<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[ ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________.
Commission File No. 0-9614
CADEMA CORPORATION
----------------------------------------------
(Name of small business issuer in its charter)
DELAWARE 88-0160741
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
c/o Number One Corporation
50 Washington Street, Norwalk CT 06854
-----------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number, including area code: (203) 854-6711
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act:
(Title of class) Common Stock, $0.01 Par Value
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 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 [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. ( X )
State issuer's revenues for its most recent fiscal year $0. As of February 7,
2000, the aggregate market value of common stock held by non-affiliates of the
registrant, based on the average of the bid and asked prices of such stock as
reported by the National Association of Securities Dealers, Inc. on such date,
was approximately $1,721,536.
There were 10,905,549 shares of the Registrant's common stock outstanding as of
February 7, 2000.
Documents incorporated by reference: None
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [X]
<PAGE> 2
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
Except for the historical information contained herein, the matters
discussed in this Annual Report are forward-looking statements which involve
risks and uncertainties, including but not limited to economic, competitive,
governmental and other factors affecting the Company's revenues and operations
and other factors discussed in the Company's various filings with the Securities
and Exchange Commission.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL DEVELOPMENT
Cadema Corporation (the "Company" ) finances and operates business
enterprises that have the potential to generate profits and positive cash flow.
The predecessor of the Company (Nevada Resources, Inc.) was
incorporated in Nevada in 1980, at which time it acquired certain mining
equipment and interests in undeveloped mining properties. The Company has been
publicly held since 1980. In 1985, the Company decided to diversify its
operations and, in September 1986, effected a merger with Cadema, Inc., a
privately held company. Although the Company originally was engaged in mineral
exploration, the 1986 acquisition of Cadema, Inc. changed the Company's primary
business to the commercialization of medical technology. All mining interests
have been sold or have been allowed to lapse. The Company was re-incorporated in
Delaware in December 1986 and changed its name to Cadema Corporation.
From 1986 until July 1992, the Company's business had been the sale of
medical products cleared by the Food and Drug Administration (FDA) and the
development of new products for which FDA clearance was sought. In 1987, the
Company raised approximately $3,900,000 in net proceeds through the public sale
of preferred stock to finance these operations. The Company left the medical
products business with the sale of its medical product lines in 1990 and 1992.
On July 15, 1992, the Company acquired SuperCads, Inc. (known by its
business name of "Cognition") and its primary business changed to computer
software products. Cognition was sold in May 1993, and with this sale the
Company no longer engaged in the computer software business.
On December 31, 1993, the Company entered into a Joint Venture
Agreement with Global Environmental Corp. which created Global Environmental
Offshore Company ("Global") which previously engaged in contracting for the
design and installation of air pollution control equipment and facilities in
areas located outside the United States. Global previously provided design,
assembly and project management services related to the construction of air
pollution control systems. Global's business was inactive during fiscal 1999.
Cadema owns 51% of Global.
Unless the context otherwise indicates, all references herein to Cadema
or the Company include Cadema Corporation and its subsidiary and predecessors.
1
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The Company is still exploring other possible acquisitions and mergers,
as it has done in the past, seeking to enter into new operating businesses and
to use the Company's liquid assets in connection therewith.
The Company has also used available cash to purchase, hold and dispose
of equity interests in various high technology companies as outlined in a plan
approved by stockholders in 1988. Securities transactions in 1999 netted a loss
of $ 70,493. The Company intends to continue to invest in trading securities,
including but not limited to stocks, bonds, options and warrants. The Company
previously invested, and expects in the future to invest, primarily in stocks of
smaller, lesser known and often more speculative companies, which while
entailing above average risk, offer the potential of above average return on
investment. See Note 4 to Consolidated Financial Statements.
NUMBER OF EMPLOYEES
The Company's Chief Executive Officer and President, Mr. Roger D.
Bensen, was the sole employee as of December 31, 1999 and was not compensated
for serving in such capacity.
ITEM 2. DESCRIPTION OF PROPERTY
The Company does not currently own or lease any real property.
ITEM 3. LEGAL PROCEEDINGS
No material legal proceedings are pending to which the Company is a
party or to which any of its property is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no meetings of stockholders during the fourth quarter of
1998 nor were any matters submitted for vote.
2
<PAGE> 4
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Common Stock ("Common Stock")and the Series A 8% Cumulative
Convertible Preferred Stock ("Preferred Stock")of the Company trade on the
Nasdaq Bulletin Board under the symbols CDMA and CDMAP, respectively. Effective
May 25, 1993 these shares commenced trading on the Nasdaq Bulletin Board System.
Previously these shares had traded on the Nasdaq Small Cap Market but were
removed from this market due to failure to meet administrative requirements. The
following Table sets forth, for the respective periods indicated, the prices of
the Common Stock and Preferred Stock in the over-the-counter market, based upon
inter-dealer high and low bid prices, without retail mark-up, mark-down,
commissions or adjustments (and may not represent actual transactions), as
reported and summarized by the National Association of Securities Dealers
Automated Quotation Service.
COMMON PREFERRED
------ ---------
HIGH LOW HIGH LOW
--------------------- -----------------------
4th Quarter 1999 $.50 $.02 $.66 $.31
3rd Quarter 1999 $.04 $.02 $.41 $.21
2nd Quarter 1999 $.06 $.01 $.62 $.33
1st Quarter 1999 $.03 $.01 $.39 $.33
4th Quarter 1998 $.02 $.01 $.34 $.30
3rd Quarter 1998 $.03 $.01 $.34 $.30
2nd Quarter 1998 $.03 $.01 $.34 $.30
1st Quarter 1998 $.03 $.01 $.34 $.30
The approximate number of stockholders of record of the Company's
Common Stock and Preferred Stock as of February 7, 2000, were 1005 and 284
respectively, as set forth on the books of the transfer agent/registrar of the
Company. The Company believes that a substantial number of additional
stockholders hold their shares in nominee name.
DIVIDENDS
The Company has not paid any dividends on its Common Stock since
inception and plans to retain any earnings for the future development of its
business. Future dividends on the Common Stock, if any, will be dependent upon
the Company's earnings, financial condition, and other relevant factors as
determined by its Board of Directors. Annual cumulative dividends of $0.40 per
share of Preferred Stock are payable semi-annually in cash or common stock
unless they are deferred by the Board of Directors. The dividends that were
payable during 1993 through 1999 were deferred and have accumulated for possible
payment at a later date.
3
<PAGE> 5
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company's primary focus in 1999 was to seek additional joint
venture partners since its existing Joint Venture investee, Global Environmental
Offshore Company, generated no revenues in 1999. Global was set up to provide
pollution control services for international customers.
The Company continues in its principal business of seeking and
financing business enterprises with the potential to generate profits and
positive cash flow. The Company's previous entry into the pollution control
business is part of this strategy. New opportunities were evaluated in 1999 but
none were deemed appropriate to enter into.
The Company intends to continue using its available funds to purchase,
invest in and sell securities as outlined in a plan approved by stockholders in
1988.
In the near future, the Company will need to restructure its joint
venture, Global Environmental Offshore Company. During 1996, Global
Environmental Corp., the other party to the joint venture, disposed of one of
its subsidiaries which produced products of the type the Joint Venture was
intending to sell internationally. Therefore, the Company is currently
reevaluating its Joint Venture's status and plans. In connection with the
formation of the Joint Venture, the Joint Venture loaned $345,000 to Global
Environmental Corp., which was due to be repaid on December 31, 1996. Global
Environment Corp. does not presently have available funds to make such a
repayment. Global Environmental Corp. has offered to exchange its stock for the
note. The Company has established a 75% reserve against the carrying value of
the aforementioned note in recognition of the potential costs involved in
liquidating any noncash settlement of this investment. Negotiations are
continuing to resolve this issue.
During 1999, Cadema reviewed potential acquisition opportunities, as it
continues to move toward its goal to become a larger company. All negotiations
failed, however, because of a continuing problem with the existence of the
Company's Preferred Stock. Originally issued 12 years ago, the Preferred Stock
initially paid dividends in cash, and then paid them in shares of Common Stock,
as provided for in its certificate of Designation for the Preferred Stock. This
practice was continued for many years until Cadema's liquidity was impaired by
the losses brought on by the Cognition acquisition and its subsequent disposal.
Over the past several years, Preferred Stock dividends have been accrued rather
than paid, because the Company has been unable to pay dividends.
Management believes that investors understand the practical limitation
on payment of dividends by a company the size of Cadema. If the Company were to
issue more shares of Common Stock, in lieu of a cash dividend, at the past
year's price of $.01, stockholders would be substantially diluted. Management is
reviewing this situation.
In Cadema's case, all stockholders have a common interest in the value
of the Common Stock. Even individuals who only purchased the Preferred Stock now
have Common Stock because of dividends they received in Common Stock. Management
is working toward a solution to resolve this matter pertaining to the Preferred
Stock.
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The Company has experienced no impact on its operations from the Year
2000 issue. No impact is expected in the future.
RESULTS OF OPERATIONS
FISCAL 1999 COMPARED TO FISCAL 1998
In 1999, Global generated no revenues. Therefore operating results
present Cadema's administrative expenses and marketable securities activity.
REVENUES
Global generated no orders in 1999 and so revenues were $0 the same as
in 1998. The Joint Venture continues to seek revenue opportunities.
GENERAL AND ADMINISTRATIVE
General and administrative expenses, costs incurred in maintaining the
Company, were $46,187 in 1999, down slightly from 1998's $47,470.
TRADING SECURITIES TRANSACTIONS
Trading securities investment activity generated a realized gain of
$14,002 in 1999 compared to a realized loss of $86,420 in 1998. The securities
portfolio also generated an unrealized loss of $84,495 in 1999, compared to the
1998 unrealized loss of $134,549. The performance of individual stocks
comprising the trading securities holdings are the cause of these results.
FISCAL 1998 COMPARED TO FISCAL 1997
In 1998, Global generated no revenues. Therefore operating results
present Cadema's administrative expenses and marketable securities activity.
REVENUES
Global generated no orders in 1998 and so revenues were $0 the same as
in 1997. The Joint Venture continues to seek revenue opportunities.
GENERAL AND ADMINISTRATIVE
General and administrative expenses, costs incurred in maintaining the
Company, were $47,470 in 1998, up slightly from 1997's $46,273.
In 1998, the Company took an additional $18,000 reserve against the note
receivable from the Joint Venture whereas in 1997 an additional $70,000 reserve
was established.
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FISCAL 1998 COMPARED TO FISCAL 1997 (CONT.)
TRADING SECURITIES TRANSACTIONS
Trading securities investment activity generated a realized loss of
$86,420 in 1998 compared to a realized gain of $75,339 in 1997. The securities
portfolio also generated an unrealized loss of $134,549 in 1998, compared to the
1997 unrealized loss of $211,054. The performance of individual stocks
comprising the trading securities holdings are the cause of these results.
LIQUIDITY AND CAPITAL RESOURCES
Working capital was $152,579 at the end of 1999, down from $269,045 in
1998. Management believes this resource is sufficient for funding the Company's
anticipated needs in 1999.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------
OPERATING DATA: 1999 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue -- -- --
Cost of Goods Sold -- -- --
Operating Expenses $ 46,187 $ 65,470 $ 116,273
Other Expense (70,280) (219,365) (132,498)
Loss Before
Income Taxes (116,467) (284,835) (248,771)
Provision for Income
Taxes -- -- --
Preferred Dividends Earned (169,781) (169,781) (169,781)
Net Loss
Applicable to Common Stockholders (286,248) (454,616) (418,552)
Net Loss per Common Share -
Basic and Diluted (.03) (.04) (.04)
Weighted Average Common Shares
Outstanding 10,905,549 10,905,549 10,905,549
BALANCE SHEET DATA:
Working Capital 152,579 269,045 535,880
Total Assets 250,329 366,795 651,630
Total Current Liabilities 13,000 13,000 13,000
Stockholders' Deficiency (958,436) (672,188) (217,572)
</TABLE>
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated herein by reference are the Consolidated Financial
Statements and Schedules of the Company and its Subsidiary filed with and made a
part of this report. (Also see Item 13 of this Report.)
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES
Not applicable.
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
The Directors and Executive Officers of the Company are as follows:
<TABLE>
<CAPTION>
DIRECTOR OR OFFICER
NAME AGE POSITION SINCE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roger D. Bensen 64 Chairman of the Board, Chief Executive 1983
Officer and President/Director
Richard B. Ames 61 Director 1985
</TABLE>
All directors and officers of Cadema serve for a term of one year and
until their respective successors are duly elected and qualified. There are no
family relationships among any officers and directors.
ROGER D. BENSEN has been Chairman of the Board of Directors of Cadema
since February 12, 1983. He is Chief Executive Officer of Cadema and was
President of the Company from September 1990 until July 1992 and became
President again in May 1993 until present. Mr. Bensen has been President of the
Number One Corporation, a privately held financial consulting firm based in
Norwalk, Connecticut, for 25 years. He is also the President of Roundel
Petroleum Exploration Company, Inc., a privately held company that is engaged in
the exploration and production of oil and gas. Mr. Bensen devotes such time as
is necessary to perform his duties as an officer and director of Cadema.
RICHARD B. AMES became a director of Cadema in February 1985. Mr. Ames
is President of Ames and Associates, an independent investment consulting
company in Eureka, California. From 1981 until the formation of his present
company, Mr. Ames was Associate Vice President for Dean Witter Reynolds, Inc., a
member of the New York Stock Exchange, at their Eureka office.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
All necessary reports required to be filed pursuant to Section 16(a) of
the Securities Exchange Act of 1934 have been filed on a timely basis. In making
these statements, the Company has relied on representations of its incumbent
directors and officers (and its ten percent holders) and copies of the reports
that they have filed with the Securities and Exchange Commission.
ITEM 10. EXECUTIVE COMPENSATION
Roger D. Bensen received no salary or compensation in the last three
fiscal years. No officer received compensation of more than $100,000 in any of
the last three fiscal years.
7
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STOCK OPTION PLANS:
1986 PLAN
In November 1986, the Board of Directors of the Company adopted the
Company's 1986 Stock Option Plan (the "1986 Plan") and the plan was approved by
the Company's stockholders on December 15, 1986. Options intended to qualify as
incentive stock options and nonqualified options may be granted under the 1986
Plan. The aggregate number of shares which may be issued under the 1986 Plan may
not exceed 600,000 shares of Common Stock. The purpose of the 1986 Plan is to
provide eligible employees, officers and directors of the Company with an
opportunity to acquire or increase their equity interest in the Company, and
thereby to induce them to remain in the Company's service. In 1999, 1998 and
1997, no options were granted and no options expired. As of December 31, 1999,
no options were outstanding and options covering 600,000 shares of Common Stock
were available under the 1986 Plan.
OTHER STOCK OPTIONS
In 1999, 1998, and 1997 no options were granted, exercised, terminated
or expired. As of December 31, 1999 there were no options outstanding.
OTHER EXECUTIVE PLANS
The Company has no long term incentive or pension plans.
COMPENSATION OF DIRECTORS
In 1999, 1998 and 1997, the directors did not receive compensation for
their services. Currently there are no standard arrangements for the
compensation of directors for their services.
8
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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following Table sets forth information as of the February 7, 2000,
regarding the voting securities of the Company owned by each person who owns of
record, or is known by the Company to own beneficially, more than five percent
of any class of voting securities and by each director of the Company and all
directors and officers of the Company as a group. None of the directors or
officers are holders of record of Preferred Stock.
<TABLE>
<CAPTION>
TITLE NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF CLASS PERCENT OF
OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) VOTING STOCK
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Roger D. Bensen 2,620,352 shares (2)(3) 23.9 22.5
50 Washington Street
Norwalk, CT 06854
Common Richard B. Ames 87,406 shares .8 .7
730 7th Street (4)
Eureka, CA 95501
Common All Directors and Officers as a Group 2,707,758 shares 24.8 23.3
(2 Persons)
Preferred Anne W. Bensen 30,000 shares 6.2 --
69 Dandy Drive (5)(6)
Cos Cob, CT 06807
</TABLE>
(1) Shares of Common Stock which a person has the right to acquire
within 60 days after January 31, 2000 are deemed to be outstanding in
calculating the percentage ownership of the person, but are not deemed to be
outstanding as to any other person.
(2) Includes shares owned of record by Roundel Petroleum Exploration
Company, Inc., (which is a privately held company controlled by Mr. Bensen).
Also includes warrants currently exercisable by Roundel Petroleum Exploration
Company, Inc. to purchase 180,000 shares of Common Stock.
(3) Includes 140,352 shares of Common Stock held by Anne Bensen, Mr.
Bensen's wife, as to which Mr. Bensen disclaims beneficial ownership and as to
which he has no voting or investment powers. Does not include a total of 30,000
shares of Preferred Stock held by Mr. Bensen's wife as to which he disclaims
beneficial ownership and as to which he has no voting or investment powers.
(4) Includes warrants currently exercisable by Mr. Ames to purchase
1,000 shares of Common Stock. Includes 13,713 shares of Common Stock held by Mr.
Ames' wife, as to which Mr. Ames disclaims beneficial ownership and as to which
he has no voting or investment powers.
(5) The Preferred Stock is the Series A 8% Cumulative Convertible
Preferred Stock, which has one vote per share, voting together with the Common
Stock, and is currently convertible into 1.79 shares of Common Stock for each
share of Preferred Stock.
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(6) Does not include 2,300,000 shares of Common Stock held by Roger D.
Bensen, Mrs. Bensen's husband, as to which Mrs. Bensen disclaims beneficial
ownership and as to which she has no voting or investment powers.
Mrs. Bensen also owns 140,352 shares of common stock.
Anne W. Bensen is the wife of Roger D. Bensen.
By virtue of his ownership of shares of Common Stock and his service as
Chief Executive Officer and a Director, Mr. Bensen controls the management and
affairs of the Company.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Although Mr. Bensen does not receive compensation for his services to
the Company, he may receive compensation in the future as determined by the
Board of Directors.
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PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
A. FINANCIAL STATEMENTS.
Incorporated herein by reference are Consolidated Financial Statements
and Schedules of the Company and its Subsidiary filed with and made a part of
this report
B. EXHIBITS
Exhibit Number Description
- ----------------------------------------------------------------
3.1 Certificate of Incorporation, as amended (2)
3.2 Bylaws of the Company (1)
3.3 Form of Certificate of Designation of Series A
Preferred Stock (2)
3.4 Form of Certificate of Designation of Series B
Preferred Stock (2)
10.1 1986 Stock Option Plan (1)
10.2 Form of Indemnity Agreement (2)
10.3 Stock Purchase Agreement SuperCads, Inc., dated as of
July 15, 1992. (3)
10.4 Securities Exchange Agreement dated as of May 27, 1993(4)
10.5 Global Environmental Offshore Company Joint Venture
Agreement dated as of December 31, 1993 (5)
21.0 Subsidiary of Registrant (2)
27.0 Financial Data Schedule
(1) Filed as Exhibits to the Company's Form 10-KSB for the fiscal year
ended December 31, 1986 and incorporated herein by reference.
(2) Filed as Exhibits to the Company's Registration Statement on Form S-1
(File No. 33-14459) declared effective July 20, 1987 and incorporated
herein by reference.
(3) Filed as Exhibit to the Company's Form 8-K dated July 15, 1992 and
incorporated herein by reference.
(4) Filed as Exhibit to the Company's Form 8-K dated May 28, 1993 and
incorporated herein by reference.
(5) Filed as Exhibit to the Company's From 10-KSB dated December 31, 1995
and incorporated herein by reference.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the last quarter of the fiscal
year ended December 31, 1999.
11
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ITEM 7 - FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
CADEMA CORPORATION AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS F-2
FINANCIAL STATEMENTS:
Consolidated Balance Sheets - December 31, 1999 and 1998 F-3
Consolidated Statements of Operations for Each of the
Three Years in the Period Ended December 31, 1999 F-4
Consolidated Statements of Changes in Stockholders' Equity (Deficiency)
for Each of the Three Years in the Period Ended December 31, 1999 F-5
Consolidated Statements of Cash Flows for Each of the
Three Years in the Period Ended December 31, 1999 F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F-7 to F-14
</TABLE>
Schedules not listed above are omitted since they are either not applicable or
the required information is presented in the financial statements or related
notes thereto.
F-1
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Board of Directors
Cadema Corporation
Norwalk, Connecticut
We have audited the accompanying consolidated balance sheets of Cadema
Corporation and Subsidiary as of December 31, 1999 and 1998, and the related
consolidated statements of operations, changes in stockholders' equity
(deficiency) and cash flows for each of the three years in the period ended
December 31, 1999. 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Cadema Corporation
and Subsidiary as of December 31, 1999 and 1998, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1999, in conformity with generally accepted accounting principles.
/s/ Rudolph, Palitz LLC
Blue Bell, PA
February 8, 2000
F-2
<PAGE> 15
CADEMA CORPORATION AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS DECEMBER 31,1999 DECEMBER 31,1998
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 13,054 $ 13,829
Trading securities (Cost $540,655 in 150,881 267,067
1999 and $701,321 in 1998) (Notes 2 and 4)
Other current assets 1,644 1,149
----------- -----------
TOTAL CURRENT ASSETS 165,579 282,045
NOTE RECEIVABLE less allowance for bad
debt of $260,250 in 1999 and 1998
(Note 3) 84,750 84,750
----------- -----------
TOTAL ASSETS $ 250,329 $ 366,795
=========== ===========
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
CURRENT LIABILITIES:
Accrued liabilities $ 13,000 $ 13,000
----------- -----------
TOTAL CURRENT LIABILITIES 13,000 13,000
Accrued dividends on preferred stock
(Note 6) 1,188,469 1,018,687
Minority Interest in Subsidiary (Note 3) 7,296 7,296
----------- -----------
TOTAL LIABILITIES 1,208,765 1,038,983
----------- -----------
STOCKHOLDERS' DEFICIENCY (Notes 2,6 and 7)
Series A 8% Cumulative Convertible 4,851 4,851
Preferred Stock, par value $.01 per share;
authorized 5,000,000 shares; issued 485,123
shares in 1999 and 1998 -- --
Series B 8% Cumulative Convertible
Preferred Stock, par value, $.01 per -- --
Share; authorized, 150,000 shares,
none issued
Common Stock, par value, $.01 per share; 109,356 109,356
authorized 50,000,000 shares, issued
10,935,549 shares in 1999 and 1998
Additional paid=in capital 7,765,904 7,765,904
Accumulated deficit (8,742,177) (8,455,929)
Less: Treasury stock at cost
Common shares (75,000) (75,000)
Preferred shares (21,370) (21,370)
----------- -----------
TOTAL STOCKHOLDERS'DEFICIENCY (958,436) (672,188)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIENCY $ 250,329 $ 366,795
=========== ===========
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
F-3
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CADEMA CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
REVENUE -- -- --
COST OF GOODS SOLD -- -- --
------------ ------------ ------------
GROSS PROFIT -- -- --
OPERATING EXPENSES:
General and admin. (Notes 1 & 7) $ 46,187 $ 47,470 $ 46,273
Loss on Joint Venture (Note 3) -- 18,000 70,000
------------ ------------ ------------
Total operating expenses 46,187 65,470 116,273
------------ ------------ ------------
Loss from operations (46,187) (65,470) (116,273)
OTHER INCOME (EXPENSE):
Trading Securities Transactions
(Notes 2 and 4)
Realized gains (losses) 14,002 (86,420) 75,339
Unrealized gains (losses) (84,495) (134,549) (211,054)
Dividend income 213 1,604 3,217
------------ ------------ ------------
Total other income (expense) (70,280) (219,365) (132,498)
------------ ------------ ------------
LOSS BEFORE INCOME TAXES (116,467) (284,835) (248,771)
PROVISION FOR INCOME TAXES (Note 5) -- -- --
------------ ------------ ------------
NET LOSS (Note 7) (116,467) (284,835) (248,771)
PREFERRED DIVIDENDS EARNED (NOTE 6) (169,781) (169,781) (169,781)
------------ ------------ ------------
NET LOSS APPLICABLE TO
COMMON STOCKHOLDERS (Notes 2 and 6) $ (286,248) $ (454,616) $ (418,552)
============ ============ ============
WEIGHTED AVERAGE COMMON SHARES 10,905,549 10,905,549 10,905,549
============ ============ ============
OUTSTANDING (Notes 2 and 6)
LOSS PER COMMON SHARE
BASIC AND DILUTED
(Notes 2 and 6): $ (0.03) $ (0.04) $ (0.04)
============ ============ ============
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements
F-4
<PAGE> 17
CADEMA CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK
------------------ ---------------------- TOTAL
NUMBER ADDITIONAL TREASURY STOCKHOLDERS'
NUMBER OF OF PAID-IN ACCUMULATED STOCK, EQUITY
SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT AT COST (DEFICIENCY)
-------- ------ ---------- -------- ---------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, December 31, 1996 485,123 $4,851 10,935,549 $109,356 $7,765,904 ($7,582,761) ($96,370) $ 200,980
-------- ------ ---------- -------- ---------- ----------- -------- -----------
Preferred dividend accrued
(Note 6) -- -- -- -- -- (169,781) -- (169,781)
Net Loss - 1997 -- -- -- -- -- (248,771) -- (248,771)
-------- ------ ---------- -------- ---------- ----------- -------- -----------
BALANCE, December 31, 1997 485,123 $4,851 10,935,549 $109,356 $7,765,904 ($8,001,313) ($96,370) ($217,572)
-------- ------ ---------- -------- ---------- ----------- -------- -----------
Preferred dividend accrued
(Note 6) -- -- -- -- -- (169,781) -- (169,781)
Net Loss - 1998 -- -- -- -- -- (284,835) -- (284,835)
-------- ------ ---------- -------- ---------- ----------- -------- -----------
BALANCE, December 31, 1998 485,123 $4,851 10,935,549 $109,356 $7,765,904 ($8,455,929) ($96,370) ($672,188)
-------- ------ ---------- -------- ---------- ----------- -------- -----------
Preferred dividend accrued
(Note 6) -- -- -- -- -- (169,781) -- (169,781)
Net Loss - 1999 -- -- -- -- -- (116,467) -- (116,467)
-------- ------ ---------- -------- ---------- ----------- -------- -----------
BALANCE, December 31, 1999 485,123 $4,851 10,935,549 $109,356 $7,765,904 ($8,742,177) ($96,370) ($958,436)
======== ====== ========== ======== ========== =========== ======== ===========
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements
F-5
<PAGE> 18
CADEMA CORPORATION AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES 1999 1998 1997
---------- ---------- ----------
<S> <C> <C> <C>
Net loss ($116,467) ($284,835) ($248,771)
Adjustments to reconcile net loss to
net cash used in operating
activities
Provision for uncollectible note
receivable -- 18,000 70,000
Realized (gain) loss on sale of
trading securities (14,002) 86,420 (75,339)
Unrealized loss in value
of trading securities 84,495 134,549 211,054
Increase in other
current assets (495) (99) (282)
--------- --------- ---------
Net cash used in operating
activities (46,469) (45,965) (43,338)
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of trading securities (37,122) (74,336) (290,553)
Proceeds from sales of trading
securities 82,816 85,448 375,256
--------- --------- ---------
Net cash provided by investing
activities 45,694 11,112 84,703
--------- --------- ---------
Net increase (decrease) in cash (775) (34,853) 41,365
Cash and equivalents- Beginning of Year 13,829 48,682 7,317
--------- --------- ---------
Cash and equivalents- End of Year $ 13,054 $ 13,829 $ 48,682
========= ========= =========
SUPPLEMENTAL DISCLOSURES OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
Preferred Stock Dividends Accrued $ 169,781 $ 169,781 $ 169,781
========= ========= =========
</TABLE>
The accompanying notes to the consolidated financial statements
are an integral part of these statements.
F-6
<PAGE> 19
CADEMA CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR EACH OF THE THREE YEARS ENDED DECEMBER 31, 1999
(1) NATURE OF BUSINESS AND CURRENT OPERATING ENVIRONMENT:
The principal business of Cadema Corporation (the "Company") is the
financing and operating of business enterprises with the potential to
generate profits and cash flow. Currently the Company is exploring
possible acquisitions and mergers throughout the United States and
abroad, as it has done in the past, seeking to enter into new operating
businesses and to use the Company's liquid assets in connection
therewith. As part of this strategy, the Company entered into a joint
venture agreement with Global Environmental, Inc. in December 1993. The
Company did not generate any revenues from operations in 1997, 1998 or
1999, and is currently pursuing additional business opportunities.
While the principal business of the Company is the financing and
operating of business enterprises with the potential to generate
profits and cash flow, it still intends to invest in and sell
marketable securities as outlined in a plan approved by stockholders in
1988.
The Company intends to continue to invest in trading securities,
including but not limited to stocks, bonds, options and warrants.
The Company now holds and currently expects to invest primarily in the
stock of smaller, lesser known and often more speculative companies,
which while entailing above-average risk, offer the potential of
above-average reward.
There are significant risk factors affecting the Company, including
potential operating losses it may incur from operating ventures, the
volatility of market values of its investment securities portfolio, and
the possible need for additional capital. These and other factors may
adversely affect the Company's future operations.
(2) SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid instruments purchased with an
original maturity of three months or less to be cash equivalents
TRADING SECURITIES
In accordance with Statement of Financial Accounting Standards (SFAS)
No. 115, Accounting for Certain Investments in Debt and Equity
Securities, the Company classifies marketable securities as trading and
records them at fair market value, with unrealized gains and losses
reported as a component of net income (loss).
Realized gains and losses are determined on a first-in, first-out
basis.
F-7
<PAGE> 20
(2) SIGNIFICANT ACCOUNTING POLICIES: (CONT.)
LOSS PER COMMON SHARE
The Company adopted Statement of Financial Accounting Standards No. 128
(SFAS No. 128), "Earnings per Share," during the year ended December
31, 1997. SFAS No.128 replaced the previously reported primary and
fully diluted earnings per share with basic and diluted earnings per
share, respectively. Unlike the previously reported primary earnings
per share, basic earnings per share excludes the dilutive effects of
stock options. Diluted earnings per share is similar to the previously
reported fully diluted earnings per share. All convertible preferred
stock series, options and warrants outstanding presently have an
anti-dilutive effect and, accordingly, no calculations of diluted loss
per share have been presented. Loss per share amounts for all periods
presented have been calculated in accordance with the requirements of
SFAS No. 128 (Note 6) and determined by dividing the net loss by the
weighted average number of common shares outstanding during the period.
There were 10,905,549 weighted average number of shares outstanding
during 1999, 1998 and 1997.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of management's
estimates.
STOCK-BASED COMPENSATION
In October 1995, FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation", ("Statement") which provides an alternative method of
accounting for stock-based compensation arrangements, based on fair
value of the stock-based compensation utilizing various assumptions
regarding the underlying attributes of the options and the Company's
stock, rather than the existing method of accounting for stock-based
compensation which is provided in Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued To Employees" (APB No. 25). FASB
encourages entities to adopt the fair value-based method but does not
require adoption of this method. SFAS No. 123 became effective for
fiscal years beginning after December 15, 1995. The Company is
continuing its current accounting policy and has adopted the
"disclosure only" provisions of SFAS No. 123. SFAS No. 123 had no
impact on the Company's financial position or results of operations for
1997, 1998 and 1999.
F-8
<PAGE> 21
(3) JOINT VENTURE:
On December 31, 1993 the Company entered into a Joint Venture Agreement
with Global Environmental, Corp., a New York corporation, to create the
Joint Venture entity Global Environmental Offshore Company ("Global" or
"Joint Venture"). The Joint Venture Company engages in contracting for
the design and installation of Air Pollution Control equipment and
facilities in areas located outside the United States. Under the terms
of the Joint Venture Agreement, the Company contributed $350,000 and
received 51% of control of the Joint Venture.
Under the Joint Venture Agreement, Global Environmental, Corp. has the
right to acquire the Company's interest in the Joint Venture for, at the
Company's option, 875,000 shares of Global stock or the greater of
$350,000 or the Company's existing capital account. The Company has the
option to convert its Joint Venture interest into 875,000 shares of
Global Environmental, Corp.'s common stock.
The financial statements of the Joint Venture are consolidated with the
Company's results in the accompanying financial statements. The portion
of the Joint Venture's income that is not applicable to the Company is
recorded as Minority Interest on the Statement of Operations. That
income along with Global Environmental Corp.'s capital contribution to
the Joint Venture is recorded under the caption Minority Interest in
Subsidiary on the Balance Sheet. All significant intercompany accounts
and transactions have been eliminated in consolidation
The Note payable issued by Global Environmental Corp. to the Joint
Venture is carried on the Balance Sheet as a Note Receivable (the
"Note") and was due on December 31, 1996. Negotiations are in process
for the refinancing of this note receivable. Global Environmental Corp.
does not have funds available to repay the Note in full in cash and has
offered to exchange its common stock for the Note. Since collection of
the Note in 2000 is not likely, the Note has been classified as long
term.
The Company has established a 75% reserve against the carrying value of
the Note in recognition of the potential costs involved in liquidating
any noncash settlement of this Note. Although the Company believes such
75% reserve to be adequate, the reserve is an estimate based on
information presently available. The Company's estimate could change,
which would result in a change in the reserve in the future.
F-9
<PAGE> 22
(4) TRADING SECURITIES:
In July, 1988, the Company received stockholder approval to establish an
investment program in marketable securities utilizing the excess funds
generated by the proceeds of the 1987 Series A 8% Cumulative Preferred
Stock offering.
The aggregate cost and market value of trading securities at December
31, 1999 were:
<TABLE>
<CAPTION>
Aggregate Unrealized Unrealized Market
Title of Issue Cost Gains Losses Value
<S> <C> <C> <C> <C>
COMMON STOCK AND EQUIVALENTS:
Cover-All Tech $ 93,001 -- $ (16,751) $ 76,250
Galagen 24,225 $6,588 -- 30,813
Isonics 37,122 378 -- 37,500
Photran Corp. 39,523 -- (39,508) 15
Reuter Mfg 186,384 -- (180,144) 6,240
Syntech 103,737 -- (103,674) 63
Vista Tech. Inc. 56,663 -- (56,663) --
-------- ------ --------- --------
Total $540,655 $6,966 $(396,740) $150,881
======== ====== ========= ========
</TABLE>
The aggregate cost and market value of trading securities at December
31, 1998 were:
<TABLE>
<CAPTION>
Aggregate Unrealized Unrealized Market
Title of Issue Cost Gains Losses Value
<S> <C> <C> <C> <C>
COMMON STOCK AND EQUIVALENTS:
Children's Broadcast $ 75,363 -- $ (38,644) $ 36,719
Cover-All Tech 93,001 $23,283 -- 116,284
Galagen 28,500 14,626 -- 43,126
Photran Corp. 39,523 -- (16,273) 23,250
Reuter Mfg 186,384 -- (164,384) 22,000
Syntech 103,737 -- (103,674) 63
Temtex 118,150 -- (92,525) 25,625
Vista Tech. Inc. 56,663 -- (56,663) --
-------- ------- --------- --------
Total $701,321 $37,909 $(472,163) $267,067
======== ======= ========= ========
</TABLE>
Proceeds from sales of trading securities during 1999 were $82,816.
Gross gains on those sales were $19,685 and gross losses were $5,683.
During 1999 net unrealized losses on trading securities of $84,495 were
credited to 1999 earnings. In 1998, proceeds from sales of trading
securities were $85,448. Gross gains on those sales were $0 and gross
losses were $86,420. During 1998 net unrealized loss on trading
securities of $134,549 were charged against 1998 earnings.
F-10
<PAGE> 23
(5) INCOME TAXES:
As of December 31, 1999, the Company had available capital loss and net
operating loss carryforwards of approximately $ 4,100,000 which may be
carried forward to reduce future taxable income. These carryforwards
expire in varying amounts from 2000 to 2019. Approximately $140,000 of
these carryforwards were generated prior to a 1986 merger ( with
Cadema, Inc.) and may not be fully utilized by the Company unless
certain conditions are met.
The Company accounts for income taxes to comply with Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes". A requirement of SFAS No. 109 is that deferred tax assets and
liabilities be recorded for any temporary differences between the
financial statement and tax bases of assets and liabilities, using the
currently enacted tax rate expected to be in effect when the taxes are
actually paid or recovered.
Total income tax expense (benefit) amounted to -0- in 1999, 1998 and
1997 (effective tax rates of 0% in each year) compared to income tax
benefit of ($40,000), ($91,000) and ($85,000) computed by applying the
statutory rate of 34.0% to loss before income taxes. These differences
are accounted for as follows:
1999
----
PERCENT OF
AMOUNT PRETAX LOSS
-------------- ------------------
Computed expected tax benefit $(40,000) (34.0%)
Decrease in benefit due to
valuation allowance provided for
deferred tax assets 40,000 34.0%
-------------- ------------------
-- 0%
============== ==================
1998
----
PERCENT OF
AMOUNT PRETAX LOSS
-------------- ------------------
Computed expected tax benefit $(91,000) (34.0%)
Decrease in benefit due to
valuation allowance provided for
deferred tax assets 91,000 34.0%
-------------- ------------------
-- 0%
============== ==================
1997
----
PERCENT OF
AMOUNT PRETAX LOSS
-------------- ------------------
Computed expected tax benefit $(85,000) 34.0%
Decrease in benefit due to
valuation allowance provided for
deferred tax assets 85,000 (34.0%)
-------------- ------------------
$ -- 0%
============== ==================
Deferred income tax assets (liabilities) result from net operating loss
carryforwards and differences in the recognition of expenses for income tax and
financial reporting purposes.
F-11
<PAGE> 24
(5) INCOME TAXES: (CONT.)
The net deferred tax asset at December 31, 1999 and 1998, includes the
following:
1999 1998
---- ----
Deferred tax asset $ 1,613,000 $ 1,832,000
Valuation allowance for deferred
tax asset (1,613,000) (1,832,000)
----------- -----------
$ 0 $ 0
=========== ===========
The Company has recorded a valuation allowance for its entire net
deferred tax asset at December 31, 1999 and 1998 since management
believes that it is more likely than not that the deferred tax asset
will be not realized.
The tax effect of major temporary differences that gave rise to the
Company's net deferred tax asset at December 31, 1999 and 1998 is as
follows:
1999 1998
---- ----
Net operating loss carryforward $1,393,000 $1,597,000
Unrealized losses on marketable
securities 132,000 148,000
Allowance for uncollectible note
receivable 88,000 87,000
---------- ----------
$1,613,000 $1,832,000
========== ==========
(6) NET LOSS AND STOCKHOLDERS' DEFICIENCY:
LOSS PER COMMON SHARE
The following is a reconciliation of the numerator and denominator of
the Basic and Diluted loss per share computation.
1999 1998 1997
---- ---- ----
Numerator for Basic
and Diluted
Loss Per Share:
Net Income (Loss) $ (116,467) $ (284,835) $ (248,771)
Less Preferred Stock
Dividends (169,781) (169,781) (169,781)
------------ ------------ ------------
Net loss applicable to
common shareholders $ (286,248) $ (454,616) $ (418,552)
============ ============ ============
Denominator for Basic
And Diluted
Loss Per Share:
Weighted average shs. 10,905,549 10,905,549 10,905,549
============ ============ ============
Basic and Diluted loss
per share $ (.03) $ (.04) $ (.04)
============ ============ ============
F-12
<PAGE> 25
(6) STOCKHOLDERS' DEFICIENCY: (CONT.)
PUBLIC OFFERING - PREFERRED STOCK
In 1987, the Company completed a public offering of 1,000,000 shares of
Series A 8% Cumulative Convertible Preferred Stock ( "Series A
Preferred Stock"). The preferred stock is convertible into common
stock, at any time, at the option of the holder, beginning January 28,
1988. The conversion ratio is based upon the original price of the
preferred stock of $5.00 in relation to the conversion price of 1.79 to
1 subject to adjustment under certain conditions. Each share of the
preferred stock is entitled to one vote and an annual cumulative
dividend of $.40 per share, which is payable semiannually in cash or
common stock. The first year's dividend was paid in cash from proceeds
of the offering. Subsequent dividends through December 1992 were paid
in common stock of the Company. Dividends accrued since January 1993
remain unpaid.
The Series A Preferred Stock is redeemable at the option of the Company
at any time after July 28, 1989, in whole or in part, at a redemption
price of $5.40 per share, subject to certain conditions. In addition,
the Series A Preferred Stock is also redeemable, upon 30 days notice
beginning July 28, 1988, if during any period of 30 consecutive trading
days the market price for the Company's common stock is at least $3.00.
At December 31, 1999, 514,877 shares have been converted into common
stock or redeemed.
The Series B Preferred Stock has identical preferences and privileges
to the Series A Preferred Stock, except that the Series B Preferred
Stock is not subject to redemption by the Company. The Company has been
authorized to issue up to 150,000 shares of Series B Preferred Stock.
At December 31, 1999 and 1998, no shares of Series B Preferred Stock
were issued and outstanding.
No dividends were declared in 1999, 1998 or 1997. However, dividends on
Series A 8% Preferred Stock of $.40 per share payable in cash or Cadema
Corporation common stock do accumulate and as such the accompanying
1999, 1998 and 1997 financial statements reflect the accrual of this
dividend.
TREASURY STOCK
The Company held 30,000 and 60,670 shares of Common Stock and Series A
Preferred Stock, respectively in its treasury as of December 31,1999.
WARRANTS
In 1983, 744,900 stock purchase warrants were issued to stockholders of
record. The warrants expired June 30, 1999. None of these warrants have
been exercised as of December 31, 1999.
As of December 31, 1999, the Company has reserved 2,420,772 shares of
common stock for possible future issuance resulting from conversion of
preferred stock.
F-13
<PAGE> 26
(7) OPERATIONS AND MANAGEMENT'S PLANS
The Company did not earn any revenue for the year, incurred a net loss
of approximately $117,000 and had a stockholders' deficiency of
approximately $958,000 at year end. The Company's primary activities
for 1999 related to trading of its investment portfolio, which
generated a loss (both realized and unrealized) totaling approximately
$70,000.
The Company continues its principal business of seeking and financing
business enterprises with the potential to generate profits and
positive cash flow. New opportunities are evaluated on an ongoing
basis. None were deemed appropriate to enter into during 1999. The
Company's previous entry into the pollution control business is part of
this strategy.
There is approximately $150,000 of working capital at year-end. Annual
required cash outlays include only the payment of administrative
expenses of approximately $47,000. The Company is also attempting to
restructure its payment of dividends arrearages, a long-term liability,
in light of its future plans.
The Company believes in its long-term prospects for revenue growth.
However, the realization of this revenue growth cannot be assured.
F-14
<PAGE> 27
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed in its
behalf by the undersigned, thereto duly authorized.
CADEMA CORPORATION
Dated: March 11 , 2000
By:/s/ Roger D. Bensen
-------------------
ROGER D. BENSEN
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Roger D. Bensen MARCH 11 , 2000
- ------------------------------- ------------------------------
ROGER D. BENSEN
Chairman of the Board and Chief
Executive Officer and Director
/s/ Richard Ames MARCH 15 , 2000
- ------------------------------- ------------------------------
RICHARD B. AMES
Director
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 13,054
<SECURITIES> 150,881
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 165,579
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 250,329
<CURRENT-LIABILITIES> 13,000
<BONDS> 0
0
109,356
<COMMON> 4,851
<OTHER-SE> (1,072,643)
<TOTAL-LIABILITY-AND-EQUITY> 250,329
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 46,187
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (116,467)
<INCOME-TAX> 0
<INCOME-CONTINUING> (116,467)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (286,248)
<EPS-BASIC> (.03)
<EPS-DILUTED> (.03)
</TABLE>
