<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest reported) August 7, 2000
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World Collectibles, Inc.
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(Exact name of registrant as specified in its chapter)
Delaware 0-9798 95-2930683
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
5720 South Arville Street, Suite 106, Las Vegas, Nevada 89118
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 310-6676
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(Former name or former address, if changed since last report)
PORTIONS AMENDED:
The Registrant hereby amends Item 7 contained in the Registrant's Current
Report on Form 8-K filed August 7, 2000 to provide the requisite financial
required by Item 7. Except as set forth in Item 7 below, no other changes are
made to the Registrant's Current Report on Form 8-K filed August 7, 2000.
<PAGE>
Item 7. Financial Statements and Exhibits.
a. Financial Statements of World Collectibles, Inc. for the period from
inception to July 31, 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 13, 2000 World Collectibles, Inc.
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(Registrant)
/s/ Brad Smith
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Brad Smith
Chairman and President
<PAGE>
WORLD COLLECTIBLES, INC. AND SUBSIDIAIRIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
FOR PERIOD MARCH 1, 2000 (INCEPTION) TO JULY 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors F-1
Consolidated Balance Sheet as of July 31, 2000 F-2
Consolidated Statement of Operations for the
Period from Inception March 1, 2000 to July 31, 2000 F-3
Consolidated Statement of Shareholders' Equity for the
Period from February 28, 2000 to July 31, 2000 F-4
Consolidated Statement of Cash Flows for the
Period from Inception March 1, 2000 to July 31, 2000 F-5
Notes to Consolidated Financial Statements F-6
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Shareholders of
World Collectibles, Inc. and Subsidiaries
We have audited the accompanying consolidated balance sheet of World
Collectibles, Inc. (formerly Medical Monitors, Inc.) and Subsidiaries as of July
31, 2000, and the related consolidated statement of operations, shareholders'
equity, and cash flows for the period from inception March 1, 2000 to July 31,
2000. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated 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
misstatements. 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 consolidated financial position of World
Collectibles, Inc. and Subsidiaries as of July 31, 2000, and the results of its
operations, shareholders' equity and its cash flows for the period from
inception March 1, 2000 to July 31, 2000, in conformity with generally accepted
accounting principles.
HOLLANDER, LUMER & CO. LLP
Los Angeles, California
October 24, 2000
F-1
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WORLD COLLECTIBLES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
JULY 31, 2000
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 64,116
Inventory 228,726
Advance to employee 6,500
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TOTAL CURRENT ASSETS 299,342
PROPERTY AND EQUIPMENT, net 20,240
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TOTAL ASSETS $ 319,582
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 196,422
Note payable 90,000
Income taxes payable 4,824
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TOTAL LIABILITIES 291,246
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SHAREHOLDERS' EQUITY
Common stock, $0.001 par value; authorized - 50,000,000 shares
issued and outstanding - 8,820,370 shares 8,820
Additional paid in capital 1,952,391
Retained earnings (1,932,875)
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TOTAL SHAREHOLDERS' EQUITY 28,336
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 319,582
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</TABLE>
See accompanying Notes to Financial Statements
F-2
<PAGE>
WORLD COLLECTIBLES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR PERIOD MARCH 1, 2000 (INCEPTION) TO JULY 31, 2000
<TABLE>
<S> <C>
SALES $1,062,464
COST OF GOODS SOLD 586,256
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GROSS PROFIT 476,208
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COSTS AND EXPENSES
Operating expenses 113,626
Selling, general and administrative 323,672
Depreciation 3,000
Interest expense 3,750
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TOTAL EXPENSES 444,048
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NET INCOME BEFORE PROVISION FOR INCOME TAXES 32,160
PROVISION FOR INCOME TAXES (4,824)
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NET INCOME $ 27,336
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WEIGHED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 8,820,370
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BASIC AND DILUTED EARNINGS PER SHARE $ 0.003
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</TABLE>
See accompanying Notes to Financial Statements
F-3
<PAGE>
WORLD COLLECTIBLES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR PERIOD FEBRUARY 28, 2000 TO JULY 31, 2000
<TABLE>
<CAPTION>
Common Stock Additional Retained
Shares Amount Paid in Capital Earnings Total
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<S> <C> <C> <C> <C> <C>
Balance, February 28, 2000 50,000,000 $ 50,000 $1,141,299 $(1,960,211) $(768,912)
Reverse stock split (49,629,630) (49,630) 49,630 -
Issuance of 6,450,000 shares in
exchange for 64,500 shares of WCIN 6,450,000 6,450 (7,450) (1,000)
Issuance of 2,000,000 shares to cancel debt
due to a former officer and shareholder 2,000,000 2,000 485,448 487,448
Forgiveness of accrued salaries
due to a former officer and shareholder 283,464 283,464
Net income 27,336 27,336
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Balance, July 31, 2000 8,820,370 $ 8,820 $1,952,391 $(1,932,875) $ 28,336
=========== ======== ========== =========== =========
</TABLE>
See accompanying Notes to Financial Statements
F-4
<PAGE>
WORLD COLLECTIBLES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR PERIOD MARCH 1, 2000 (INCEPTION) TO JULY 31, 2000
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 27,336
Adjustments:
Depreciation 3,000
Changes in operating assets and liabilities:
Inventory (228,726)
Accounts payable and accrued expenses 196,422
Income taxes payable 4,824
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NET CASH USED IN OPERATING ACTIVITIES 2,856
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CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (23,240)
Advance to employee (6,500)
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NET CASH USED IN INVESTING ACTIVITIES (29,740)
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CASH FLOWS FROM FINANCING ACTIVITIES
Note payable 90,000
Proceeds from sale of common stock 1,000
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NET CASH PROVIDED BY FINANCING ACTIVITIES 91,000
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NET INCREASE IN CASH 64,116
CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR -
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CASH AND CASH EQUIVALENTS, END OF THE YEAR $ 64,116
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NON-CASH TRANSACTIONS
Issuance of 2,000,000 shares of common stock
to cancel debt due to a former officer and shareholder $ 485,448
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Forgiveness of accrued salaries due to a former officer and shareholder $ 283,464
=========
</TABLE>
See accompanying Notes to Financial Statements
F-5
<PAGE>
WORLD COLLECTIBLES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
World Collectibles, Inc. (the "Company") imports and conducts live auctions
of home and office furnishings and decorator items. Auction activity occurs
primarily in Colorado, Utah, Nevada, and California. The Company also
operates a retail store in Las Vegas, Nevada that sell these items.
On May 17, 2000, World Collectibles, Inc. (formerly Medical Monitors, Inc.
or the "Company"), World Collectible Holdings, Inc. ("WCID"), and World
Collectibles, Inc., a Nevada corporation ("WCIN") entered into a Merger
Agreement and Plan of Reorganization (the "Merger Agreement") pursuant to
which WCIN merged with and into WCID (the "Merger"). The Merger Agreement
closed on July 26, 2000. Pursuant to the Merger Agreement, shareholders of
WCIN exchanged their shares for shares of common stock of the Company at the
rate of 100 shares of common stock of the Company for each one share of
WCIN. Following the conversion of shares by WCIN's shareholders,
shareholders of WCIN owned approximately 73% of the outstanding shares of
common stock of the Company and the shareholders of the Company before the
Merger owned approximately 4.2%
For accounting purposes, the transaction has been treated as an acquisition
of the Company by WCIN. The historical financial statements of the Company
prior to the acquisition are those of WCIN even though they are labeled as
those of the Company. The Company did not have significant operations before
the Merger, which, for financial statement purposes, was effective March 1,
2000.
As part of the Merger, the former director of Medical Monitors, Inc.,
Stanley Shuster, resigned and was replaced by the following directors: Brad
Smith (the current CEO and principal shareholder of the Company) and Susan
Shuey (the current CFO and principal shareholder of the Company).
2. Significant Accounting Policies
Principles of Consolidation: The consolidated financial statements include
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the accounts of World Collectibles, Inc. and its wholly-owned subsidiaries.
All significant intercompany transactions and balances have been eliminated.
Use of Estimates: The preparation of consolidated financial statements in
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conformity with generally accepted accounting principles requires
management, to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and reported amounts of
revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Cash and Cash Equivalents: The Company considers all highly liquid
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investments purchased with an original maturity of three months or less to
be cash equivalents.
Fair Value of Financial Instruments: The Company's financial instruments
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consist of cash equivalents, accrued expenses, and due to related parties.
The fair values of the Company's financial instruments approximate the
carrying value of the instruments.
F-6
<PAGE>
Inventory: Inventory consists primarily of reproductions of works of art
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purchased from foreign and domestic entities incidental to the auction
process as well as for sales in the retail store. Inventories are stated at
the lower of cost (first-in, first out method, "FIFO") or market.
Impairment of Long-Lived Assets: Long-lived assets are reviewed for
-------------------------------
impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable.
Property and Equipment: Property and Equipment is recorded at cost.
----------------------
Depreciation is computed on the straight-line method based upon the
estimated useful life of the assets or over the lease term, whichever is
shorter. Currently, all property and equipment is being depreciated over 3
years.
Earnings Per Share: Earnings per share has been computed in accordance with
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SFAS 128. Basic earnings per share is computed by dividing net income
attributable to common shareholders by the weighted average number of common
shares outstanding during the respective periods. Diluted earnings per share
is computed similarly, but also gives effect to the impact that convertible
securities, such as warrants, if dilutive, would have on net earnings and
average common shares outstanding if converted at the beginning of the year.
The Company had no convertible securities outstanding during the period from
inception March 1, 2000 to July 31, 2000.
Revenue Recognition: Auction and related revenues are generally recognized
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at the date of sale. Revenues from the sales in the retail store are
generally recognized at the date of sale.
Income Taxes: The Company utilizes the asset and liability method for income
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taxes. Under this method, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carryforwards.
Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date.
3. Disclosure of Certain Significant Risks and Uncertainties
Dependence on Key Personnel: The success of the Company is largely dependent
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on the personal efforts of Mr. Brad Smith and Susan Shuey, the CEO and CFO,
respectively, and majority shareholders of the Company. The loss of Mr.
Smith and Ms. Shuey could have a materially adverse effect on the Company's
operations.
4. Related Party Transactions
Related party transaction consists of payments made to BSA Group, Inc., a
wholly owned company of Brad Smith and Susan Shuey, the CEO and the CFO,
respectively, and majority shareholders of the Company. For period March 1,
2000 (inception) to July 31, 2000, the Company made payments of $21,587 to
BSA Group, Inc. as compensation to Mr. Smith and Ms. Shuey under their
employment agreements. (See Note 9)
5. Advance to Employee
Advance to Employee of $6,500 is secured by the employee's 1996 Ford pick-up
truck. The advance bears interest at 10% per annum and is due and payable on
demand.
F-7
<PAGE>
6. Property and Equipment
Property and equipment is comprised of the following as of July 31, 2000:
<TABLE>
<S> <C>
Warehouse equipment $ 8,225
Office equipment 9,250
Furniture 5,765
Accumulated depreciation (3,000)
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$20,240
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</TABLE>
7. Notes Payable
Notes payable consists of principal amount of $90,000 due to Brad Smith, the
CEO and majority shareholder of the Company. The note, secured by the
Company's inventory and issued on March 31, 2000, bears interest at 10% per
annum and is due and payable on March 1, 2001.
8. Shareholders' Equity
The shareholders' equity transactions described below were effective March
1, 2000.
The Company undertook a reverse stock split whereby 50,000,000 outstanding
shares of the Company was converted into 370,370 outstanding shares.
Pursuant to the Merger Agreement described in Note 1, shareholders of the
Company exchanged their shares for shares of common stock of World
Collectibles, Inc. (formerly Medical Monitors, Inc.) at the rate of 100
shares of common stock of WCIN. Total number of the Company's shares issued
in this transaction was 6,450,000.
The Company issued 2,000,000 shares of the Company's common stock (post-
split) to a former officer and shareholder of the Company to cancel a note
payable of $485,448.
The Company was forgiven accrued salaries due to a former officer and
shareholder of the Company of $283,464.
9. Commitments and Contingencies
Minimum lease payments required under noncancelable leases are as follows:
<TABLE>
<CAPTION>
Year Ended July 31,
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<S> <C>
2001 $ 50,140
2002 52,320
2003 52,320
2004 52,320
2005 54,500
Thereafter 2,180
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Total $261,600
========
</TABLE>
Under the lease agreement monthly lease payments will increase annually at
the rate of the CPI per annum. The chart shown above does not reflect these
increases.
F-8
<PAGE>
On March 31, 2000 the Company entered into an employment agreement with Brad
Smith, the CEO and majority shareholder of the Company. Under the agreement
the Company will pay Brad Smith or his nominee $120,000 per annum for his
services to the Company.
On March 31, 2000 the Company entered into an employment agreement with
Susan Shuey, the CFO and shareholder of the Company. Under the agreement the
Company will pay Susan Shuey or her nominee $44,000 per annum for her
services to the Company.
F-9
