UNITED STATES
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 of 1934
Date of Report (Date of earliest event reported) November 21, 2000
Commission file number 000-31447
DALJAMA, INC.
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
Texas 75-2877875
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
</TABLE>
1353 Middleton Dr. Cedar Hill, Texas 75104
(Address of Principal Executive Office) (Zip Code)
(972) 293-1115
(Registrant's Executive Office Telephone Number)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Acquisition Agreement and Plan of Merger (the "Merger
Agreement") dated as of November 21, 2000 between Entertainment Trends, Inc
("ET"), a Texas corporation, and Daljama, Inc. ("DAL"), a Texas corporation, all
the outstanding shares of common stock of DAL were exchanged for 10,000 shares
of common stock of ET in a transaction in which ET was the surviving
corporation.
The Merger Agreement was adopted by the unanimous consent of the Board of
Directors of DAL on November 21, 2000. The Merger Agreement was adopted by the
unanimous consent of the Board of Directors of ET on November 21, 2000. The
Articles of Merger were filed on November 21, 2000. The officers of ET will
continue as officers of ET.
A copy of the Merger Agreement is filed as an exhibit to this Form 8-K and
is incorporated in its entirety herein. The foregoing description is modified by
such reference.
(b) The following table contains information regarding the shareholdings of
ET's current directors and executive officers and those persons or entities who
beneficially own more than 5% of its common stock (giving effect to the exercise
of the warrants held by each such person or entity):
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<S> <C> <C>
------------------------- -------------------------- --------------------------
Amount of Common Percent of Common Stock
Stock Beneficially Beneficially Owned
Name Owned (1)
------------------------- -------------------------- --------------------------
------------------------- -------------------------- --------------------------
James P. Massengale 2,750,000 27.9%
------------------------- -------------------------- --------------------------
------------------------- -------------------------- --------------------------
Carolyn J. Massengale 2,750,000 27.9%
------------------------- -------------------------- --------------------------
------------------------- -------------------------- --------------------------
Bonita S. Clifton 2,750,000 27.9%
------------------------- -------------------------- --------------------------
</TABLE>
(1) Based upon 9,850,000 outstanding shares of common stock (subsequent to
the merger).
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Merger Agreement was negotiated
between DAL and ET.
BUSINESS
Entertainment Trends Corporation was formed as an internet website design
company as well as a holding company for other businesses. Entertainment Trends
Corporation operates through its' wholly owned subsidiary Beverly International
Southwest, a retailer through the internet, retail stores and fitness centers,
vitamin and nutritional products. Entertainment Trends Corporation designs and
develops websites and maintains the website for Beverly International.
Currently, Beverly International Nutrition Southwest markets Beverly
International Nutrition, high quality researched dietary sports nutrition
supplements, vitamins, minerals and health and fitness related products. Beverly
International Southwest wholesales to gyms and health and fitness stores.
Beverly International also retails to the general public in an exclusive
territory of Texas, New Mxico, Colorado, Oklahoma, Kansas, Missouri and
Louisiana. Initially Beverly International supplied products for athletes only
but as fitness became more popular the general public has been a good market.
Initially Entertainment Trends Corporation developed and maintained the website
for the corporate headquarters of Beverly International Nutrition. The company
was sold in 1999. As a result the corporate website was retained by
Entertainment Trends and now allows Beverly International South West to
distribute nutritional supplements through the internet.
Litigation
There is no outstanding litigation in which the Company is involved and the
Company is unaware of any pending actions or claims against it.
Description of Securities
In February 2000 the company authorized a 10 for 1 forward split in preparation
for going public. The outstanding stock went from 985,000 shares to 9,850,000
shares. The authorized capital stock of the Company consists of 100,000,000
shares of common stock, par value $.001 per share, of which there are 9,850,000
issued. The Company also has 50,000,000 shares of preferred stock, par value
$.001 per share authorized of which none are issued at this time, however, the
officers and directors of the company have the right to amend the articles of
incorporation at any time to increase or decrease the amount of preferred stock
authorized. The following statements relating to the capital stock set forth the
material terms of the Company's securities; however, reference is made to the
more detailed provisions of, and such statements are qualified in their entirety
by reference to, the Certificate of Incorporation and the By-laws.
Common Stock
Holders of shares of common stock are entitled to one vote for each share on all
matters to be voted on by the stockholders. Holders of common stock do not have
cumulative voting rights. Holders of common stock are entitled to share ratably
in dividends, if any, as may be declared from time to time by the Board of
Directors in its discretion from funds legally available therefore. In the event
of a liquidation, dissolution or winding up of the Company, the holders of
common stock are entitled to share pro rata all assets remaining after payment
in full of all liabilities. All of the outstanding shares of common stock are
fully paid and non-assessable.
Holders of common stock have no preemptive rights to purchase the Company's
common stock. There are no conversion or redemption rights or sinking fund
provisions with respect to the common stock.
Preferred Stock
The Board of Directors is authorized to amend the articles of incorporation to
provide for the issuance of preferred stock in series and, by filing a
certificate pursuant to the applicable law of Texas, 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 the qualifications, limitations or restrictions thereof without any further
vote or action by the shareholders. Any shares of preferred stock so issued
would have priority over the common stock with respect to dividend or
liquidation rights. Any future issuance of preferred stock may have the effect
of delaying, deferring or preventing a change in control of the Company without
further action by the shareholders and may adversely affect the voting and other
rights of the holders of common stock. At present, the Company has no plans to
issue any preferred stock nor adopt any series, preferences or other
classification of preferred stock.
The issuance of shares of preferred stock, or the issuance of rights to purchase
such shares, could be used to discourage an unsolicited acquisition proposal.
For instance, the issuance of a series of preferred stock might impede a
business combination by including class voting rights that would enable the
holder to block such a transaction, or facilitate a business combination by
including voting rights that would provide a required percentage vote of the
stockholders. In addition, under certain circumstances, the issuance of
preferred stock could adversely affect the voting power of the holders of the
common stock. Although the Board of Directors is required to make any
determination to issue such stock based on its judgment as to the best interests
of the stockholders of the Company, the Board of Directors could act in a manner
that would discourage an acquisition attempt or other transaction that some, or
a majority, of the stockholders might believe to be in their best interests or
in which stockholders might receive a premium for their stock over the then
market price of such stock. The Board of Directors does not at present intend to
seek stockholder approval prior to any issuance of currently authorized stock,
unless otherwise required by law or stock exchange rules. The Company has no
present plans to issue any preferred stock.
MARKET FOR ET's SECURITIES
ET is currently not trading but as a result of this merger has elected to
continue with the reporting requirements of the 1934 Securities and Exchange Act
as amended. The Entertainment Trends Corporation intends to apply for
application to trade on the Over The Counter Bulletin Board as soon as the
merger document has been filed with the Securities and Exchange Commission.
MANAGEMENT
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Name Age Title
------------------------------ ------------- ---------------------------
------------------------------ ------------- ---------------------------
James P. Massengale 49 President/Director
------------------------------ ------------- ---------------------------
------------------------------ ------------- ---------------------------
Carolyn J. Massengale 52 Vice President/Director
------------------------------ ------------- ---------------------------
------------------------------ ------------- ---------------------------
Bonita S. Clifton 42 Secretary/Director
------------------------------ ------------- ---------------------------
</TABLE>
James P. Massengale President/Director has 30 years of promotion and sales
experience. For the past five years he has been the owner and operator of
Beverly International Nutrition Southwest which is the wholly owned subsidiary
of Entertainment Trends Corporation, a nutrition and sports supplement wholesale
distributorship. Beverly International Nutrition Southwest markets Beverly
International Nutrition, high quality, researched products. Beverly
International SW wholesales to gyms and health and fitness stores and retails to
the general public in an exclusive territory of Texas, New Mexico, Colorado,
Oklahoma, Kansas, Missouri and Lousiana. James is the husband of Carolyn
Massengale who is a Vice President of our Company.
Carolyn Massengale Vice President/Director has 30 years of administrative
experience. For the past five years Carolyn has assisted in the operations of
Beverly international with her husband James Massengale by adding Beverly
International apparel and the Beverly International Web Site. Mrs. Massengale
also has 14 years of experience as a legal assistant. For the past five years
she has also been the administrative coordinator for National Physique Committee
athletic events. Carolyn is the wife of James Massengale our President.
Bonita S. Clifton Secretary/Director has been our Secretary and a director since
our inception. She has been self-employed since September of 1985 as an author
of fiction, although she devotes less than full time to such occupation. Mrs.
Clifton has an Associates of Applied Science Degree in Business from Blair
College in Colorado Springs, Colorado.
Executive Compensation
Entertainement Trends Corporation does not currently pay remuneration to its'
Officers and Directors. The three directors of the Company hold office until the
next annual meeting of shareholders or until their successors are elected and
qualified. At present, the Company's Bylaws provide for not less than one nor
more than five directors. Currently, there are three directors of the Company.
The Bylaws permit the Board of Directors to fill any vacancy and such director
may serve until the next annual meeting of shareholders or until his successor
is elected and qualified. Officers serve at the discretion of the Board of
Directors.
RISK FACTORS
Competition from larger and more established companies may hamper marketability.
ET may face intense competition from similar, more well established competitors,
including national, regional and local companies possessing substantially
greater financial, marketing, personnel and other resources than ET. ET may not
be able to market or sell its products if faced with direct product competition
from these larger or more established companies.
Issuance of future shares may dilute investors share value. The Articles of
Incorporation as amended of ET authorizes the issuance of 100,000,000 shares of
common stock and 50,000,000 shares of preferred stock. The future issuance of
all or part of the remaining authorized common stock may result in substantial
dilution in the percentage of the Company's common stock held by the its then
existing shareholders. Moreover, any common stock issued in the future may be
valued on an arbitrary basis by ET. The issuance of the Company's shares for
future services or acquisitions or other corporate actions may have the effect
of diluting the value of the shares held by investors, and might have an adverse
effect on any trading market, should a trading market develop for the Company's
common stock.
Current trading market for the Company's securities.
ET's common stock is not currently trading however upon the closing of the
merger ET plans to apply for a listing to trade its' stock on the OTC Bulletin
Board maintained by Nasdaq.
Penny Stock Regulation.
The Company's common stock may be deemed a penny stock. Penny stocks generally
are equity securities with a price of less than $5.00 per share other than
securities registered on certain national securities exchanges or quoted on the
Nasdaq Stock Market, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system. The Company's securities may be subject to "penny stock rules" that
impose additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual income exceeding
$200,000 or $300,000 together with their spouse). For transactions covered by
these rules, the broker-dealer must make a special suitability determination for
the purchase of such securities and have received the purchaser's written
consent to the transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the "penny stock rules"
require the delivery, prior to the transaction, of a disclosure schedule
prescribed by the Commission relating to the penny stock market. The
broker-dealer also must disclose the commissions payable to both the broker-
dealer and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information on the limited market in penny stocks. Consequently, the "penny
stock rules" may restrict the ability of broker-dealers to sell the Company's
securities. The foregoing required penny stock restrictions will not apply to
the Company's securities if such securities maintain a market price of $5.00 or
greater. There can be no assurance that the price of the Company's securities
will reach or maintain such a level.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Not applicable.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Pursuant to the Merger Agreement James P. Massengale will remain as
President, Carolyn J. Massengale will remain as Vice President and Director and
Bonita S. Clifton will remain as Secretary and Director of ET.
ITEM 7. FINANCIAL STATEMENTS
Enclosed are the audited Financial statements for the year ended December 31,
1999. The financial statements for the year ended December 31, 2000 will be
included in the annual report.
Entertainment Trends Corporation
December 31, 1999
Clyde Bailey, P.C.
Certified Public Accountant
10924 Vance Jackson #404
San Antonio, Texas 78230
CONTENTS
PAGE 1 - INDEPENDENT AUDITORS' REPORT
PAGE 2 - BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31, 1999
PAGE 3 - STATEMENT OF OPERATIONS FOR THE PERIOD
DECEMBER 31, 1999
PAGE 4 - STATEMENT OF CHANGES IN STOCKHOLDER'S
EQUITY FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR
THE SIX MONTHS ENDED JUNE 30, 2000
PAGE 5 - STATEMENT OF CASH FLOWS FOR THE YEAR ENDED
DECEMBER 31, 1999
PAGES 6 -8 - NOTES TO FINANCIAL STATEMENTS AS OF
DECEMBER 31, 1999
CLYDE BAILEY P.C.
--------------------------------------------------------------------------------
Certified Public Accountant
10924 Vance Jackson #404
San Antonio, Texas 78230
(210) 699-1287(ofc.)
(888) 699-1287 (210) 691-2911 (fax)
Member:
American Institute of CPA's
Texas Society of CPA's
Board of Directors
Entertainment Trends Corporation
INDEPENDENT AUDITOR'S REPORT
I have audited the accompanying balance sheet of Entertainment Trends
Corporation (Company) as of December 31, 1999 and the related statement of
operations, statement of stockholders' equity, and the statement of cash flows
for the year ended December 31, 1999. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these 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 used 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 Company as of December 31, 1999
and the results of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has no viable operations to date and little or
no tangible assets that raise substantial doubt about its ability to continue as
a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
S/ Clyde Bailey
Clyde Bailey P.C.
San Antonio, Texas
November 21, 2000
1
Entertainment Trends Corporation
Balance Sheet
As of December 31, 1999
<TABLE>
<S> <C> <C>
A S S E T S
Current Assets
Cash $ 1,501
Inventory 8,042
---------------------
Total Current Assets 9,543
------------------
Fixed Assets
Property and Equipment 17,610
--------------------
Less: Accumulated Depreciation (5,495)
--------------------
Total Fixed Assets 12,115
-----------------
Other Assets:
Franchise Fee, net 14,000 14,000
--------------------- ----------------
Total Assets $ 35,658
================
L I A B I L I T I E S
Current Liabilities
Other Current Liability -
--------------------
Total Current Liabilities -
-----------------
Total Liabilities -
Commitments and Contingencies -
S T O C K H O L D E R S ' E Q U I T Y
Preferred Stock
Common Stock 9,850
(Retroactively Restated)
Additional Paid-in-Capital 51,229
Accumulated Surplus (25,421)
----------------
Total Stockholders' Equity (Deficit) 35,658
----------------
Total Liabilities and Stockholders' Equity $ 35,658
================
</TABLE>
2
Entertainment Trends Corporation
Statement of Operations
As of December 31, 1999
<TABLE>
<S> ......................................... <C>
Revenues:
Revenues ............................. $
40,219
---------
Total Revenues
40,219
Cost of Revenues
Cost of Revenues
26,557
---------
Gross Profit
13,662
Expenses:
Rent
6,776
Depreciation Expense
3,964
Amortization Expense
1,000
Internet Service
5,231
Utilities
7,009
Other Expenses
5,952
---------
Total Expenses
29,932
Net Income (Loss) from Operations $
(16,270)
Provision for Income Taxes:
Income Tax Benefit (Expense)
---------
---------
Net Income (Loss) ................ $
(16,270)
=========
Basic and Diluted Earnings Per Common Share
(0.002)
---------
Weighted Average number of Common Shares .... 9,850,000
=========
used in per share calculations ........ *
* - Retroactively Restated
</TABLE>
3
Entertainment Trends Corporation
Statement of Stockholders' Equity
As of December 31, 1999
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<S> <C> <C> <C> <C> <C>
* *** $ 0.001 Paid-In Accumulated Stockholders'
* Shares Par Value Capital Deficit Equity
* --
Balance, January 1, 1999 9,850,000 $ 9,850 $ 51,229 $ (9,151) $ 51,928
Net Income (Loss) -- -- -- (16,270) (16,270)
--------
Balance June 30, 2000 9,850,000 $ 9,850 $ 51,229 $(25,421) $ 35,658
========
</TABLE>
Retroactively Restated
4
Entertainment Trends Corporation
Statement of Cashflows
As of December 31, 1999
<TABLE>
<S> <C>
Cash Flows from Operating Activities:
Net Income (Loss) $
(16,270)
Changes in operating assets and liabilities:
Depreciation /Amortization
4,964
Stock Issued for Services
--------
Inventory
(8,042)
Other Liabilities
--------
--------
Total Adjustments
(3,078)
--------
Net Cash Used in Operating Activities $
(19,348)
Cash Flows from Investing Activities:
Fixed Assets
(26,293)
--------
Net Cash Used in Investing Activities $
(26,293)
--------
Cash Flows from Financing Activities:
Note Payable
--------
Paid in Capital
45,937
--------
Net Cash Provided for Financing Activities $
45,937
--------
$
Net Increase (Decrease) in Cash 296
Cash Balance, Begin Period 1,205
--------
$
Cash Balance, End Period 1,501
========
Supplemental Disclosures:
Cash Paid for interest $ --
Cash Paid for income taxes $ --
Stock Issued for Services
</TABLE>
5
Entertainment Trends Corporation
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Organization
Entertainment Trends Corporation ("the Company") was incorporated under the laws
of the State of Texas on June 30, 1998 for the purpose to promote and carry on
any lawful business for which a corporation may be incorporated under the laws
of the State of Delaware. The company has a total of 100,000,000 authorized
common shares with a par value of $.001 per share and with 9,850,000 shares
issued and outstanding as of December 31, 1999. On February 24, 2000, an
amendment to the Articles of Incorporation was filed with the Texas Secretary of
State to increase the authorized common shares to 100,000,000 authorized and
50,000,000 in preferred shares.
On July 5, 1998, the Company acquired Beverly International Nutrition (Beverly)
as a division of the Company. Beverly offers quality, researched dietary
supplements, vitamins, minerals, and health and fitness related products.
Federal Income Tax
The Company has adopted the provisions of Financial Accounting Standards Board
Statement No. 109, Accounting for Income Taxes. The Company accounts for income
taxes pursuant to the provisions of the Financial Accounting Standards Board
Statement No. 109, "Accounting for Income Taxes", which requires an asset and
liability approach to calculating deferred income taxes. The asset and liability
approach requires the recognition of deferred tax liabilities and assets for the
expected future tax consequences of temporary differences between the carrying
amounts and the tax basis of assets and liabilities.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure on
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.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. Revenues are recognized when earned and expenses when incurred.
Fixed assets are stated at cost. Depreciation and amortization using the
straight-line method for financial reporting purposes and accelerated methods
for income tax purposes.
Inventory
Inventory consists of nutritional products and is valued at cost.
6
Entertainment Trends Corporation
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies (con't)
Fixed Assets
Fixed Assets are recorded at cost and depreciated over the useful lives of the
assets. The assets consist of computer equipment and furniture and equipment.
Beverly holds a franchise with Beverly International to market the nutritional
products. A total of $15,000 was paid for the franchise and is being amortized
over 15 years.
Earnings per Common Share
The Company adopted Financial Accounting Standards (SFAS) No. 128, "Earnings Per
Share," which simplifies the computation of earnings per share requiring the
restatement of all prior periods.
Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.
Diluted earnings per share are computed on the basis of the weighted average
number of common shares and dilutive securities outstanding. Dilutive securities
having an anti-dilutive effect on diluted earnings per share are excluded from
the calculation.
Comprehensive Income
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No.130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements. The Company does not have any assets requiring disclosure
of comprehensive income.
Segments of an Enterprise and Related Information
Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information, supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
establishes standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance. The Company has evaluated this SFAS and does not believe it is
applicable at this time.
7
Entertainment Trends Corporation
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies (con't)
Accounting for Derivative Instruments and Hedging Activities
Statement of Financial Accounting Standards (SFAS) 133, "Accounting for
Derivative Instruments and Hedging Activities," establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain conditions are
met, a derivative may be specifically designated as (a) a hedge of the exposure
to changes in the fair value of a recognized asset or liability or an
unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows
of a forecasted transaction, or (c) a hedge of the foreign currency exposure of
a net investment in a foreign operation, an unrecognized firm commitment, an
available-for sale security, or a foreign-currency-denominated forecasted
transaction. Because the Company has no derivatives, this accounting
pronouncement has no effect on the Company's financial statements.
Note 2 - Common Stock
In July 0f 1998, a total of 985,000 shares of stock were issued for founders and
consulting services. On February 24, 2000, the Company approved a 10 to 1
forward split of the outstanding shares. There were a total of 985,000
outstanding prior to the forward split, which relates to 9,850,000 shares
outstanding. The financial statements have been retroactively restated to record
this forward split.
Note 3 - Related Parties
There were no significant related party transactions.
Note 4 - Going Concern
The Company has had little or no operations to date, has little or no tangible
assets or financial resources, and incurred losses since inception. These losses
and lack of operations raise substantial doubt about the Company's ability to
continue as a going concern.
8
Entertainment Trends Corporation
Notes to Financial Statements
Note 5 - Income Taxes
Deferred income taxes arise from temporary differences resulting from the
Company's subsidiary utilizing the cash basis of accounting for tax purposes and
the accrual basis for financial reporting purposes. Deferred taxes are
classified as current or non-current, depending on the classification of the
assets and liabilities to which they relate. Deferred taxes arising from timing
differences that are not related to an asset or liability are classified as
current or non-current depending on the periods in which the timing differences
are expected to reverse. The Company's previous principal temporary differences
relate to revenue and expenses accrued for financial purposes, which are not
taxable for financial reporting purposes. The Company's material temporary
differences consist of bad debt expense recorded in the financial statements
that is not deductible for tax purposes and differences in the depreciation
expense calculated for financial statement purposes and tax purposes.
Note 6 - Subsequent Events
There were no other material subsequent events that have occurred since the
balance sheet date that warrants disclosure in these financial statements.
9
ITEM 8. CHANGE IN FISCAL YEAR
Not applicable.
EXHIBITS
1.1 Agreement and Plan of Merger between Daljama, Inc. and Entertainment Trends
Corporation.
1.2 Articles of Merger between Daljama, Inc. and Entertainment Trends
Corporation
27.1 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Current Report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
ENTERTAINMENT TRENDS, INC.
By /s James P. Massengale
President
Date: November 21, 2000
