SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-KSB
(Mark One)
X Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the fiscal year ended December 31, 1999
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition Period from ________ to ________
Commission file number 2-70345-NY
TimeOne Inc.
(Exact name of registrant as specified in its charter)
Nevada 88-0182534
- ------------------------------- -----------------------
(State or other jurisdiction of (IRS Employer ID Number)
incorporation of organization.)
631 North Stephanie Street, PMB 378
Henderson, Nevada 89014
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 456-8070
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
State issuer's revenues for its most recent fiscal year $548,667
State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be computed
by reference to the price at which the stock was sold, or the average bid and
asked prices of such stock, as of a specified date within 60 days prior to the
date of the filing.
2,900,438 shares at $4.50 per share = $13,051,971 as of March 30, 2000
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
8,266,300 shares common stock par value $0.0001 as of March 27, 2000
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(b) 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
---
1
<PAGE>
PART I
ITEM 1. BUSINESS
TimeOne, Inc., formerly known as Buffs-N-Puffs, Ltd. and before that as
Pubcoa, Inc., (the "Company") was incorporated under the laws of the State of
Nevada on November 14, 1980. It has engaged in various business opportunities
during the past nineteen (19) years.
From March 22, 1990 to October 20, 1998, the Company was in the carwash
business located at 6500 South State Street, Murray, Utah. The facilities had
eight gas pumps and two tunnels. One tunnel housed the carwash equipment and the
second had the automotive interior cleaning equipment. The facility also had a
boutique offering convenience items and a waiting room.
On October 20, 1998, the Company sold its carwash business, real
property and operating assets to CWP West Corp. in an all cash sale for
$3,160,000.
Following the sale of the carwash business, the Company was in the all
cash position. The Company invested in various securities which resulted in
gains in 1999 of $489,123. This amount greatly exceeded earnings that would have
been earned if the funds were solely in cash or cash equivalents.
Since the sale the carwash business, management of the Company has
explored business acquisitions and merger candidates. The investigative process
has continued into the year 2000 and has resulted in the signing on March 3,
2000 of a non-binding letter of intent to acquire all of the outstanding shares
of SunGlobe Fiber Systems Corporation, a Delaware corporation. The due diligence
process is in progress and is expected to be completed by April 30, 2000.
ITEM 2. PROPERTIES
In September, 1994, Daniel Pentelute, the majority stockholder of the
Company, purchased 21 acres of land in Montana. Three days later, the Company
purchased a 50% interest in the land from Mr. Pentelute at his cost (50%). The
other 50% interest was purchased by Desert Land Enterprises whose sole
stockholder is Daniel Pentelute. The cost of the 50% interest was $52,590. In
1998, Desert Land presented the Company with a bill for approximately $42,000
for 50% of the improvements made to the land. The Company agreed to repay these
costs as the lots were sold. On July 27, 1999 one of the four remaining lots was
sold for $55,500 resulting in a net profit of $6,746 to the Company. The payable
to Desert Land Enterprises was reduced by $12,915 leaving a balance at December
31, 1999 of $14,279.
ITEM 3. LEGAL PROCEEDINGS
The Company is not currently involved in any litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
2
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK & RELATED
SHAREHOLDERS MATTERS.
The Company's common stock is traded on the OTC Bulletin Board under
the symbol TYME. The information below was provided by Olsen, Payne and Co. of
Salt Lake City, Utah and does not necessarily represent prices of actual sales
of the Company's common stock, nor does it take into account any brokerage
discounts, commissions, or fees. At the close of business on March 28, 2000 the
Company had approximately 564 stockholders of record.
The following table lists the high and low sales price for the common
stock of the Company during the two most recent years:
NASDAQ-OTC
High Low
Sales Price Sales Price
1999 First Quarter $ .25 $ .25
Second Quarter .25 .25
Third Quarter .25 .228
Fourth Quarter .50 .3125
1998 First Quarter .1875 .1875
Second Quarter .5625 .1875
Third Quarter .25 .25
Fourth Quarter .140 .125
No dividends have been paid nor are any anticipated in the foreseeable future.
ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS
a. Plan of Operation.
Since the sale of the Carwash business on October 20, 1998, the Company
has had no operating business. Comparing operating results from previous years
is not meaningful. Management of the Company has and will continue to evaluate
new business opportunities.
In 1999, the Company invested in securities and achieved greater
returns than if the monies were invested in the cash or cash equivalent market.
For the year 2000, the Company is restricted by the Investment Company Act of
1940 from making investments other than in cash or U.S. Government Securities.
Unless the Company is successful in acquiring or merging into an operating
business, this restriction will result in lower earnings by the Company for the
year 2000. This will partially offset by a reduction of investment expenses and
no further expenses from the sale of the carwash.
On March 3, 2000, the Company announced that it had entered into a
non-binding letter of intent to acquire all of the outstanding shares of
SunGlobe Fiber Systems Corporation ("SGFS"), a Delaware corporation.
SGFS is developing the "Maya-1 fiber Network", which combines the
technology of undersea fiber optic cable and communication satellites to create
a seamless digital Internet and telephony delivery system throughout Central
America. The Maya-1 cable is scheduled to become operational in June of 2000 and
will be shared by SGFS and other major foreign and domestic Tier 1 International
Carriers.
3
<PAGE>
Under the terms of the agreement, SGFS shareholders will receive 51% of
the issued and outstanding shares of the combined companies. The closing of the
transaction is dependent on satisfying a number of conditions precedent,
including each party completing its due diligence.
b. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
As of December 31, 1999, the Company had cash and cash equivalents of
$421,046 compared to $623,408 as of December 31, 1998, a decrease of $201,362
(32%). The decrease is attributed to a shift from cash to U.S. Government
Securities.
Current assets at December 31, 1999 were $2,041,904 as compared to
$1,967,709 as of December 31, 1998, an increase of $74,195 (4%). The increase is
attributed to net earnings from 1999.
Current liabilities as of December 31, 1999 were $105,840 as compared
to $247,353 as of December 31, 1998 a decrease of $141,513 (57%). The decrease
is attributed to the Company having no operating business. The Company was
presented in March, 2000 with a claim as permitted in the Asset Purchase
Agreement by and among Car Wash Partners, Inc. and TimeOne, Inc. dated as of
August 14, 1998, as amended. The amount has been accrued for as December 31,
1999. The Company has no long- term liabilities as of December 31, 1999 or
December 31, 1998.
Stockholders' equity as of December 31, 1999 was $1,995,154 compared to
$1,798,310 as of December 31, 1998 and increase of $196,844 (11%). The increase
is due to net income from sale of securities, interest and dividend income.
October 20, 1998
On October 20, 1998 the Company sold its carwash assets and operations,
including real property, to CWP West Corporation for $3,160,000. CWP West
corporation is a Delaware corporation, whose parent is involved in purchasing
carwashes in various locations throughout the United States. The Company netted
approximately $1,404,000 from the sale, after paying the mortgage on the real
property, expenses to the closing date, and certain adjustments. After the sale,
the existing board of Directors resigned and new Directors were appointed. The
Company also moved its corporate offices to:
631 N. Stephanie Street, PMB 378
Henderson, Nevada 89014
(702) 456-8070
1998 to 1997
The following discussion relates to operations from January 1, 1998 to
October 19,1998.
As of December 31, 1998 the Company had cash of $622,408 compared to
cash of $270,215 as of December 31, 1997, an increase of $352,193 (130%). The
increase is attributable to the sale of the carwash assets, gains on sales of
securities, and income from the Q lube joint venture.
Current assets as of December 31, 1998 were $1,967,709 compared to
$790,570 as of December 31,1997, an increase of $1,177,139 (148%). The increase
is due to higher receivables and the market value of securities held. Property,
plant and equipment were $0 as of December 31, 1998 compared to $2,354,266 as of
December 31, 1997. The decrease is due to the sale of the carwash assets.
4
<PAGE>
Current liabilities as of December 31, 1998 were $247,353 compared to
$82,447 as of December 31, 1997, and increase of $164,906, this increase (200%)
consists mostly of income taxes payable. Long term liabilities decreased from
$1,697,610 as of December 31, 1997 to $0 as of December 31, 1998. The decrease
is due to the repayment of the Bank One loan when the carwash assets were sold.
Total liabilities as of December 31, 1998 were $247,353 compared to $1,780,057
as of December 31, 1997.
Stockholders' Equity as of December 31, 1998 was $1,798,310 compared to
$1,523,619 as of December 31, 1997, an increase of $274,641 (18%). The increase
is due to the sale of assets, securities, and income from the Q lube joint
venture.
Total revenues for the year ended December 31, 1998 were $1,005,556
compared to $1,465,687 for the year ended December 31, 1997, a decrease of
$460,131. The 1998 figures only include revenues through October 19, 1998, at
which time the carwash operations were sold. Weather and traffic pattern changes
were the most significant factors on the Company's revenues during 1998. These
factors ultimately led to the decision to sell the carwash assets.
Total costs and expenses for the year ended December 31, 1998 were
$1,445,027 compared to $1,566,411 for the year ended December 31, 1997. The 1998
figures only include operations through October 19, 1998. On a full year of
operations in 1998 costs and expenses would have been somewhat higher than 1997.
Total costs and expenses were higher in the following areas, salaries, due to
severance pay to key personnel, legal and professional fees relating to the sale
of the carwash assets. Net income before taxes for the year ended December 31,
1998 was $526,670 compared to $143,034 as of December 31,1997, an increase of
$383,636. Net income per share of the Company's common stock for 1998 was .03
compared to a net income per share of .01 for 1997. The current ratio of the
Company as of December 31, 1998 was 7.96 compared to 9.58 as of December 31,
1997.
LIQUIDITY AND CAPITAL RESOURCES.
Operations.
As of December 31, 1999, the Company's working capital was $1,936,064
and included cash and cash equivalents of $421,046 as compared with $1,720,356
in working capital and $622,408 in cash and cash equivalents at December 31,
1998. During the two years ended December 31, 1999, the cash provided by
operating activities more than offset the amount of cash used in the Company's
operating activities. The net cash provided by operating activities in these two
periods were $332,909 in 1999, and $2,937,806 in 1998.
Investing Activities.
Net cash used by investing activities was $534,271 for 1999 compared to
net cash provided by investing activities of $839,710 in 1998. The primary use
of cash in 1999 and 1998 was purchase of securities.
Financing Activities.
The cash used by the Company's financing activities was $0 in 1999 and
$1,745,903 in 1998. The primary use of cash for financing activities has been
the reduction in the Company's long term debt.
5
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
C O N T E N T S
(a) 1. Financial Statements
The following Financial Statements of TimeOne, Inc.
are included in PART II, ITEM 7:
Page
INDEPENDENT AUDITOR'S REPORT..................................7
FINANCIAL STATEMENTS:
BALANCE SHEET -
December 31, 1999 ............................................8
STATEMENTS OF OPERATIONS -
years ended December 31, 1999 and 1998 .......................9
STATEMENTS OF STOCKHOLDERS' EQUITY -
years ended December 31, 1999 and 1998 .....................10
STATEMENTS OF CASH FLOWS -
years ended December 31, 1999 and 1998 .....................11
NOTES TO THE FINANCIAL STATEMENTS ...........................12
6
<PAGE>
Smith
&
Company
A Professional Corporation of Certified Public Accountants
INDEPENDENT AUDITOR'S REPORT
Board of Directors and Shareholders
TimeOne, Inc.
Salt Lake City, Utah
We have audited the accompanying balance sheet of TimeOne, Inc. (a development
stage company) as of December 31, 1999, and the related statements of
operations, stockholders' equity, and cash flows for the years ended December
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 TimeOne, Inc. at December 31,
1999, and the results of its operations and its cash flows for the years ended
December 31, 1999 and 1998, in conformity with generally accepted accounting
principles.
Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
March 27, 2000
10 West 100 South, Suite 700o Salt Lake City, Utah 84101-1554
Telephone: (801) 575-8297o Facsimile: (801) 575-8306
E-mail: [email protected]
Members: American Institute of Certified Public Accountants
o Utah Association of Certified Public Accountants
7
<PAGE>
TIMEONE, INC.
(A Development Stage Company)
BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
1999
-----------------
ASSETS
------
CURRENT ASSETS:
<S> <C>
Cash $ 421,046
Accounts receivable - trade 389
U.S. Government securities, at market value (Note A) 1,604,725
Prepaid expenses and supplies 15,744
-----------------
TOTAL CURRENT ASSETS 2,041,904
OTHER ASSETS
Deposit 2,501
Montana Land (Note C) 56,589
-----------------
59,090
-----------------
$ 2,100,994
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Accounts payable and payroll and sales taxes $ 105,840
-----------------
TOTAL CURRENT LIABILITIES 105,840
STOCKHOLDERS' EQUITY:
Capital stock, common, authorized 100,000,000
shares of $0.0001 par value; issued and outstanding
8,266,300 shares in 1999 826
Additional paid-in capital 1,229,336
Retained earnings 764,992
-----------------
TOTAL STOCKHOLDERS' EQUITY 1,995,154
-----------------
$ 2,100,994
=================
</TABLE>
See Auditor's Report and Notes to Financial Statements.
8
<PAGE>
TIMEONE, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------
1999 1998
----------------- -----------------
Revenues
<S> <C> <C>
Gain (loss) on sale of securities $ 489,123 $ 211,031
Adjustment of securities to market 6,678 (163,894)
Gain on sale of property 6,746 5,315
Loss on sale of equipment 0 0
Interest and dividends 46,018 14,570
Other 102 0
----------------- -----------------
INCOME FROM CONTINUING
OPERATIONS BEFORE TAXES 548,667 67,022
Administrative expense 320,175 0
Income tax expense 1,933 31,979
Interest expense 9,529 0
----------------- -----------------
NET INCOME FROM
CONTINUING OPERATIONS 217,030 35,043
Discontinued operations-net of income taxes
Gain (loss) from discontinued operations
net of income taxes of $0, $33,137, and
$7,266 respectively (20,186) (369,432)
Gain on disposition, net income taxes
of $220,000, $0, and $0, respectively
Buffs-N-Puffs Car Wash 0 609,080
----------------- -----------------
INCOME (LOSS) FROM
DISCONTINUED OPERATIONS (20,186) 239,648
----------------- -----------------
NET INCOME $ 196,844 $ 274,691
================= =================
NET INCOME (LOSS) PER SHARE OF COMMON STOCK
(based on weighted average
number of shares outstanding)
From continuing operations $ .02 $ .00
From discontinued operations .00 .03
----------------- -----------------
TOTAL INCOME PER SHARE $ .02 $ .03
================= =================
Weighted average number of common
shares used to compute net income
per weighted average share 8,226,300 8,354,900
================= =================
</TABLE>
See Auditor's Report and Notes to Financial Statements.
9
<PAGE>
TIMEONE, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional
Common Stock Paid-in Retained
Shares Amount Capital Earnings
----------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Balances 12/31/97 8,354,900 $ 835 $ 1,229,327 $ 293,457
Net income for
year ended 12/31/98 274,691
----------------- ---------------- ----------------- -----------------
Balances 12/31/98 8,354,900 835 1,229,327 568,148
Cancel Company stock (88,600) (9) 9
Net income for
year ended 12/31/99 196,844
----------------- ---------------- ----------------- -----------------
Balances 12/31/99 8,266,300 $ 826 $ 1,229,336 $ 764,992
================= ================ ================= =================
</TABLE>
See Auditor's Report and Notes to Financial Statements.
10
<PAGE>
TIMEONE, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------
1999 1998
--------------- --------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 196,844 $ 274,691
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 0 122,950
Book value of assets sold 0 2,318,065
Decrease in deferred tax asset 0 17,000
Adjust securities to lower of cost or market (6,678) 163,894
Changes in operating assets and liabilities:
(Increase) decrease in receivables 300,000 (248,718)
(Increase) decrease in prepaid expense, supplies
and deposits (15,744) 50,425
(Increase) decrease in inventory 0 26,300
Increase (decrease) in accounts payable and
payroll taxes payable 78,487 (6,801)
(Decrease) Increase in income taxes payable (220,000) 220,000
--------------- --------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 332,909 2,937,806
INVESTING ACTIVITIES
Cost of securities sold 0 551,752
Purchase of securities (553,135) (1,368,599)
Cost of land sold 18,864 0
Purchase of property 0 (22,863)
--------------- --------------
NET CASH (USED)
BY INVESTING ACTIVITIES (534,271) (839,710)
FINANCING ACTIVITIES
Repayment of loans and leases 0 (1,745,903)
--------------- --------------
NET CASH (REQUIRED) BY
FINANCING ACTIVITIES 0 (1,745,903)
--------------- --------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (201,362) 352,193
Cash and cash equivalents at beginning of year 622,408 270,215
--------------- --------------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 421,046 $ 622,408
=============== ==============
SUPPLEMENTAL INFORMATION
Taxes paid $ 1,933 $ 14,979
Interest paid 9,529 203,814
</TABLE>
See Auditor's Report and Notes to Financial Statements.
11
<PAGE>
TIMEONE, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
-----------------------------
December 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue Recognition
Interest income is accrued as earned. Gains or losses on the sale of securities
are recorded as of the trade date
U.S. Government Securities
U.S. Government securities, as a group, are carried at market value in
accordance with FAS #115. Prior to January 1, 1994, the securities were carried
at the lower of cost or market. At December 31, 1999, an increase of $6,678 was
made to adjust to market ($(163,894 decrease was made for 1998).
Income Taxes
No federal income taxes were due for the year ended December 31, 1999. At
December 31, 1999, the Company had prepaid income taxes of $15,744.
Cash and Cash Equivalents
For financial statement purposes, the Company considers all highly liquid
investments with an original maturity of three months or less when purchased to
be cash equivalents.
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, liabilities, revenues, and expenses
during the reporting period. Estimates also affect the disclosure of contingent
assets and liabilities at the date of the financial statements. Actual results
could differ from these estimates. Such estimates of significant accounting
sensitivity are allowance for doubtful accounts and reserves for obsolete
inventory.
NOTE B - DEVELOPMENT STAGE COMPANY
The Company re-entered the development stage on January 1, 1999, after the sale
of its sole operating activity "Buffs-N-Puffs" carwash. Management is currently
seeking other business opportunities while earning the maximum return possible
on its cash and other liquid assets.
NOTE C - MONTANA LAND
In September, 1994, Daniel Pentelute, the Majority stockholder of the Company,
purchased 21 acres of land in Montana. Three days later, the Company purchased a
50% interest in the land from Mr. Pentelute at his cost (50%). The other 50%
interest was purchased by Desert Land Enterprises whose sole stockholder is
Daniel Pentelute. The cost of the 50% interest was $52,590. In 1998, Desert Land
presented the Company with a bill for approximately $42,000 for 50% of the
improvements made to the land. The Company agreed to repay these costs as the
lots were sold. On July 27, 1999 one of the four remaining lots was sold for
$55,500 resulting in a net profit of $6,746 to the Company. The payable to
Desert Land was reduced by $12,915 leaving a balance at December 31, 1999 of
$14,279.
NOTE D - FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying amount of cash and cash equivalents, accounts payable, and accrued
expenses approximate fair value due to the short maturity periods of these
instruments.
NOTE E - SUBSEQUENT EVENTS
On March 3, 2000, the Company signed a non-binding letter of intent to acquire
all of the outstanding shares of SunGlobe Fiber Systems Corporation, a Delaware
corporation. The due diligence process is expected to be completed by April 30,
2000
12
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Identification of Officers and Directors
(1) Daniel F. Pentelute, President and Director, resigned
March 13, 2000
(2) Roy E. Molina, CFO and Director, appointed October
20, 1998, President, appointed March 13, 2000
(3) Yolanda Oyler, Secretary and Director, appointed
October 20, 1998
All directors serve until the next annual meeting of stockholders or
until their successors have been duly qualified and elected.
(c) Identification of certain significant employees.
Their business backgrounds are set forth in (e) hereinafter.
(d) Family relationships.
The Company's majority stockholder is Daniel Pentelute. There
are no family relationships between any of the directors or officers.
(e) Business experience.
(1) Background
DANIEL PENTELUTE, 51, President and Director since October 20, 1998 and
resigned March 13, 2000. Mr. Pentelute is also the Company's largest and
majority shareholder. Mr. Pentelute attended Brigham Young University and the
University of Utah between the years of 1967 and 1970. Mr. Pentelute was
President and Director of the Company from 1980 to 1985. He has been a
consultant to the Company and developed the Buffs'N'Puffs carwash concept. Since
1986 Mr. Pentelute has engaged in the development and management of real
property located in the states of Nevada, Utah, and Montana. Mr. Pentelute is
also a private investor in various business enterprises and ventures.
ROY MOLINA, 48, Appointed President March 13, 2000, Chief Financial
Officer and Director, since October 20, 1998. Mr. Molina is a Certified Public
Accountant, and President of his own firm. Mr. Molina received a Bachelor of
Science Degree in Accounting in 1974 and a Masters in Business Taxation Degree
in 1976, both from the University of Southern California. Mr. Molina was the CFO
of a large privately held carpet manufacturer from 1979 to 1983. Mr. Molina is
also a member of various professional accounting organizations.
YOLANDA OYLER, 47, Secretary and Director since October 20, 1998. Ms.
Oyler has been an administrative assistant to Mr. Pentelute since 1987. Ms.
Oyler attended Weber State University but did not graduate. Ms. Oyler has worked
for various stock brokerage firms before starting to work for Mr. Pentelute.
13
<PAGE>
(2) Directorships.
None of the officers and directors serve on the Board of any other
company whose securities are registered pursuant to Section 12 or subject to the
requirements of Section 15 (d) of the Exchange Act or any company registered
under the Investment Company Act of 1940.
(f) Involvement in certain legal proceedings.
None of the officers or directors have any disability
as defined in (1) through (6) of this item.
(g) Promoters and control persons.
Daniel Pentelute, President and Director from October 20, 1998 to March
13, 2000, is the Company's largest and majority shareholder.
ITEM 10. EXECUTIVE COMPENSATION
None of the officers and directors of the Company received remuneration
in excess of $100,000 (One hundred thousand dollars) for the year ended December
31, 1999.
REMUNERATION TABLE
<TABLE>
<CAPTION>
1999 2000
NAME SERVING AS REMUNERATION PROPOSAL
- ---------------------------- ---------------------------------- ---------------- -----------
<S> <C> <C> <C>
Daniel F. Pentelute President, Director $ 0* 0*
October 1998 - March 13, 2000
Roy E. Molina CFO, Director -October 1998 0** 0**
President - March 13, 20000
Yolanda Oyler Secretary, Director 12,500*** 0***
since October 1998
</TABLE>
* Excludes monthly fee of $4,500 plus out of pocket expenses
paid per agreement to Desert Land Enterprises, Inc. a
corporation owned 100% by Daniel Pentelute (Also see Item 12).
For the year ended December 31, 1999, a bonus of $25,000 was
accrued to Desert Land Enterprises, Inc.
** Excludes monthly fee of $4,000 paid per agreement to Roy E.
Molina Certified Public Accountant, Inc. a corporation owned
100% by Roy E. Molina (Also see Item 12). For the year ended
December 31, 1999, a bonus of $12,500 was accrued to Roy E.
Molina Certified Public Accountant, Inc.
*** Excludes compensation paid (salary) by Desert Land
Enterprises, Inc., a corporation owned 100% by Daniel
Pentelute. For the year ended December 31, 1999, a bonus of
$12,500 was accrued to Yolanda Oyler.
Employee Stock Option Plan
NONE.
14
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS &
MANAGEMENT
(a) Other than management indicated below, the Company knows of no
stockholders holding 5% or more of the Company's common stock.
(b) Security ownership of certain beneficial owners and management
as of March 28, 2000.
<TABLE>
<CAPTION>
Name and Address Amount and Nature
Of Beneficial of Beneficial Percent of
Title of Class Owner Ownership Class
- ------------------------ ------------------------------ ------------------------------ ----------------
<S> <C> <C> <C>
Common Stock Daniel F. Pentelute 4,910,862* 59.4%
631 N. Stephanie Street, PMB 378
Henderson, NV 89014
Roy E. Molina 0 0
18818 Teller Avenue, #130
Irvine, CA 92612
Yolanda Olyer 0 0
631 N. Stephanie Street, PMB 378
Henderson, NV 89014
All officers and Directors as a class 4,910,862 59.4%
</TABLE>
* Includes 168,625 shares held by Penex, Inc., a Nevada
Corporation and 44,000 shares held by Desert Land Enterprises,
Inc., a Nevada Corporation both of which Mr. Pentelute is the
sole shareholder.
(c) Changes in Control
The Company has entered into a letter of intent which, if
consummated, would result in a change of control. See Item 6.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions with management and others.
Related Party Transactions.
During 1994, Daniel Pentelute, the major shareholder of the Company,
purchased 21 acres of land in Montana and three (3) days later sold a one-half
interest to the Company at his cost. The other one-half interest is owned by
Desert Land Enterprises, whose sole shareholder is Daniel Pentelute.
In January of 1999, the Board of Directors of the Company entered into
an agreement with Desert Land Enterprises, Inc., whose sole shareholder is
Daniel Pentelute, President and majority shareholder of the Company, to provide
certain services to the Company on a monthly basis for a fee of $4,500 per
month, plus all out of pocket expenses. These services include telephone and fax
service, all necessary secretarial services, financial tracking of all of the
Company's brokerage accounts and investments, research into possible
investments, and access to various financial publications, websites, and
sources. This agreement was approved by the directors having no financial
interest in the agreement and is believed to be at or below the prevailing rates
for similar services from independent sources.
In January, 1999 the Company entered into a retainer agreement with Roy
E. Molina Certified Public Accountant, Inc., to provide all in-house accounting
services, tax advice, and other miscellaneous accounting services for a monthly
fee of $4,000, including all expenses. Mr. Molina is a director and officer of
the Company. This agreement was approved by the directors having no financial
interest in the agreement and is believed to be at or below the prevailing rates
for similar services from independent sources.
15
<PAGE>
(b) Certain Business Relationships.
See Item 12.
(c) Indebtedness of Management.
NONE.
(d) Transaction with promoters.
NONE.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
a. Reports on Form 8-K.
NONE.
b. Exhibits
Exhibit Number Description of Exhibit
10 Letter of Intent dated March 3, 2000 between
TimeOne, Inc. and SunGlobe Fiber Systems
Corporation
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated this 4th day of April, 2000.
TimeOne, Inc.
By
Roy E. Molina
President and Director
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.
Signatures Title Date
President, CFO, and Director 4/4/2000
Roy E. Molina
Secretary and Director 4/4/2000
Yolanda Oyler
16
<PAGE>
Exhibit 10
TimeOne, Inc.
631 North Stephanie Street
Henderson, NV 89104
702-456-8070
March 3, 2000
Mr. Barry H. Pastemak
President
SunGlobe Fiber Systems Corporation
1550 Sawgrass Corporate Parkway, Suite 370
Sunrise, FL 33323
Dear Mr. Pastemak
This letter of intent sets forth the understanding of the principal
terms upon which TimeOne, Inc. (TOI), with principal address at 631 North
Stephanie Street, Henderson, Nevada 89014, proposes to acquire all of the issued
and outstanding shares of SunGlobe Fiber Systems Corporation, with principal
address at 1550 Sawgrass Corporate Parkway, Suite 370, Sunrise Florida 33323,
("SGFS") in exchange for 51% of TOI after completion of a BUSINESS COMBINATION.
1. The BUSINESS COMBINATION shall be effected either through a
merger, a reverse triangular merger or such other vehicles
that will provide tax-free reorganization tax consequences to
the SGFS shareholders. At the conclusion of the Business
Combination, the current TOI shareholders shall collectively
own 49% of TOI and the shareholders of SGFS shall collectively
own 51% of TOI. The delivery of shares to SGFS shall be
effected by new issuances of stock by TOI or the delivery of
shares from existing TOI shareholders or a combination
thereof.
2. The terms and conditions of the proposed Business Combination
are to be contained in the Definitive Agreements, which will
be satisfactory in all respects, in form and substance, to the
parties. It is anticipated that the Definitive Agreements
will, among other things:
a. Provide that upon the consummation of the Business
Combination TOI will change its name to SGFS;
b. Provide for the delivery of customary legal opinions,
closing certificates and other documents;
c. Provide that each party shall be responsible for its
own costs and expenses, including attorneys' fees,
incurred in connection with the transactions
comtemplated hereby;
d. Provide that the officers and directors of SGFS will
be the officers and directors of TOI upon
consummation of the Business Compbination;
e. Provide that the parties and their affiliates will
cooperate in the preparation of, and expeditiously
file or provide, any information to governmental
authorities, required to effectuate the transactions
contemplated hereby, and
f. Terms of the purchase of TOI by the shareholders of
SGFS are as follows:
o The terms of any purchase of TOI stock by
SGFS shareholders, the registration rights
pertaining thereto and related matters shall
be negotiated in good faith and mutually
agreed upon in the Definitive Agreement.
o SGFS shall provide audited financial
statements prepared in accordance with GAAP
and Securities Regulation S-X.
o Other terms and conditions relating to the
transaction e.g. beneficiaries of the cash
payment, timing parameters etc. shall be
negotiated in good faith and mutually agreed
upon prior to preparation and finalization
of the Definitive Agreements.
g. Provide that the consummation of the transactions
contemplated hereby will be subject to conditions
customary in transactions similar to those
contemplated hereby, including, without limitation,
that (i) the representations and warranties contained
in the Definitive Agreement will be true and correct
in all material respects as of the date they are made
and as of the closing date, (ii) the parties shall
have obtained all necessary or desirable consents,
1
<PAGE>
rulings and approvals from such governmental or
non-governmental authorities having jurisdiction
including the Federal Communications Commission, the
Securities and Exchange Commission and all other
state and local regulatory agencies, (iii) the
parties shall have obtained all necessary consents
pursuant to existing agreements or instruments by
which they may be bound; and (iv) the parties shall
have compiled with all requisite corporate
procedures.
3. Public announcements regarding the transactions contemplated
hereby will be made only with the approval of each party
hereto, except as may be required under applicable law (and
then only after notice to the other party, to the extent
possible).
4. (a) From the date hereof until the earlier of the closing of
the transactions comtemplated hereby or the termination of
negotiations between the parties, the parties (and, their
designated representatives) will have reasonable access on
reasonable advance notice through the personnel, facilities,
officers and to all appropriate books and records of each
other for purposes of conducting a due diligence investigation
with respect to the transactions contemplated hereby.
(b) If the transactions contemplated hereby are not
consummated, the parties will return all documents, including
originals and all copies in their possession, which were
obtained hereunder and maintain the confidentiality of any
information obtained hereunder in accordance with the terms of
paragraph 5.
5. In the course of the parties due diligence investigation and
discussions and negotiations, each party may disclose to the
other certain propriety, confidential or other non-public
information (collectively, the "Information") relating to its
respective business, the proprietary, confidential and
non-public nature of which information both parties desire to
maintain. Except as herein set forth, not party shall (a)
reveal or make known to any person, firm, corporation or
entitiy or (b) utilize in its own business or (c) make any
other usage of, any information disclosed to it by the other
in connection with the discussions and negotiations about
mentioned. A party's obligations with respect to any item of
information disclosed to it shall terminate if that item of
information becomes disclosed in published literature or
otherwise becomes generally available to the public; provided,
however, that such public disclosure did not result, directly
or indirectly, from any act, omission or fault of such party
with respect to that item of information. Further, this
paragraph shall not apply to any item of information which (i)
was independently developed by such party without the use of
any information provided to such party, (ii) at the time of
disclosure was already generally available to the public, or
(iii) at the time of disclosure was already in the possession
of the party intending to utilize the item of information and
was not acquired by such party, directly or indirectly, for
the disclosing party under a confidentiality agreement. All
parties agree that the information either it has received or
may receive from any other party has been and will be used by
the receiving party solely for the limited purpose of its
investigation and evaluation of the other party in connection
with the potential Business Combination.
6. It is understood that this letter is merely a non-binding
expression of intent, subject to the performance of due
diligence by both parties, and no party (nor any of their
affiliates) will have any binding obligation liability
hereunder or other wise with respect to the transaction
contemplated hereby, or any expenses related thereto, except
for any obligations or expenses under paragraph 4, 5, and 7
unless and until the Definitive Agreements are duly executed
and delivered in a form satisfactory to both parties, and
thereafter any binding obligation or liability will only be
pursuant to the terms of the Definitive Agreement.
7. Whether not the transactions contemplated hereby are
consummated and except as may be specifically agreed as to
particular expenses, each party will pay its own expenses,
including those of its accountants, advisors, and counsel, in
connection with the transactions contemplated hereby. TimeOne,
Inc. will be responsible for any and all liabilities on behalf
of the other party for any brokerage or finders fees,
including without limitation the fees and expenses of Capital
Resources Group LLC, or other compensation in connection with
the transactions contemplated hereby.
8. The parties hereto further acknowledge that (a) SunGlobe Fiber
Systems Corp. has disclosed to TimeOne, Inc. that it has an
option to purchase a 100% interest in Island Sun
Communications, Corp., Campo Rico, Puerto Rico (exhibit C);
and said option shall remain in force for a period of one year
from February 28, 2000; (b) TOI will have no less than $1.5
million in free available cash upon consummation of the
BUSINESS COMBINATION.
9. This letter may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
10. This letter shall be governed by and construed in accordance
with the laws of the State of Nevada, without giving effect to
any conflicts of law principles.
2
<PAGE>
****Signature Page****
If the foregoing correctly sets forth the understanding between us, please
execute this letter and enclosed copies and return them to use at the same
address set forth above.
Very truly yours,
TimeOne, Inc.
By:
Roy Molina, Chief Financial Officer
Acknowledged by and agreed as of March 3, 2000
SunGlobe Fiber Systems, Corporation
By:
Barry Pastemak, President
3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
TimeOne, Inc. December 31, 1999 financial statements and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000350133
<NAME> TimeOne, Inc.
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1.00
<CASH> 421,046
<SECURITIES> 1,604,725
<RECEIVABLES> 389
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,041,904
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,100,994
<CURRENT-LIABILITIES> 105,840
<BONDS> 0
0
0
<COMMON> 826
<OTHER-SE> 1,994,328
<TOTAL-LIABILITY-AND-EQUITY> 2,100,994
<SALES> 0
<TOTAL-REVENUES> 548,667
<CGS> 0
<TOTAL-COSTS> 320,175
<OTHER-EXPENSES> 20,186
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,529
<INCOME-PRETAX> 198,777
<INCOME-TAX> 1,933
<INCOME-CONTINUING> 196,844
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 196,844
<EPS-BASIC> .02
<EPS-DILUTED> .02
</TABLE>
