<PAGE>
U.S. Securities and Exchange Commission
Washington, DC 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to ________
Commission File No. 33-05844-NY
Wealth International, Inc.
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(Name of Small Business Issuer in its Charter)
NEVADA 87-0443026
(State or Other Jurisdiction (IRS Employer ID No.)
of incorporation or organization)
1190 North Spring Creek Place, Suite A
Springville, Utah 84663
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(Address of Principal Executive Offices)
(801) 489-8414
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(Issuer's Telephone Number, including Area Code)
IMPRESSIVE VENTURES LTD.
1969 West North Temple
Salt Lake City, Utah 84111
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(Former Address of Principal Executive Office)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
There were 11,800,776 shares of common stock, $.001 par value, outstanding
as of January 21, 1997.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The unaudited Consolidated Financial Statements of the Registrant
and its subsidiary required to be filed with this 10-QSB Quarterly Report were
prepared by management and commence below, together with related Notes. In
the opinion of management, the Financial Statements fairly present the
financial condition of the Registrant.
<TABLE>
Wealth International Inc.
Consolidated Balance Sheets
November 30, 1996 and February 29, 1996
(Unaudited)
<CAPTION>
Assets November 30, 1996 February 29, 1996
<S> <C> <C>
Current Assets:
Cash $54,769 $0
Accounts Receivable 8,910 0
Supplies
& prepaid expenses & deposits 13,391 0
Total Current Assets 77,070 0
Equipment:
Computers & furniture 34,217 0
Software & mall development 30,997 0
Less accumulated depreciation (7,334) 0
Net Equipment 57,880 0
Total Assets $134,950 $0
Liabilities & Stockholders' Equity
Current Liabilities:
Accounts Payable and accrued liabilities $87,967 $1,600
Merchandise and Commission
Liability to Members 414,688 0
Advance from stockholders 11,617 0
Total Current Liabilities 514,272 1,600
Stockholders' Equity:
Common Stock, $001 par value;
authorized 500,000,000 shares,
issued and outstanding 11,510,776
shares at November 30, 1996 11,511 182
Paid-in capital deficiency (265,619) 539,965
Accumulated Deficit (125,214) (541,747)
Total Stockholders' Equity (379,322) (1,600)
Total Liabilities & Stockholders'
Equity $134,950 $0
</TABLE>
<TABLE>
Wealth International Inc.
Consolidated Statement of Operations
Nine & Three Months Ending November 30,1996 &
Nine & Three Months Ending November 30, 1995
(Unaudited)
<CAPTION>
Three Months Ending Nine Months Ending
11/30/96 11/30/95 11/30/96 11/30/95
<S> <C> <C> <C> <C>
Revenues:
Member sales $615,314 $0 $1,162,648 $0
Interest Income 635 0 1,200 0
Total Revenue 615,949 0 1,163,848 0
Costs & Expenses:
Cost of Sales 185,084 0 582,393 0
Member commissions 111,435 0 410,306 0
Payroll & office costs 311,843 0 478,781 0
Depreciation 2,421 0 7,334 0
Mall Development & Maintenance 74,918 0 79,238 0
Total Costs & Expenses 685,701 0 1,558,052 0
Net Loss ($69,752) $0 ($394,204) $0
Net Loss per common share ($0.006) $0.000 ($0.034) $0.000
</TABLE>
<TABLE>
Wealth International Inc.
Consolidated Statements of Cash Flows
Nine & Three Months Ending November 30,1996 &
Nine & Three Months Ending November 30,1995
(Unaudited)
<CAPTION>
Three Months Ending Nine Months Ending
11/30/96 11/30/95 11/30/96 11/30/95
<S> <C> <C> <C> <C>
Cash Flows Provided (used)
in Operations:
Net Loss ($69,752) $0 ($394,204)($1,600)
Adjustments to reconcile
Net Loss to cash used in
operations:
Depreciation 2,421 7,334
Increase in accounts payable
& accrued liabilities 9,146 86,367 1,600
Increase in liability to
members 59,603 414,688
Increase in current assets-
receivables & prepaids (20,526) (22,301)
Net Cash Flow Provided (Used)
In Operations (19,108) 0 91,884 0
Cash Flow Used in Investing
Activities:
Purchase equipment & software
development (23,044) 0 (65,214) 0
Acquisition of deficient in
Wealth International capital 0 (13,518)
Net Cash Flow Used In Investing
Activities (23,044) 0 (78,732) 0
Cash Flow From (Used) in
Financing Activities:
Stock issued for services 30,000 30,000
Advance on note payable
& stockholders 11,617 53,517
Repayment of note payable (41,900) (41,900)
Net Cash Flows From (Used) in
Financing Activities (283) 0 41,617 0
Cash at beginning of period 97,204 0 0 0
Cash at end of period $54,769 $0 $54,760 $0
</TABLE>
<TABLE>
Wealth International Inc.
Consolidated Statement of Stockholders' Equity
Nine Months Ending November 30,1996
(Unaudited)
<CAPTION>
Common Stock Capital Accumulated
Shares Amount Deficiency Deficit
<S> <C> <C> <C> <C>
Balance at
February 29, 1996 182,000 $182 $539,965 ($541,747)
Issuance of fractional
shares from stock
split 19,796 20 (20)
Issuance 16,800,000
shares of Common
Stock for Wealth
International
August 17, 1996 net
of returned shares
of 5,791,020 11,008,980 11,009 (566,274) 541,747
Issuance of 300,000
shares for
consulting services 300,000 300 29,700
Net loss for the nine
months ending
November 30, 1996
$394,204 (268,990) (125,214)
Balances at
November 30,1996 11,510,776 $11,511 ($265,619) ($125,214)
</TABLE>
Wealth International Inc
Notes to Financial Statements
Note 1: Organization of the Company
On August 27, 1996 the Company completed an acquisition of Wealth
International Inc. and assumed the name of the subsidiary. The
acquisition has been accounted for as a reverse acquisition with the
historical cost basis of the assets and liabilities of the subsidiary
continued forward as the basis to the Company. Wealth International
operated as a partnership prior to July 9, 1996 when it incorporated in
the state of Utah. The accompanying financial statements include the
operations from the inception of the partnership as well as the
operations of the incorporated entity.
Wealth International is engaged in the development and operation of a
mall on the Internet. Members of Wealth International purchase points
which can be redeemed for merchandise available through the mall. Members
earn points and cash commissions through a marketing system of
the Company. The marketing efforts of the Company have been directed
towards development of "store fronts" for its members whereby each member
can bring in customers to the mall through their store and earn
commissions from the sale of products to these customers. The initial
marketing commissions have been higher than the long term business plan,
as most of the commissions are based on expansion of the network
marketing base of members.
Note 2: Summary of Significant Accounting Policies
Liabilities to Members- The Company has recorded the cash received from
members for future purchases as a liability until the Company delivers
the product or the points expires. Commissions have been accrued for the
network volume in the system.
Note 3: Stock Transactions
The Company registered options to purchase 1,700,000 shares in an S-8
filing in October, 1996. As of January 20, 1997 290,000 option have been
exercised at 50 cents per share. The Company issued 300,000 restricted
shares for services rendered to the Company which were value at 10 cents
per share.
Item 2. Management's Discussion and Analysis or Plan of Operation.
History
For a discussion of the Company's acquisition on August 27, 1996, of
all of the outstanding stock of Wealth International, Inc. , a Utah
corporation, (the "subsidiary") in exchange for shares of the Company, see the
Company's Current Report on Form 8-K, filed with the Securities and Exchange
Commission on October 24, 1996, and its Current Report on Form 8-KA-1, filed
on November 26, 1996. See the Exhibit Index, Item 6 below.
Description of Business and Plan of Operation
The Company's wholly-owned subsidiary, Wealth International, Inc.,
a Utah corporation, owns and operates a "Virtual Mall" on the Internet's world
wide web that consists of name-brand product categories, including
electronics, computers, men's and women's apparel, jewelry and others.
Currently, the Virtual Mall has approximately 2000 products. The availability
of products is subject to the Company's continual efforts to secure supply of
quality products and reasonable prices. The marketing and sale of the
products on the Virtual Mall is accomplished through a nationwide independent
sales force. The Virtual Mall allows a customer to purchase products through
a sophisticated on-line shopping mechanism. Presently, the best-selling
products are desktop and notebook computers, and electronic items.
The marketing approach employed by the Company was developed by the
Company's management and other personnel based on a collective 25 years of
marketing experience and many years of experience in importing through
contractual arrangements with some of the world's largest manufacturers and
importing companies.
In order to enter the Virtual Mall, a customer must enter through
one of many Internet web-site "storefronts," which are owned and updated by
the individuals and organizations that comprise the Company's independent
sales force. This sales force promotes the storefronts, and in turn the
Virtual Mall and the products contained in it, through mass and targeted
advertising and word-of-mouth to encourage customers and potential customers
to access the Virtual Mall through such storefront. Currently, several
storefront owners are advertising nationwide and hosting seminars on
Internet-related business issues in as many as 15 cities a week.
If a customer purchases a product, the owner of the storefront
through which the customer accessed the Virtual Mall receives an in-store
credit or commission, to be redeemed by the storefront owner in the form of
product. In addition, storefront owners and other members of the independent
sales force also have the opportunity to assist others to join the independent
sales force, and to create individualized new storefronts for them on the
Virtual Mall. The Company's compensation program provides increased amounts
of in-store credits or commissions, based on product sales, to those
storefront owners that successfully assist others in marketing the Company's
products. The Company is able to give generous in-store credits and
commissions because it has relatively low overhead and distribution costs.
Moreover, the Company has low advertising costs, since advertising is
performed by members of the independent sales force.
The Company has developed and implemented a comprehensive tracking
system called "Wealth-Link," which tracks all of the sales through each
storefront, together with other storefronts that are interconnected for
purposes of the Company's compensation plan. Wealth-Link is a
state-of-the-art program designed to ensure that each storefront
owner will be correctly compensated for their sales, whether they
are in New York, California, or anywhere else. The Company is continuing
efforts to develop innovative new strategies to provide information and
support to its independent sales force, and it is planned that personalized
information concerning sales, compensation and marketing matters will be just
a "mouse-click" away.
Management believes that shopping by the Internet will become a
major economic force in the future and that the revenues of the Company and
its subsidiary, which amounted to $615,949 in the quarter ended November 30,
1996, will show substantial increase during the next year. In order to
facilitate expansion of the Company's capacity to provide rapid and easy
Internet access to its customers, the Company plans to continue to develop new
capabilities as an Internet service provider.
At November 30, 1996, the Company and its subsidiary had total
assets of $134,950 and liabilities of $514,272. The figure for liabilities is
in part derived from a method of accounting currently employed by the Company
that accounts for any potential liabilities for in-store credits or
commissions, to be redeemed for the Company's products, that may become due to
certain members of the independent sales force. Because management
anticipates that much of the potential in-store credits or commissions will
not actually be earned or redeemed, management believes that this method of
accounting represents a cautious indication of the Company's finances, and
that actual liabilities will be less than $514,272.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.*
(a) EXHIBIT EXHIBIT NUMBER
Financial Data 27
Schedule
(b) Reports on Form 8-K
Form 8-K filed October **
24, 1996
Form 8-KA-1 filed November **
26, 1996
* Summaries of any exhibit are modified in their entirety by
this reference to each exhibit.
** Each of these documents has previously been filed with
the Securities and Exchange Commission and is incorporated
herein by this reference.
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.
WEALTH INTERNATIONAL, INC.
Date: 1/22/97 By /s/ Ronald A. Nilsson
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Ronald A. Nilsson
President and Director
Date: 1/22/97 By /s/ Richard T. Smith
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Richard T. Smith
Chief Financial Officer and
Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000793981
<NAME> WEALTH INTERNATIONAL, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-1996
<PERIOD-END> NOV-30-1996
<CASH> 54,769
<SECURITIES> 0
<RECEIVABLES> 8,910
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 77,070
<PP&E> 65,214
<DEPRECIATION> (7,334)
<TOTAL-ASSETS> 134,950
<CURRENT-LIABILITIES> 514,272
<BONDS> 0
0
0
<COMMON> 11,511
<OTHER-SE> (390,833)
<TOTAL-LIABILITY-AND-EQUITY> 134,950
<SALES> 615,314
<TOTAL-REVENUES> 615,949
<CGS> 185,084
<TOTAL-COSTS> 685,701
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (69,752)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (69,752)
<EPS-PRIMARY> (0.006)
<EPS-DILUTED> (0.006)
