<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
APRIL 26, 2000
Date of Report
(Date of earliest event reported)
GOLDONLINE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
111 RHODES ROAD
CONROE, TX 77301
(Address of principal executive offices)
(409) 756-6888
Registrant's telephone number
BENTON VENTURES, INC.
7633 EAST 63RD PLACE, # 220
TULSA, OK 74133
Former name and former address
DELAWARE 0-29671 13-3986493
(State or other jurisdiction) (Commission File (IRS Employer
of incorporation) File Number) Identification No.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
(a) On April 20, 2000, Goldonline International, Inc., a Delaware
corporation ("GDOL"), acquired 100% of the issued and outstanding stock of
Benton Ventures, Inc., a Delaware corporation ("Registrant") pursuant to an
Agreement and Plan of Reorganization which has previously been reported on Form
8-K and filed on April 24, 2000.
As a result of GDOL's 100% ownership of the Registrant, the Board of
Directors of GDOL, on April 25, 2000, by unanimous written consent, elected to
merge the Registrant into GDOL
<PAGE> 2
pursuant to Section 253 of Delaware's General Corporate Law ("Merger"). Pursuant
to the Merger, GDOL will be the surviving company.
Upon the effectiveness of the Merger, GDOL has an aggregate of
89,902,408 shares of common stock issued and outstanding, $.0001 par value.
The officers of GDOL will continue as officers of the successor issuer.
See "Management" below. The officers, directors, and bylaws of GDOL will
continue without change as the officers, directors, and bylaws of the successor
issuer.
A copy of the Certificate of Ownership and Merger is filed as an
exhibit to this Form 8-K and is incorporated in its entirety herein. The
foregoing description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of GDOL's current directors and executive officers and those
persons or entities who beneficially own more than 5% of its common stock as of
April 26, 2000:
<TABLE>
<CAPTION>
Amount of Common % of Common Stock
Name Stock Beneficially Owned Beneficially Owned
<S> <C> <C>
James G. Gordon 67,500,000 75.08%
President, Director
111 Rhodes Rd.
Conroe, TX 77301
Phillip Walker 65,000 <1%
Secretary
111 Rhodes Rd.
Conroe, TX 77301
International Internet, Inc. 10,200,000 11.35%
6413 Congress Blvd., #240
Boca Raton, FL 33487
All directors and 75.15%
executive officers as
a group (2 persons)
</TABLE>
The persons and entities named in the above table have sole voting and
investment power with respect to all shares shown as beneficially owned by them,
unless otherwise noted.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) As a result of GDOL merging with Registrant, its wholly-owned
subsidiary pursuant to Section 253 of the Delaware General Corporate Law,
Registrant's outstanding shares shall be cancelled, and GDOL shall assume
Registrant's reporting obligations under successor issuer status as more fully
detailed in Section 12g-3(a).
(b) GDOL intends to continue developing and marketing a variety of
luxury and premium jewelry products, including, but not limited to, gold, silver
and diamond jewelry on both a retail and wholesale basis, through the internet.
<PAGE> 3
BUSINESS
THE COMPANY
GoldOnline International, Inc., a Delaware corporation ("GDOL") through its
wholly-owned subsidiaries, Con-Tex Silver Imports, Inc. and Gold Online.com,
Inc., is an Internet-based retailer and wholesaler focused exclusively on a
variety of luxury and premium products including gold and silver jewelry,
neckchains, bracelets, fancy necklaces, earrings, diamond jewelry, pre-owned
high-end watches and mass-market watches. GDOL currently carries over 10,000
styles of jewelry which may be purchased at http://www.goldonline.com. GDOL's
online store is designed to provide consumers with a convenient and enjoyable
shopping experience in an Internet-based retail environment through
easy-to-navigate Web pages. GDOL offers customers the convenience and
flexibility of shopping 24 hours a day, seven days a week, from their homes,
offices or other locations. By selling online, GDOL is able to offer an
extensive selection of products throughout the U.S. and worldwide where the
products might not otherwise be available. GDOL's current luxury and premium
products offerings are well suited for online commerce, having high average
prices and relatively low average distribution or shipping costs. GDOL offers
its customers products at discounted prices providing compelling value to the
customer.
GDOL assists its customers in making informed purchasing decisions by providing
significant content and detailed product information. Additionally, GDOL has
considerable product inventory, which enables it to ship most products to its
customers within 24 hours. GDOL's customer service representatives are available
by phone and e-mail and are trained to answer questions regarding product styles
and features. This informative shopping experience is being created to provide
potential customers with a shopping experience consistent with a luxury shopping
experience.
MANAGEMENT
<TABLE>
<CAPTION>
NAME AGE TITLE
<S> <C> <C>
James G. Gordon 33 President, Director
Philip Walker 45 Vice-President, Secretary
</TABLE>
JAMES G. GORDON is the President and Director of GDOL since 1999. Prior
to starting the Company, Mr. Gordon was founder and President of Con-Tex Silver
Imports, Inc., a wholesale and retail jewelry operation from 1994 to the
present. Mr. Gordon received a Bachelor of Science Degree from the University of
Arkansas in 1990 and has been involved in the jewelry wholesale business since
1990. Mr. Gordon has also been a Certified Gemologist since 1990.
PHILIP S. WALKER serves as Vice-President and Secretary of GDOL. Mr.
Walker has served in various and progressively more responsible sales and
marketing positions for Gordon's Jewelry Corporation, a division of Zales
Corporation and for 18 years as Sales and Credit Manager for South Texas. In
1987, he supervised the Jewelry Department of Saks Department Store in New
Orleans, Louisiana territories. From 1993 to 1996, Mr. Walker was instrumental
in the formation and day to day operations of Walker Jewelry, Inc. From 1996 to
the present, Mr. Walker has acted as Vice President for Con-Tex Silver Imports,
Inc. and Goldonline International, Inc.
<PAGE> 4
EXECUTIVE COMPENSATION
James G. Gordon currently receives an annual salary of $75,000. He
receives no other form of compensation. Mr. Walker receives an annual salary of
$36,000. He receives no other form of compensation.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not Applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable.
ITEM 5. OTHER EVENTS
Successor Issuer.
Pursuant to Rule 12g-3(a) of the General Rules Rules and Regulations of
the Securities and Exchange Commission, the Company is the successor issuer to
Benton Ventures, Inc. for reporting purposes under the Securities Exchange Act
of 1934.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Audited financial statements of GDOL are filed herewith along
with Proforma financial statements after the merger.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
The audited financial statements of the acquired business,
Goldonline International, Inc. and Subsidiaries, together with
the audit report of Stephen P. Higgins, CPA is attached hereto
as Exhibit 99.1.
(b) PRO FORMA FINANCIAL INFORMATION
On April 20, 2000, Goldonline International, Inc., a Delaware
corporation ("GDOL"), acquired 100% of the issued and
outstanding stock of Benton Ventures, Inc., a Delaware
corporation ("Registrant"), in exchange for 1,200,000 GDOL
common shares. As a result of GDOL's 100% ownership of the
Registrant, the Board of Directors of GDOL, on April 25, 2000,
elected to merge the Registrant into GDOL pursuant to Section
253 of Delaware's General Corporate Laws. As a result of the
merger, GDOL will be the surviving company.
The pro forma exhibits include a combining consolidated
balance sheet as of January 31, 2000 that reflects the effect
of the stock issued in the acquisition. The acquisition
<PAGE> 5
has been accounted for as an issuance of GDOL common stock in
exchange for the net monetary assets of Registrant,
accompanied by a recapitalization. In addition, two combining
pro forma consolidated statements of operations are included
which present income (loss) from operations for the year ended
March 31, 1999, the four months ended July 31, 1999 and the
six months ended January 31, 2000.
(c) EXHIBITS
1.1 Certificate of Ownership and Merger Merging Benton
Ventures, Inc. into GoldOnline International, Inc.
1.2 Original Unamended Certificate of Incorporation of
GoldOnline International, Inc.(f/k/a Transun
International Airways, Inc.)
99.1 Audited financial statements of Goldonline
International, Inc. as of July 31, 1999 and March 31,
1999 and 1998 and for the periods then ended
99.2 Unaudited financial statements of Goldonline
International, Inc. as of January 31, 2000 and 1999
and for the three and six months then ended
99.3.a Pro forma combined consolidated balance sheet as of
January 31, 2000
99.3.b Pro forma combined consolidated statement of
operations for the year ended March 31, 1999
99.3.c Pro forma combined consolidated statement of
operations for the four months ended July 31, 1999
99.3.d Pro forma combined consolidated statement of
operations for the six months ended January 31, 2000
99.4 Consent of Stephen P. Higgins, C.P.A.
ITEM 8. CHANGE IN FISCAL YEAR
Not Applicable.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GOLDONLINE INTERNATIONAL, INC.
BY /s/ JAMES G. GORDON, PRESIDENT
DATE: APRIL 26, 2000
<PAGE> 1
CERTIFICATE OF OWNERSHIP AND MERGER
MERGING
BENTON VENTURES, INC.
INTO
GOLDONLINE INTERNATIONAL, INC.
(PURSUANT TO SECTION 253)
GOLDONLINE INTERNATIONAL, INC., a Delaware corporation (the "Corporation"), does
hereby certify:
FIRST: That the Corporation is incorporated in the State of Delaware
pursuant to the General Corporation Law of the State of Delaware.
SECOND: That the Corporation owns all of the outstanding shares of each
class of the capital stock of Benton Ventures, Inc., a Delaware corporation.
THIRD: That the Corporation, by the following resolutions of its Board
of Directors, duly adopted on the 25th day of April, 2000, determined to merge
itself with Benton Ventures, Inc. on the conditions set forth in such
resolutions:
RESOLVED: That Goldonline International, Inc. merge into itself its
wholly-owned subsidiary, Benton Ventures, Inc., and assume all of said
subsidiary's liabilities and obligations;
FURTHER RESOLVED: That the President and the Secretary of the
Corporation be and they hereby are directed to make, execute and acknowledge a
certificate of ownership and merger setting forth a copy of the resolution to
merge Benton Ventures, Inc. into this Corporation and to assume the subsidiary's
liabilities and obligations on the date of adoption thereof and to file the same
in the office of the Secretary of State of Delaware.
IN WITNESS WHEREOF, Goldonline International, Inc. has caused its
corporate seal to be affixed and this certificate to be signed by Greg Gordon,
its authorized officer, this 26th day of April, 2000.
GOLDONLINE INTERNATIONAL, INC.
/s/ GREG GORDON
GREG GORDON, PRESIDENT
<PAGE> 1
CERTIFICATE OF INCORPORATION
OF
TRANSUN INTERNATIONAL AIRWAYS, INC.
The undersigned, desiring to form a corporation pursuant to Section 103
of the General Corporation Law of the State of Delaware, does hereby certify, as
follows:
FIRST: The name of the corporation is TRANSUN INTERNATIONAL AIRWAYS,
INC. (the "Corporation").
SECOND: The address of the Corporation's registered office in the
State of Delaware is c/o UNITED CORPORATE SERVICES, INC., 15
East North Street, in the City of Dover, County of Kent, State
of Delaware, 19901. The name of the registered agent at such
address is United Corporate Services, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the
General Corporation Law of Delaware.
FOURTH: The aggregate number of shares which the Corporation shall
have authority to issue is Ten Million Fifty Thousand
(10,050,000) shares, of which Ten Million such shares shall be
designated common stock and shall have a par value of $.0001
per share sand Fifty Thousand such shares shall be designated
preferred stock and shall have a par value of $.0001 per
share.
The Corporation's Board of Directors is authorized, subject to
the limitations prescribed by law and the provisions of this
Article "FOURTH", to provide for the issuance of the above
authorized preferred stock in series, and by filing a
certificate of designations pursuant to Section 151 of the
General Corporation Law of Delaware, as the same may be
amended, to establish from time to time the number of shares
to be included in each such series and to fix the designation,
powers, preferences and rights of the shares of each such
series and qualifications, limitations or restrictions
thereof.
The authority of the Board of Directors with respect to each
series shall include, but not be limited to, determination of
the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend shall be cumulative, and, if so, from
which dates or dates, and the relative rights of
priority, if any, of payment of dividends on shares
of that series:
<PAGE> 2
(c) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and,
if so, the terms of such voting rights;
(d) Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such
conversion, including provision for adjustment of the
conversion rate upon events as the Board of Directors
shall determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of
such redemption, including the date or date upon or
after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount
may vary under different conditions and at different
redemption dates;
(f) The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, and relative rights
of priority of payment of shares of that series; and
(g) Any other relative rights, preferences and
limitations of that series.
Dividends on outstanding shares of preferred stock shall be
paid or declared and set apart for payment before any
dividends shall be paid or declared and set apart for payment
on common shares with respect to the same dividend period.
FIFTH: The name and mailing address of the incorporator of
the Corporation is as follows:
Bruce S. DePaola
c/o Hofheimer Gartlir & Gross, LLP
633 Third Avenue
New York, NY 10017
SIXTH: The names and mailing address of the person who is to
serve as the initial director of the Corporation
until the first annual meeting of stockholders or
until his successors are elected and qualified is as
follows:
Douglas B. Cunningham
5335 S.E. Miles Grant Road
Suite H204
Stuart, FL 34997
SEVENTH: The Corporation is to have perpetual existence.
EIGHTH: The number of directors which shall constitute the
whole Board of Directors
<PAGE> 3
of the Corporation shall be designated in the By-Laws
of the Corporation.
NINTH: In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is
expressly authorized to make, alter or repeal the
By-laws of the Corporation, without the need for
shareholder approval.
TENTH: To the fullest extent permitted by the General
Corporation Law of Delaware, as the same exists or as
it may hereafter by amended, no director of the
Corporation shall be personally liable for monetary
damages for breach of his/her fiduciary duty as a
director. The Corporation shall indemnify each
officer and director of the Corporation to the
fullest extent permitted by Section 145 of the
General Corporation Law of the State of Delaware, as
the same may be amended from time to time.
ELEVENTH: Meetings of stockholders of the Corporation may be
held within or without the State of Delaware, as the
By-laws may provide. The books of the Corporation may
be kept (subject to any contrary provision contained
in the General Corporation Law of Delaware) outside
of the State of Delaware at such place or places as
may designated form time to time by the Board of
Directors or in the By-laws of the Corporation.
TWELFTH: The Corporation reserves the right to amend, alter
change or repeal any provision contained in this
Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights
conferred upon stockholders herein are granted
subject to this reservation.
The effective time of this Certificate of Incorporation of the
Corporation and the time when the existence of the Corporation shall commence is
upon the filing hereof.
Dated: May 14, 1996
/s/ Bruce S. DePaola,
Incorporator
<PAGE> 1
STEPHEN P. HIGGINS, C.P.A.
67 DUMBARTON DRIVE
HUNTINGTON, NEW YORK 11743
GOLDONLINE INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
JULY 31, 1999 AND MARCH 31, 1999 AND 1998
<PAGE> 2
GOLDONLINE INTERNATIONAL, INC.
Index to Consolidated Financial Statements
Page
No.
Index 2
Auditors Report 3
Consolidated Balance Sheet 4
Consolidated Statements of Operations 5
Consolidated Statement of Stockholders' Equity 6
Consolidated Statements of Cash Flows 7-8
Notes to Consolidated Financial Statements 9-13
2
<PAGE> 3
STEPHEN P. HIGGINS, C.P.A.
67 DUMBARTON DRIVE
HUNTINGTON, NEW YORK 11743
Board of Directors
Goldonline International, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheets of Goldonline
International, Inc. and subsidiaries as of July 31, 1999 and the consolidated
statements of operations, stockholders' equity and cash flows for the four
months ended July 31, 1999 and the years ended March 31, 1999 and 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Goldonline International, Inc.
and subsidiaries as of July 31, 1999 and the results of its operations and its
cash flows for the four months ended July 31, 1999 and the years ended March 31,
1999 and 1998 in conformity with generally accepted accounting principles.
December 14, 1999
Huntington, New York
3
<PAGE> 4
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
BALANCE SHEET
JULY 31, 1999
<TABLE>
<CAPTION>
ASSETS
CURRENT ASSETS
<S> <C>
Cash and cash equivalents $ 34,426
Accounts receivable, net of allowance of $0 30,999
Inventory 413,208
Prepaid expenses and other assets 500
Deferred income taxes 31,648
--------
Total current assets 510,781
Property and equipment, net 154,597
Deposits 6,141
Goodwill, less accumulated amortization of $1,112 99,008
--------
$770,527
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term debt and notes payable $202,146
Accounts payable 86,901
Bank overdraft 52,555
Accrued expenses 10,568
Income taxes payable 5,384
Due to shareholder 8,012
--------
Total current liabilities 365,566
Long-term debt less current installments 76,674
Deferred income tax liability 10,004
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value. Authorized 200,000,000 shares; issued and 8,700
outstanding 86,996,408
Paid-in capital 217,420
Retained earnings 92,163
--------
Total stockholders' equity 318,283
--------
$770,527
========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
FOUR MONTHS ENDED JULY 31, 1999 AND 1998 AND YEARS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
FOUR MONTHS ENDED YEARS ENDED
JULY 31, MARCH 31,
1999 1998 1999 1998
(UNAUDITED)
<S> <C> <C> <C> <C>
SALES AND REVENUES $ 462,915 $ 440,116 $ 1,509,028 $ 1,411,585
COST OF SALES 229,340 221,257 814,835 876,384
------------ ------------ ------------ ------------
GROSS PROFIT 233,575 218,859 694,193 535,201
OTHER EXPENSE (INCOME)
Selling, general and administrative expense 257,656 204,889 659,063 483,044
Interest expense 7,426 4,545 17,542 16,963
Other income (25) (12) (165) (7,656)
------------ ------------ ------------ ------------
265,057 209,422 676,440 492,351
------------ ------------ ------------ ------------
EARNINGS (LOSS) BEFORE INCOME TAXES (31,482) 9,437 17,753 42,850
INCOME TAX EXPENSE (BENEFIT) (10,501) 744 (68) 3,196
------------ ------------ ------------ ------------
NET EARNINGS (LOSS) (20,981) 8,693 17,821 39,654
============ ============ ============ ============
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $ (0.000) $ 0.000 $ 0.000 $ 0.001
============ ============ ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 80,014,892 75,000,000 75,000,000 75,000,000
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENT OF STOCKHOLDERS' EQUITY
APRIL 1, 1997 THROUGH JULY 31, 1999
<TABLE>
<CAPTION>
Common Stock Paid-in Retained
Shares Par Value Capital Earnings Total
<S> <C> <C> <C> <C> <C>
BALANCE, April 1, 1997 500 $ 1,000 $ -- $ 55,669 $ 56,669
Net earnings 39,654 39,654
----------- ----------- ----------- ----------- -----------
Balance March 31, 1998 500 1,000 -- 95,323 96,323
Net earnings 8,693 8,693
----------- ----------- ----------- ----------- -----------
Balance July 31, 1998 (unaudited) 500 1,000 -- 104,016 105,016
Net earnings 9,128 9,128
----------- ----------- ----------- ----------- -----------
Balance March 31, 1999 500 1,000 -- 113,144 114,144
Recapitalization 74,999,500 6,500 (6,500) -- --
----------- ----------- ----------- ----------- -----------
75,000,000 7,500 (6,500) 113,144 114,144
Acquire Goldonline International, Inc 1,196,408 120 120
Acquire Gold Online.com, Inc. 10,000,000 1,000 24,000 25,000
Common stock sold for cash 800,000 80 199,920 200,000
Net loss (20,981) (20,981)
=========== =========== =========== =========== ===========
BALANCE, July 31, 1999 86,996,408 $ 8,700 $ 217,420 $ 92,163 $ 318,283
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
FOUR MONTHS ENDED JULY 31, 1999 AND 1998 AND YEARS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
FOUR MONTHS ENDED YEARS ENDED
JULY 31, MARCH 31,
1999 1998 1999 1998
(UNAUDITED)
Cash flows used in operating activities
<S> <C> <C> <C> <C>
Net earnings (loss) $ (20,981) $ 8,693 17,821 39,654
Adjustments to reconcile net earnings (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 11,523 6,435 22,681 14,106
Deferred income taxes (10,501) 1,202 (5,452) (10,043)
Accounts receivable (12,091) (115) (4,422) (14,486)
Inventory (125,401) (2,306) (11,898) (106,731)
Other assets -- -- (3,691) (1,800)
Accounts payable 43,482 (63,563) (17,472) 62,285
Accrued expenses 5,944 (5,110) (10,525) 2,126
--------- --------- --------- ---------
Net cash used in operating activities (108,025) (54,764) (12,958) (14,889)
--------- --------- --------- ---------
CASH FLOWS USED IN INVESTING ACTIVITIES
Capital expenditures (6,035) (4,076) (15,595) (23,673)
Proceeds from sale of equipment -- -- -- 11,988
--------- --------- --------- ---------
Net cash used in investing activities (6,035) (4,076) (15,595) (11,685)
--------- --------- --------- ---------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from sale of common stock 200,000 -- -- --
Loan proceeds 50,000 57,567 98,000 132,880
Repayment of long-term debt and notes payable (106,721) (23,657) (60,350) (103,235)
Loans from (repayment) of amounts due shareholder (4,279) 19,433 (6,776) --
--------- --------- --------- ---------
Net cash provided by financing activities 139,000 53,343 30,874 29,645
--------- --------- --------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 24,940 (5,497) 2,321 3,071
CASH AND CASH EQUIVALENTS, beginning of period 9,486 7,165 7,165 4,094
--------- --------- --------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 34,426 $ 1,668 $ 9,486 $ 7,165
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
Continued
7
<PAGE> 8
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
FOUR MONTHS ENDED JULY 31, 1999 AND 1998 AND YEARS ENDED MARCH 31, 1999 AND 1998
<TABLE>
<CAPTION>
FOUR MONTHS ENDED YEARS ENDED
JULY 31, MARCH 31,
1999 1998 1999 1998
(UNAUDITED)
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for interest and income taxes are as follows:
<S> <C> <C> <C> <C>
Interest $ 7,426 $ 4,545 $ 17,542 $ 16,963
Income taxes $ -- $ 13,640 $ 13,640 $ --
Noncash investing and financing activities are as follows:
Acquisition of equipment in exchange for long-term debt $ 19,983 $ -- $ 42,145 $ 22,985
Common stock issued to acquire Gold Online.com, Inc. $ 25,000
Common stock issued to acquire Goldonline International, Inc. $ 120
Note payable assumed to acquire Goldonline International, Inc. $100,000
</TABLE>
See accompanying notes to consolidated financial statements.
8
<PAGE> 9
GOLDONLINE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
1. 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.) ("GOII") and its wholly owned subsidiaries
Con-Tex Silver Imports, Inc. ("Con-Tex") and Gold Online.com,
Inc. ("GO.com") (collectively referred to as the "Company").
All material intercompany accounts and transactions have been
eliminated.
(b) ORGANIZATION
GOII 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.
Con-Tex was incorporated September 12, 1994 in Texas. GO.com
was incorporated on February 3, 1999 in Delaware.
On June 10, 1999, GOII acquired all of the issued and
outstanding common stock of Con-Tex and GO.com. For accounting
purposes, the acquisitions have been treated as the
acquisition of Con-Tex and GO.com by GOII with Con-Tex as the
acquiror (reverse acquisition). The historical financial
statements prior to June 10, 1999 are those of Con-Tex.
(c) NATURE OF BUSINESS
GOII is now a holding company principally engaged in acquiring
and developing businesses. Con-Tex is a company involved in
both the wholesale and retail jewelry business. GO.com is
establishing an Internet jewelry business.
(d) CASH EQUIVALENTS
The Company considers all liquid investments with original
maturities of three months or less to be cash equivalents. At
July 31, 1999, cash equivalents consist of money market
accounts and business checking accounts.
(e) INVENTORIES
Inventories consist primarily of silver jewelry and are
carried at the lower of average cost or market.
(f) MACHINERY AND EQUIPMENT
Owned machinery and equipment are stated at cost and
depreciated using the straight-line method over the estimated
useful lives of the respective assets.
(g) GOODWILL
Costs in excess of the fair value of net assets acquired are
amortized over a fifteen-year period on a straight-line basis.
The carrying value of goodwill is reviewed if the facts and
circumstances suggest that it may be impaired. If this review
indicates that goodwill will not be recoverable, the Company's
carrying value of the goodwill would be reduced.
9
<PAGE> 10
(h) INCOME TAXES
Deferred income taxes are recognized for income and expense
items that are reported for financial purposes in different
years than for income tax purposes.
(i) REVENUE AND COST RECOGNITION
Sales revenues are recognized when the product is shipped.
Cost of sales, which is recognized simultaneously with the
recognition of sales, is comprised of the cost of materials
and indirect costs incurred during the manufacturing process.
(j) NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share amounts are computed using the
weighted average number of shares outstanding during the
period. Fully diluted earnings (loss) per share is presented
if the assumed conversion of common stock equivalents results
in material dilution.
(k) USE OF ESTIMATES
The process of preparing consolidated financial statements in
conformity with generally accepted accounting principles
requires the use of estimates and assumptions regarding
certain types of assets, liabilities, revenues and expenses.
Such estimates primarily relate to unsettled transactions and
events as of the date of the consolidated financial
statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.
(l) FAIR VALUE DETERMINATION
Financial instruments consist of cash, accounts receivable,
accounts payable, accrued liabilities, notes payable and
long-term debt. The carrying amount of these financial
instruments approximates fair value due to their short-term
nature or the current rates which the Company could borrow
funds with similar remaining maturities.
2. ACQUISITION
On June 10, 1999, GOII issued 75,000,000 of its common shares to
acquire all of the common shares of Con-Tex. Con-Tex is both a
wholesale and retail marketer of jewelry, primarily silver. For
accounting purposes, the acquisition has been treated as the
acquisition of Con-Tex by GOII with Con-Tex as the acquiror (reverse
acquisition). Simultaneously, GOII issued 10,000,000 of its common
shares to acquire all of the common shares of GO.com. GO.com is a new
Internet Company and it has the domain name Gold Online.com. A value of
$25,000 was recorded for this acquisition. Pro forma information has
not been presented as GOII had no prior continuing operations and
GO.com had only recently commenced operations.
3. RELATED PARTY TRANSACTIONS
Con-Tex leases its corporate headquarters from the principal
shareholder of the Company at the rate of $2,200 per month. This
amounted to $8,800 during the four month period ended July 31, 1999,
amounted to $8,800 during the four month period ended July 31, 1998
(unaudited) and amounted to $26,400 during each of the years ended
March 31, 1999 and 1998.
The Company had received loans from its principal shareholder. The
balance owed was $8,012 at July 31, 1999, $12,291 at March 31, 1999,
$24,947 at July 31, 1998 (unaudited) and $5,515 at March 31, 1998.
10
<PAGE> 11
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at July 31, 1999:
<TABLE>
<CAPTION>
<S> <C>
Equipment and store furnishings $ 46,322
Transportation equipment 133,663
Web site 26,000
Leasehold improvements 1,035
---------
207,020
Less accumulated depreciation (52,423)
---------
$ 154,597
=========
</TABLE>
5. LONG-TERM DEBT AND NOTES PAYABLE
Notes payable consists of the following:
<TABLE>
<CAPTION>
<S> <C>
Note payable to bank with interest at 10% payable on $136,400
demand or January 1, 2000 if no demand is made; accrued
interest payable monthly; collateralized by all assets of
Con-Tex and guaranteed by the principal shareholder of the
Company
Note payable to the brother of the principal shareholder 50,000
of the Company due on July 23, 2000 with interest at 8%,
unsecured, convertible into common stock of the Company at
$.01 per share
Note payable to company in monthly installments of 13,913
$597.61, including interest at 10% through September 30, 2001;
collateralized by transportation equipment
Note payable to company in monthly installments of 19,377
$330.96, including interest at 9.8% through July 23, 2000 and
a final payment of $17,464.96 due on August 23, 2000;
collateralized by transportation equipment
Note payable to company in monthly installments of 39,147
$730.18, including interest at 10.46% through November 7, 2001
and a final payment of $27,603.18 due on December 7, 2001;
collateralized by transportation equipment
Note payable to company in monthly installments of $442.44,
including interest at 11.6% through July 21, 2004;
collateralized by transportation equipment 19,983
--------
278,820
Current installments of long-term debt and notes payable 202,146
--------
Long-term debt less current installments $ 76,674
========
</TABLE>
11
<PAGE> 12
The aggregate maturities of long-term debt for the periods ending July
31, 2004 are as follows: 2000 - $25,214, 2001 $38,451, 2002 - $36,783,
2003 - $5,309 and 2004 - $5,309.
6. INCOME TAXES
Income tax expense (benefit) for the four months ended July 31, 1999
and 1998 and the year ended March 31, 1999 and 1998 consists of:
<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
<S> <C> <C> <C>
July 31, 1999 - Federal $ -- ($ 10,501) ($ 10,501)
======== ========== =========
July 31, 1998 - Federal $ 1,946 (1,202) 744
======== ========== =========
March 31, 1999 - Federal $ 5,384 (5,452) (68)
======== ========== =========
March 31, 1998 - Federal $ 13,239 (10,043) 3,196
======== ========== =========
</TABLE>
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>
JULY 31, MARCH 31,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
"Normally expected" income tax
expense (benefit) ($10,704) 3,209 6,036 14,569
Surtax exemption -- (2,465) (6,816) (11,485)
Non-deductible entertainment 203 -- 712 112
-------- -------- -------- --------
($10,501) 744 (68) 3,196
======== ======== ======== ========
</TABLE>
The deferred income tax assets and liabilities at July 31, 1999 are
comprised of the following:
<TABLE>
<CAPTION>
CURRENT NONCURRENT
<S> <C> <C>
Expenses deferred for tax purposes $ 25,243 -
Net operating loss carryforwards 6,405 -
--------- --------
31,648 -
Less valuation allowance ( -) -
--------- --------
Deferred income tax asset 31,648 -
Deferred income tax liability - asset basis - (10,004)
--------- --------
Net deferred income tax assets (liabilities) $ 31,648 ($10,004)
========= ========
</TABLE>
7. CAPITAL STOCK
The Company sold 200,000 units (The "Units") at $1.00 per Unit. Each
Unit consisted of 4 shares of common stock, par value $.001, and 1
warrant. Each warrant entitled the holder to purchase eight shares of
the common stock of the Company at a purchase price of $.50 per share.
12
<PAGE> 13
Under the terms of the initial offering, the warrants are scheduled to
expire on September 30, 1999. The exercise period for the warrants was
extended until February 29, 2000.
At July 31, 1999, warrants for the purchase of 1,600,000 shares of the
Company's common stock at $.50 per share had been issued and all were
outstanding.
8. COMMITMENTS
The Company operates three retail jewelry stores in addition to its
corporate headquarters, which also houses its wholesale jewelry
operations. Rental expense was $58,554 and $48,550 during the
four-month periods ended July 31, 1999 and 1998, respectively, and
$215,531 and $86,976 during the years ended March 31, 1999 and 1998,
respectively. Minimum rental commitments under all non-cancelable
leases with an initial term in excess of one year are payable as
follows: 2000 - $13,836, 2001 - $12,819, 2002 - $13,201, 2003 - $8,561.
The majority of the Company's leases are month-to-month.
9. SUBSEQUENT EVENT
On September 1, 1999, the Company established a stock option plan,
which reserved 10,000,000 shares of the Company's common stock for
issue to certain employees, directors and consultants. The Plan
provides that options may be granted for no less than fair market value
at the date of the option grant.
13
<PAGE> 1
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENT
JANUARY 31, 2000
<PAGE> 2
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
No.
<S> <C>
Consolidated Balance Sheets - 3
January 31, 2000 and July 31, 1999
Consolidated Statements of Operations - 4
Three and Six Months Ended January 31, 2000
Consolidated Statement of Stockholders' Equity - 5
Six Months Ended January 31, 2000
Consolidated Statements of Cash Flows - 6-7
Six Months Ended January 31, 2000
Notes to Consolidated Financial Statements - 8-11
Six Months Ended January 31, 2000
</TABLE>
2
<PAGE> 3
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JANUARY 31, JULY 31,
2000 1999
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 199,237 $ 34,426
Trade accounts receivable 83,519 30,999
Inventory 550,164 413,208
Prepaid expenses and other assets 500 500
Deferred income taxes 44,103 31,648
---------- ----------
877,523 510,781
Property and equipment, net 169,997 154,597
Goodwill, net of amortization of $4,448 and $1,112, respectively 95,672 99,008
Other assets 6,141 6,141
---------- ----------
$1,149,333 $ 770,527
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term debt and notes payable 222,193 202,146
Accounts payable 163,892 86,901
Bank overdraft 89,935 52,555
Accrued expenses 10,271 10,568
Income taxes payable -- 5,384
Due to shareholder 3,659 8,012
---------- ----------
489,950 365,566
Deferred income taxes 10,004 10,004
Long-term debt less current installments 68,572 76,674
Stockholders' equity
Common stock, $.0001 par value, 200,000,000 shares authorized,
87,616,408 and 86,996,408 shares issued and outstanding at
January 31, 2000 and July 31, 1999, respectively 9,320 8,700
Additional paid-in capital 503,500 217,420
Retained earnings (deficit) 67,987 92,163
---------- ----------
580,807 318,283
---------- ----------
$1,149,333 $ 770,527
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JANUARY 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JANUARY 31, JANUARY 31,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Sales and revenues $ 501,483 $ 511,176 $ 910,961 $ 858,171
Cost of sales 391,330 271,594 748,342 459,966
--------- --------- --------- ---------
Gross profit 110,153 239,582 162,619 398,205
Selling, general and administrative expense 123,368 177,641 187,497 340,841
--------- --------- --------- ---------
Loss from operations (13,215) 61,941 (24,878) 57,364
Other income (expense):
Interest expense (7,123) (4,734) (11,754) (9,438)
Interest and other income -- 99 1 143
--------- --------- --------- ---------
(7,123) (4,635) (11,753) (9,295)
--------- --------- --------- ---------
Net earnings (loss) before income taxes (20,338) 57,306 (36,631) 48,069
Income tax expense (benefit) (6,915) 19,484 (12,455) 16,343
--------- --------- --------- ---------
Net earnings (loss) $ (13,423) $ 37,822 $ (24,176) $ 31,726
========= ========= ========= =========
Net earnings (loss) per share $ (0.000) $ 0.001 $ (0.000) $ 0.000
========= ========= ========= =========
Weighted average shares outstanding, in millions 87.2 75.0 87.1 75.0
========= ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK PAID-IN RETAINED
SHARES PAR VALUE CAPITAL EARNINGS TOTAL
------ --------- ------- -------- -----
<S> <C> <C> <C> <C> <C>
BALANCE, August 1, 1999 86,996,408 $ 8,700 $217,420 $ 92,163 $318,283
Exercise of common stock options 50,000 50 1,650 1,700
Exercise of common stock warrants 570,000 570 284,430 285,000
Net earnings (loss) (24,176) (24,176)
------------------------------------------------------------------------
BALANCE, January 31, 2000 87,616,408 $ 9,320 $503,500 $ 67,987 $580,807
========================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JANUARY 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $ (24,176) 31,726
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 21,623 4,348
Deferred income taxes (12,455) --
Changes in assets and liabilities:
Accounts receivable (52,520) --
Inventory (136,956) (9,654)
Other assets -- (4,812)
Accounts payable and accrued expenses 71,310 27,883
Bank overdraft 37,380 --
--------- ---------
Net cash provided by operating activities (95,794) 49,491
--------- ---------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
Capital expenditures (14,225) (7,519)
--------- ---------
Net cash provided by investing activities (14,225) (7,519)
--------- ---------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from sales of common stock 286,700 --
Loan proceeds 50,000 --
Repayment of notes payable and long-term debt (57,518) (41,438)
Increase (decrease) in amount due stockholder (4,352) --
--------- ---------
Net cash provided by financing activities 274,830 (41,438)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 164,811 534
CASH AND CASH EQUIVALENTS, beginning of period 34,426 1,668
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 199,237 $ 2,202
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED
SIX MONTHS ENDED JANUARY 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $11,754 $ 9,438
======= =======
Income taxes paid $ 5,384 $ --
======= =======
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Acquisition of transportation equipment for long-term debt $19,462
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 8
GOLDONLINE INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
1. 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
Con-Tex Silver Imports, Inc. ("Con-Tex") 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.
Con-Tex was incorporated September 12, 1994 in Texas. GO.com
was incorporated on February 3, 1999 in Delaware.
On June 10, 1999, GDOL acquired all of the issued and
outstanding common stock of Con-Tex and GO.com. For accounting
purposes, the acquisitions have been treated as the
acquisition of Con-Tex and GO.com by GDOL with Con-Tex as the
acquiror (reverse acquisition). The historical financial
statements prior to June 10, 1999 are those of Con-Tex.
(c) NATURE OF BUSINESS
GDOL is now a holding company principally engaged in acquiring
and developing businesses. Con-Tex is a company involved in
both the wholesale and retail jewelry business. GO.com is
establishing an Internet jewelry business.
(d) CASH EQUIVALENTS
The Company considers all liquid investments with original
maturities of three months or less to be cash equivalents. At
January 31, 2000, cash equivalents consist of money market
accounts and business checking accounts.
(e) INVENTORIES
Inventories consist primarily of silver jewelry and are
carried at the lower of average cost or market.
(f) MACHINERY AND EQUIPMENT
Owned machinery and equipment are stated at cost and
depreciated using the straight-line method over the estimated
useful lives of the respective assets.
(g) GOODWILL
Costs in excess of the fair value of net assets acquired are
amortized over a fifteen-year period on a straight-line basis.
The carrying value of goodwill is reviewed if the facts and
circumstances suggest that it may be impaired. If this review
indicates that goodwill will not be recoverable, the Company's
carrying value of the goodwill would be reduced.
8
<PAGE> 9
(h) INCOME TAXES
Deferred income taxes are recognized for income and expense
items that are reported for financial purposes in different
years than for income tax purposes.
(i) REVENUE AND COST RECOGNITION
Sales revenues are recognized when the product is shipped.
Cost of sales, which is recognized simultaneously with the
recognition of sales, is comprised of the cost of materials
and indirect costs incurred during the manufacturing process.
(j) NET EARNINGS (LOSS) PER SHARE
Net earnings (loss) per share amounts are computed using the
weighted average number of shares outstanding during the
period. Fully diluted earnings (loss) per share is presented
if the assumed conversion of common stock equivalents results
in material dilution.
(k) USE OF ESTIMATES
The process of preparing consolidated financial statements in
conformity with generally accepted accounting principles
requires the use of estimates and assumptions regarding
certain types of assets, liabilities, revenues and expenses.
Such estimates primarily relate to unsettled transactions and
events as of the date of the consolidated financial
statements. Accordingly, upon settlement, actual results may
differ from estimated amounts.
(l) FAIR VALUE DETERMINATION
Financial instruments consist of cash, accounts receivable,
accounts payable, accrued liabilities, notes payable and
long-term debt. The carrying amount of these financial
instruments approximates fair value due to their short-term
nature or the current rates which the Company could borrow
funds with similar remaining maturities.
2. ACQUISITION
On June 10, 1999, GDOL issued 75,000,000 of its common shares to
acquire all of the common shares of Con-Tex. Con-Tex is both a
wholesale and retail marketer of jewelry, primarily silver. For
accounting purposes, the acquisition has been treated as the
acquisition of Con-Tex by GDOL with Con-Tex as the acquiror (reverse
acquisition). Simultaneously, GDOL issued 10,000,000 of its common
shares to acquire all of the common shares of GO.com. GO.com is a new
Internet Company and it has the domain name Gold Online.com. A value of
$25,000 was recorded for this acquisition. Pro forma information has
not been presented as GDOL had no prior continuing operations and
GO.com had only recently commenced operations.
3. RELATED PARTY TRANSACTIONS
Con-Tex leases its corporate headquarters from the principal
shareholder of the Company at the rate of $1,596.78 per month. This
amounted to $9,581 during each of the six months periods ended January
31, 2000 and 1999.
The Company had received loans from its principal shareholder. The
balance owed was $3,659 at January 31, 2000 and $8,012 at July 31,
1999.
9
<PAGE> 10
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at January 31, 2000 and
July 31, 1999:
<TABLE>
<CAPTION>
January 31, July 31,
2000 1999
<S> <C> <C>
Equipment and store furnishings $ 46,322 $ 46,322
Transportation equipment 156,125 133,663
Web site 37,225 26,000
Leasehold improvements 1,035 1,035
--------- ---------
240,707 207,020
Less accumulated depreciation (70,710) (52,423)
--------- ---------
$ 169,997 $ 154,597
========= =========
</TABLE>
5. LONG-TERM DEBT AND NOTES PAYABLE
Notes payable consists of the following:
<TABLE>
<CAPTION>
<S> <C>
Note payable to bank with interest at 10% payable on $136,400
demand or January 1, 2000 if no demand is made; accrued
interest payable monthly; collateralized by all assets of
Con-Tex and guaranteed by the principal shareholder of the
Company
Note payable to the brother of the principal shareholder of
the Company due on July 23, 2000 with interest at 8%,
unsecured, convertible into common stock of the Company at
$.01 per share 50,000
Notes payable to company in monthly installments
aggregating $2,534, including interest at 9.8% to 11.6%;
collateralized by transportation equipment 104,365
--------
290,765
Current installments of long-term debt and notes payable 222,193
--------
Long-term debt less current installments $ 68,572
========
</TABLE>
6. INCOME TAXES
Federal income tax expense (benefit) for the three and six months ended
January 31, 2000 consists of deferred tax benefit in the amounts of
$6,915 and $12,455, respectively. Federal income tax expense for the
three and six month periods ended January 31, 1999 amounted to $19,484
and $16,343, respectively.
10
<PAGE> 11
Actual income tax expense (benefit) applicable to earnings (loss)
before income taxes is the same as the "normally expected" federal
income tax expense (benefit).
The deferred income tax assets and liabilities at January 31, 2000 are
comprised of the following:
<TABLE>
<CAPTION>
CURRENT NONCURRENT
<S> <C> <C>
Expenses deferred for tax purposes $ 25,243 -
Net operating loss carryforwards 18,860 -
-------- --------
44,103 -
Less valuation allowance ( -) -
-------- --------
Deferred income tax asset 44,103 -
Deferred income tax liability - asset basis - (10,004)
-------- --------
Net deferred income tax assets (liabilities) $ 44,103 ($10,004)
======== ========
</TABLE>
7. CAPITAL STOCK
The Company sold 200,000 units (The "Units") at $1.00 per Unit. Each
Unit consisted of 4 shares of common stock, par value $.001, and 1
warrant. Each warrant entitled the holder to purchase eight shares of
the common stock of the Company at a purchase price of $.50 per share.
Under the terms of the initial offering, the warrants were scheduled to
expire on September 30, 1999. The exercise period for the warrants was
extended until February 29, 2000.
At January 31, 2000, warrants for the purchase of 1,600,000 shares of
the Company's common stock at $.50 per share had been issued and
warrants for the purchase of 570,000 shares had been exercised.
On September 1, 1999, the Company established a stock option plan,
which reserved 10,000,000 shares of the Company's common stock for
issue to certain employees, directors and consultants. The Plan
provides that options may be granted for no less than fair market value
at the date of the option grant. As of January 31, 2000, one option to
acquire 50,000 shares had been granted and exercised at a price of
$.034 per share.
8. SUBSEQUENT EVENTS
During February 2000, the remaining warrants to purchase 1,030,000
shares of common stock of the Company were exercised at an exercise
price of $.50 per share.
On April 20, 2000, pursuant to an agreement and plan of reorganization
dated April 11, 2000, DGOL acquired 100% of the issued and outstanding
common stock of Benton Ventures, Inc. ("Benton or Registrant"), a
Delaware corporation, in exchange for 1,2000,000 newly issued common
shares of GDOL. On April 25, 2000, the Board of Directors of GDOL
elected to merge Benton, Registrant, into GDOL pursuant to Section 253
of Delaware's General Corporate Laws. As a result of the merger, GDOL
will be the surviving company.
11
<PAGE> 1
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET
EXHIBIT 99.3.a
JANUARY 31, 2000
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA BALANCE
UNAUDITED ADJUSTMENT SHEET
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 199,237 $ 199,237
Trade accounts receivable 83,519 83,519
Inventory 550,164 550,164
Other 44,603 44,603
----------------------------------------------
877,523 - 877,523
Property and equipment, net 169,997 169,997
Goodwill, net of amortization of $4,448 95,672 95,672
Other assets 6,141 6,141
----------------------------------------------
$ 1,149,333 $ - $ 1,149,333
==============================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term debt and notes payable 222,193 222,193
Accounts payable 163,892 163,892
Bank overdraft 89,935 89,935
Accrued expenses 10,271 10,271
Due to shareholder 3,659 3,659
-
----------------------------------------------
267,757 - 267,757
Deferred income taxes 10,004 10,004
Long-term debt less current installments 68,572 68,572
Stockholders' equity
Common stock, $.00001 par value, 1,000,000,000 shares authorized, 9,320 120 9,440
757,296,187 shares issued and outstanding at September 30, 1999 -
Additional paid-in capital 503,500 (120) 503,380
Retained earnings (deficit) 67,987 67,987
----------------------------------------------
580,807 - 580,807
---------------------------------------------
$ 927,140 $ - $ 927,140
==============================================
</TABLE>
The adjustment records the issuance of 1,200,000 common shares of GDOL to
acquire 100% of Benton Ventures, Inc. No assets were acquired.
<PAGE> 1
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
EXHIBIT 99.3.b
YEAR ENDED MARCH 31, 1999
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA STATEMENT OF
AUDITED ADJUSTMENT OPERATIONS
<S> <C> <C> <C>
Sales and revenues $ 1,509,028 $1,509,028
Cost of sales 814,835 814,835
-----------------------------------------------
Gross profit 694,193 - 694,193
Selling, general and administrative expense 659,063 659,063
-----------------------------------------------
Loss from operations 35,130 - 35,130
Other income (expense):
Interest expense (17,542) (17,542)
Interest and other income 165 165
-----------------------------------------------
(17,377) - (17,377)
-----------------------------------------------
Net earnings (loss) before income taxes 17,753 - 17,753
Income tax expense (benefit) (68) (68)
-----------------------------------------------
Net earnings (loss) $ 17,821 $ - $ 17,821
===============================================
Net earnings (loss) per share $ 0.000 $ 0.000
===============================================
Weighted average shares outstanding, in millions 75.0 1.2 76.2
===============================================
</TABLE>
The adjustment records the effect of the acquisition and merger which resulted
in an increase in the weighted average shares outstanding.
<PAGE> 1
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
EXHIBIT 99.3.c
FOUR MONTHS ENDED JULY 31, 1999
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA STATEMENT OF
AUDITED ADJUSTMENT OPERATIONS
<S> <C> <C> <C>
Sales and revenues $ 462,915 $462,915
Cost of sales 229,340 229,340
--------------------------------------------
Gross profit 233,575 - 233,575
Selling, general and administrative expense 257,656 257,656
--------------------------------------------
Loss from operations (24,081) - (24,081)
Other income (expense):
Interest expense (7,426) (7,426)
Interest and other income 25 25
--------------------------------------------
(7,401) - (7,401)
--------------------------------------------
Net earnings (loss) before income taxes (31,482) - (31,482)
Income tax expense (benefit) (10,501) (10,501)
--------------------------------------------
Net earnings (loss) $ (20,981) $ - $(20,981)
============================================
Net earnings (loss) per share $ (0.000) $ (0.000)
============================================
Weighted average shares outstanding, in millions 80.0 1.2 81.2
============================================
</TABLE>
The adjustment records the effect of the acquisition and merger which resulted
in an increase in the weighted average shares outstanding.
<PAGE> 1
GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS
EXHIBIT 99.3.d
SIX MONTHS ENDED JANUARY 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA
PRO FORMA STATEMENT OF
UNAUDITED ADJUSTMENT OPERATIONS
<S> <C> <C> <C>
Sales and revenues $ 910,961 $ 910,961
Cost of sales 748,342 748,342
---------------------------------------------
Gross profit 162,619 - 162,619
Selling, general and administrative expense 187,497 187,497
---------------------------------------------
Loss from operations (24,878) - (24,878)
Other income (expense):
Interest expense (11,754) (11,754)
Interest and other income 1 1
---------------------------------------------
(11,753) - (11,753)
---------------------------------------------
Net earnings (loss) before income taxes (36,631) - (36,631)
Income tax expense (benefit) (12,455) (12,455)
---------------------------------------------
Net earnings (loss) $ (24,176) $ - $ (24,176)
=============================================
-
Net earnings (loss) per share $ (0.000) $ (0.000)
=============================================
Weighted average shares outstanding, in millions 87.1 1.2 88.3
=============================================
</TABLE>
The adjustment records the effect of the acquisition and merger which resulted
in an increase in the weighted average shares outstanding.
<PAGE> 1
STEPHEN P. HIGGINS, C.P.A.
67 DUMBARTON DRIVE
HUNTINGTON, NEW YORK 11743
INDEPENDENT AUDITOR'S CONSENT
I consent to the use in this Form 8-K/A of Goldonline International, Inc. of the
Financial Statements and Independent Auditor's Report for the four-month period
ended July 31, 1999 and for the fiscal years ended March 31, 1999 and March 31,
1998 of Goldonline International, Inc. and Subsidiaries.
Stephen P. Higgins, C.P.A.
April 27, 2000
