SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDED CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): June 1, 2000
iSHOPPER.COM, INC.
(Exact name of registrant as specified in this Charter)
Nevada 033-03275-D 87-0431533
--------------------------- ----------------------- ----------------
State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
8722 South 300 West, Suite 106
Sandy, Utah 84070
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (801) 984-9300
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
On June 1, 2000, iShopper.com, Inc. acquired Atlantic
Technologies International, Inc. and Internet Software Solutions,
Inc. The financial statements of Atlantic Technologies
International, Inc. are filed herewith as Exhibit 99.1.
(a) Financial Statements.
See Exhibit Index, Exhibit 99.1
(b) Pro forma financial information
See Exhibit Index, Exhibit 99.1
(c) Exhibits. The following exhibits are
incorporated herein by this reference:
Exhibit No. Description of Exhibit
------------ --------------------------------------------------
2.5* Stock Exchange Agreements dated as of June 1, 2000
among the Registrant and Atlantic Technologies
International, Inc. and Internet Software Solutions, Inc.
99.1** Pro forma financial information.
99.1** Financial statements of Atlantic Technologies
International, Inc.
____________________________
* Incorporated by reference to the Company's Report on Form 8-K,
as filed on June 16, 2000
** Filed herewith
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.
iSHOPPER.COM, INC.
Date: August 22, 2000 By: /S/ Douglas S. Hackett
-------------------------------
Douglas S. Hackett, President,
Chief Executive Officer and Director
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
2.5* Stock Exchange Agreements dated as of June 1, 2000
among the Registrant and Atlantic Technologies
International, Inc. and Internet Software Solutions, Inc.
99.1** Pro forma financial information
99.1** Financial statements of Atlantic Technologies
International, Inc.
____________________________
* Incorporated by reference to the Company's Report on Form 8-K,
as filed on June 16, 2000
** Filed herewith
<PAGE>
iSHOPPER.COM, INC.
INDEX TO FINANCIAL STATEMENTS
Page
Unaudited Pro Forma Condensed Consolidated Financial Statements F-2
Unaudited Pro Forma Condensed Consolidated Statements of
Operations for the Six Months Ended June 30, 2000 and for
the Year Ended December 31, 1999 F-3
Notes to Unaudited Pro Forma Condensed Consolidated
Financial Statements F-5
Atlantic Technologies International, Inc. Financial Statements
Report of Independent Certified Public Accountants F-6
Balance Sheets - March 31, 2000 (Unaudited) and December
31, 1999 F-7
Statements of Operations for the Three Months Ended March
31, 2000 and 1999 (Unaudited) and for the Years Ended
December 31, 1999 and 1998 F-8
Statements of Stockholders' Equity (Deficit) for the Years
Ended December 31, 1998 and 1999 and for the Three Months
Ended March 31, 2000 (Unaudited) F-9
Statements of Cash Flows for the Three Months Ended March
31, 2000 and 1999 (Unaudited) and for the Years Ended
December 31, 1999 and 1998 F-10
Notes to Financial Statements F-11
F-1
<PAGE>
iSHOPPER.COM, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
On June 1, 2000, iShopper.com, Inc. (the Company) completed
agreements (the Agreements) acquiring Atlantic Technologies
International, Inc. (Atlantic) and Internet Software Solutions,
Inc. (ISSI), both Florida corporations. Atlantic is involved in
the business of assembling and selling computers. ISSI was newly
formed to provide computer services. ISSI had only nominal
operations prior to the acquisition.
Under the terms of the Agreements, Atlantic and ISSI were
acquired by the Company issuing 298,200 restricted shares of
common stock and options to purchase 1,800 common shares at $0.10
per share. In addition, 198,800 common shares and 1,200 options
will be issued upon Atlantic and ISSI meeting certain performance
criteria.
The acquisitions were accounted for by the purchase method of
accounting based upon the fair value of the common stock issued.
The common stock issued was valued at $1,335,936, or $4.48 per
share and the options issued were valued at $8,064, or $4.48 per
share. The contingently issuable common shares and options were
not included in the purchase price but will be recorded at their
fair value if and when the contingency is resolved. The
additional cost of the acquisition, if recorded, will increase
goodwill. The purchase price was allocated to the net assets of
Atlantic and ISSI based upon their fair value with the $1,376,903
excess of the purchase price allocated to goodwill. Goodwill is
being amortized over a period of five years by the straight-line
method. Any additional goodwill recognized upon the contingently
issuable common shares and options are issued will be amortized
over the remaining estimated life of the goodwill.
The following unaudited pro forma condensed consolidated
statements of operations have been prepared to present the
results of operations of the Company assuming the acquisitions
occurred on January 1, 1999. The amounts presented for the
Company have been derived from the Company's historical
consolidated financial statements for the six months ended June
30, 2000 and for the year ended December 31, 1999. The amounts
presented for the acquired companies were derived from their
historical financial statements through the dates they were
acquired.
The accompanying pro forma financial statements have been
prepared for comparative purposes. Had the acquisitions occurred
on January 1, 1999, actual results of operations would likely
have differed from the amounts presented in these pro forma
financial statements. In addition, the pro forma results of
operations presented in the accompanying pro forma financial
statements are not necessarily indicative of the results that may
be expected for the remainder of the year ending December 31,
2000.
<PAGE>
iSHOPPER.COM, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Atlantic
Tech- KT Pro Forma Pro Forma
iShopper Uniq nologies Solutions Adjustments Results
----------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues $ 2,781,309 $ 121,500 $1,065,840 $ 62,954 $ - $ 4,031,603
Cost of Sales 1,568,858 1,300 910,292 7,211 - 2,487,661
----------- ---------- --------- --------- ---------- -----------
Gross Profit 1,212,451 120,200 155,548 55,743 - 1,543,942
----------- ---------- --------- --------- ----------- -----------
Operating Expenses
General and
administrative 2,432,736 181,505 166,307 114,469 C 33,878 2,928,895
Bad debt 82,666 - 21,662 - 104,328
Depreciation 25,463 - 15,473 - D 1,748 42,684
Amortization of
software costs 150,000 - - - B 155,738 305,738
Amortization of
goodwill 404,621 2,180 - 325 A 283,457
C 114,366
E 360,670 1,165,619
----------- ----------- ----------- ---------- ----------- -----------
Total Operating
Expenses 3,095,486 183,685 203,442 114,794 949,857 4,547,264
----------- ----------- ---------- --------- ---------- -----------
Loss from Operations (1,883,035) (63,485) (47,894) (59,051) (949,857) (3,003,322)
Other expense (267) - - (9,550) - (9,817)
Interest income 14,674 - 1,161 2,627 - 18,462
Interest expense (33,953) (777) (23,215) (4,197) - (62,142)
------------ ---------- --------- -------- ----------- -----------
Loss Before Income
Taxes (1,902,581) (64,262) (69,948) (70,171) (949,857) (3,056,819)
Income Tax Benefit
(Expense) (236,060) - 5,080 - - (230,980)
------------- ----------- -------- -------- ---------- -----------
Net Loss $ (2,138,641) $ (64,262) $(64,868) $(70,171) $ (949,857) $(3,287,799)
============= =========== ======== ======== ========== ===========
Basic and Diluted
Loss Per Common
Share $ (0.18) $ (0.25)
============= ==========
Weighted Average Number
of Common Shares Used
in Per Share
Calculation 11,574,232 13,408,135
============= ==========
</TABLE>
See the accompanying notes to the unaudited condensed consolidated pro
forma financial statements.
<PAGE> F-3
iSHOPPER.COM, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
Atlantic
Tech- KT Pro Forma Pro Forma
iShopper Uniq nologies Solutions Adjustments Results
------------ --------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ 3,924,869 $ 295,974 $ 4,702,838 $ 872,445 $ - $ 9,796,126
Cost of Sales 276,600 23,385 4,316,526 113,221 - 4,729,732
------------ --------- ----------- ----------- ------------- -----------
Gross Profit 3,648,269 272,589 386,312 759,224 - 5,066,394
------------ --------- ----------- ----------- ------------- -----------
Operating Expenses
General and
administrative 3,912,542 513,410 316,040 1,027,586 - 5,769,578
Research and development - - 39,639 - - 39,639
Bad debt 653,702 - 191,742 - - 845,444
Loss from write-off of
goodwill 229,713 - - - - 229,713
Depreciation 23,543 - 28,425 8,803 D 4,209 64,980
Amortization of software
Costs - - - - B 600,000 600,000
Amortization of goodwill - - - - A 1,092,055 -
C 275,381
E 360,670 1,728,106
------------ --------- ----------- ------------ ------------- ----------
Total Operating Expenses 4,819,500 513,410 575,846 1,036,389 2,332,315 9,277,460
------------ --------- ----------- ------------ ------------- ----------
Loss from Operations (1,171,231) (240,821) (189,534) (277,165) (2,332,315) (4,211,066)
Interest income 28,567 - 2,234 - - 30,801
Interest expense (5,197) (38,744) (47,077) (56,193) - (147,211)
------------ --------- ----------- ------------ ------------- ------------
Loss Before Income
Taxes (1,147,861) (279,565) (234,377) (333,358) (2,332,315) (4,327,476)
Income Tax Benefit 233,810 - 40,012 - - 273,822
------------ --------- ----------- ------------ ------------- ------------
Loss Before Extraordinary
Item $ (914,051) $(279,565)$ (194,365) $ (333,358) $ (2,332,315) $ (4,053,654)
============ ========= ========== ============ ============= ============
Basic and Diluted Loss Before
Extraordinary Item Per
Common Share $ (0.68) $ (1.29)
============ ===========
Weighted Average Number of
Common Shares Used In
Per Share Calculation 1,349,234 3,147,434
============ ==========
</TABLE>
<PAGE> F-4
See the accompanying notes to the unaudited condensed consolidated pro
forma financial statements.
iSHOPPER.COM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
A- To recognize amortization of Uniq goodwill ($5,460,273),
acquired on April 4, 2000, over a period of five years by the
straight-line method.
B- To recognize amortization of Uniq capitalized software costs
($3,000,000) acquired on April 4, 2000, over a period of five
years by the straight-line method.
C- To recognize amortization of the Atlantic goodwill
($1,074,225) acquired on June 1, 2000, over a period of five
years, to recognize the amortization of the ISSI goodwill
($302,678) over a period of five years, and to recognize $33,878
of expenses recognized by ISSI prior to the acquisition not shown
elsewhere.
D- To recognize depreciation of increased carrying value of
Atlantic's property and equipment ($21,046) acquired on June 1,
2000, over five years by the straight-line method.
E- To recognize amortization of the KT Solutions goodwill
($4,342,278) acquired on June 1, 2000, over a period of five
years.
<PAGE> F-5
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East 300 South, Suite 200
Member of Summit International Associates Salt Lake City, Utah 84111-2693
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and the Stockholders
iShopper.com, Inc.
We have audited the accompanying balance sheet of Atlantic
Technologies International, Inc. (the Company) as of December 31,
1999 and the related statements of operations, stockholders'
equity (deficit), 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 auditing standards
generally accepted in the United States. Those standards require
that we plan and perform the audits 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 Atlantic Technologies International, Inc. as of 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
accounting principles generally accepted in the United States.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
August 9, 2000
<PAGE> F-6
ATLANTIC TECHNOLOGIES INTERNATIONAL, INC.
BALANCE SHEETS
ASSETS
Current Assets
Cash $ - $ 23,120
Short-term investments 81,718 80,715
Trade accounts receivable, net of
allowance for doubtful accounts of
$168,390 and $168,390, respectively 116,542 161,428
Other accounts receivable 73,890 73,890
Inventory 162,929 163,639
Prepaid expenses 3,000 3,000
--------- ------------
Total Current Assets 483,079 505,792
--------- ------------
Property and Equipment
Furniture and equipment 62,123 62,123
Computers 31,228 31,228
Automobiles 37,300 37,300
Land 294,525 294,525
Buildings 166,704 166,704
Less: accumulated depreciation (85,611) (78,347)
Net Property and Equipment 506,269 513,533
--------- -----------
Other Assets 4,140 4,140
--------- -----------
Total Assets $ 948,488 $ 1,023,465
========= ===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Checks drawn in excess of cash in bank $ 15,254 $ -
Notes payable - current portion 284,669 260,129
Note payable to related party 42,067 46,382
Accounts payable 267,191 344,730
Accrued liabilities 9,810 2,392
--------- -----------
Total Current Liabilities 618,991 653,633
--------- -----------
Long-Term Liabilities
Notes payable 396,221 400,004
--------- -----------
Stockholders' Deficit
Common stock - $1.00 par value; 10,000
shares authorized; 1,000 shares issued
and outstanding 1,000 1,000
Additional paid-in capital 33,214 33,214
Retained earnings (deficit) (100,938) (64,386)
--------- -----------
Total Stockholders' Deficit (66,724) (30,172)
--------- -----------
Total Liabilities and Stockholders' Deficit $ 948,488 $ 1,023,465
========= ===========
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE>
ATLANTIC TECHNOLOGIES INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Three Months For the Years Ended
Ended March 31, December 31,
---------------------- ------------------------
2000 1999 1999 1998
---------- ---------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 673,381 $ 882,385 $ 4,702,838 $ 3,376,286
Cost of goods sold 558,702 805,480 4,316,526 2,771,472
---------- ---------- ----------- -----------
Gross Profit 114,679 76,905 386,312 604,814
---------- ---------- ----------- -----------
Operating Expenses
General and Administrative Expense 124,078 100,179 316,040 524,684
Research and development expense - - 39,639 -
Bad debt expense 13,158 - 191,742 55,012
Depreciation expense 7,264 - 28,425 18,465
---------- ---------- ----------- -----------
Total Operating Expenses 144,500 100,179 575,846 598,161
---------- ---------- ----------- -----------
Income (Loss) From Operations (29,821) (23,274) (189,534) 6,653
Interest Income 1,096 804 2,234 1,902
Interest Expense (12,907) (11,476) (47,077) (14,299)
---------- ---------- ----------- -----------
Net Loss Before Income Taxes (41,632) (33,946) (234,377) (5,744)
Income Tax Benefit (Expense) 5,080 - 40,012 (7,124)
---------- ---------- ----------- -----------
Net Loss $ (36,552) $ (33,946) $ (194,365) $ (12,868)
========== ========== =========== ===========
Basic and Diluted Loss Per
Common Share $ (36.55) $ (33.95) $ (194.37) $ (12.87)
========== ========== =========== ===========
Weighted Average Shares Used in
Per Share Calculation 1,000 1,000 1,000 1,000
========== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE>
ATLANTIC TECHNOLOGIES INTERNATIONAL, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
Total
Common Stock Additional Retained Stockholders'
---------------------- Paid-In Earnings Equity
Shares Amount Capital (Deficit) (Deficit)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balance - December 31, 1997 1,000 $ 1,000 $ 33,214 $ 142,847 $ 177,061
Net loss - - - (12,868) (12,868)
---------- ---------- ---------- ---------- ----------
Balance - December 31, 1998 1,000 1,000 33,214 129,979 164,193
Net loss - - - (194,365) (194,365)
---------- ---------- ---------- ---------- ----------
Balance - December 31, 1999 1,000 1,000 33,214 (64,386) (30,172)
Net loss (unaudited) - - - (36,552) (36,552)
---------- ---------- ---------- ---------- ----------
Balance - March 31, 2000
(Unaudited) 1,000 $ 1,000 $ 33,214 $ (100,938) $ (66,724)
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-9
<PAGE>
ATLANTIC TECHNOLOGIES INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Three Months For the Years Ended
Ended March 31, December 31,
---------------------- ------------------------
2000 1999 1999 1998
---------- ---------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net income $ (36,552) $ (33,946) $ (194,365) $ (12,868)
Depreciation 7,264 - 28,177 20,542
Changes in current assets and liabilities:
Accounts Receivables 44,886 (19,703) (78,814) (116,226)
Allowance for Doubtful Account - 42,098 168,390 -
Other Accounts Receivable - - (73,890) -
Inventories 710 22,025 88,100 (180,089)
Prepaids - - - (3,000)
Accounts payable (77,539) (90,363) (9,536) 87,085
Accrued liabilities 7,418 (34,011) (136,044) (16,108)
---------- ---------- ----------- -----------
Net Cash Used In Operating Activities (53,813) (113,900) (207,982) (220,664)
---------- ---------- ----------- -----------
Cash Flows From Investing Activities
Cash paid for property and equipment - - (19,205) (487,509)
Short-term investments (1,003) - (3,823) 86,119
Increase in other assets - - - 855
---------- ---------- ----------- -----------
Net Cash Used In Investing
Activities (1,003) - (23,028) (400,535)
---------- ---------- ----------- -----------
Cash Flows From Financing Activities
Capital contributions - - - 8,604
Payments on related party borrowings (4,315) (37,348) (13,200) (3,581)
Proceeds from related party borrowings - - - 61,982
Payments on borrowings (3,658) (4,199) (14,758) (12,194)
Proceeds on borrowings 39,669 - 94,988 528,335
---------- ---------- ----------- -----------
Net Cash Provided (Used) In
Financing Activities 31,696 (41,547) 67,030 583,146
---------- ---------- ----------- -----------
Net Decrease In Cash (23,120) (155,447) (168,980) (38,053)
Cash - Beginning of Period 23,120 187,100 187,100 225,153
---------- ---------- ----------- -----------
Cash - End of the Period $ - $ 31,653 $ 23,120 $ 187,100
========== ========== =========== ===========
Supplemental Cash Flow Information
Cash Paid for Interest $ 12,907 $ 11,476 $ 47,077 $ 14,299
========== ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-10
<PAGE>
ATLANTIC TECHNOLOGIES INTERNATIONAL, INC.
NOTES TO FINANCIAL STATEMENTS
(Information with Respect to March 31, 2000 and for the Three Months Ended
March 31, 2000 and 1999 is Unaudited)
NOTE 1 - ORGANIZATION
On May 16, 1990 Atlantic Technologies International, Inc. was
formed as a corporation under the laws of the State of Florida.
The Company was formed for the purpose of assembling and marketing
of desk top computers.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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
these estimates.
Financial Instruments - The carrying amount reported in the
accompanying consolidated financial statements for cash,
investments, accounts payable, accrued liabilities, and notes
payable approximate fair values because of the immediate or
short_term maturities of these financial instruments.
Inventory - Inventory is stated at the lower of cost (using the
first_in, first_out method) or market value. Inventory consists
of computer components available for sale.
Property & Equipment - Property and equipment are stated at cost
and consist of computer equipment, automobiles and various other
equipment. Maintenance and repairs are charged to operations
while major improvements are capitalized. Upon retirement, sale,
or other disposition, the cost and accumulated depreciation are
eliminated from the accounts and gain or loss is included in
operations. Depreciation is computed using the straight-line
method over the estimated useful lives of the property and
equipment, which are three to seven years. Depreciation expense
for the three month period ended March 31, 2000 and the years
ended December 31, 1999 and 1998 was $7264 , $28,425 and $18,465
respectively.
Revenue Recognition - Revenue is recognized upon shipment of
product.
Net Loss per Common Share - The Company computes basic and
diluted loss per common share by dividing net loss by the
weighted average number of common shares outstanding.
NOTE 3 - NOTES PAYABLE
Notes payable at March 31, 2000 and December 31, 1999
consisted of the following:
2000 1999
---------- ----------
Line of credit agreement with a bank,
interest at 8.5% $ 269,415 $ 245,000
Note payable to a bank; interest at 8%;
secured by land and building; monthly
payment of $3,493 with a balloon payment
due November 2008. 402,149 404,561
Notes payable to a bank; interest at 10.5%;
secured by an automobile; monthly payment
of $504 9,326 10,572
---------- ----------
Total notes payable 680,890 660,133
Less current portion 284,669 260,129
---------- ----------
Total notes payable-long term $ 396,221 $ 400,004
========== ==========
F-12
<PAGE>
Annual maturities of long-term debt as of March 31, 2000 and
December 31, 1999 for each of the next five years are as follows:
Year Ending December 31: 2000 1999
------------------------ --------- ---------
2000 $ 280,886 $ 260,129
2001 16,156 16,156
2002 11,663 11,663
2003 12,631 12,631
2004 13,680 13,680
Thereafter 345,874 345,874
NOTE 4 - RELATED PARTY TRANSACTIONS
Related Party Note Payable - Notes payable to related parties
consists of amounts owed to a shareholder. During the year ended
December 31, 1998, a shareholder advanced the Company $63,163 for
miscellaneous operating expenses. The Company repaid $3,581 for
a balance due at December 31, 1998 of $59,582. During the three
months ended March 31, 2000 and for the year ended December 31,
1999, the Company repaid $4,315 and $13,200 for balances due of
$$42,067 and $46,382 respectively. These advances are due on
demand and bear no interest. All amounts are considered current.
NOTE 5 - LEASE OBLIGATIONS
Operating lease - During the year ended December 31, 1999, the
Company entered into an operating lease with a company for an
automobile. The agreement calls for monthly rental payments of
$479. Rent expense for the three months ended March 31, 2000 and
for the year ended December 31, 1999 was $1,437 and $479
respectively.
NOTE 6 - INCOME TAXES
The Company recognizes an asset or liability for the deferred tax
consequences of all temporary differences between the tax bases
of assets or liabilities and their reported amounts in the
financial statements that will result in taxable or deductible
amounts in future years when the reported amounts of the assets
or liabilities are recovered or settled. These deferred tax
assets or liabilities are measured using the enacted tax rates
that will be in effect when the differences are expected to
reverse. Deferred tax assets are reviewed periodically for
recoverability and valuation allowances are provided, as
necessary. The components of the deferred tax asset as of
December 31, 1999 are as follows:
Contributions carryforwards $ 5,586
NOL carryforwards 42,971
--------
Deferred Tax Assets 48,557
Valuation allowance (48,557)
--------
Net Deferred Tax Assets $ -
========
F-12
<PAGE>
The following is a reconciliation of income tax benefit to the
amount computed using the federal statutory rate:
1999 1998
---------- ----------
Tax at statutory rates (34%) $ (98,855) $ (1,953)
Nondeductible expenses 1,744 1,953
State tax, net of federal benefit (9,595) -
Effect of lower tax rate 21,711 -
Change in valuation allowance 44,983 -
---------- ----------
Total Benefit from Income Taxes $ (40,012) $ -
========== ==========
F-13
<PAGE>
