SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
(Amendment No. 1)
(Amending Item 7 to file required financial information)
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 27, 1999
NORTHEAST (USA) CORP. (formerly Celcor, Inc.)
(Exact name of registrant as specified in its charter)
DELAWARE 000-13337 22-2497491
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1800 Bloomsbury Avenue, Ocean, NJ 07712
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code 732-922-3355
Not applicable
(Former name or former address, if changed since last report)
The undersigned registrant hereby amends, to the extent set forth herein, the
registrant's Current Report on Form 8-K dated as of November 11, 1999 and filed
with the Securities and Exchange Commission on November 12, 1999.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
The audited financial statements of Buy It Cheap.com, Inc. ("BUYC"),
a Delaware corporation, for the period July 19, 1999 (date of inception) to
September 30, 1999 are filed as Exhibit 99.1 to this Form 8-K/A and are
incorporated herein by reference.
(b) Pro Forma financial information.
The unaudited pro forma consolidated financial statements of Northeast
(USA) Corp. ("Northeast"), a Delaware corporation, reflecting the acquisition of
BUYC are filed as Exhibit 99.2 to this Form 8-K/A and are incorporated herein by
reference.
(c) Exhibits.
27 Financial Data Schedule.
99.1 Financial Statements of BUYC for the period July 19, 1999 (date
of inception) to September 30, 1999.
99.2 Pro forma Unaudited Consolidated Financial Statements of
Northeast (reflecting the acquisition of BUYC).
<PAGE>
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.
NORTHEAST (USA) CORP.
Date: January 10, 2000 By: /s/Stephen E. Roman, Jr.
---------------------------------
Stephen E. Roman, Jr., President
<PAGE>
EXHIBIT INDEX
Exhibit No.
27 Financial Data Schedule
99.1 Financial Statements of BUYC for the period July 19, 1999 (date
of inception) to September 30, 1999:
Independent Auditors Report
Balance Sheet
State of Operations
Statement of Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
99.2 Proforma Unaudited Consolidated Financial Statements of Northeast
(reflecting the acquisition of BUYC):
Proforma Consolidated Balance Sheet at September 30, 1999
Proforma Consolidated Statement of Operations
for the three months ended September 30, 1999
Proforma Consolidated Statement of Cash Flows for the
three months ended September 30, 1999
Notes to Financial Statements
Buy It Cheap.com, Inc.
(A Development Stage company)
Index to the Financial Statements
For the Period July 19, 1999 (Date of Inception)
to September 30, 1999
Page
Independent Auditors' Report.................................................1
Balance Sheet ...........................................................2
Statement of Operations......................................................3
Statement of Stockholders' Equity............................................4
Statement of Cash Flows......................................................5
Notes to Financial Statements..............................................6-7
<PAGE>
(Letter on Letterhead of
Rosenberg Rich Baker Berman
& Company)
To the Board of Directors and Shareholders of
Buy It Cheap.com, Inc.
We have audited the accompanying balance sheet of Buy It Cheap.com, Inc. (A
Development Stage Company) as of September 30, 1999 and the related statements
of operations, stockholders' equity and cash flows for the period July 19, 1999
(date of inception) to September 30, 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 audit.
We conducted our audit 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 audit provides 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 Buy It Cheap.com, Inc. (A
Development Stage Company) as of September 30, 1999, and the results of its
operations, and its cash flows for the period July 19, 1999 (date of inception)
to September 30, 1999 in conformity with generally accepted accounting
principles.
Bridgewater, New Jersey
November 29, 1999
<PAGE>
<TABLE>
<CAPTION>
Buy It Cheap.com, Inc.
(A Development Stage Company)
Balance Sheet
September 30, 1999
Assets
Current Assets
<S> <C>
Cash $ 23,566
Notes receivable - Northeast (USA) Corp. 21,751
Other receivable 125
---------
Total Current Assets 45,442
Software 19,400
---------
Total assets 64,842
=========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses 9,697
---------
Total Current Liabilities 9,697
---------
Stockholders' Equity
Common stock - no par value; 1,000 shares authorized, 87
shares issued and outstanding 62,125
Deficit accumulated during the development stage (6,980)
----------
Total Stockholders' Equity 55,145
----------
Total Liabilities and Stockholders'
Equity $ 64,842
===========
</TABLE>
See Notes to the financial statements.
<PAGE>
Buy It Cheap.com, Inc.
(A Development Stage Company)
Statement of Operations
For the Period July 19, 1999 (Date of Inception)
to September 30, 1999
Revenues $ --
Costs and expenses:
General and administrative 6,980
--------
Net loss $ 6,980
========
See Notes to the financial statements.
<PAGE>
<TABLE>
<CAPTION>
Buy It Cheap.com, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
For the Period July 19, 1999 (Date of Inception)
to September 30, 1999
Deficit
Accumulated
During the Total
Common Stock Development Stockholders'
Shares Amount Stage Equity
<S> <C> <C> <C> <C>
Balance at July 19, 1999 (Date of Inception) - $ - $ - $ -
Issuance of Stock in exchange for subscription 25 125 - 125
receivable
Issuance of stock in exchange for software 15 15,000 - 15,000
Issuance of stock pursuant to private placement
offering 47 47,000 - 47,000
Net loss for the period - - (6,980) (6,980)
___________ _____________ __________ ________
Balance at September 30, 1999 87 $ 62,125 $(6,980) $ 55,145
=========== ============= ========== =========
See notes to the financial statements.
<PAGE>
Buy It Cheap.com, Inc.
(A Development Stage Company)
Statement of Cash Flows
For the Period July 19, 1999 (Date of Inception)
to September 30, 1999
Cash Flows From Operating Activities
Net Loss $ (6,980)
Changes in Assets and Liabilities
Accounts payable 6,797
------
Net Cash Used by Operating Activities (183)
-------
Cash Flows From Investing Activities
Loan to related party (21,751)
Purchase of software (1,500)
--------
Net Cash Used by Investing Activities (23,251)
--------
Cash Flows From Financing Activities
Sale of common stock 47,000
-------
Net Increase in Cash and Cash Balance at
September 30, 1999 $ 23,566
=========
SUPPLEMENTAL SCHEDULE OF NON CASH INVESTING AND FINANCING ACTIVITIES
Software costs financed by issuance of common stock $ 15,000
Software costs financed by accounts payable 2,900
Issuance of common stock for receivable 125
---------
Total Non Cash Investing and Financing Activities $ 18,025
=========
</TABLE>
See notes to the financial statements.
<PAGE>
Buy It Cheap.com, Inc.
(A Development Stage Company)
Notes to the Financial Statements
For the Period July 19, 1999 (Date of Inception)
to September 30, 1999
SUMMARY OF SIGNIFICANT ACCOUNT POLICIES
Nature of Organization
Buy It Cheap.com, Inc. (the "Company") is a Delaware corporation
organized on July 19, 1999. The Company will operate in the
Internet retailing industry.
Since there has been no significant revenues generated from
Internet retailing, the Company is considered a Development Stage
Company for financial reporting purposes.
Software Costs
Software is stated at cost. Amortization will be computed using
the straight line method over the estimated useful life, when the
Company substantially begins operations.
Income Taxes
Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes
currently due plus deferred taxes related primarily to
differences between the basis of assets and liabilities for
financial and income tax reporting. The deferred tax assets and
liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the
assets and liabilities are recovered or settled. Deferred taxes
also are recognized for operating losses that are available to
offset future federal and state income taxes.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
INCOME TAXES
The Company's deferred tax asset is comprised of the following
temporary differences:
Net operating losses $ (6,980)
==========
Deferred taxes are recognized for temporary differences between the bases
of assets and liabilities for financial statement and income tax purposes
and net operating loss carryforwards. The differences relate primarily
net operating loss carryforwards.
<PAGE>
The Company's provision for income taxes differs from applying the
statutory U.S. federal income tax rate to income before income taxes. The
primary difference results from providing for state income taxes and from
deducting certain expenses for financial statement purposes but not for
federal income tax purposes.
Those amounts have been presented in the Company's financial statement as
follows:
Deferred tax asset, noncurrent $ 1,500
Total valuation allowance recognized for deferred tax assets (1,500)
---------
Net deferred tax assets $ -
===========
The Company has available net operating loss carryforwards which may be
used to reduce Federal and State taxable income and tax liabilities in
future years as follows:
<TABLE>
<CAPTION>
Federal State
Available Through
<S> <C> <C> <C>
2007 $ - $ (6,980)
2019 (6,980) -
------------- -------------
Total $ (6,980) $ (6,980)
============= =============
</TABLE>
RELATED PARTY TRANSACXTIONS
The Company loaned $21,751 to Northeast (USA) Corp., an entity owned in
part by some of the Company's shareholders. These loans evidenced by
promissory notes, do not bear interest until the original maturity date,
November 30, 1999, at which time interest would accrue at 10% per annum.
SUBSEQUENT EVENT
On October 27, 1999, the Company entered into an agreement to merge with
Northeast (USA) corp. Pursuant to the agreement all of the outstanding
shares of Buy It Cheap.com, Inc. will be converted into the right to
receive shares of Northeast (USA) Corp. on the basis of 10,000 shares of
Northeast common stock for each outstanding share of Buy It Cheap.com, Inc.
common stock.
Proforma Financial Information
Northeast (USA) Corp. and Buy It Cheap.com, Inc.
At and for the three months ended September 30, 1999
Page
Proforma Consolidated Balance Sheet.......................................1
Proforma Consolidated Statement of Operations.............................2
Proforma Consolidated Statement of Cash Flows.............................3
Notes to Financial Statements...........................................4-6
<PAGE>
<TABLE>
<CAPTION>
NORTHEAST (USA) CORP.
Proforma Consolidated Balance Sheets
As of September 30, 1999
Northeast Buy It
(USA) Corp. Cheap.com, Inc. Adjustments Proforma
Assets
Current assets:
<S> <C> <C> <C>
Cash $708 $23,566 - $24,274
Notes receivable - 21,751 $(21,751) -
Other - 125 125
------- -------- --------- ---------
Total current assets 708 45,442 (21,751) 24,399
------- -------- --------- ---------
Investment in and net advances to joint venture 620,535 - - 620,535
Reserve against investment in and net advances to (620,535) - - (620,535)
joint venture
Investment in website - 19,400 - 19,400
Goodwill - - 136,429 136,429
-------- ------- --------- ---------
Total assets $708 $64,842 $114,678 $180,228
======== ======= ========= ========
Liabilities and Equity
Current liabilities:
Accounts payable $175,713 $ 9,697 - $185,409
Due to officers and directors 4,962 - - 4,962
Notes payable 21,751 - $(21,751) -
Loan payable 3,559 - - 3,559
--------- ------- --------- ---------
Total current liabilities 205,985 9,697 (21,751) 193,930
--------- ------- --------- ---------
Stockholders' equity:
Preferred stock-Series C, $.001 par 10 - - 10
Common stock-$.001 par 7,158 $62,125 (61,174) 8,109
Paid in capital 2,566,856 - 190,624 2,757,480
Treasury stock (751,100) - - (751,100)
Deficit (2,028,201) (6,980) 6,980 (2,028,201)
---------- -------- -------- -----------
Total stockholders' equity 205,277 55,145 136,430 (13,702)
---------- -------- -------- -----------
Total Liabilities and Equity $ 708 $64,842 $114,678 $ 180,228
========== ======= ======== ==========
</TABLE>
<PAGE>
<TABLE>
NORTHEAST (USA) CORP.
Statements of Loss
For the Three Months Ended September 30,1999
<CAPTION>
Northeast (USA) Buy It Proforma
Corp. Cheap.com,Inc. Adjustments Consolidated
<S> <C> <C> <C> <C>
Sales Revenues $ - $ - $ - $ -
------------- ------------ ----------- ------------
General and administrative
expenses 20,471 6,980 (6,980) 20,471
------------- ------------ ----------- -----------
Net loss $(20,471) $(6,980) $ 6,980 $(20,471)
============= ============ =========== ===========
Net loss per share -
$===========
</TABLE>
<PAGE>
<TABLE>
NORTHEAST (USA) CORP.
Proforma Consolidated Statements of Cash Flows
<CAPTION>
-------------For the three months ended September 30,---------
Northeast Buy It
(USA) Corp. Cheap.com, Inc. Proforma
1999 1999 Adjustments 1999 1998
Cash flows from operating activities:
<S> <C> <C> <C> <C> <C>
Net loss $(20,471) $(6,980) $ 6,980 $(20,471) $(321)
Adjustments to reconcile net loss to net cash
used by operating activities:
Changes in assets and liabilities
Subscription receivable (125) (125)
Notes payable 21,751 - (21,751) - -
Accounts payable (1,652) 9,697 - 8,045 -
-------- ------ ------- -------- -----
Net cash used by operating activities (372) 2,592 (14,771) (12,551) (321)
-------- ------ ------- -------- -----
Cash flows from investing activities:
Issuance of notes receivable - (21,751) 21,751 - -
Investment in website - (19,400) - (19,400) -
-------- -------- -------- -------- -----
- (41,151) 21,751 (19,400) -
Cash flows from financing activities:
Sale of common stock - 62,125 (6,980) 55,145 -
-------- ------- -------- ------- -----
Net increase (decrease) in cash (372) 23,566 - 23,194 (321)
Cash at beginning of period 1,080 - - 1,080 1,102
------- ------- -------- ------- ------
Cash at end of period $ 708 $23,566 $ - $ 24,274 $ 781
======= ======= ======== ======== =====
</TABLE>
<PAGE>
Northeast (USA) Corp.
Notes to Financial Statements
Financial Statements
The proforma consolidated balance sheets, proforma consolidated statements of
loss, and proforma consolidated statements of cash flows for all periods
reported herein have been prepared by Northeast (USA) Corp. (the "Company")
without audit. In the opinion of the Company, all adjustments necessary to
present fairly these financial statements have been made. The proforma format of
the financial statements give effect to the merger between the Company and Buy
It Cheap.com, Inc. as though it was consummated at September 30, 1999. Buy It
Cheap.com, Inc. was incorporated in July of 1999. See Note on Subsequent Event.
Nature of Business
The Company is a Delaware corporation. The Company has had limited business
operations for the past 27 months. Its current business plans include the
seeking of business opportunities thorough acquisitions, mergers, joint ventures
and/or the formation of operating subsidiaries. All prior operations have been
classified as discontinued.
Summary of Significant Accounting Policies
Basis of Presentation
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has incurred losses
and has no current source of revenues or funds and has a working capital deficit
as of September 30, 1999. In addition, the Company, as a result of its
acquisition of Buy It Cheap.com, Inc. (see Note on Subsequent Event) will
require additional funds to finance the combined operations. The Company's
continued existence is dependent upon its ability to secure adequate financing.
The Company plans to raise capital for the combined entity in the future;
however, there are no assurances that such plan will be successful. The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
Joint Venture
The Company in 1992 formed a joint venture agreement with the Northeast General
Pharmaceutical Factory ("NEGPF"), a government owned pharmaceutical concern in
Shenyang, China, whereby both companies established a joint venture company in
China. Each of the Company and NEGPF were to have contributed certain assets to
the joint venture. The Company was to have contributed $2.1 million in cash and
$1.15 million in technology for a total capital contribution of $3.25 million.
NEGPF was to have contributed $750,000 in cash and a land-use right valued at
$1.75 million for a total contribution of $2.5 million. Based upon the amount of
contribution, the Company owned 56.52% of the joint venture and NEGPF owned
<PAGE>
43.48% . To date, the Company has contributed $1 million of cash and has
contributed the technology. NEGPF has contributed $750,000 of cash but has not
contributed the land-use right. The joint venture had only limited start-up
operations and operations effectively ceased in 1997 due to lack of funding. The
Company has communicated with NEGPF that it no longer has nay interest in the
joint venture. As such the Company has reserved $620,535 against the investment
in and net advances from the joint venture.
Net Loss Per common Share
The weighted average number of common shares outstanding used in computing net
loss per common share was 7,008,187 in the 1998 period and 7,878,187 in the 1999
period. The weighted average number of common shares used in computing the net
loss per common share does not include any shares issuable upon the assumed
conversion of the preferred stock (see Note of Preferred Stock), since the
effect would have been to decrease net loss per common share for the period.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the basis of assets and liabilities for
financial and income tax reporting. The deferred tax assets and liabilities
represent the future tax return consequences of those differences, which will
either be taxable or deductible when the assets or liabilities are recovered or
settled. Deferred taxes also are recognized for operating losses that are
available to offset future federal and state income taxes. The Company has a net
operating loss carryforward of $373,614 which expires in years through 2018.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Preferred Stock
In May 1994, the company sold 275,000 shares of its newly designated Series C
convertible preferred stock, $.001 par value, for an aggregate amount of
$825,000 to a group of private investors. Except for $10,000 (representing
30,000 shares) of the preferred stock, all had been converted according to their
terms prior to July 1, 1998. The Company has the right to redeem the shares at
$4.50 per share. The shares carry a stated dividend rate of 8% per annum.
Dividends are cumulative and are payable quarterly. No cash dividends have ever
been paid. Some former preferred shareholders (prior to or simultaneous with
their conversion) have accepted shares of the Company's stock in lieu of cash
dividends. Those that did not accept shares of stock for dividends and those
that did not covert their preferred shares are owed a total of $105,000 of
dividend arrcarages at September 30, 1999.
<PAGE>
Subsequent Event
On August 5, 1999, the Company's Board of Directors duly adopted a resolution
approving the acquisition of Buy It Cheap.com, Inc. ("BUY"). Approval of the
merger by the Company's shareholders was not required. The directors and
shareholders of BUY approved the merger on September 16, 1999. BUY is a start-up
company formed by two directors of the Company that will operate a discount
Internet retailing business. Based upon the final pre-merger asset value of BUY,
BUY stockholders received 1,400,000 shares of the Company's common stock in
accordance with the terms of the Agreement and Plan of Merger dated October 27,
1999, by and between the Company and BUY. The merger was consummated on October
27, 1999 and became effective on November 3, 1999.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000745651
<NAME> NORTHEAST (USA) CORP.(AS TO ACQUIRED COMPANY, BUY
IT CHEAP.COM, INC.)
<MULTIPLIER> 1
<CURRENCY> U.S.
<S> <C>
<PERIOD-TYPE> 2-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-19-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 23,566
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 45,442
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 64,842
<CURRENT-LIABILITIES> 9,697
<BONDS> 0
0
0
<COMMON> 62,125
<OTHER-SE> (6,980)
<TOTAL-LIABILITY-AND-EQUITY> 64,842
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,980
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,980)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,980)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,980)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
