<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: OCTOBER 31, 2000
Commission File Number: 0-29671
GOLDONLINE INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-3986493
(State of Incorporation) (IRS Employer ID No)
111 RHODES STREET, CONROE, TX 77301
(Address of principal executive office)
409-756-6888
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No .
--- ---
The number of shares outstanding of registrant's common stock, par value $.0001
per share, as of October 31, 2000 was 96,084,408.
Transitional Small Business Disclosure Format (Check one): Yes No X .
--- ---
<PAGE> 2
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
No.
<S> <C>
Part I. Financial Information
Item 1. Condensed Consolidated Balance Sheets - 3
October 31, 2000 and July 31, 2000
Condensed Consolidated Statements of Operations - 4
Three Months Ended October 31, 2000 and 1999
Condensed Consolidated Statement of Stockholders' Equity - 5
Three Months Ended October 31, 2000
Condensed Consolidated Statements of Cash Flows - 6-7
Three Months Ended October 31, 2000 and 1999
Notes to Condensed Consolidated Financial Statements - 8-13
Three Months Ended October 31, 2000 and 1999
Item 2. Managements Discussion and Analysis of Financial Condition 14-15
and Results of Operations
Part II. Other Information 16
</TABLE>
2
<PAGE> 3
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
OCTOBER 31, JULY 31,
2000 2000
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 3,550,534 $ 5,969,201
Trade accounts receivable 2,247,076 86,568
Marketable equity securities 840,000 --
Inventory 6,860,788 925,338
Prepaid expenses and other assets 241,336 89,450
Deferred income taxes -- 2,000
----------- -----------
13,739,734 7,072,557
Property and equipment, net 353,694 157,024
Goodwill, net of amortization of $30,137 and $7,784, respectively 3,819,528 92,336
Deferred income taxes -- 46,100
Other assets 28,438 6,441
----------- -----------
$17,941,394 $ 7,374,458
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term debt and notes payable $ 5,087,414 $ 211,913
Accounts payable 2,269,745 186,006
Accrued expenses 72,050 14,202
Deferred income taxes payable 140,400 --
Due to shareholder 4,262 2,457
----------- -----------
7,573,871 414,578
Deferred income taxes 5,800 --
Long-term debt less current installments 1,359,668 58,930
Stockholders' equity
Common stock, $.0001 par value, 200,000,000 shares authorized, 9,608 9,498
96,084,408 and 94,984,408 shares issued and outstanding,
respectively
Additional paid-in capital 8,581,336 7,013,946
Retained earnings (deficit) 411,111 (122,494)
----------- -----------
9,002,055 6,900,950
----------- -----------
$17,941,394 $ 7,374,458
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
3
<PAGE> 4
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED OCTOBER 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
OCTOBER 31,
2000 1999
<S> <C> <C>
Sales and revenues $ 2,056,293 $ 409,478
Cost of sales 1,337,705 212,335
----------- -----------
Gross profit 718,588 197,143
Selling, general and administrative expense 623,791 208,807
----------- -----------
Loss from operations 94,797 (11,664)
Other income (expense):
Unrealized gain on marketable securities 540,000 --
Interest expense (39,838) (4,631)
Interest and other income 132,946 1
----------- -----------
633,108 (4,630)
----------- -----------
Net earnings (loss) before income taxes 727,905 (16,294)
Income tax expense (benefit) 194,300 (5,540)
----------- -----------
Net earnings (loss) $ 533,605 $ (10,754)
=========== ===========
Net earnings (loss) per share $ 0.006 $ (0.000)
=========== ===========
Weighted average shares outstanding, in thousands 95,151.8 87,008.9
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED OCTOBER 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK PAID-IN RETAINED
SHARES PAR VALUE CAPITAL EARNINGS TOTAL
------ --------- ------- -------- -----
<S> <C> <C> <C> <C> <C>
BALANCE, August 1, 2000 94,984,408 $ 9,498 $ 7,013,946 $ (122,494) $ 6,900,950
Sale of common stock for cash 1,100,000 110 1,567,390 1,567,500
Net earnings (loss) 533,605 533,605
----------- ----------- ----------- ----------- -----------
BALANCE, October 31, 2000 96,084,408 $ 9,608 $ 8,581,336 $ 411,111 $ 9,002,055
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
THREE MONTHS ENDED OCTOBER 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $ 533,605 $ (10,754)
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 36,352 10,398
Deferred income taxes 194,300 (5,540)
Purchase of marketable equity securities (300,000) --
Unrealized gain on marketable equity securities (540,000) --
Changes in assets and liabilities:
Accounts receivable (749,391) (54,761)
Inventory (1,476,954) (30,941)
Other assets (138,586) --
Accounts payable and accrued expenses 908,969 86,161
----------- -----------
Net cash provided by operating activities (1,531,705) (5,437)
----------- -----------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
Capital expenditures (7,855) (6,225)
Acquisition of HMS, net of cash acquired (2,817,872) --
Acquisition of assets at wholesale location (105,000) --
----------- -----------
Net cash provided by investing activities (2,930,727) (6,225)
----------- -----------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from sales of common stock 1,567,500 1,700
Loan proceeds 478,898 --
Repayment of notes payable and long-term debt (4,439) (4,012)
Increase (decrease) in amount due stockholder 1,806 (1,785)
----------- -----------
Net cash provided by financing activities 2,043,765 (4,097)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS (2,418,667) (15,759)
CASH AND CASH EQUIVALENTS, beginning of period 5,969,201 34,426
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 3,550,534 $ 18,667
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
Continued
6
<PAGE> 7
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED
THREE MONTHS ENDED OCTOBER 31, 2000 AND 1999
(UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information
Interest paid $ 39,838 $ 4,631
========== =======
Income taxes paid $ -- $ --
========== =======
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Convertible promissory notes issued in acquisition of HMS $2,500,000 $ --
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 8
GOLDONLINE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED OCTOBER 31, 2000 AND 1999
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
Goldonline International, Inc. (formerly Transun International
Airways, Inc.) ("GDOL") and its wholly owned subsidiaries HMS
Jewelry Company, Inc. ("HMS"), Con-Tex Silver Imports, Inc.
("Silver") and Gold Online.com, Inc. ("GO.com") (collectively
referred to as the "Company"). All material intercompany accounts
and transactions have been eliminated.
(b) ORGANIZATION
GDOL was incorporated May 22, 1996 in Delaware and until June 1999
was a development stage company with plans to establish itself as
an air transport company providing non-scheduled air service
(charter flights) for tour operators, charter brokers, cruise line
casinos, theme parks and theme attractions.
Silver was incorporated September 12, 1994 in Texas. GO.com was
incorporated on February 3, 1999 in Delaware. HMS was incorporated
on October 12, 2000 in Texas.
On June 10, 1999, GDOL acquired all of the issued and outstanding
common stock of Silver and GO.com. For accounting purposes, the
acquisitions have been treated as the acquisition of Silver and
GO.com by GDOL with Silver as the acquiror (reverse acquisition).
The historical financial statements prior to June 10, 1999 are
those of Silver.
Effective October 1, 2000, the Company acquired HMS in a
transaction treated as a purchase for accounting purposes. The
results of operations of HMS will be included in the consolidated
financial statements commencing October 1, 2000.
(c) NATURE OF BUSINESS
GDOL is now a holding company principally engaged in acquiring and
developing jewelry related businesses. Silver is a company involved
in both the wholesale and retail jewelry business, principally
silver, with retail locations in the Houston area. The wholesale
operation of Silver consists of both sales directly from its
headquarters in Conroe, Texas a satellite location in Dallas, Texas
and from jewelry shows at locations throughout the south central
United States. GO.com is establishing an Internet jewelry business,
and commencing in the late fall of 1999, the Company began selling
through e-commerce sites, located at http://www.GoldOnline.com and
http://yahoo.com/goldonline on Yahoo! and offers a wide selection
of discounted gold and silver jewelry as well as diamonds and
watches.
HMS is a national jewelry wholesaler, specializing in 18K, 14K and
10K gold and platinum jewelry, with headquarters in Dallas, Texas.
HMS markets its products to a network of over 30,000 retail
jewelers, through a catalog and telephone ordering system and
through its B2B online catalog http://www.HMSgold.com.
(d) GENERAL
The financial statements included in this report have been prepared
by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission for interim reporting and
include all adjustments (consisting only of normal recurring
adjustments) that are, in the
8
<PAGE> 9
opinion of management, necessary for a fair presentation. These
financial statements have not been audited.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to
such rules and regulations for interim reporting. The Company
believes that the disclosures contained herein are adequate to make
the information presented not misleading. However, these financial
statements should be read in conjunction with the financial
statements and notes thereto included in the Company's Annual
Report for the period ended July 31, 1999, which is included in the
Company's Form 8-K dated April 26, 2000 and filed April 28, 2000.
The financial data for the interim periods presented may not
necessarily reflect the results to be anticipated for the complete
year. Certain reclassifications of the amounts presented for the
comparative period have been made to conform to the current
presentation.
2. ACQUISITION OF HMS JEWELRY COMPANY, INC.
Effective October 1, 2000, the Company acquired, pursuant to an
Agreement and Plan of Merger the operations and business of HMS, in
exchange for $4,500,000 in cash and convertible promissory notes in the
amount of $2,500,000. The purchase also included $47,500 in legal and
professional costs. The transaction resulted in the merger of the
business and operations of HMS Jewelry Co., Ltd., a Texas limited
partnership and HMS Operating Company, a Texas corporation into a newly
formed subsidiary of the Company, HMS Jewelry Company, Inc. HMS is a
national jewelry wholesaler, specializing in 18K, 14K and 10K gold and
platinum jewelry, with headquarters in Dallas, Texas. HMS markets its
products to a network of over 30,000 retail jewelers, through a catalog
and telephone ordering system and through its B2B online catalog
http://www.HMSgold.com.
The acquisition was accounted for by the purchase method of accounting
and, accordingly, the statements of consolidated income include the
results of HMS beginning October 1, 2000. The assets acquired and the
liabilities assumed were recorded at estimated fair values as
determined by the Company's management based on information currently
available and on current assumptions as to future operations. A summary
of the assets acquired and liabilities assumed in the acquisition
follows:
<TABLE>
<S> <C>
Estimated fair values:
Assets acquired $ 7,758,635
Liabilities assumed (4,428,077)
Goodwill (amortized by the straight-line method
over fifteen years) 3,716,942
-----------
Purchase price 7,047,500
Less cash acquired (1,729,628)
Less convertible promissory notes (2,500,000)
-----------
Net cash paid $ 2,817,872
===========
</TABLE>
9
<PAGE> 10
Unaudited pro forma results of operations for the three months ended
October 31, 2000 and 1999, as if the Company and HMS had been combined
as of the beginning of the periods, follow. The pro forma results
include estimates and assumptions which management believes are
reasonable. However, pro forma results are not necessarily indicative
of the results which would have occurred if the business combination
had been in effect on the dates indicated, or which may result in the
future.
<TABLE>
<CAPTION>
Pro forma
Three months ended October 31,
(Thousands except for per share data) 2000 1999
<S> <C> <C>
Net sales $4,028 $4,059
Net income $ 560 $ 341
Net income per common share
Assuming dilution $ .006 $ .004
Basic $ .006 $ .004
</TABLE>
3. RELATED PARTY TRANSACTIONS
Silver leases its corporate headquarters from the principal shareholder
of the Company at the rate of $2,200 per month. This amounted to $6,600
during each of the three-month periods ended October 31, 2000 and 1999.
The Company had received loans from its principal shareholder. The
balance owed was $4,262 at October 31, 2000 and $2,457 at July 31,
2000.
HMS leases its facility from HMS Leasing Company, LLC, at the rate of
$8,075 per month pursuant to a lease agreement that expires on October
31, 2010. This amounted to $8,075 during the three-month period ended
October 31, 2000. HMS Leasing Company, LLC is owned by the president of
HMS.
4. MARKETABLE EQUITY SECURITIES
FAS No. 115 "Accounting for Certain Investments in Debt and Equity
Securities," requires that all applicable investments be classified as
trading securities, available-for-sale securities or held-to-maturity
securities. The Company has classified its investment in marketable
equity securities as trading securities, which are reported at fair
value. Fair value is defined to be the last closing price for the
listed securities. The unrealized gains and losses, which the Company
recognizes from its trading securities, are included in earnings. As of
October 31, 2000, all of the Company's investment in marketable equity
securities was in stock of one company. Due to the size of the
investment and its limited trading volume, there can be no assurance
that the Company will realize the value which is required to be used by
FAS No. 115.
10
<PAGE> 11
The following summarizes the Company's investments at October 31, 2000
(the Company did not have an investment in marketable equity securities
at July 31, 2000):
<TABLE>
<S> <C>
Trading securities:
Cost $300,000
Unrealized gain 540,000
--------
FAS No. 115 value $840,000
========
</TABLE>
The Company recognized an unrealized gain from trading securities
during the three months ended October 31, 2000 in the amount of
$540,000.
5. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at October 31, 2000 and
July 31, 2000:
<TABLE>
<CAPTION>
OCTOBER 31, JULY 31,
2000 2000
<S> <C> <C>
Equipment and store furnishings $ 288,836 $ 55,725
Transportation equipment 156,125 156,125
Furniture and fixtures 133,056 --
Computer software 62,975 --
Web site 37,225 37,225
Leasehold improvements 1,035 1,035
--------- ---------
679,252 250,110
Less accumulated depreciation (325,558) (93,086)
--------- ---------
$ 353,694 $ 157,024
========= =========
</TABLE>
11
<PAGE> 12
6. LONG-TERM DEBT AND NOTES PAYABLE
Long-term debt and notes payable at April 30, 2000 consist of the
following:
<TABLE>
<S> <C>
Note payable to bank with interest at 10%
payable on demand or January 1, 2001 if no
demand is made; accrued interest payable
monthly; collateralized by all assets of Silver
and guaranteed by the principal shareholder of
the Company $ 128,736
Line of credit and gold consignment facility
with accrued interest payable monthly;
collateralized by all assets of HMS 3,456,635
Note payable to the mother of the president of
HMS; payable $105,000 on February 15, 2001 and
$55,153 on February 15, 2002 160,153
Note payable to the president of HMS, due on
demand 61,555
Notes payable to the president of HMS Jewelry
Company, Inc., due $1,250,000 on October
15,2001 and $1,250,000 on October 15, 2002,
with interest payable monthly at 8%,
collateralized by the stock of HMS Jewelry
Company, Inc. 2,500,000
Note payable to the brother of the principal
shareholder of the Company due on demand with
interest at 8%, unsecured, convertible into
common stock of the Company at $.01 per share 50,000
Notes payable to companies in monthly
installments aggregating $2,534, including
interest at 9.8% to 11.6%; collateralized by
transportation equipment 90,003
----------
6,447,082
Current installments of long-term debt and
notes payable 5,087,414
----------
Long-term debt less current installments $1,359,668
==========
</TABLE>
12
<PAGE> 13
7. INCOME TAXES
Federal income tax expense (benefit) for the three months ended October
31, 2000 and 1999 consists of:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
Federal income taxes $ -- $ --
Deferred income tax expense (benefit) 194,300 (5,540)
--------- ---------
$ 194,300 $ (5,540)
========= =========
</TABLE>
For the three months ended October 31, 2000 and 1999, actual income tax
expense (benefit) applicable to earnings (loss) before income taxes is
reconciled with the "normally expected" federal income tax expense
(benefit) as follows:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
"Normally expected" income tax expense (benefit) $ 247,500 $ (5,540)
Change in valuation allowance (54,000) --
Other 800 --
--------- ---------
$ 194,300 $ (5,540)
========= =========
</TABLE>
The deferred income tax assets and liabilities at October 31, 2000 are
comprised of the following:
<TABLE>
<CAPTION>
CURRENT NONCURRENT
<S> <C> <C>
Net operating loss carryforwards $ 39,200 --
Allowance for bad debts 4,000 --
Asset basis -- (5,800)
Unrealized gain on trading securities (183,600) --
--------- ---------
Net deferred income tax assets (liabilities) ($140,400) ($ 5,800)
========= =========
</TABLE>
13
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
From time to time, the Company may publish forward-looking statements
relative to such matters as anticipated financial performance, business
prospects, technological developments and similar matters. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. All statements other than statements of
historical fact included in this section or elsewhere in this report
are, or may be deemed to be, forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Exchange Act of 1934. Important factors that could cause actual
results to differ materially from those discussed in such
forward-looking statements include: 1. General economic factors
including, but not limited to, changes in interest rates, trends in
disposable income; 2. Information and technological advances; 3. Cost
of products sold; 4. Competition; and 5. Success of marketing,
advertising and promotional campaigns.
The Company has historically sold jewelry, principally silver, in its
own retail outlets and wholesale to other jewelry stores. Commencing in
the late fall of 1999, the Company began selling through e-commerce
sites, located at http://www.GoldOnline.com and
http://yahoo.com/goldonline on Yahoo! and offers a wide selection of
discounted gold and silver jewelry as well as diamonds and watches.
Effective October 1, 2000, the Company acquired, pursuant to an
Agreement and Plan of Merger the operations and business of HMS, in
exchange for $4,547,500 in cash (including $47,500 in legal and
professional costs) and convertible promissory notes in the amount of
$2,500,000. The transaction resulted in the merger of the business and
operations of HMS Jewelry Co., Ltd., a Texas limited partnership and
HMS Operating Company, a Texas corporation into a newly formed
subsidiary of the Company, HMS Jewelry Company, Inc. HMS is a national
jewelry wholesaler, specializing in 18K, 14K and 10K gold and platinum
jewelry, with headquarters in Dallas, Texas. HMS markets its products
to a network of over 30,000 retail jewelers, through a catalog and
telephone ordering system and through its B2B online catalog
http://www.HMSgold.com.
A. LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital decreased from $6,657,979 at July 31,
2000 to $6,165,863 at October 31, 2000. The decline in working capital
is primarily the result of the purchase of HMS during the quarter. HMS
provided $3,256,884 in working capital at October 31, 2000, whereas the
Company used $5,797,500 ($4,547,500 in cash and $1,250,000 in current
notes payable) in working capital to complete the acquisition. The
Company also received net proceeds from the sale of common stock in the
amount of $1,567,500 and recognized an unrealized gain from marketable
equity securities in the amount of $540,000.
B. RESULTS OF OPERATIONS
SALES AND COST OF SALES - During the three months ended October 31,
2000 sales increased $1,646,815 from $409,478 to $2,056,293 from the
same year earlier period. The sales increase includes $1,406,366 from
HMS during the month of October 2000 and $240,449 from the operations
of Silver and GO.com. Silver had retail sales increases of $66,947
(71%) and increases of $174,216 from wholesale sales together with a
decline of $714 in GO.com's sales. Sales increases are primarily the
result of increased marketing efforts and an expanded inventory of
products
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE - During the three months
ended October 31, 2000, selling, general and administrative expense
increased $414,984 (199%) from the same year earlier period. The
increase includes the selling, general and administrative expense
14
<PAGE> 15
of HMS for the month of October 2000 in the amount of $244,272, which
was not included in the year earlier period, and an increase of
$170,712 from other operations, principally Silver. The major
components of the increase in Silver's costs include payroll of
$26,816, advertising of $23,093, rent of $23,026, professional fees of
$13,067, commissions of $20,153, supplies of $12,344, travel costs of
$14,083 and other costs of $38,130.
INTEREST EXPENSE - Interest expense increased $35,207 (760%) during the
three-month periods ended October 31, 2000, as compared to the same
year earlier period. The increase includes $30,026 from HMS and $5,181
from Silver, which relates to new debt incurred for transportation
equipment after the first quarter of last year.
INTEREST AND OTHER INCOME - Interest and other income of the Company
increased during the three-month periods ended October 31, 2000 from
the same year earlier period to $132,946 from $1. The increase is
attributed to the higher cash balances during the quarter ended October
31, 2000, which were due to the sale of common stock through exercise
of stock options and warrants.
UNREALIZED GAIN ON MARKETABLE SECURITIES - The Company recognized an
unrealized gain in the amount of $540,000 during the three months ended
October 31, 2000, from its investment in marketable equity securities
that have been classified as trading securities. The Company did not
have an investment in marketable equity securities until the quarter
ended October 31, 2000.
INCOME TAXES - The Company recorded income tax expense in the amount of
$194,300 during the three month period ended October 31, 2000, and
recorded a benefit of $5,540 during the year earlier period. The
current year expense was $54,000 less than the expected tax would have
been as a result of the Company reversing the valuation allowance which
it had previously recorded.
15
<PAGE> 16
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Not applicable
(b) Reports on Form 8-K - Form 8-K dated October 26, 2000 which reported
the completion of the acquisition of 100% of the issued and outstanding
common stock of HMS Operating Company, a Texas corporation, and 100% of
the partnership interests of HMS Jewelry Co., Ltd., a Texas limited
partnership. Both entities were merged into HMS Jewelry Company, Inc.,
a Texas corporation and a wholly owned subsidiary of the Company.
Exhibits to the Form 8-K included the Agreement and Plan of Merger, the
Articles of Merger, the audited financial statements of HMS Jewelry
Co., Ltd. as of December 31, 1999 and 1998 and for the years then
ended, the pro forma combined consolidated balance sheet as of July 31,
2000 and the pro forma combined consolidated statement of operations
for the year ended July 31, 2000.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GOLDONLINE INTERNATIONAL, INC.
Date: December 15, 2000 By: /s/ James G. Gordon
------------------------------------
James G. Gordon, President and
Principal Accounting Officer
16
