SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KA-1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
August 27, 1996
Date of Report
(Date of Earliest Event Reported)
WEALTH INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Nevada 33-05844-NY 87-0443026
(State or other (Commission File No.) (IRS Employer I.D. No.)
Jurisdiction)
1190 North Spring Creek Place, Suite A
Springville, Utah 84663
(Address of Principal Executive Offices)
Registrant's Telephone Number
(801) 489-8414
IMPRESSIVE VENTURES, LTD.
1969 West North Temple
Salt Lake City, Utah 84116
(Former Name or Former Address if changed Since Last Report)
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Item 7. Financial Statements and Exhibits.
Report of Independent Certified Public Accountant.
Consolidated Balance Sheets for periods ended August 31, 1996 and
February 29, 1996.
Consolidated Statements of Operations for the Six Months Ended August
31, 1996 and the Years Ended February 29, 1996 and February 28, 1995.
Consolidated Statement of Changes in Stockholders' Equity for the
period from February 28, 1994 to August 31, 1996.
Consolidated Statements of Cash Flows for the Six Months ended August
31, 1996 and the Years Ended February 29, 1996 and February 28, 1995.
Notes to Financial Statements
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly cuased this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
WEALTH INTERNATIONAL, INC.
Date: 11/25/96 By /s/ Ronald A. Nilsson
President and Director
WEALTH INTERNATIONAL INC.
FINANCIAL STATEMENTS AND REPORT
OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
August 31, 1996, February 29, 1996, and February 28, 1995
ANDERSEN ANDERSEN & STRONG, L.C.
[letterhead]
Board of Directors
Wealth International, Inc. and Subsidiary
Salt Lake City, Utah
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of Wealth
International, Inc,. and Subsidiary, at August 31, 1996 and
February 29, 1996 and the statements of operations,
stockholders' equity, and cash flows for the six months ended
August 31, 1996, and the years ended February 29, 1996 and
1995. 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 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 Wealth International, Inc. and Subsidiary, at
August 31, 1996 and February 29, 1996, and the statements of
operations, stockholders' equity, and cash flows for the six
months ended August 31, 1996 and the years ended February 29,
1996, and 1995 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
As discussed in Note 3 to the financial statements, the
combined companies have suffered recurring losses from
operations from inception of the reported operations, which
raises doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are
described in Note 10. The financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.
/s/Andersen Andersen & Strong
November 20, 1996
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<CAPTION>
WEALTH INTERNATIONAL INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
AUGUST 31,1996 and FEBRUARY 29,1996
August 31 February 29
1996 1996
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 97,204 $ -
Supplies 475 -
Prepaid expenses 1,300 -
Total Current Assets 98,979 -
PROPERTY AND EQUIPMENT
Net of accumulated depreciation
- (Note 2) 37,257 -
$136,236 $
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable - (Note 4) $ 41,900
Accounts payable 78,820 $ 1,600
Accrued commissions payable
- (Note 5) 58,965
Sales representatives'
account balances - (Note 6) 296,120 -
Total Current Liabilities 475,805 1,600
STOCKHOLDERS' EQUITY
Common stock
500,000,000 shares authorized
at $0.001 par value; 17,001,796
shares issued and outstanding at
August 31; 182,000 at February
29, 1996 17,002 182
Capital in excess of par value
(Deficiency) (301,109) 539,965
Accumulated deficit - dated
July 10, 1996 - (Note 3) (55,462) (541,747)
Total Stockholders' Equity
(Deficiency) (339,569) (1,600)
$ 136,236 $ -
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<TABLE>
<CAPTION>
WEALTH INTERNATIONAL INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months Ended August 31, 1996
and the Years Ended February 29, 1996 and February 28, 1995
August 31 February 29 February 28
1996 1996 1995
<S> <C> <C> <C>
REVENUE ( Note 3 ) $ 547,899 $ - $ -
COST OF SALES 397,309 - -
Gross profit 150,590 - -
EXPENSES
Sales expenses 298,871 - -
Administrative
expenses 171,258 1,600 300,000
Depreciation 4,913 - -
475,042 1,600 300,000
NET INCOME (LOSS) $(324,452) $ (1,600) $(300,000)
NET INCOME (LOSS)
PER SHARE $ (.03) $ - $ (.03)
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<TABLE>
<CAPTION>
WEALTH INTERNATIONAL INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Period from February 28, 1994 to August 31, 1996
Common Stock Capital in Excess Accumulated
Shares Amount of Par Value Deficit
<S> <C> <C> <C> <C>
Balance February
28, 1994 102,400 $ 102 $ 240,045 $(240,147)
Issuance of common stock
for services no value
assigned - 1994 14,800 15 (15) -
Issuance of common stock for
all of the outstanding stock
of Louis Siegal Associates,
Inc. - no value assigned
rescinded August 3, 1995
- June 20, 1994 64,000 64 (64) -
Issuance of common stock for
cash October 24, 1994 80,000 80 299,920 -
Net loss for the year ended
February 28, 1995 - - - (300,000)
Balance February 28, 1995 261,200 261 539,886 (540,147)
Cancellation of common stock
resulting from recision of
Louis Siegal Associates Inc.
purchase - August 3, 1995 (79,200) (79) 79 -
Net loss for the year ended
February 28, 1996 - - - (1,600)
Balance February 29, 1996 182,000 182 539,965 (541,747)
Issuance of common stock from
minimum share resolution
resulting from stock split 19,796 20 (20) -
Issuance of common stock for
all outstanding stock of
Wealth International, Inc.,
a Utah corporation, and
recapitalization - August
17, 1996 - (Note 3) 16,800,000 16,800 (572,064) 541,747
Net loss for the six
months ended August 31,
1996-$(324,452)-(Note 3) - - (268,990) (55,462)
Balance August 31, 1996 17,001,796 $17,002 $(301,109) $(55,462)
</TABLE>
The accompanying notes are an integral part of these financial statements
<TABLE>
<CAPTION>
WEALTH INTERNATIONAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended August 31, 1996
and the Years Ended February 29, 1996 and February 28, 1995
August 31, February 29, February 28,
1996 1996 1995
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) from operations $(324,452) $ (1,600) $ (300,000)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Provision for bad debts - 300,000
Depreciation 4,913 - -
Decrease in prepaid expense (1,775) - -
Increase in sales representatives'
balances 296,120 - -
Increase commissions payable 58,965 - -
Increase in accounts payable 57,564 1,600 -
Net Cash Used by Operating
Activities: 91,335 - -
CASH FLOWS FROM INVESTING ACTIVITIES:
Advances - note receivable - - (300,000)
Purchase of equipment (42,170) - -
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contribution 6,139 - -
Cash received - sale of stock - - 300,000
Cash received - note payable 41,900 - -
Increase in cash 97,204 - -
Cash at Beginning of Period - - -
Cash at End of Period $ 97,204 $ - $ -
</TABLE>
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Issuance of 14,800 shares common stock for services - no value
assigned - 1994 $ -
Issuance of 64,000 shares common stock for all of the
outstanding stock of Louis Siegal Associates inc, - no value
assigned - rescinded August 3, 1995 - June 20, 1994 $ -
Cancellation of 79,200 shares common stock resulting from
recession of Louis Siegal Associates Inc. Purchase -
August 3, 1995 $ -
Issuance of 16,800,000 shares common stock for all of the
outstanding stock of Wealth International, Inc. and
recapitalization - August 17, 1996 - 5,791,020 shares
returned in October 1996 $ -
The accompanying notes are an integral part of these financial statements.
WEALTH INTERNATIONAL, INC. AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the State of
Nevada on March 17, 1986, with authorized common stock of
500,000,000 shares at $.001 par value and three classes of
stock warrants with the name of"Impressive Ventures, LTD".
The name was changed to "Wealth International, Inc." on
August 27, 1996, in connection with a reverse acquisition
outlined in note 3. The warrants expired without being
exercised.
During 1988, the Company purchased all of the outstanding
stock of Med-Recon, Inc., a Nevada corporation, in a stock
for stock exchange. Med-Recon was in the business of
reconditioning medical equipment and operated until 1990,
when operations ceased.
On June 7, 1994, the Company purchased all of the outstanding
stock of Louis Siegal Associates, Inc., a California
corporation, in a stock for stock exchange. Louis Siegal
operated several retail floor covering stores. In connection
with the acquisition of Louis Siegal, an additional 80,000
common shares of the Company was issued October 24, 1994, for
$300,000. The $300,000 was loaned to Louis Siegal and later
written off as a bad debt. On August 3, 1995, the transaction
was mutually rescinded, due to a failure of consideration,
and 79,200 shares of the Company was returned and cancelled.
On June 7, 1994, the Company completed a reverse stock split
of 20 shares for 1, and on August 27, 1996, a reverse stock
split of 250 shares for 1, with no stockholder having less
than 50 shares after the split. On October 25, 1996, the
Company completed a forward stock split of 1 share for 4.
This report has been restated to show after stock split
shares from it's inception.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the
accrual method of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of
dividends.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased
with a maturity, at the time of purchase, of less than three
months, to be cash equivalents.
Property and Equipment
The equipment consists of computers, software systems, and
office equipment and are shown at cost, less accumulated
depreciation. Depreciation is computed on the straight line
method over 5 and 7 years.
Computers and office equipment $30,240
Software systems 11,930
42,170
Less accumulated depreciation 4,913
37,257
Income Taxes
Impressive Ventures, LTD - parent - ( pre-acquisition )
At February 29, 1996, the Company had a net operating loss
(NOL) carry forward totaling $541,747. The tax benefit from
the loss carry forward has been fully offset by a valuation
reserve because management believes that the use of the loss
carry forward will not be available against future profits.
Wealth International, Inc. - subsidiary - ( post-acquisition)
The subsidiary has sustained an operating loss for the period
from July 10 to August 31, 1996. Management believes that the
loss will be available to offset a projected operating profit
in the coming year, however the subsidiary has had no
operating history prior to 1996, and an operating profit
cannot be assured, therefore no income tax-benefit has been
provided.
Earnings (Loss) Per Share
Earnings (loss) per share amounts are computed based on the
weighted average number of shares actually outstanding,
except that the outstanding shares have been restated to
reflect the equivalent number of shares received by the
stockholder's of Wealth International Inc.( the subsidiary ),
resulting from the acquisition outlined in note 3.
Estimates and Assumptions
Management uses estimates and assumptions in preparing
financial statements in accordance with generally accepted
accounting principles. Those estimates and assumptions affect
the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary
from the estimates that were assumed in preparing the
financial statements.
3. ACQUISITION ON OF WEALTH INTERNATIONAL INC. (the subsidiary)
On August 27, 1996, the Company completed an acquisition of
all of the outstanding stock of Wealth International, Inc., a
Utah corporation, ( the subsidiary ) which was organized in
the state of Utah on July 10, 1996. The reportable operations
of the subsidiary, and a prior partnership, started in
January 1996, and at August 31, 1996 had eight months of
operations. The contractual agreement and plan of exchange
provided for a stock for stock exchange in which the owners'
of the outstanding stock of the subsidiary exchanged their
shares ( consisting of 20,000 shares ) for 16,800,000 newly
issued restricted common shares of the Company, however,
5,791,020 of the shares were returned to the Company during
October 1996. After the completion of the exchange, the
subsidiary was wholly owned by the Company and the Company's
only asset was the stock in the subsidiary. On the date of
this report the parties to the exchange, who were the former
two stockholder's of the subsidiary, held 98% of the
outstanding stock of the Company, after the return of the
stock mentioned above. The name of the Company was then
changed to "Wealth International, Inc." from "Impressive
Ventures, LTD."
For reporting purposes, the acquisition has been treated as
an acquisition of the Company by it's subsidiary (a reverse
acquisition) and as a recapitalization of the subsidiary with
it's assets, carried at historical costs, and it's
operations, and that of :he former partnership, for the eight
months ended August 27, 1996, being included in the financial
statements.
The fair value for the acquisition was considered to be the
historical cost, net of accumulated depreciation, of the
assets of the subsidiary, which was a more clearly evident
value for the exchange of stock The liabilities of the
subsidiary exceeded the fair value of the assets and the
excess is shown in the Capital in Excess of Par Value account
as a deduction.
For this report, the financial statements of the Company,
Wealth International Inc.(the subsidiary), and the
partnership, have been combined. The subsidiary had not
established a reporting fiscal year and the Company has a
fiscal year of February 29. The balance sheets and statements
of operations of both companies, and the partnership, have
been combined as if each has a fiscal year February 29. Since
February 29, 1996, the Company has had no operations and the
subsidiary's operations covers the period from July 10 to
August 31, 1996 and the partnership covers the period from
January 1 to July 9, 1996. The partnership's share and the
subsidiary's share of the net operating loss of the combined
companies for the eight months ended August 31, 1996 has been
allocated to the Accumulated Deficit account and the Capital
in Excess of Par Value account and therefore the Accumulated
Deficit account balance is that of the subsidiary .
Selected parts of these financial statements have been
restated to reflect the combined report. No proforma
statements have been included in this report because the
acquisition is considered to be a recapitalization of the
subsidiary and not a business combination.
The subsidiary is in the business of a multilevel shopping
organization using the Internet.
There are no contingent payments or options specified in the
acquisition agreement.
4. NOTE PAYABLE
The note payable resulted from advances to "Wealth" (the
subsidiary) and was paid in September 1996 with no interest.
5. ACCRUED COMMISSIONS PAYABLE
"Wealth"( the subsidiary) conducts sales of a variety of
products over the Internet through independent sales
representatives. The sales representatives purchase the
products from "Wealth" for resale to other customers.
Commissions are paid to the representatives only after the
completion of a prescribed level of sales. Commissions
payable are accrued on the books of"Wealth" based on an
estimate of the amounts that will eventually be paid.
6. SALES REPRESENTATIVES' ACCOUNT BALANCES
Sales representatives maintain their membership in the
organization by purchasing a prescribed amount of monthly
points that are recorded on the books of "Wealth" as a
liability, in the name of the representative. The points are
recorded at a value of one point for one dollar. The
representatives then use the points and additional cash, when
needed, to purchase the products that "Wealth" has offered
for sale over the internet.
7. LEASE
"Wealth" leases office space under a three year lease
starting December 1, 1995, through November 30, 1998, The
terms of the lease provides for a three year extension. The
total yearly lease amounts, payable monthly, are listed:
First year $15,600
Second Year 16,380
Third Year 17,199
8. RELATED PARTY TRANSACTIONS
"Wealth" purchases substantially all of the products for sale
from " Rantec", a partnership controlled by the two major
stockholder's of the Company. Rantec is in the business of
importing products for sale and "Wealth" has not sought other
supply sources.
See note 3 regarding the acquisition of "Wealth' and a change
in the controlling parties and note 8 for stock issued after
the report date.
9. SUBSEQUENT EVENTS
On October 30, 1996, the Company issued 300,000 restricted
common shares for services in connection with the acquisition
outlined in note 3.
On October 28, 1996 the Company granted options to six
individuals, including current and former directors,
employees, and consultants, to purchase 1,700,000 common
shares of the Company at $.50 per share. The option period is
effective for five years from October 28, 1996. The Company
has registered the shares as part of a form S-8 registration
statement filed with the Securities and Exchange Commission.
On October 28, 1996, 5,791,020 shares of the Company were
returned for cancellation, as a contribution to capital,
which was part of the 16,800,000 shares issued to the two
stockholder's of the subsidiary, for the acquisition of
Wealth International, Inc.
9. GOING CONCERN
Continuation of the Company as a going concern is dependent
upon obtaining additional working capital and the management
of the Company has developed a strategy, which it believes
will accomplish this objective through additional equity
funding which will enable the Company to continue operations
into the future.
Management recognizes that, if it is unable to raise
additional capital, they cannot continue to conduct
operations in the future.
