SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FROM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of the earliest event reported: January 8, 1999
INTELLIQUIS INTERNATIONAL, INC.
(f/k/a Leesburg Land & Mining, Inc.)
(Exact name of registrant as specified in charter)
NEVADA 0-12139 82-0379959
(State or other jurisdiction (Commission (IRS employer
of incorporation) file number) identification no.)
352 West 12300 South, Suite 300
Draper, Utah 84020
(Address of Principal Executive Offices)
Registrant's telephone number, including area code (801) 990-2600
INTELLIQUIS INTERNATIONAL, INC.
Item 7. Financial Statements and Exhibits
Included are the financial statements of Intelliquis International, Inc.
for the periods ended December 31, 1998 and 1997.
Exhibits.
Included are the proforma financial statements of Intelliquis
International, Inc. for the periods ended December 31, 1998 and 1997.
INTELLIQUIS INTERNATIONAL, INC..
AND SUBSIDIARY
FINANCIAL STATEMENTS
December 31, 1998
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Balance Sheets
ASSETS
December 31,
1998 1997
Current assets
Cash $ 23,074 $52,455
Accounts receivable (Note 2) 619,966 28,067
Inventory (Note 2) 130,517 18,398
Prepaid expenses 6,838 8,253
Deposits 500 -
780,895 107,173
Property, Plant & Equipment (Note 2) 54,297 16,533
Other assets
Certificate of deposit (Note 2) 40,351 -
Intangibles (Note 2) 8,328 10,444
Total Assets $ 883,871 $134,150
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 502,973 $18,673
Short term notes (Note 3) 104,500 -
Short term notes - related party (Note 4) 85,000 -
692,473 18,673
Stockholders' Equity
Preferred Stock, 5,000,000 shares authorized,
par value $.001, no shares outstanding - -
Common Stock, 50,000,000 shares authorized,
$.001 par, 12,586,411 shares issued and outstanding 12,586 -
Members equity (1997) (Note 6) - 170,000
Additional paid in capital 157,414 -
Retained earnings (deficit) 21,398 (54,523)
Total Stockholders' Equity 191,398 115,477
Total Liabilities and Stockholders' Equity $ 883,871 $ 134,150
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Statements of Operations
For the
Year Ended
December 31,
1998 1997
Sales
$1,461,196 $34,709
Cost of Sales 355,613 4,948
Gross Margin 1,105,583 29,761
Expenses:
Sales & Marketing 596,125 36,443
General & Administrative 430,304 47,841
Total Expenses 1,026,429 84,284
Operating Income (Loss) 79,154 (54,523)
Other Income (Expense) (3,233 ) -
Net Income (Loss) before Taxes 75,921 (54,523)
Taxes (Note 1) - -
Net Income $ 75,921 $ (54,523)
Net Income Per Share $ .006 $ -
Total average shares outstanding
12,586,411 -
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Statements of Stockholders' Equity
Common Stock Paid in Members' Retained
Shares Amount Capital Equity Deficit
Balance, January 1, 1997 - $ - $ - $ - $ -
Members contributions
(Note 6) - - - 170,000 -
Net loss - - - - (54,523)
Balance, December 31, 1997 - - - 170,000 (54,523)
Issuance of Common Stock for purchase
Of Intelliquis, Inc.
(Note 6) 12,586,411 12,586 157,414 (170,000) -
Net Income - - - 75,921 -
Balance,
December 31, 1998 12,586,411 $ 12,586 $ 157,414 $ - $ 21,398
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Statements of Cash Flows
For the
Year Ended
December 31,
1998 1997
Cash Flows form Operating
Activities:
Net loss (loss) $ 75,921 $ (54,523)
Non Cash Flow Items:
Depreciation & Amortization
10,756 4,630
Increase (decrease) in
Accounts receivable (591,899) (28,067)
Inventory (112,119) (18,398)
Prepaids & deposits 915 (8,253)
Accounts payable & accrued expenses 484,300 18,673
Net Cash Flows used in
Operating Activities (132,126) (85,938)
Cash Flows from Investing Activities:
Cash from stock sales / LLC units
- 170,000
Purchase of certificates of deposits
(40,000) -
Net Cash Flows used in
Investing Activities (40,000) 170,000
Cash Flows from Financing
Activities:
Purchase of fixed assets (46,404) (21,030)
Purchase of intangibles & other assets
(351) (10,577)
Cash from short term debt 189,500 -
Net Cash Flows from Financing Activities
142,745 (31,607)
Net increase (decrease) in cash
(29,381) 52,455
Cash, beginning of year 52,455 -
Cash, end of year $ 23,074 $ 52,455
Supplemental Cash Flow Information
Cash Paid for:
Taxes $ - $ -
Interest $ 2,334 $ -
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Notes to The Financial Statements
December 31, 1998
NOTE 1 - Background and History
Intelliquis International, Inc. (the Company) (formerly Leesburg Land and
Mining, Inc.) was created on June 21, 1983 in the State of Colorado. The
Company was involved in mining activities until approximately 1987, when it
ceased all activities and began disposing of its assets. It has not
had any business activity since that time. The Company changed its name in
1998.
Also in 1998, the Company created and later merged with, a Nevada
subsidiary.
Intelliquis, LLC was created in 1997 as a corporation and later
reorganized as a limited liability company in the State of Utah. Intelliquis
was organized for the purpose of licensing and marketing computer software to
wholesale and private label customers.
Intelliquis International, Inc. acquired all of the outstanding units of
Intelliquis LLC effective December 31, 1998.
The acquisition is accounted for as a "reverse acquisition" where the
parent corporation is taken over by the owners of the subsidiary. All
activity of the financial reports is that of the subsidiary operation.
NOTE 2 - Significant Accounting Policies
Cash and Cash Equivalents The Company considers all short term, highly
liquid investments that are readily convertible to known amounts as cash
equivalents.
Intangible Assets Intangible assets consist of contract design work and
goodwill. Both intangibles are being amortized over 60 months on the straight
line method. Amortization expense for 1997 was $133 and $2115 for 1998.
Use of Estimates The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements and revenues and expenses during the reporting period.
In these financial statements, assets, liabilities and earnings involve
extensive reliance on management's estimates. Actual results could differ
from those estimates.
Income Taxes The Company adopted Statement of Financial Standards No. 109
"Accounting for Income taxes" in the fiscal year ended December 31, 1998 and
was applied retroactively.
Statement of Financial Accounting Standards No. 109 " Accounting for
Income Taxes" requires an asset and liability approach for financial
accounting and reporting for income tax purposes. This statement recognizes
(a) the amount of taxes payable or refundable for the current year and (b)
deferred tax liabilities and assets for future tax consequences of events
that have been recognized in the financial statements or tax returns.
Deferred income taxes result from temporary differences in the
recognition of accounting transactions for tax and financial reporting
purposes. There were no temporary differences at December 31, 1998 and
earlier years; accordingly, no deferred tax liabilities have been recognized
for all years.
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Notes to The Financial Statements
December 31, 1998
NOTE 2 - Significant Accounting Policies (continued)
The Company has cumulative net operating loss carryforwards of over
$4,000,000 at December 31, 1998. No effect has been shown in the financial
statements for the net operating loss carryforwards as the likelihood of future
tax benefit from such net operating loss carryforwards is highly improbable.
Accordingly, the potential tax benefits of the net operating loss
carryforwards, estimated based upon current tax rates at December 31, 1998
have been offset by valuation reserves of the same amount.
The subsidiary operation was a limited liability company (LLC) throughout
1997 and 1998. LLC's report their earnings on a partnership tax return and no
tax liability accrued at the company level. Taxable income is allocated to
its individual members and tax paid by each member.
Inventory Inventory consists of finished goods (assembled and unassembled
computer software) that is valued at lower of cost (FIFO) or market.
Certificate of Deposit The Company holds a Certificate of Deposit as
partial security for a short term loan at the Company's bank (see Note 3).
The certificate matures on March 10, 1999, the same day that the note is due.
Interest is stated at 4.91%
Fixed Assets
Fixed assets consist of the following:
December 31,
1998 1997
Computer Equipment & Software $32,886 $12,464
Office Equipment & Furniture 34,549 8,566
67,435 21,030
Less: Accumulated Depreciation (13,138) (4,497)
$ 54,297 $ 16,533
Computer equipment and software is being depreciated on the straight line
method over three to five years. Office equipment is being depreciated on
the straight line method over five years. Depreciation expense is $4,497 and
$8,641 for 1997 and 1998, respectively.
Principles of Consolidation The Company consists of the parent
corporation, Intelliquis International, Inc., and its subsidiary, Intelliquis
LLC. The two companies together report as a consolidated group known as The
Company. All intercompany accounts and transactions have been eliminated.
Accounts Receivable Accounts Receivable is shown net of allowance for
returns of $186,660 and $0 and allowance for bad debt of $150,000 and $0 for
1998 and 1997, respectively.
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Notes to The Financial Statements
December 31, 1998
NOTE 3 - Short Term Notes
The Company has acquired short term borrowing for working capital as follows:
Note payable to a bank, secured by
$40,000 certificate of deposit, all
assets of the Company and personal
guarantees from the corporation
officers, interest stated at 10%,
due March 10, 1999 $ 79,500
Note payable to an individual, no
security, interest stated at 25%
payable in January 1999 25,000
$ 104,500
Interest expense for 1998 was $3,584.
NOTE 4 - Short Term Notes - Related Party
The Company has acquired short term financing from two officers of the
corporation. One loan was for $80,000 and the other for $5,000. These are
demand notes with no interest accruing. The $80,000 was paid in 1999.
NOTE 5 - Economic Dependency
The Company currently uses one major distributor for most of its sales.
That distributor accounted for 67% of all sales in 1998. The Company could
recognize significant declines in sales if the distributor or the Company
chooses to alter its current sales relationship.
NOTE 6 - Member Contributions/Common Stock Transactions
In 1997, the Company was organize as a Utah limited liability company
with $170,000 of member contributions for start up operations.
In 1998, the Company continued to operate as a limited liability company
until December 31, 1998 when Intelliquis International, Inc. acquired 100% of
the membership units in exchange for 10,837,200 shares of common stock.
Before the acquisition, the corporation had 1,749,211 shares outstanding
with no assets and no liabilities.
NOTE 7 - Subsequent Events
In 1999, the Company leased office space for a term of three years at
$4,000 per month.
In 1999, the Company repurchased 2,067,648 of the company shares for
$160,000.
Supplementary Schedules
Proforma Financial Statements
For the Period Ended
December 31, 1998 and 1997
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Proforma Balance Sheets
December 31, 1998
Intelliquis Int. Intelliquis Adjustments
Total
ASSETS
Cash and short term deposits $ - $ 23,074 $ - $ 23,074
Prepaid expenses and other
current assets - 757,821 - 757,821
Total - 780,895 - 780,895
CAPITAL ASSETS - 54,297 - 54,297
OTHER ASSETS - 48,679 - 48,679
Total $ - $883,871 $ - $883,871
LIABILITIES AND
SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable and accruals $ - $ 502,973 $ - $ 502,973
Notes payable - 189,500 - 189,500
Total - 692,473 - 692,473
STOCKHOLDERS' EQUITY
Common stock 1,749 10,837 12,586
Additional paid in capital 4,147,083 159,163 4,306,246
Members equity - 170,000 (170,000)
Retained (deficit)
earnings (4,148,832) 21,398 - (4,127,434)
Total $ - $883,871 $ - $883,871
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Proforma Balance Sheets
December 31, 1997
Intelliquis Int. Intelliquis Adjustments Total
ASSETS
Cash and short term deposits $ - $ 52,455 $ - $ 52,455
Prepaid expenses and other
current assets - 54,718 - 54,718
Total - 107,173 - 107,173
CAPITAL ASSETS - 16,533 - 16,533
OTHER ASSETS
Other - 10,444 - 10,444
Total $ - $134,150 $ - $134,150
LIABILITIES AND
SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable and accruals $ 23,536 $ 18,673 $ - $ 42,209
Notes and advances payable - - - -
Total 23,536 18,673 - 42,209
STOCKHOLDERS' EQUITY
Common stock 4,148,832 - 170,000 4,318,832
Additional paid in capita - - - -
Members equity - 170,000 (170,000) -
Retained deficit (4,172,368) (54,523) - (4,226,891)
Total $ - $134,150 $ - $134,150
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Proforma Consolidated Statements of Operations
For the Year Ended December 31, 1998
Intelliquis Int. Intelliquis Adjustments Total
INCOME $ - $1,461,196 $ - $ 1,461,196
Cost of sales - 355,613 - 355,613
Sales and Marketing - 596,125 - 596,125
General and Administrative - 430,304 - 430,304
OTHER INCOME (EXPENSE) 23,536 (3,233) - 20,303
Net (loss) Income $ 23,536 $ 75,921 $ - $ 99,457
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Proforma Consolidated Statements of Operations
For the Year Ended December 31, 1997
Intelliquis Int. Intelliquis Adjustments Total
INCOME $ - $ 34,709 $ - $ 34,709
Cost of sales - 4,948 - 4,948
Selling and Marketing - 36,443 - 36,443
General and Administrative 19,483 47,841 - 67,324
OTHER INCOME (EXPENSE) 377 - - 377
Net (loss) Income $ (19,106) $(54,523) $ - $(73,629)
INTELLIQUIS INTERNATIONAL, INC. AND SUBSIDIARY
Proforma Financial Statements
Statement of Assumptions
1 - Basis of Presentation
The purpose of the presentation of the proforma financial statements of
Intelliquis International, Inc. is to show the financial position and results
of operations as if the two corporations were combined as one entity for the
period for the two years 1997 and 1998.
Separate columns are used to show the financial position and results of
operations of each company separately, adjustments, if any between the two
companies, and the resulting totals from both companies.
Intelliquis International, Inc. acquired all of the assets and
liabilities of Intelliquis LLC as of December 31, 1998. The end result being
that of Intelliquis International, Inc. as a parent corporation, with the
assets of Intelliqiuis being its wholly owned subsidiary.
This transaction was accounted for as a "pooling of interest" method for
the business combination.
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 thereunto duly authorized.
Date: March 8, 1999
Intelliquis International, Inc.
by: /s/ Bernard Yaw
Bernard Yaw
President
