accounted
for at historical cost as if a pooling of interests had occurred with the
recording of the net assets transferred at their historical book value. The
financial statements of the Company have been retroactively restated to exclude
the combined statements of operations and cash flows for the period from
inception, in April 18, 1996, to October 28, 1998.
As part of the transaction Kumar Hathiramani and Surindar Aggarwal each
transferred 3,375,000 shares each to Roger Fidler and Jay Hait on October 29,
1998.
Note 4 - Note Receivable- Stock Subscription
In March, 1998, the Company offered 1,000,000 shares of common stock at
an offering price of $1.00 per share. The offering was fully subscribed to by
Thu Nguyen with the purchase of the shares for an aggregate consideration of
$1,000,000 consisting of the payment of an aggregate of $50,000 in cash and with
a Note in the amount of $950,000 dated May, 1998. The Note was with interest at
8.5% and immediately payable upon the earlier of 1) one month from the date the
Company becomes a reporting Company in compliance with the 1934 Securities
Exchange Act or 2) 6 months from the date of this Note.
The shares offered carry with them anti-diulution protection for a
period of time not to exceed three years. The anti-dilution rights allow for two
one time adjustments: 1) a one time protection against reverse stock splits or
other reorganizations that permit the issuance of up to an additional one
million shares, and 2) a one time protection against a decrease in the market
price if the price falls below $1.00 per share, up to one million shares may be
issued to restore the value of the total shares (including both the originals
shares sold and any anti-dilution shares issued) to $1,000,000.
As of December 31, 1998, the Note was in default as to payment and the
Company has set up a 100% reserve as a bad debt allowance.
Note 5 - Related Party transactions
a. Leased Office Space
The Company occupies office space on a month to month basis at 305 West
50th St., Suite 2k, New York, NY at $250 per month.
For the months of November and December, the Company has accrued $500
in rent.
b. Officer Salaries
No officer has received a salary in excess of $100,000.
For the period from reorganization, October 29, 1998, to December 31,
1998, the Company has accrued a minimal compensation of $500 per month as
compensation to Mr. Fidler as consideration for services while the Company is in
the development stage of development of $1,000.
c. Transfer of Shares of Common Stock and Change in Managerial Control.
As part of the transaction Kumar Hathiramani and Surindar Aggarwal each
transferred 3,375,000 shares each to Roger Fidler and Jay Hait on October 29,
1998 and resigned their offices with the Company.
This effectively changed the managerial control of the Company to Roger
Fidler who had accepted the position as an officer and sole director of the
Company.
Note 6 - Income Taxes
The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any, represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of December 31, 1998, the Company had
no material current tax liability, deferred tax assets, or liabilities to impact
on the Company's financial position because the deferred tax asset related to
the Company's net operating loss carry forward and was fully offset by a
valuation allowance.
At December 31, 1998, the Company has net operating loss carry forwards for
income tax purposes of $1,500. These carry forward losses are available to
offset future taxable income, if any, and expire in the year 2010. The Company's
utilization of this carry forward against future taxable income may become
subject to an annual limitation due to a cumulative change in ownership of the
Company of more than 50 percent.
The components of the net deferred tax asset as of December 31, 1998 are as
follows:
Deferred tax asset:
Net operating loss carry forward $ 510
Valuation allowance $(510)
------
Net deferred tax asset $ -0-
The Company recognized no income tax benefit for the loss generated for the
period from reorganization, October 29, 1998, to December 31, 1998. SFAS No. 109
requires that a valuation allowance be provided if it is more likely than not
that some portion or all of a deferred tax asset will not be realized. The
Company's ability to realize benefit of its deferred tax asset will depend on
the generation of future taxable income. Because the Company has yet to
recognize significant revenue from the sale of its products, the Company
believes that a full valuation allowance should be provided.
Note 7 - Development Stage Company
The Company is considered to be a development stage company with little
operating history. The Company is dependent upon the financial resources of the
Company's management and from the net proceeds of any private placement for its
continued existence. The Company will also be dependent upon its ability to
raise additional capital to complete is search for a new viable business
opportunity, management talent, and working capital to engage in any profitable
business activity. Since its reorganization, the Company's activities have been
limited to the search for a new viable business opportunity and office space.
Note 8 - Subsequent Events
In April, 1999, pursuant to the terms of the of the subscription
agreement under which the 1,000,000 shares were originally purchased by Thu
Nguyen in April, 1998, the outstanding Note receivable for the shares of common
stock subscribed to by Thu Nguyen were purchased by four unrelated parties and
the Note was paid with an aggregate consideration of $950,000 into the escrow
account of John Peterson, Esq. pursuant to the terms of the subscription
agreement, an additional 1,900,000 shares of common stock were issued without
further consideration.
On April 30, 1999, the Company issued 11,000,000 shares of common stock
in consideration for all the assets of Mont Granitos SA ("Mont"). The
transaction has been accounted for as the issuance of shares of common stock by
a public company for the net assets of a private Company, accompanied by a
recapitalization. Accordingly, the financial statements of Company became the
consolidated financial statements of Mont.
<PAGE>
<TABLE>
<CAPTION>
THE LEONARD SWINDBOURNE THE SECOND ACQUISITION CORP.
(formerly Soup Nutsy Corp.)
(a development stage company)
BALANCE SHEET
SEPTEMBER 30, 1999
UNAUDITED
Assets
Current assets
<S> <C>
Cash $13,746
Accounts receivable 180,358
-------
Total current assets 194,104
Permanent assets
Property improvements 321,959
Property and equipment 411,272
Less accumulated depreciation (41,127)
--------
Total assets 692,104
Other assets
Accounts receivable-related party 143,956
Mining rights 82,755
------
Total other assets 226,711
-------
Total assets $1,112,919
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $226,789
Accounts payable related party 32,499
------
Total liabilities 259,288
Stockholders' equity
Preferred Stock authorized 5,000,000 shares, $.001 par value each. At December
31, 1998, there are -0- shares outstanding
Common Stock authorized 20,000,000 shares, $.001 par value each. 13,201 At
September 30, 1999, there are 13,200,850 shares outstanding .
Additional paid in capital 1,480,374
Retained earnings deficit (639,944)
Total stockholders' equity 853,631
Total liabilities and stockholders' equity $1,112,919
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONTT INTERNATIONAL CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF OPERATIONS
September 30, September 30,
1998 1999
Unaudited Unaudited
<S> <C> <C>
Revenue $71,485 $130,481
Costs of goods sold 62,140 61,713
------- ------
Gross profit 9,343 68,767
Operations:
General and administrative 7,512 783,483
Non cash payment for consulting fees 16,000
Depreciation and amortization -0- 41,127
--- ------
Total expense 7,512 840,610
Profit (Loss) from operations 1,831 (771,843)
Net income (loss) $1,831 $(771,843)
======= ==========
Net income (loss) per share -basic $(0.00)
Number of shares outstanding-basic 4,500,000
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONTT INTERNATIONAL CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
Additional Retained
Common Stock Common Stock paid in earnings
Date capital deficit Total
- ---- ------- ------- -----
<S> <C> <C> <C> <C> <C>
Initial issuance of shares in 200 $250,300 $250,300
consideration for an aggegate for
contribution of assets on 4-18-1996
Net loss $(22,537) $(22,537)
------- --------- ---------
Balance December 31, 1996 200 250,300 (22,537) 227,763
Forward split of shares by a ratio of 1,500,000 $1,500 $248,800 $(22,537) $227,763
7,500 to 1 on 7-24-1997
Sale of shares through private 200,000 $200 $1,800 $2,000
placement at $.001 per share 7-31-1997
Sale of shares through private 57,000 $57 $5,643 5,700
placement at $0.10 per share in
10-1-1997
Sale of shares through private 60,000 $60 $540 600
placement at $0.01 per share on
10-29-1997
Net loss (88,280) (88,280)
------- -------- --------
____
Balances December 31, 1997 1,817,000 $1,817 $256,783 $(110,817) $147,783
Balances
Forward split in a ratio of 5 to 1 on 9,085,000 $9,085 $249,515 (110,817) $147,783
May 22, 1998
Sale of shares through private 1,000,000 1,000 49,000 50,000
placement for $1.00 per share (Note 4)
Net loss as of October 31, 1998 (197,783) (197,783)
Transfer of assets on October 31, 1998 (308,600) 308,600 -0-
Net loss (1,500) (1,500)
------- -------
Balance December 31, 1998 10,085,000 $10,085 $(10,085) $(1,500) $(1,500)
=========== ======== ========= ======== ========
Unaudited
100 to 1 reverse stock split 100,850 101 (101) (1,500) (1,500)
Issuance of shares pursuant to 1,900,000 1,900 948,100 950,000
antidilution terms in $950,000 Note
Issuance of shares for acquisition 11,000,000 11,000 516,575 133,399 660,974
Issuance of shares for consulting fees 200,000 200 15,800 16,000
Net loss (771,843) (771,843)
--------- ---------
Balances September 30, 1999 13,200,850 $13,201 $1,480,374 $(639,944) $853,631
=========== ======== =========== ========== ========
</TABLE>
See accompanying notes to financial statements
<PAGE>
<TABLE>
<CAPTION>
MONTT INTERNATIONAL CORPORATION
(a development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
September 30, September 30,
1998 1998
Unaudited Unaudited
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) $1,831 $(771,843)
Adjustments to reconcile net loss to cash used in operating activities
Depreciation 41,127
Payment of consulting fees with the issuance of shares of common stock 16,000
Accounts receivable (180,358)
Accounts payable and accrued liabilities 212,539
---------- -------
TOTAL CASH FLOWS FROM OPERATIONS 1,831 (682,535)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of Note Receivable 950,000
Capital contribution 497,652
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 1,447,652
CASH FLOWS FROM INVESTING ACTIVITIES
Accounts receivable-related party (5,044)
Property improvements (321,959)
Property and equipment (411,272)
Accounts payable related party (19,381)
---------- -------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (5,044) (752,612)
NET INCREASE (DECREASE) IN CASH (3,213) 12,505
CASH BALANCE BEGINNING OF PERIOD 4,479 1,241
------ -----
CASH BALANCE END OF PERIOD $1,266 $13,746
======= =======
</TABLE>
See accompanying notes to financial statements
<PAGE>
MONTT INTERNATIONAL CORPORATION
(a development stage company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
Note 1 - Formation of Company and Issuance of Common Stock
a. Formation and Description of the Company
The Leonard Swindbourne The Second Acquisition Corp. (the "Company"), was
formed under the laws of the State of New York on April 18, 1996 under Soup
Nutsy Corporation. The Company was authorized to issue 200 shares of common
stock, no par value per share. On July 24, 1997, the Company amended its
certificate of incorporation changing the number of common shares authorized to
20,000,000 shares of common stock, $.001 par value each share and 5,000,000
shares of preferred stock, $.001 par value each share. On December 3, 1998, the
Company amended its certificate of incorporation to change its name to The
Leonard Swindbourne The Second Acquisition Corp. On June 30, 1999, the Company
amended the certificate of incorporation changing its name to Montt
International Corporation
b. Description of Company
On April 30, 1999, the Company entered into a Stock Exchange Agreement
with Mont Granitos, SA ("Mont"), a Brazilian corporation and is engaged in the
mining of granite from eight deposits in the state of Ceara to which it owns
exploration rights. The Company is in the organization stage which consists of
development of the mineral deposits and acquisition of equipment for the mining
of the granite. Once mining operations begin, the granite will be exported to
international markets.
c. Issuance of Shares of Common Stock
All share issuance's take into consideration a forward split of 7,500 to 1
on July 24, 1997 and a 5 to 1 forward split on May 22, 1998.
On April 18, 1996, the Company sold an aggregate of 7,500,000 shares of
common stock to Prakash T. Melwani, Surinder Aggarwal and Kamal Ramani and Kumar
Hathiramani for an aggregate consideration of $250,000 in leasehold
improvements, office and restaurant equipment and organization expense of $300
or $.033 per share.
As of July 31, 1997, the Company sold pursuant to a private placement
under "Rule 504" of the Securities Act of 1933, as amended ("Rule 504"), an
aggregate of 1,000,000 shares of common stock for an aggregate consideration of
$2,000 or $.002 per share.
As of September 30, 1997, the Company sold pursuant to a private placement
under Rule 504 an aggregate of 285,000 shares of common stock for an aggregate
consideration of $5,700 or $.002 per share.
As of October 31, 1997, the Company sold pursuant to a private placement
under Rule 504 an aggregate of 300,000 shares of common stock for an aggregate
consideration of $600 or $.002 per share.
In May, 1998, the Company sold to an individual, pursuant to a private
placement under Rule 504 1,000,000 shares of common stock (the "Shares") for an
aggregate consideration of $1,000,000 or $1.00 per share consisting of the
payment of an aggregate of $50,000 in cash and a $950,000 Note dated May, 1998
In April, 1999 the Company authorized a 100 to 1 reverse split restating
the number of shares of common stock outstanding from 10,085,000 to 100,850.
In April, 1999, pursuant to the antidilution terms of a $950,000 Note an
additional 1,900,000 shares of common stock were issued without further
consideration.
In May, 1999, the Company issued pursuant to Section 4(2) an aggregate
of 200,000 shares of common stock in consideration of financial consulting
expenses aggregating $16,000 or $0.08 per share, taking into consideration the
risk of a holding period, the restricted stock was valued at one-half market
price.
On April 30, 1999, the Company paid $950,000 and issued 11,000,000
shares of restricted common stock in consideration for all the issued and
outstanding shares of common stock of Mont.
Note 2-Summary of Significant Accounting Policies
a. Basis of Financial Statement Presentation
The unaudited financial statements presented at September 30, 1999
consist of the unaudited balance sheet as at September 30, 1999 and the
unaudited statements of operations, cash flows and stockholders equity for the
nine months ended September 30, 1998 and 1999.
b. Cash and Cash Equivalents
Cash and Cash Equivalents - Temporary investments with a maturity of less
than three months when purchased are treated as cash
c. Loss Per Share:
Basic loss per common share is computed by dividing the loss by the
weighted average number of common shares outstanding during the period. For the
nine months ended September 30, 1999, there were no dilutive securities
outstanding.
d. Translation to US dollars
The US dollar amounts presented have been translated from the Brazilian
currency amounts in accordance with he criteria set forth in Statement of
Financial Accounting Standards 52 (SFAS 52) as applicable to the accounts and
transactions of a company operating in the currency of a country with a
non-highly inflationary economy.
As of July 01, 1997, the three years cumulative rate of inflation in
Brazil was less than 100% and the entity's functional currency became the
Brazilian real, the currency of the primary economic environment in which the
Company operates.
As the reporting currency is the U.S. dollar, the following criteria for
the translation of Brazilian reais to U.S. dollars was applied to the local
currency basis financial statements according to SFAS 52.
Assets and liabilities were translated by using the exchange rate at the
balance sheet date;
Revenues, expenses, gains, losses were translated by using the weighted
average exchange rate for the period from January 1, September 30, 1999.
The translation loss for the period from January 1, September 30, 1999
was reported separately as a component of shareholder's Equity (as a CTA
- -cumulative translation adjustment);
The capital account in Shareholder's equity was translated by using the
historical exchange rate.
e. Mining Rights
Mining exploration rights are stated at historical costs.
f. Revenues and Expenses
Revenues are recognized monthly based on a temporary-leasing contract.
Expenses and costs are recognized on the accrual basis.
g. Comprehensive Income
On January 1, 1998, the Company adopted Statements of Financial
Accounting Standards for reporting and presentation of comprehensive income and
its components an a full set of financial statements. The statement requires
only additional disclosures in the consolidated financial statements; it does
not affect the Company's financial position or results of operations. No
relevant effects resulted from the application from the application of this
statement.
h. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Note 3 - Acquisition of Mont Granitos, SA.
On April 30, 1999, the Company entered into a Stock Exchange Agreement
with Mont Granitos, SA ("Mont"), a Brazilian corporation, represented by
Franciso Mendes Aragao whereby the Company purchase all of the issued and
outstanding stock of Mont for the issuance of 11,000,000 shares of the Company's
common stock and $950,000 in cash.
The transaction has been accounted for as the issuance of shares of
common stock by a private company for the net assets of the Company, accompanied
by a recapitalization. Accordingly, the financial statements of Company became
the consolidated financial statements of Mont.
Note 4 - Note Receivable- Stock Subscription
In March, 1998, the Company offered 1,000,000 shares of common stock at
an offering price of $1.00 per share. The offering was fully subscribed to an
individual with the purchase of the shares for an aggregate consideration of
$1,000,000 consisting of the payment of an aggregate of $50,000 in cash and a
$950,000 Note dated May, 1998. The Note was with interest at 8.5% and
immediately payable upon the earlier of 1) one month from the date the Company
becomes a reporting Company in compliance with the 1934 Securities Exchange Act
or 2) 6 months from the date of the $950,000 Note.
The Shares offered carry with them anti-diulution protection for a
period of time not to exceed three years. The anti-dilution rights allow for two
one time adjustments: 1) a one time protection against reverse stock splits or
other reorganizations that permit the issuance of up to an additional one
million shares, and 2) a one time protection against a decrease in the market
price if the price falls below $1.00 per share, of up to one million shares so
that the market value of the total shares (including both the original shares
sold and any anti-dilution shares issued) may equal but not exceed $1,000,000.
As of December 31, 1998, the $950,000 Note was in default as to payment and
the Company has set up a 100% reserve as a bad debt allowance.
In April, 1999, the Note was sold for $950,000.
In April, 1999, pursuant to the anti dilution terms of a $950,000 Note
an additional 1,900,000 shares of common stock were issued without further
consideration.
Note 5 - Related Party transactions
a. Leased Office Space
The Company occupies office space on a month to month basis at 156 Main
Street, Hackensack, New Jersey at $250 per month.
For the months of November and December, the Company has accrued $500
in rent.
b. Officer Salaries
No officer has received a salary in excess of $100,000.
c. Transfer of Shares of Common Stock and Change in Managerial Control.
As part of the transaction Kumar Hathiramani and Surindar Aggarwal each
transferred 3,375,000 shares each to Roger Fidler and Jay Hait on October 29,
1998 and resigned their offices with the Company.
This effectively changed the managerial control of the Company to Roger
Fidler, who had accepted the position as President and sole director of the
Company.
d. Affiliated transactions
The Company has balances receivable and payable from the renting of
four mining deposits in the period from July 1, 1998 to June, 1999, with the
company Minevale - Mineracao Vale do Acarau Ltda. in which the controlling
shareholder of the Company holds an interest.
Accounts payable as of September 30, 1999, refers to exploration costs
of mining properties paid by Minevale - - Mineracao Vale do Acarau Ltda.., IMARF
- - Granitos e Mineracao S.A. and INBRASMA - Industria Brasileira de Marmores S.A.
in which the controlling shareholder of the Company holds an interest.
Note 6 - Commercial Commitment
On May 3, 1998, the Company executed a sales agreement with a Japanese
company by which it committed to sell 225,000 m3 (15% of the project estimated
production) of specified granite blocks from its mining deposits for total
proceeds of US$122,483,700 over 7 years. Sales under the agreement begin when
the Company is able to produce the rough blocks of granite under the buyer's
acceptable quality patterns and ends the 7th anniversary of the date of
execution or any time before, but not less than 6 months prior to the
termination date expressed by one of the parties.
Note 7 - Income Taxes
The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any, represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of September 30, 1999, the Company had
no material current tax liability, deferred tax assets, or liabilities to impact
on the Company's financial position because the deferred tax asset related to
the Company's net operating loss carry forward and was fully offset by a
valuation allowance.
At September 30, 1999 the Company has net operating loss carry forwards for
income tax purposes of $639,944. These carry forward losses are available to
offset future taxable income, if any, and expire in the year 2010. The Company's
utilization of this carry forward against future taxable income may become
subject to an annual limitation due to a cumulative change in ownership of the
Company of more than 50 percent.
Income taxes in Brazil comprise federal income and social contribution
taxes. The statutory rates applicable in 1998 was 25% for income tax and 8% for
social contribution tax. (resulting in a composite rate of 33%.)
The Company is established in a tax incentive area and has the
intention to request for an exemption from income tax ( there is no exemption
for social contribution tax) for a period of ten years. If this exemption is
granted, the exempted amount must be recorded as a capital reserve under
Brazilian law.
The components of the net deferred tax asset as of September 30, 1999 are
as follows:
Deferred tax asset:
Net operating loss carry forward $ 217,580
Valuation allowance $(217,580)
----------
Net deferred tax asset $ -0-
The Company recognized no income tax benefit for the loss generated for the
period from inception to September 30, 1999. SFAS No. 109 requires that a
valuation allowance be provided if it is more likely than not that some portion
or all of a deferred tax asset will not be realized. The Company's ability to
realize benefit of its deferred tax asset will depend on the generation of
future taxable income. Because the Company has yet to recognize significant
revenue from the sale of its products, the Company believes that a full
valuation allowance should be provided.
Note 8 - Development Stage Company
The Company is considered to be a development stage company which
consists of development of the mineral deposits and acquisition of equipment for
the mining of the granite. Once mining operations begin, the granite will be
exported to international markets. The Company is dependent upon the financial
resources of the Company's management and from the net proceeds of any private
placement for its continued existence. The Company will also be dependent upon
its ability to raise additional capital to complete the development of the
mineral property, find management talent, and working capital to engage in
mineral production.
<PAGE>
PART III
- - --------
Item 1. INDEX TO EXHIBITS
The following exhibits are filed as a part of this disclosure statement:
Exhibit
Number Description
- - ------- -----------
2.1 Certificate of Incorporation, filed on April 17, 1996
2.2 Certificate of Amendment of Certificate of Incorporation
filed on July 24, 1997
2.3 Certificate of Amendment of Certificate of Incorporation
filed on December 3, 1998
2.4 Certificate of Amendment of Certificate of Incorporation
filed on June 30, 1999
2.5 By-laws
10.1 Consent of Thomas P. Monahan
27.1 Financial Data Schedule for nine-months ending September 30, 1999
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, there unto duly authorized.
Montt International Corporation
(Registrant)
Date: February 14, 2000 By: /s/ Francisco Demontie Mendes Aragao
----------------------------
Francisco Demontie Mendes Aragao
President, Chairman and
Chief Executive Officer
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this Registration Statement to be signed on its behalf by
the undersigned thereunto duly authorized.
MONTT INTERNATIONAL CORPORATION
Date: February 14, 2000 By:/s/Francisco Demontie Mendes Aragao
Francisco Demontie Mendes Aragao,
President and Director
Date: February 14, 2000 By: /s/Francisco Jocele Ribeiro
Francisco Jocele Ribeiro, Secretary,
Treasurer and Director
Date: February 14, 2000 By: /s/Francisco De Assis Furlani
Francisco De Assis Furlani, Secretary,
Treasurer and Director
Date: February 14, 2000 By: /s/Francisco Das Chagas Tabosa
Francisco Das Chagas Tabosa, Secretary,
Treasurer and Director
<PAGE>
CERTIFICATE OF INCORPORATION OF
Soup Nutsy Corporation
Under Section 402 of the Business Corporation Law
IT IS HEREBY CERTIFIED THAT:
FIRST: The name of the proposed corporation is Soup Nutsy Corporation
SECOND: The purpose or purpose for which this corporation is formed, are
as follows, to wit:
To engage in any lawful act or activity for which corporations
may be organized under the Business Corporation Law. The
corporation is not formed to engage in any act or activity
requiring consent or approval of any state official, department,
board, agency or other body without such consent or approval
first being obtained.
THIRD: The office of the corporation is to be located in the County of
New York, State of New York.
FOURTH: The aggregate number of shares which the corporation shall have
authority to issue is two hundred (200). All such shares are to
be without par value and are to be of one class.
FIFTH: The Secretary of State is to be designated as agent of the
corporation upon whom process against it may be served. The
post office address to which the Secretary of State shall mail
a copy of any process against the corporation served upon him
is:
Kumar Hathirami
148 East 46th St.
New York, NY 10017
SIXTH: A director of the corporation shall not be liable to the
corporation or its shareholders for damages for any breach
of duty in such capacity except for:
(a) liability if a judgement or other final adjudication
adverse to a director establishes that his or her acts or
omissions were in bad faith or involved intentional misconduct
or a knowing violation of law or that the director personally
gained in fact a financial profit or other advantage to which
he or she was not legally entitled or that the director's acts
violated BCL section 719, or
(b) liability for any act or omission prior to the adoption of
this provision.
The undersigned incorporator, or each of them if there are more than one, is of
the age of eighteen years or over.
IN WITNESS THEREOF, this certificate has been subscribed on the seventeenth day
of April, 1996 by the undersigned who affirm(s) that the statements made herein
are true under penalties of perjury.
/s/ Kumar Hathiramani
Incorporator
Name and Address of Incorporator: Kumar Hathiramani
148 East 46th Street
New York NY 10017
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
SOUP NUTSY CORPORATION
Under Section 805 of the Business Corporation Law
IT IS HEREBY CERTIFIED THAT:
(1) The name of the corporation is Soup Nutsy Corporation
(2) The certificate of incorporation was filed by the department of state of
the 18th day of April, 1996.
(3) The certificate of incorporation of this corporation is hereby amended to
affect the following change:
The article thereof numbered "Fourth:" shall be changed so that as amended
said Article shall be and read as follows:
"The aggregate number of shares of stock which the corporation shall have
authority to issue is twenty five million (25,000,000), which are divided into
twenty million shares of Common Stock of one class at a par value of one tenth
of a cent ($0.001) each, and, five million shares of Preferred stock of a par
value of one tenth of a cent ($0.001) each, which shares of stock may be issued
from time to time in one or more classes or one or more series within any class
thereof, in any manner permitted by law, as determined from time to time by the
board of directors, and stated in the resolution or resolution providing for the
issuance of such shares adopted by the board of directors pursuant to authority
hereby vested in it, each class or series to be appropriately designated, prior
to the issuance of any shares thereof, by some distinguishing letter, number,
designation or title. All shares of stock in such classes or series may be
issued for such consideration and have such voting powers, full or limited, or
no voting powers, and shall have such designations, preferences and relative,
participating, optional, or other special rights, and qualifications,
limitations or restrictions thereof, permitted by law, as shall be stated and
expressed in the resolution or resolutions, providing for the issuance of such
shares adopted by the board of directors pursuant to authority hereby vested in
it. The nummber of shares of stock of any class or series within any class, so
set forth in such resolution or resolutions may be increased (but not above the
total number of authorized shares of the class) or decreased (but not below the
number of shares thereof then outstanding) by further resolution or resolutions
adopted by the board of directors pursuant to authority hereby vested in it."
instead of the original article which read " The aggregate number of shares
which the corporation shall have authority to issue is two hundred (200). All
such shares are to be without par value and are to be of one class."
Prior to this Amendment 200 shares were issued and 0 were unissued. Once this
Amendment is filed there will be 1,500,000 shares issued of common stock (7500
to 1) with 18,500,000 shares of common stock unissued, and no preferred shares
issued.
(4) The amendment to the certificate of incorporation was authorized: by the
board of directors followed by vote of a majority of all the outstanding
shares entitled to vote thereon.
IN WITNESS WHEREOF, this certificate has been subscribed this 23rd day of July,
1997 by the undersigned who affirm(s) that the statements made herein are true
under the penalties of perjury.
/s/ Kumar Hathiramani
Kumar Hathiramani, Director
/s/ Pak Melwani
Pak Melwani, President & Director
/s/ Kamal Ramani
Kamal Ramani, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
SOUP NUTSY CORPORATION
Under Section 805 of the Business Corporation Law
IT IS HEREBY CERTIFIED THAT:
(1) The name of the corporation is
Soup Nutsy Corporation
(2) The certificate of incorporation was filed by the department of
state of the 18th day of April, 1996, under the name of "Soup
Nutsy Corp."
(3) The certificate of incorporation of this corporation is hereby
amended to affect the following change:
The article thereof numbered "First:" shall be changed so that as
amended said Article shall be and read as follows:
"The name of the corporation is The Leonard Swindbourne the
Second Acquisition Corp."
(4) That at a meeting of the Board of Directors of Leonard Swindbourne
The Second Acquisition Corp. resolutions were duly adopted setting
forth proposed amendments of the Certificate of Incorporation of
said corporation, declaring said amendments to be advisable and
calling a meeting of the stockholders of said corporation for
consideration thereof. The resolutions setting forth the proposed
amendment is as follows:
RESOLVED, that the Certificate of Incorporation of
this corporation be amended by changing the Article thereof
numbered "First." so that as amended said Article shall be and
read as follows:
"The name of the corporation is The Leonard Swindbourne the
Second Acquisition Corp."
(5) That thereafter, pursuant to resolution of its Board of Directors,
a special meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with New York's
Business Corporation Law, at which meeting the necessary number of
shares as required by statute were voted in favor of the
amendments.
IN WITNESS WHEREOF, said Leonard Swindbourne The Second Acquisition Corp., has
caused this certificate to be signed by a duly authorized officer this 16th day
of November, 1998.
BY: __/s/ Roger Fidler__________ BY: ___/s/ Jay Hait___________
Roger Fidler Jay Hait
President Secretary
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
LEONARD SWINDBOURNE THE SECOND ACQUISITION CORP.
Under Section 805 of the Business Corporation Law
IT IS HEREBY CERTIFIED THAT:
(1) The name of the corporation is
Leonard Swindbourne The Second Acquisition Corp.
(2) The certificate of incorporation was filed by the department of
state of the 18th day of April, 1996, under the name of "Soup
Nutsy Corp."
(3) The certificate of incorporation of this corporation is hereby amended to
affect the following change:
The article thereof numbered "First:" shall be changed so that as
amended said Article shall be and read as follows:
"The name of the corporation is Montt International Corporation"
(4) That at a meeting of the Board of Directors of Leonard Swindbourne
The Second Acquisition Corp. resolutions were duly adopted setting
forth proposed amendments of the Certificate of Incorporation of
said corporation, declaring said amendments to be advisable and
calling a meeting of the stockholders of said corporation for
consideration thereof. The resolutions setting forth the proposed
amendment is as follows:
RESOLVED, that the Certificate of Incorporation of
this corporation be amended by changing the Article thereof
numbered "First." so that as amended said Article shall be and
read as follows:
"The name of the corporation is Montt International Corporation"
(5) That thereafter, pursuant to resolution of its Board of Directors,
a special meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with New York's
Business Corporation Law, at which meeting the necessary number of
shares as required by statute were voted in favor of the
amendments.
IN WITNESS WHEREOF, said Leonard Swindbourne The Second Acquisition Corp., has
caused this certificate to be signed by a duly authorized officer this 12th day
of May, 1998.
BY: __/s/ Roger Fidler__________ BY: ___/s/ Jay Hait___________
Roger Fidler Jay Hait
President Secretary
<PAGE>
BY-LAWS OF MONTT INTERNATIONAL CORPORATION
ARTICLE I - OFFICES
1. The registered office of the corporation shall be as designated in the
Certificate of Incorporation or any future amended Certificate of Incorporation
of Montt International Corporation (hereinafter referred to as "MONTT
INTERNATIONAL" or the "corporation"), unless changed by resolution of the
corporation's Board of Directors.
2. The corporation may also have offices at such other places as-the Board
of Directors may from time to time appoint or the business of the corporation
may require.
<PAGE>
ARTICLE II - SEAL
1. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal, New
York".
<PAGE>
ARTICLE III - SHAREHOLDERS' MEETING
1. Meetings of the shareholders shall be held at the office of the
corporation at 163 South St, Hackensack, New Jersey, or at such other place or
places, either within or without the State of New Jersey, as may from time to
time be selected.
2. The annual meeting of the shareholders, shall be held on the second
Monday of February in each year, if not a legal holiday, and if a legal holiday,
then on the next secular day following at 10:00 o'clock a.m. when they shall
elect a Board of Directors, and transact such other business as may properly be
brought before the meeting. If the annual meeting shall not be called and held
during any calendar year, any shareholder may call such meeting at any time
thereafter.
3. The presence, in person or by proxy, of shareholders entitled to cast at
least a majority of the votes which all shareholders are entitled to cast on the
particular matter shall constitute a quorum for the purpose of considering such
matter, and, unless otherwise provided by statute, the acts, at a duly organized
meeting, of the shareholders present, in person or by proxy, entitled to cast at
least a majority of the votes which all shareholders present are entitled to
cast shall be the acts of the shareholders. The shareholders present at a duly
organized meeting can continue to do business until adjournment, notwithstanding
the withdrawal of enough shareholders to leave less than a quorum. Adjournment,
or adjournments, of any annual or special meeting may be taken but any meeting
at which directors are to be elected shall be adjourned only from day to day, or
for such longer periods not exceeding fifteen days each, as may be directed by
shareholders who are present in person or by proxy and who are entitled to cast
at least a majority of the votes which all such shareholders would be entitled
to cast at an election of directors until such directors have been elected. If a
meeting cannot be organized because a quorum has not attended, those present
may, except as otherwise provided by statute, adjourn the meeting to such time
and place as they may determine, but in the case of any meeting called for the
election of directors, those who attend the second of such adjourned meetings,
although less than a quorum, shall nevertheless constitute a quorum for the
purpose of electing directors.
4. Every shareholder entitled to vote at a meeting of shareholders, or
to express consent or dissent to corporate action in writing without a meeting,
may authorize another person or persons to act for him by proxy. Every proxy
shall be executed in writing by the shareholders, or by his duly authorized
attorney in fact, and filed with the Secretary of the corporation. A proxy,
unless coupled with an interest, shall be revocable at will, notwithstanding any
other agreement or any other provision in the proxy to the contrary, but the
revocation of a proxy shall not be effective until notice thereof has been given
to the Secretary of the corporation. No unrevoked proxy shall be valid after
eleven months from the date of its execution, unless a longer time is expressly
provided therein, but in no event shall a proxy, unless coupled with an interest
be voted on after three years from the date of its execution. A proxy shall not
be revoked by the death or incapacity of the maker unless before the vote is
counted or the authority is exercised, written notice of such death or
incapacity is given to the Secretary of the corporation. A shareholder shall not
sell his vote or execute a proxy to any person for any sum of money or anything
of value. A proxy coupled with an interest shall include an unrevoked proxy in
favor of a creditor of a shareholder and such proxy shall be valid so long as
the debt owed by him to the creditor remains unpaid. Elections for directors
need not be by ballot, except upon demand made by a shareholder at the election
and before the voting begins. Cumulative voting shall not be allowed. No share
shall be voted at any meeting upon which any installment is due and unpaid.
5. Written notice of the annual meeting shall be given to each shareholder
entitled to vote thereat, at least five (5) days prior to the meeting.
6. In advance of any meeting of shareholders, the Board of Directors may
appoint judges of election, who need not be shareholders, to act at such meeting
or any adjournment thereof. If judges of election be not so appointed, the
chairman of any such meeting may, and on the request of any shareholder or his
proxy shall, make such appointment at the meeting. The number of judges shall be
one or three. If appointed at a meeting on the request of one or more
shareholders or proxies, the majority of shares present and entitled to vote
shall determine whether one or three judges are to be appointed. On request of
the chairman of the meeting, or of any shareholder or his proxy, the judges
shall make a report in writing of any challenge or question or matter determined
by them, and execute a certificate of any fact found by them. No person who is a
candidate for office shall act as a judge.
7. Special meetings of the shareholders may be called at any time by the
President, or the Board of Directors, or shareholders entitled to cast at least
one-fifth of the votes which all shareholders are entitled to cast at the
particular meeting. At any time, upon written request of any person or persons
who have duly called a special meeting, it shall be the duty of the Secretary to
fix the date of the meeting, to be held not more than sixty days after the
receipt of the request, and to give due notice thereof. If the Secretary shall
neglect or refuse to fix the date of the meeting and give notice thereof, the
person or persons calling the meeting may do so.
8. Business transacted at all special meetings shall be confined to the
objects stated in the call and matters germane thereto, unless all shareholders
entitled to vote are present and consent.
9. Written notice of a special meeting of shareholders stating the time and
place and object thereof, shall be given to each shareholder entitled to vote
thereat at least five (5) days before such meeting, unless a greater period of
notice is required by statute in a particular case.
10. The officer or agent having charge of the transfer books shall make at
least five days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at the meeting, arranged in alphabetical order,
with the address of and the number of shares held by each, which list shall be
subject to inspection by any shareholder, at any time during usual business
hours. Such list shall also be produced and kept open at the time and place of
the meeting, and shall be subject to the inspection of any shareholder during
the whole time of the meeting. The original share ledger or transfer book, or a
duplicate thereof kept in this state, shall be prima facie evidence as to who
are the shareholders entitled to examine such list or share ledger or transfer
book, or to vote in person or by proxy, at any meeting of shareholders.
<PAGE>
ARTICLE IV - DIRECTORS
1. The business of this corporation shall be managed by its Board of
Directors, which shall initially be composed of a sole member, but which may be
increased up to eleven members. The directors need not be residents of this
state or shareholders in the corporation. They shall be elected by the
shareholders, at the annual meeting of shareholders of the corporation, and each
director shall be elected for the term of one year and until his successor shall
be elected and shall qualify. Whenever there are three or more shareholders,
there must be at least three directors. The number of directors may be increased
or decreased within the limits set forth hereinabove by majority vote of the
Board of Directors. In the event that a vacancy occurs on the Board of
Directors, the remaining directors may fill that vacancy by appointing by
majority vote a replacement director who shall serve until his successor is
elected and qualified.
2. In addition to the powers and authorities by these ByLaws expressly
conferred upon them, the Board may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the Articles
or by these ByLaws directed or required to be exercised or done by the
shareholders.
3. The meetings of the Board of Directors may be held at
such place within this state, or elsewhere, as a majority of the directors may
from time to time appoint, or as may be designated in the notice calling the
meeting.
4. Each newly elected Board may meet at such place and time as shall be
fixed by the shareholders at the meeting at which such directors are elected and
no notice shall be necessary to the newly elected directors in order legally to
constitute the meeting, or they may meet at such place, and time as may be fixed
by the con ent in writing of all directors.
5. Regular meetings of the Board shall be held without notice on the second
Monday in February of each year at 10:30 a.m. at the registered office of the
corporation, or at such other time and place as shall be determined by the
Board.
6. Special meetings of the Board may be called by the President or by
shareholders of at least 20% of the Company's common stock on five days notice
to each director, either personally or by mail or by telegram; special meetings
shall be called by the President or Secretary in like manner and on like notice
on the written request of a majority of the directors in office.
7. A majority of the directors in office shall be necessary to constitute a
quorum for the transaction of business, and the Acts of a majority of the
directors present at a meeting at which a quorum is present shall be the acts of
the Board of Directors. Any action which may be taken at a meeting of the
directors may be taken without a meeting if a consent or consents in writing,
setting forth the action so taken, shall be signed by all of the directors and
shall be filed with the Secretary of the corporation.
8. Directors as such, shall not receive any stated salary for their
services, but by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or special
meeting of the Board PROVIDED, that nothing herein contained shall be construed
to preclude any director from serving the corporation in any other capacity and
receiving compensation therefor.
<PAGE>
ARTICLE V - OFFICERS
1. The executive officers of the corporation shall be chosen by the
directors and shall be a President, Secretary and Treasurer. The Board of
Directors may also choose a Vice President and such other officers and agents as
it shall deem necessary, who shall hold their offices for such terms and shall
have such authority and shall perform such duties as from time to time shall be
prescribed by the Board. Any number of offices may be held by the same person.
It shall not be necessary for the officers to be directors.
2. The salaries of all officers and agents of the corporation shall be
fixed by the Board of Directors. 3. The officers of the corporation shall
hold office for one year and until their-successors are chosen and have
qualified.
Any officer or agent elected or appointed by the Board of Directors may be
removed by the Board of Directors whenever in its judgment the best interests of
the corporation will be served thereby.
4. The President shall be the chief executive officer of the corporation;
he shall preside at all meetings of the shareholders and directors; he shall
have general and active management of the business of the corporation, shall see
that all orders and resolutions of the Board are carried into effect, subject,
however, to the right of the directors to delegate any specific powers, except
such as may be by statute exclusively conferred on the President, to any other
officer or officers of the corporation. He shall execute bonds, mortgages and
other contracts requiring a seal, under the seal of the corporation. He shall be
EX-OFFICIO a member of all committees, and shall have the general powers and
duties of supervision and management usually vested in the office of President
of a corporation.
5. The Secretary shall attend all sessions of the Board and all meetings of
the shareholders and act as clerk thereof, and record all the votes of the
corporation and the minutes of all its transactions in a book to be kept for
that purpose; and shall perform like duties for all committees of the Board of
Directors when required. He shall give, or cause to be given, notice of all
meetings of the shareholders and of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors or President,
and under whose supervision he shall be. He shall keep in safe custody the
corporate seal of the corporation, and when authorized by the Board, affix the
same to any instrument requiring it.
6. The Treasurer shall have custody of the corporate funds and securities
and shall keep full and accurate accounts of receipts and disbursements in books
belonging to the corporation, and shall keep the moneys of the corporation in a
separate account to the credit of the corporation. He shall disburse the funds
of the corporation as may be ordered by the Board, taking proper vouchers for
such disbursements, and shall render to the President and directors, at the
regular meetings of the Board, or whenever they may require it, an account of
all his transactions as Treasurer and of the financial condition of the
corporation.
<PAGE>
ARTICLE VI VACANCIES
1. If the office of any officer or agent, one or more, becomes vacant for
any reason, the Board of Directors may choose a successor or successors, who
shall hold office for the unexpired term in respect of which such vacancy
occurred.
2. Vacancies in the Board of Directors, including vacancies resulting from
an increase in the number of directors, shall be filled by a majority of the
remaining members of the Board though less than a quorum, and each person so
elected shall be a director until his successor is elected by the shareholders,
who may make such election at the next annual meeting of the shareholders or at
any special meeting duly called for that purpose and held prior thereto.
<PAGE>
ARTICLE VII CORPORATE RECORDS
1. There shall be kept at the registered office or principal place of
business of the corporation an, original or duplicate record of the proceedings
of the shareholders and of the directors, and the original or a copy of its
By-Laws, including all amendments or alterations thereto to date, certified by
the Secretary of the corporation. An original or duplicate share register shall
also be kept at the registered office or principal place of business or at the
office of a transfer agent or registrar, giving the names of the shareholders,
their respective addresses and the number and classes of shares held by each.
2. Every shareholder shall, upon written demand under oath stating the
purpose thereof, have a right to examine, in person or by agent or attorney,
during the usual hours for business for any proper purpose, the share register,
books or records of account, and records of the proceedings of the shareholders
and directors, and make copies or extracts therefrom. A proper purpose shall
mean a purpose reasonably related to such person's interest as a shareholder. In
every instance where an attorney or other agent shall be the person who seeks
the right to inspection, the demand under oath shall be accompanied by a power
of attorney or such other writing which authorizes the attorney or other agent
to so act on behalf of the shareholder. The demand under oath shall be directed
to the corporation at or at its principal place of business.
<PAGE>
ARTICLE VIII - SHARE CERTIFICATES, DIVIDENDS, ETC.
1. The share certificates of the corporation shall be numbered and
registered in the share ledger and transfer books of the corporation as they are
issued. They shall bear the corporate seal and shall be signed by the President
and Secretary.
2. Transfers of shares shall be made on the books of the corporation upon
surrender of the certificates therefor, endorsed by the person named in the
certificate or by attorney, lawfully constituted in writing. No transfer shall
be made which is inconsistent with law.
3. The Board of Directors may fix a time, not more than fifty days, prior
to the date of any meeting of shareholders, or the date fixed for the payment of
any dividend or distribution, or the date for the allotment of rights, or the
date when any change or conversion or exchange of shares will be made or go into
effect, as a record date for the determination of the shareholders entitled to
notice of, or to vote at, any such meeting, or entitled to receive payment of
any such dividend or distribution, or to receive any such allotment of rights,
or to exercise the rights in respect to any such change, conversion, or exchange
of shares. In such case, only such shareholders as shall be shareholders of
record on the date so fixed shall be entitled to notice of, or to vote at, such
meeting or to receive payment of such dividend, or to receive such allotment of
rights, or, to exercise such rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after any record date
fixed as aforesaid. The Board of Directors may close the books of the
corporation against transfers of shares during the whole or any part of such
period, and in such case, written or printed notice thereof shall be mailed at
least ten days before the closing thereof to each shareholder of record at the
address appearing on the records of the corporation or supplied by him to the
corporation for the purpose of notice. While the stock transfer books of the
corporation are closed, no transfer of shares shall be made thereon. If no
record date is fixed for the determination of shareholders entitled to receive
notice of, or vote at, a shareholders' meeting, transferees of shares which are
transferred on the books of the corporation within ten days next preceding the
date of such meeting shall not be entitled to notice of or to vote at such
meeting.
4. In the event that a share certificate shall be lost, destroyed or
mutilated, a new certificate may be issued therefor upon such terms and
indemnity to the corporation as the Board of Directors may prescribe.
5. The Board of Directors may declare and pay dividends upon the
outstanding shares of the corporation, from time to time and to such extent as
they deem advisable, in the manner and upon the terms and conditions provided by
statute and the Articles of Incorporation.
6. Before payment of any dividend there may be set aside out of the net
profits of the corporation such sum or sums as the directors, from time to time,
in their absolute discretion, think proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or maintaining any
property of the corporation, or for such other purpose as the directors shall
think conducive to the interests of the corporation, and the directors may
abolish any such reserve in the manner in which it was created.
<PAGE>
ARTICLE IX MISCELLANEOUS PROVISIONS
1. All checks or demands for money and notes of the corporation shall
be signed by such officer or officers as the Board of Directors may from time to
time designate.
2. The fiscal year shall begin in the first day of January
each year.
3. Whenever written notice is required to be given to any person, it may
be given to such person, either personally or by sending a copy thereof through
the mail, or by telegram, charges prepaid, to his address appearing on the books
of the corporation, or supplied by him to the corporation for the purpose of
notice. If the notice is sent by mail or by telegraph, it shall be deemed to
have been given to the person entitled thereto when deposited in the United
States mail or with a telegraph office for transmission to such person. Such
notice shall specify the place, day and hour of the meeting and, in the case of
a special meeting of shareholders, the general nature of the business, to be
transacted.
4. Whenever any written notice is required by statute, or by the Articles
or By-Laws of this corporation, a waiver thereof in writing, signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice. Except
in the case of a special meeting of shareholders, neither the business to be
transacted at nor the purpose of the meeting need be specified in the waiver of
notice of such meeting. Attendance of a person, either in person or by proxy, at
any meeting shall constitute a waiver of notice of such meeting, except where a
person attends a meeting for the express purpose of objecting to the transaction
of any business because the meeting was not lawfully called or convened.
5. One or more directors or shareholders may participate in a meeting of
the Board, of a committee of the Board or of the shareholders, by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other.
6. Except as otherwise provided in the Articles or ByLaws of this
corporation, any action which may be taken at a meeting of the shareholders or
of a class of shareholders may be taken without a meeting, if a consent or
consents in writing, setting forth the action so taken, shall be signed by all
of the shareholders who would be entitled to vote at a meeting for such purpose
and shall be filed with the Secretary of the corporation.
7. Any payments made to an officer or employee of the corporation such as a
salary, commission, bonus, interest, rent, travel or entertainment expense
incurred by him, which shall be disallowed in whole or in part as a deductible
expense by the Internal Revenue Service, shall be reimbursed by such officer or
employee to the corporation to the full extent of such disallowance. It shall be
the duty of the directors, as a Board, to enforce payment of each such amount
disallowed. In lieu of payment by the officer or employee, subject to the
determination of the directors, proportionate amounts may be withheld from his
future compensation payments until the amount owed to the corporation has been
recovered.
<PAGE>
ARTICLE X ANNUAL STATEMENT
1. The President and Board of Directors shall present at
each annual meriting a full and complete statement of the business and affairs
of the corporation for the preceding year. Such statement shall be prepared and
presented in whatever manner the Board of Detectors shall deem advisable and
need not be verified by a certified public accountant.
<PAGE>
ARTICLE XI AMENDMENTS
1. These By-Laws may be amended or repealed by the vote of the directors
entitled to cast at least a majority of the votes which all directors are
entitled to cast thereon, at any regular or special meeting of the directors,
duly convened after notice to the directors of that purpose.
The By-Laws set forth hereinabove were adopted by the Board of
Directors of Montt International Corporation at its organizational meeting on
April 30, 1999. I hereby certify that this is a true and exact copy of said
By-Laws.
----------------------------
/s/ Francisco Jocele Ribeiro
Corporate Secretary
<PAGE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the nine month period ended September 30, 1999 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Sep-30-1999
<CASH> 13,746
<SECURITIES> 0
<RECEIVABLES> 180,358
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 194,014
<PP&E> 733,231
<DEPRECIATION> 41,127
<TOTAL-ASSETS> 1,112,919
<CURRENT-LIABILITIES> 259,288
<BONDS> 0
0
0
<COMMON> 13,201
<OTHER-SE> 840,430
<TOTAL-LIABILITY-AND-EQUITY> 853,631
<SALES> 130,481
<TOTAL-REVENUES> 130,481
<CGS> 61,713
<TOTAL-COSTS> 840,610
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (771,843)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (771,843)
<INCOME-TAX> 0
<INCOME-CONTINUING> (771,843)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (771,843)
<EPS-BASIC> (.17)
<EPS-DILUTED> (.17)
</TABLE>
