SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
March 22, 2000
Date of Report
(Date of Earliest Event Reported)
QUIK PIX, INC.
(Exact Name of Registrant as Specified in its Charter)
7050 Village Drive, Suite F
Buena Park, California 90621
(Address of principal executive offices)
714/522-8255
(Registrant's telephone number)
Baroque Corporation
1504 R Street, N.W.
Washington, D.C. 20009
(Former name and former address)
Nevada 0-26407 33-0198595
State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to an Agreement and Plan of Reorganization
(the "Acquisition Agreement"), Quik Pix, Inc. ("Quik Pix" or the
"Company"), a Nevada corporation, has acquired all the outstanding
shares of common stock of Baroque Corporation ("Baroque"), a
Delaware corporation, from the shareholders thereof in an exchange
for an aggregate of 410,510 shares of common stock of (the
"Acquisition"). As a result, Baroque has become a wholly-owned
subsidiary of Quik Pix.
The Acquisition was approved by the unanimous consent of the
Board of Directors of Quik Pix on March 21, 2000. The Acquisition
was effective March 22, 2000. The Acquisition is intended to
qualify as a reorganization within the meaning of Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended.
Quik Pix had 8,503,462 shares of common stock issued and
outstanding prior to the Acquisition. Immediately after the
Acquisition, Quik Pix had 8,913,972 shares issued and outstanding.
As of the date of this Current Report, the Company has 9,897,305
shares issued and outstanding.
Pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, Quik Pix is
the successor issuer to Baroque for reporting purposes under the
Securities Exchange Act of 1934, as amended (the "Act").
A copy of the Acquisition Agreement is filed as an exhibit
to this Current Report and is incorporated in its entirety herein.
The foregoing description is modified by such reference.
(b) The following table contains information regarding the
shareholdings of Quik Pix's current directors and executive officers
and those persons or entities who beneficially own more than 5% of
its common stock (giving effect to the exercise of any warrants held
by each such person or entity which are exercisable within 60 days
hereof):
Number of shares of Percent of
Common Stock Beneficially Common Stock
Name Owned (1) Beneficially
Owned (2)
John Capie 3,521,121 35.6%
President, Chief
Executive Officer,
Chairman, Director
7050 Village Drive, Suite F
Buena Park, California 90621
Software Technology, Inc. (3) 2,500,000 25.3%
STI, #501
Dong Woo Building, 784-13
Weok Smdong
Kang Anm Gu
Seoul, Korea 135-080
Ed Youngman 17,778 *
Secretary, Treasurer, Director
7050 Village Drive, Suite F
Buena Park, California 90621
Lee Finger 54,445 *
Director
7050 Village Drive, Suite F
Buena Park, California 90621
Brian Bonar 0 0%
Director
2428 Oak Canyon Place
Escondido, California 92025
Chris McKee 0 0%
Director
1792 Old Canyon Drive
Hacienda Heights, California 91745
All executive officers and directors 3,593,344 35.6%
of the company as a group (5 persons)
* Less than 1%
(1) Includes options and warrants which are exercisable within
60 days of the date hereof.
(2) Based upon 9,897,305 shares of the Company's common stock
issued and outstanding.
(3) Mr. Woo Young Kim, of Seoul , Korea, is President and
controlling shareholder of Software Technology, Inc. and may
be deemed a beneficial owner of these securities.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Acquisition
Agreement was negotiated between Baroque and Quik Pix. In evaluating
the Acquisition, Baroque used criteria such as the value of assets
of Quik Pix, Quik Pix's ability to compete in the marketplace, Quik
Pix's current and anticipated business operations, and Quik Pix
management's experience and business plan. In evaluating Baroque,
Quik Pix placed a primary emphasis on Baroque's status as a
reporting company under Section 12(g) of the Securities Exchange Act
of 1934, as amended, and Baroque's facilitation of Quik Pix's
becoming a reporting company under the Act.
(b) The Company intends to achieve its expansion objectives
by maintaining growth at its existing facilities, using multiple
media consumer education marketing efforts, and establishing name
recognition and consumer familiarity with the Company's products and
services.
BUSINESS
COMPANY
Quik Pix, Inc., doing business as Quality Photographic
Imaging, is a publicly held company located in Buena Park,
California. The Company was established in 1982 with the purpose of
capitalizing on its patented Photomotion(TM) technology and its
commercial applications. The common stock of the Company is traded
on the NASD OTC Bulletin Board under the symbol "QPIX."
The Company offers a spectrum of services allowing a client
to produce color visuals (digital and photographic) according to
parameters as specified by a client. The process allows a
combination of three or more images into a single color transparency
that changes as a viewer moves past the image. The Company's
services include a full range of Photomotion(TM) technology related
client support, technical and customer service.
The Company has limited finances and requires additional
funding in order to accomplish its growth objectives and marketing
of its products and services. There is no assurance that the Company
will have revenues in the future or that it will be able to secure
other funding necessary for its future growth and expansion. There
is also no assurance that the Company's technology will perform as
intended or that potential customers will show sufficient interest
in the Company's product and related services. See ITEM 2, "RISK
FACTORS"
PRODUCTS
The Company's principal product is a patented technology for
adding multiple images to backlit static displays that appear to
change as the viewer passes by the image. The process is called
Photomotion(TM) and uses existing original art to create an illusion
of movement. This color medium uses existing originals and allows
for three to five distinct images to be displayed within an existing
light box. Images appear to change or "morph" as the viewer passes
the display. The Company's ability to put multiple images in a
single space allows the user to create an active and entertaining
display using existing originals and fixtures. The illusion is
optical and requires no special equipment. This process of "pop and
display" advertising is intended to capture the targeted audience
for a longer period of time and to increase visual effectiveness.
Several large companies and services providers have selected
PhotoMotion(TM) as part of their marketing campaigns.
OPERATIONS
The Company currently operates at a loss. The Company's
management expects losses to continue for the foreseeable future.
The Company requires additional funding to achieve its growth
objectives. If the Company does not receive additional funding, it
will not be able to pursue the intended marketing plan and, in such
case, may not be able to successfully conduct its operations. There
is no assurance that the Company will be successful in development
or marketing of its product or in generating any meaningful revenues
from operations.
The Company intends to acquire other related businesses in
exchange for cash or issuance of securities. To date, no
acquisitions have been consummated and there can be no assurance
that any future acquisitions will be consummated. Furthermore, no
assurance can be given that the Company will be able to effect any
aspects of its business plan or to maintain the operations that it
has currently established. The Company will need additional capital
either through financing or through operations to meet its business
goals. There is no assurance that the Company can reverse its
operating losses or that it can raise additional capital to allow it
to expand its planned operations.
MARKETING
The Company intends to employ a variety of marketing
techniques to attract potential consumers of its products. In
addition to trade shows, conferences and conventions, the Company
intends to mount an integrated marketing campaign targeting Fortune
1000 companies, distributors and other related channels for the
Company's products. To that end, the Company has employed a
marketing consultant to establish and expand its presence into
alternative markets. To date, the Company has not launched any such
marketing efforts.
As part of its promotional campaign, the Company has begun a
direct mailing and Internet initiative.
There is no assurance that the Company will be able to
successfully market and distribute its product to any of its intended
customers.
TRADEMARKS AND PATENTS
In July, 1999, the Company was issued a patent by the United
States Patent Office for its "Back Lit Multi Image Transparency"
(Photomotion) technology. The United States patent number is
5,782,026. The Company has registered "Photomotion"as a trademark.
PROPERTY
The Company's main executive and administrative offices are
located in the Village Business Park, in the City of Buena Park,
California. There are two facilities. The first is a 8,600 square
foot facility occupying 2 suites. This facility houses the primary
color labs, the digital imaging equipment, retouching, and finishing
operations. It also provides production capabilities for mounting,
shipping and dispatching, as well as housing the administrative
offices, customer service, and marketing. The Company leases this
facility at a rate of $5,500.00 per month. The lease term is three
years which may be terminated after May 1, 2003.
The Company's second facility, a 1,750 square foot facility,
is located less than 1 mile away and is dedicated to manufacturing
support capabilities. This facility provides finished substrate
mountings, custom displays, full scale models, trade show support,
and custom crate manufacturing from raw materials. The Company
leases this space at a rate of $1,750.00 per month. The lease term
is three years which may be terminated after May 1, 2003.
In November, 1999, Quik Pix announced an upgrade to its
leased facility in Buena Park. Included in the upgrade is the
addition of new staff and equipment.
The Company's mailing address is 7050 Village Drive, Suite
F, Buena Park, California 90621. Its telephone number is
800/734-0432 and its facsimile number is 714/521-1745. Its e-mail
address is [email protected]. The Company maintains an Internet Web
site located at http://www.qpivisuals.com..
SUPPLIERS
The Company uses a variety of vendors for its film and
manufacturing processes. Presently, there are no contractual
arrangements between the Company and its suppliers. Purchase orders
are written to request parts on a "as required" basis. There is no
assurance that the Company will maintain a sufficient number of
suppliers for film and manufacturing processes in the foreseeable
future.
EMPLOYEES
The Company currently employees 20 full-time and no
part-time employees.
LITIGATION
There is no current outstanding litigation in which the
Company is involved and the Company is unaware of any pending
actions or claims against it.
DESCRIPTION OF SECURITIES
The authorized capitalization of the Company consists of
50,000,000 shares of common stock, $.001par value per share, and no
shares of preferred stock. Quik Pix had 8,503,462 shares of common
stock issued and outstanding prior to the Acquisition. Immediately
after the Acquisition, Quik Pix had 8,913,972 shares issued and
outstanding. As of the date of this Current Report, the Company has
9,897,305 shares issued and outstanding.
MARKET FOR THE COMPANY'S SECURITIES
The common stock of the Company is traded on the NASD OTC
Bulletin Board under the symbol "QPIX." The market for OTC
securities is characterized frequently by low volume and broad price
and volume volatility. The Company cannot give any assurance that a
stable trading market will develop for its stock or that an active
trading market will be sustained. Moreover, the trading price of the
Company's common stock could be subject to wide fluctuations due to
such factors as quarterly variations in operating results,
competition, announcements of new products by the Company or its
competitors, product enhancements by the Company or its competitors,
regulatory changes, differences in actual results from those
expected by investors and analysts, changes in financial estimates
by securities analysts, and other events or factors.
The Company has been a non-reporting publicly traded company
with certain of its securities exempt from registration under the
Securities Act of 1933, as amended. The NASD Stock Market has
implemented a change in its rules requiring all companies trading
securities on the NASD OTC Bulletin Board to become reporting
companies under the Securities Exchange Act of 1934. Quik Pix
acquired all the outstanding shares of Baroque to become successor
issuer to it pursuant to Rule 12g-3(a) in order to comply with the
Eligibility Rule for the NASD OTC Bulletin Board.
The following is the last 12-month trading history for the
Company's common stock:
Date High Low Volume
March,1999 0.220 0.020 1,400
April,1999 0.020 0.020 1,600
May,1999 0.718 0.020 64,400
June,1999 0.125 0.070 15,600
July,1999 0.250 0.070 19,500
August,1999 0.070 0.150 -
September,1999 0.230 0.070 9,800
October,1999 0.312 0.070 1,600
November,1999 0.312 0.070 22,500
December,1999 0.650 0.070 4,100
January,2000 0.500 0.070 3,100
February,2000 2.687 0.070
763,200
March, 2000 1.750 0.500 180,100
April, 2000* 0.875 0.250 25,800
__________
As of April 19th, 2000
The market price of the Company's common stock over the last
52 trading weeks ranged from $0.02 to $2.68. On April 17th, the
high was $0.625 and the low $0.250 with a volume of 3,600 shares.
TRANSFER AGENT
The Company's transfer agent is Atlas Stock Transfer, 5899
State Street, Salt Lake City, Utah 84107.
MANAGEMENT
Name Age Title
John Capie 53 President, Chief
Executive Officer, Chairman
Ed Youngman 68 Secretary, Treasurer, Director
Lee Finger 57 Director
Brian Bonar 52 Director
Chris McKee 51 Director
All directors hold office until the next annual meeting of
shareholders or until their successors are duly elected and
qualified. Officers serve at the pleasure of the Board of
Directors. Set forth below is a summary description of the business
experience of each director and officer of the Company.
JOHN CAPIE has been President of the Company since its
inception in 1982. Mr. Capie's employment history includes
employment at various managerial positions in New York-based
photographic labs. Mr. Capie has also had extensive experience in
Point of Purchase Displays and Trade Show exhibit building. Over the
last twelve years he has been on the Board of Directors for
corporations including Exhibitronix Inc., Modular Display Systems,
Inc., Tabery Corporation, Delta Transport, American Distributing
Company.
ED YOUNGMAN has served as Controller and Secretary/Treasurer
of the Company since 1987. Mr. Youngman has held numerous senior
executive roles at Litton, Sargent Industries and HN Bailey Associates.
LEE FINGER has been a Director of the Company since 1982 to
present. He is a founder of the Company. Mr. Finger has been retired
for the past 5 years. He has no formal educational background.
BRIAN BONAR has been a Director of the Company since
February, 2000. Mr. Bonar has served since April, 1998 as a CFO of
Imaging Technologies, San Diego, California, a software and hardware
company. Mr. Bonar and has been a Director since 1992 and recently
became Chairman of the Board. From 1991 to 1992, Mr. Bonar was Vice
President of Worldwide Sales and Marketing for Bezier Systems, Inc.,
a San Jose, California-based manufacturer and marketer of laser
printers. From 1990 to 1991, he was a Worldwide Sales Manager for
Adaptec, Inc., a San Jose-based laser printer controller developer.
From 1988 to 1990, Mr. Bonar was Vice President of Sales and
Marketing for Rastek Corporation, a laser printer controller
developer located in Huntsville, Alabama. From 1984 to 1988, Mr.
Bonar was employed as Executive Director of Engineering at QMS,
Inc., an Alabama-based developer and manufacturer of
high-performance color and monochrome printing solutions. Prior to
these positions, Mr. Bonar was employed by IBM U.K. Ltd. for
approximately 17 years.
CHRIS MCKEE has been a Director of the Company since
February, 2000. Mr. McKee also has served since August, 1998 as
Senior Vice President of Finance and Operations for Imaging
Technologies, San Jose, California, a software and hardware company.
Prior to joining the Company, Mr. McKee spent 23 years with
Flowserve Corporation and its predecessor company, BW/IP, Inc., in
various financial management positions, including most recently as
its Director of Information Technology and Baan Implementation. Mr.
McKee holds a Masters in Business Administration degree from
Pepperdine University in 1979.
EXECUTIVE COMPENSATION
The Company has no audit, compensation or executive committees.
No officers of the Company earned more than $100,000 a year during any
of the last three fiscal years. There is no key man life insurance on
any director or officer.
RELATED TRANSACTIONS
In May, 1999, the Company and YARC Systems Corporation
entered into discussions regarding the possible acquisition of the
Company by YARC Systems, a company located in Camarillo, California.
In February, 2000, all such discussions with YARC Systems were
formally ended.
RISK FACTORS
UNCERTAINTY AS TO THE CONTINUATION OF THE COMPANY AS A GOING
CONCERN. The audited financial statements of the Company show that
the Company incurred a net loss for the year ended September 30,
1998 of ($1,533,705) on net sales of $1,853,024 and a net loss for
the year ended September 30, 1999 of ($582,188) on net sales of
$1,216,449. The unaudited financial statements of the Company show
that the Company incurred a net loss for the six-month period ended
March 31, 2000 of ($473,436). As of September 30, 1999, the Company
had current assets of $249,752 and current liabilities of
$1,213,914. As of March 31, 2000 the Company had current assets of
$357,520. The existence of such losses raise doubt about the
Company's ability to continue as a going concern and if substantial
additional funding is not acquired or alternative sources developed
to meet the Company's working capital needs, management will be
required to curtail its operations.
THE COMPANY IS CURRENTLY OPERATING AT A LOSS. The Company
has historically operated at a loss. If losses continue, the
Company may need to raise additional capital through the sale of its
securities or from debt or equity financing. If the Company is not
able to raise such financing or obtain alternative sources of
funding, management will be required to curtail operations. The
Company's operations are subject to the risks and competition
inherent in the establishment of a business enterprise in the
competitive field of technology companies. There can be no assurance
that future operations will be profitable. Revenues and profits, if
any, will depend upon various factors, including market acceptance
of its concepts, market awareness, its ability to expand its network
of participating distributors and customers, dependability of its
advertising and recruiting network, and general economic conditions.
There is no assurance that the Company will achieve its expansion
goals and the failure to achieve such goals would have an adverse
impact on it.
UNCERTAINTY OF FUTURE OPERATIONS. The Company's operations
are subject to the risks and competition inherent in operating a
business enterprise in the competitive field of technology
companies. There can be no assurance that future operations will be
profitable. Revenues and profits, if any, will depend upon various
factors, including market acceptance of its products, market
awareness, its ability to expand its network of participating
distributors and customers, dependability of its advertising and
recruiting network, and general economic conditions. There is no
assurance that the Company will achieve its expansion goals and the
failure to achieve such goals would have an adverse impact on it.
THE COMPANY MAY NEED ADDITIONAL FINANCING. Future events,
including the problems, delays, expenses and difficulties frequently
encountered by companies may lead to cost increases that could make
the Company's funds insufficient to fund the Company's proposed
operations. The Company may seek additional capital, including an
offering of its equity securities, an offering of debt securities or
obtaining financing through a bank or other entity. The Company has
not established a limit as to the amount of debt it may incur nor
has it adopted a ratio of its equity to a debt allowance. If the
Company needs to obtain additional financing, there is no assurance
that financing will be available from any source, or that it will be
available on terms acceptable to the Company, or that any future
offering of securities will be successful. The Company could suffer
adverse consequences if it is unable to obtain additional capital
when needed.
FAILURE TO ATTRACT OR RETAIN QUALIFIED PERSONNEL. A change
in labor market conditions that either further reduces the
availability of employees or increases significantly the cost of
labor could have a material adverse effect on the Company's
business, financial condition and results of operations. The
Company's business is dependent upon its ability to attract and
retain highly sophisticated research and development personnel,
business administrators and corporate management. There is no
assurance that it will be able to employ a sufficient number of such
personnel in order to accomplish its growth objectives.
ISSUANCE OF FUTURE SHARES MAY DILUTE INVESTORS' SHARE VALUE.
The Company is authorized to issue 50,000,000 shares of common
stock. The future issuance of all or part of the remaining
authorized common stock may result in substantial dilution in the
percentage of the Company's common stock held by the its then
existing shareholders. Moreover, any common stock issued in the
future may be valued on an arbitrary basis by the Company. The
issuance of the Company's shares for future services or acquisitions
or other corporate actions may have the effect of diluting the value
of the shares held by investors, and might have an adverse effect on
any trading market, should a trading market for the Company's common
stock develop.
SHARES AVAILABLE FOR FUTURE SALE MAY AFFECT MARKET PRICE.
The market price of the Company's common stock could drop if
substantial amounts of shares are sold in the public market or if
the market perceives that such sales could occur. A drop in the
market price could adversely affect holders of the stock and could
also harm the Company's ability to raise additional capital by
selling equity securities.
ADVERSE ECONOMIC CONDITIONS OR A CHANGE IN GENERAL MARKET
PATTERNS. A weak economic environment could adversely affect the
Company sales and promotional efforts. General economic conditions
may impact demand and interest for the Company's technology may
decline at any time, especially during recessionary periods. Many
factors beyond the Company's control may decrease overall demand for
the Company's technology including, among other things, decrease in
the entry costs by other similarly situated companies, better and
more efficient technology, increase in the overall unemployment
rate, and additional government regulation. There can be no
assurance that the general market demand for the Company's
technology will remain the same or will not decrease in the future.
THE COMPANY MAY FAIL TO GENERATE SUFFICIENT INTEREST IN ITS
PRODUCTS. The Company must undertake substantial effort to market
its technology in the United States and other markets. There is no
assurance that the Company will be able to generate sufficient
interest in and to create and maintain steady demand for its
products over time.
LOSS OF THE COMPANY KEY EMPLOYEES MAY ADVERSELY AFFECT
GROWTH OBJECTIVES. The Company's success in achieving its growth
objectives depends upon the efforts of John Capie, President of the
Company, as well as other key management personnel. The loss of the
services of these individuals could have a material adverse effect
on the Company business, financial condition and results of
operations. There is no assurance that the Company will be able to
maintain and achieve its growth objectives should it lose any of its
key management members' services.
THIRD-PARTY MARKET PRICE MANIPULATIONS. The shares of the
Company's common stock are traded on the NASD OTC Bulletin Board.
Share price quotations for the Company's stock may reflect
inter-dealer prices, without retail mark-up, without retail
mark-up, mark-down or commissions, and may not represent actual
transactions. In addition, from time to time, persons not affiliated
with the Company may seek to manipulate the market price of the
Company's common stock in a manner unknown to the Company, which may
cause a drastic change in the price of the Company's common stock
unrelated to any activity by the Company. Any rapid change in the
Company's stock price should be viewed with caution.
COMPETITION FROM LARGER AND MORE ESTABLISHED COMPANIES MAY
HAMPER MARKETABILITY. The competition in the high technology
industry is intense. Large and highly fragmented, these industries
host a number of well-established competitors, including national,
regional and local companies possessing greater financial,
marketing, personnel and other resources than the Company. There is
no assurance that the Company will be able to market or sell its
product if faced with direct product and services competition from
these larger and more established companies.
THE COMPANY'S TECHNOLOGY MAY BECOME OBSOLETE. The
technology which the Company intends to market could become obsolete
as a result of superior technology developed by a third-party
designer or by discovering a more efficient and speedier way of
providing the results that the Company's technology is intended to
deliver. Either or both of those events, upon occurrence, could lead
to an erosion in the Company's ability to market its product as well
as an erosion of potential customer base.
TRADEMARK PROTECTION AND PROPRIETARY MARKS. There is no
assurance that the Company will be able to prevent competitors from
using its trade marks or trade names or similar names, marks,
concepts or appearances or that it will have the financial resources
necessary to protect its marks against infringing use.
PENNY STOCK REGULATION. Penny stocks generally are equity
securities with a price of less than $5.00 per share other than
securities registered on certain national securities exchanges or
quoted on the NASD Stock Market, provided that current price and
volume information with respect to transactions in such securities
is provided by the exchange or system. The Company's securities may
be subject to "penny stock rules" that impose additional sales
practice requirements on broker-dealers who sell such securities to
persons other than established customers and accredited investors
(generally those with assets in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 together with their spouse).
For transactions covered by these rules, the broker-dealer must make
a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the
transaction prior to the purchase. Additionally, for any
transaction involving a penny stock, unless exempt, the "penny stock
rules" require the delivery, prior to the transaction, of a
disclosure schedule prescribed by the Commission relating to the
penny stock market. The broker-dealer also must disclose the
commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information
on the limited market in penny stocks. Consequently, the "penny
stock rules" may restrict the ability of broker-dealers to sell the
Company's securities. The foregoing required penny stock
restrictions will not apply to the Company's securities if such
securities maintain a market price of $5.00 or greater. There can be
no assurance that the price of the Company's securities will
maintain such a level.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer.
Pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, the Company
is the successor issuer to Baroque for reporting purposes under the
Securities Exchange Act of 1934.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
The sole officer and director of Baroque resigned effective
upon completion of the Acquisition.
ITEM 7. FINANCIAL STATEMENTS
The audited financial statements for Quik Pix for the fiscal
years ended September 30, 1999 and 1998 and the unaudited financial
statements for the 6-month period ended March 31, 2000 are filed
herewith.
ITEM 8. CHANGE IN FISCAL YEAR
Baroque's fiscal year ends December 31. The Company intends
to keep its fiscal year which ends September 30.
EXHIBITS
2.1* Agreement and Plan of Reorganization between Quik Pix, Inc.
and Baroque Corporation.
* Previously filed
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Current Report to be
signed on its behalf by the undersigned hereunto duly authorized.
Quik Pix, Inc.
By /s/ John Capie
President
Date: July 5, 2000
QUIK PIX, INC.
FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 1999 AND 1998
QUIK PIX, INC.
CONTENTS
PAGE 1 INDEPENDENT AUDITORS' REPORT
PAGES 2 - 3 BALANCE SHEETS AS OF SEPTEMBER 30, 1999
PAGE 4 STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
SEPTEMBER 30, 1999 AND 1998
PAGE 5 STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE YEAR ENDED SEPTEMBER 30, 1999
PAGES 6 - 7 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
SEPTEMBER 30, 1999 AND 1998
PAGES 8 - 15 NOTES TO FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
Quik Pix, Inc.
We have audited the accompanying balance sheet of Quik Pix, Inc. as
of September 30, 1999 and 1998 and the related statements of
operations, changes in stockholders' deficiency and cash flows for
the years then ended. 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
consolidated 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 Quik Pix,
Inc. as of September 30, 1999 and 1998 and the results of its
operations and its cash flows for the years then ended in conformity
with generally accepted accounting principles.
The accompanying consolidated financial statements have been
prepared assuming that the Company will continue as a going concern.
As discussed in Note 9 to the financial statements, the Company's
recurring losses from operations, working capital deficiency and
stockholders' deficiency raise substantial doubt about its ability
to continue as a going concern. Management's Plan in regards to
these matters is also described in Note 9. The financial statements
do not include any adjustments that might result from the outcome of
this uncertainty.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
April 19, 2000
QUIK PIX,INC.
BALANCE SHEETS
SEPTEMBER 30, 1999 AND 1998
ASSETS
1999 1998
CURRENT ASSETS
Cash $ 3,615 $ 3,965
Trade accounts receivable (net of
allowance for doubtful
accounts of $72,000 and $42,000,
respectively) 208,040 228,976
Inventories 30,000 30,000
Prepaid expenses and other assets 8,097 8,946
Total Current Assets 249,752 271,887
PROPERTY & EQUIPMENT NET
Digital equipment 486,262 486,262
Machinery equipment 489,952 489,952
Furniture and fixtures 98,800 98,800
Leasehold improvements 70,839 70,839
Transportation equipment 42,282 42,282
1,188,135 1,188,135
Accumulated depreciation (1,188,135) (1,071,572)
Net Property and Equipment - 116,563
OTHER ASSETS
Goodwill 305,499 452,163
Multi-image technology (net of accumulated
amortization of $8,400 and $6,720,
respectively) 16,800 18,480
Other receivables 4,000 -
Deposits 5,335 3,780
Total Other Assets 331,634 474,423
TOTAL ASSETS $ 581,386 $ 862,873
See accompanying notes to financial statements.
QUIK PIX, INC.
BALANCE SHEETS
SEPTEMBER 30, 1999 AND 1998
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
1999 1998
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 635,090 395,628
Accrued interest 453,940 404,380
Payroll payable 49,284 61,460
Income taxes payable 1,600 1,600
Current portion of long-term debt 74,000 101,000
Total Current Liabilities 1,213,914 946,068
LONG-TERM LIABILITIES 1,264,737 1,213,882
TOTAL LIABILITIES 2,478,651 2,177,950
COMMITMENTS - -
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 50,000,000
shares authorized, 6,003,462 shares issued
and outstanding 6,003 6,003
Additional paid in capital 225,603 225,603
Accumulated deficit (2,128,871) (1,546,683)
Total Stockholders' Deficiency (1,897,265) (1,315,077)
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIENCY $ 581,386 $ 862,873
See accompanying notes to financial statements.
QUIK PIX, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
SALES - NET $ 1,216,449 $ 1,853,024
COST OF SALES 961,944 1,290,901
GROSS PROFIT 254,505 562,123
SELLING AND GENERAL
ADMINISTRATIVE EXPENSES 730,918 1,804,914
LOSS FROM OPERATIONS (476,413) (1,242,791)
OTHER INCOME (EXPENSE)
Miscellaneous income (expense) 2,144 5,923
Interest expense (107,119) (146,791)
Net Other Expense (104,975) (140,868)
LOSS BEFORE PROVISION FOR
INCOME TAXES (581,388) (1,383,659)
PROVISION FOR INCOME TAXES 800 150,046
NET LOSS $ (582,188) $ (1,533,705)
Net loss per share basic $ (.10) $ (.26)
Weighted average number of shares
outstanding during the year basic 6,003,462 6,003,462
See accompanying notes to financial statements
QUIK PIX, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIENCY
FOR THE YEARS ENDING SEPTEMBER 30, 1999 AND 1998
Additional Retained
COMMON STOCK Paid-In Earnings
Shares Amount Capital (Deficit) Total
Balance,
October 1, 1997 6,003,462 $ 6,003 $225,603 $ (12,978) $218,628
Net loss for the
year ended
September 30,
1998 - - - (1,533,705) (1,533,705)
Balance,
Sept.30, 1998 6,003,462 6,003 225,603 (1,546,683) (1,315,077)
Net loss for the
year ended
September 30,
1999 - - - (582,188) (582,188)
BALANCE, SEPT.
30, 1999 6,003,462 6,003 225,603 (2,128,871) (1,897,265)
See accompanying notes to financial statements.
QUIK PIX, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (582,188) $ (1,533,705)
Adjustments to reconcile net loss to
net cash provided (used) by
operating activities:
Depreciation 264,907 1,272,411
Provision for doubtful accounts 30,000 20,000
Changes in operating assets and liabilities:
Increase (decrease) in:
Trade accounts receivable (9,064) 92,448
Inventories - 64,820
Prepaid expenses 849 (1,358)
Deferred tax assets - 141,023
Accounts payable and accrued expenses 239,462 (70,510)
Payroll taxes payable (12,176) (3,173)
Accrued interest 49,560 90,370
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (18,650) 72,326
CASH FLOWS FROM INVESTING ACTIVITIES:
Deposit (1,555) 404
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (1,555) 404
CASH FLOWS FROM FINANCING ACTIVITIES:
Due from officer and employees (4,000) 8,820
Payments on long-term debt (90,000) (79,798)
Borrowings on long-term debt 113,855 -
Net cash provided by (USED IN)
financing Activities 19,855 (70,978)
NET INCREASE (DECREASE) IN CASH (350) 1,752
Cash and cash equivalents at
beginning of YEAR 3,965 2,213
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 3,615 $ 3,965
See accompanying notes to financial statements
QUIK PIX, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 1998
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
1999 1998
Equipment acquired under $ - $ 30,341
capital lease
Cash paid during the year
ended September 30:
1999 1998
Interest $ 57,560 $ 56,421
Taxes $ 1,600 $ 1,600
See accompanying notes to financial statements
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
(A) ORGANIZATION
Quik Pix, Inc. was incorporated under the laws of the
State of California on November 4, 1980. The Company is a
custom color laboratory specializing in visual marketing
through the production of single image and digital
multi-image color photography.
In October 1986, the original stockholders entered into a
contract for the sale of the Company through a leverage
buyout arrangement with another corporation, QPI Group,
Inc., incorporated under the laws of the State of
California on August 22, 1986. (See Note 3) QPI, Group,
Inc. was incorporated specifically for the purpose of
acquiring the original Quik Pix, Inc. Subsequent to the
acquisition, QPI Group, Inc. changed its name to Quik Pix,
Inc.
In September 1987, the new Quik Pix, Inc. entered into a
letter of intent with Redwood Financial, Inc. (a Nevada
Corporation), whereby it agreed to exchange all of its
issued and outstanding shares of common stock for
14,000,000 shares of Redwood Financial, Inc.'s common
stock. This transaction was completed in December 1987,
and 13,000,000 shares were outstanding. Subsequent to the
merger, Redwood Financial, Inc., the surviving
corporation, changed its name to Quik Pix, Inc. (the
"Company"). For financial reporting purposes this
transaction was reflected as a recapitalization of the
Company and reverse merger with Redwood Financial, Inc.
On October 1997, the Company had a 1 for 3 reverse split
of its common stock and all share and per share data in
the accompanying financial statements has been
retroactively restated to give effect to the reverse split.
(B) USE OF ESTIMATES
In preparing financial statements in conformity with
generally accepted accounting principles, management is
required to make estimates and assumptions that affect
the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the
date of the financial statements and revenues and
expenses during the reported period. Actual results
could differ from those estimates.
(C) CASH AND CASH EQUIVALENTS
For purposes of the cash flow statements, the Company
considers all highly liquid investments with original
maturities of three months or less at the time of
purchase to be cash equivalents.
(D) PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. When
retired or otherwise disposed of, the related cost and
accumulated depreciation is eliminated from the
respective accounts and the net difference, less any
amount realized from disposition, is reflected in
earnings.
(E) CAPITAL LEASES
Capital leases which were transferred to the Company
substantially all of the benefits and risks incidental
to ownership of the property are capitalized at the
fair market value of the property at the inception of
the lease. Under this method of accounting for leases,
the asset is depreciated over its estimated useful life
using an accelerated method and the obligation,
including interest, is amortized over the life of the
lease. Payments on all non-capital leases are expensed
as incurred.
(F) AMORTIZATION
In 1986, goodwill was recorded as a result of the
leveraged buyout (see Note 1(A)), and was being
amortized using the straight-line method over a period
of 40 years. In 1998, the estimated for economic life
was changed to 15 years. Multi-image technology is
amortized using the straight-line method over a period
of 15 years. When an intangible asset exceeds
associated expected operating flows it is considered
impaired and is written down to net fair market value.
(G) DEPRECIATION
Depreciation is computed using straight-line and
accelerated methods over the estimated useful lives of
the assets as follows:
Machinery and equipment 5 years
Furniture and fixtures 3 - 5 years
Leasehold improvements 5 years
Transportation equipment 3 - 5 years
All fixed assets are fully depreciated.
(H) DEFERRED TAXES
Deferred taxes are recognized for differences between
the bases of assets and liabilities for financial
reporting and income tax purposes. The differences
relate primarily to the non-deductibility of current
franchise taxes, the allowance for doubtful accounts,
and related party accruals.
(I) EARNINGS PER SHARE
The Company computes basic earnings per share by the
weighted average method. There were no common stock
equivalents at September 30, 1999 and 1998.
NOTE 2 INVENTORIES
Inventories are stated at the lower of cost (first in
first out method) or market and consist of raw film and
other photo processing stock.
NOTE 3 GOODWILL
In October 1986, a leveraged buyout of the Company's
original stockholders was completed. The leveraged
buyout agreement called for a purchase price of
$2,625,000 which was in excess of the book value of the
Company. As a result, goodwill was established. The
economic life was changed in 1998 (See Note 1(F)).
This change in the estimated life of the goodwill has
the effect of decreasing net income for 1998 by
$1,000,707 ($.17 per share). The following is a
summary of the determination of goodwill and resulting
balance as of September 30, 1999 and 1998.
1999 1998
Purchase price $ 2,625,000 $ 2,625,000
Less net book value at the date
of acquisition 425,091 425,091
Goodwill 2,199,909 2,199,909
Accumulated amortization
through September 30 (1,894,410) (1,747,746)
$ 305,499 $ 452,163
NOTE 4 MULTI-IMAGE TECHNOLOGY
During 1994, the Company purchased the rights to a
photo process called "multi-image". This process
permits up to five images to be displayed in sequence.
The original cost of purchasing this technology was
capitalized and is being amortized. (See Note 1(F))
Consulting fees and other cost relating to the
implementation of this technology are expenses as
incurred. As of the date of these financial
statements, the Company was in the process of obtaining
a patent for this technology.
NOTE 5 NOTES PAYABLE AND CAPITALIZED LEASE OBLIGATIONS
Long-term notes payable and capitalized lease
obligations consist of the following:
1999 1998
Bank line, due May 2000, interest
at prime plus 2.25%, guaranteed
by an officer of the Company $ 45,411 $ 47,755
Convertible subordinated debentures, secured by
certain of the issued and outstanding stock of the
Company, interest payable monthly at 6.47% per
annum, maturing September 2005. 813,597 843,016
Convertible subordinated debentures, secured by
certain of the issued and outstanding stock of the
Company, with no stated interest rate, maturing
September 2005. (See below) 7,918 7,918
Note payable to stockholder, unsecured, interest at
10% per annum, principal due on demand 80,529 53,529
Note payable, unsecured, interest payable at 10% per
annum, maturing September 1995. (As of the date
of issuance of these financial statements, the
principal balance was unpaid.) 37,500 37,500
Note payable to stockholder, unsecured, interest
payable at 10% per annum, maturing September
1995 (As of the date of issuance of these financial
statements the principal balance was unpaid.) 14,209 14,209
Note payable to stockholder, unsecured, interest
at 12% per annum, maturing December 2000 145,000 45,000
Capitalized lease obligation, finance company,
secured by digital equipment, payable in monthly
installments of $831 including interest at 18.8% per
annum, maturing July 2002. At September 30, 1999
the cost and accumulated depreciation of the leased
equipment was $31,000 and $12,000, respectively. 23,350 29,823
Capitalized lease obligation, finance company,
secured by digital equipment, payable in monthly
installments of $856 including interest at 21.3%
annum, maturing February 2000. At September 30,
1999, the cost and accumulated depreciation of the
leased equipment was $32,540 and $31,200,
respectively. 3,113 12,465
Capital lease obligation, finance company, secured by
machinery and equipment, payable in monthly
installments of $486 including interest at 16.25% per
annum, maturing July 2000. At September 30, 1999
the cost and accumulated depreciation of the leased
equipment was $20,411 and $19,000, respectively. 4,516 9,193
Capitalized lease obligation, finance company,
secured by digital equipment, payable in monthly
installments of $2,016 including interest at 16.3%
per annum, maturing August 2001. At September
30, 1999, the cost and accumulated depreciation of
the leased equipment was $78,394 and $64,000,
respectively. 35,903 52,453
Capitalized lease obligation, finance company,
secured by digital equipment, payable in monthly
installments of $2,050 including interest at 20.1%
per annum, maturing August 2001. At September
30, 1999, the cost and accumulated depreciation of
the leased equipment was $72,464 and $60,000,
respectively. 34,827 50,180
Capitalized lease obligation, finance company,
secured by digital equipment, payable in monthly
installments of $959 including interest at 15.7% per
annum maturing July 2001. At September 30, 1999,
the cost and accumulated depreciation of the leased
equipment was $39,988 and $33,000, respectively. 20,693 30,342
Capitalized lease obligation, finance company,
secured by telephone equipment, payable in monthly
installments of $202 including interest. 481 3,433
Notes payable, finance company, (comprised of 3
identical notes), secured by transportation
equipment, payable in cumulative monthly
installments of $1,092 including interest at 10.25%
per annum, maturing August 1999. 2,155 11,420
Notes payable to stockholders, unsecured, interest
payable at 12% per annum, principal due on
demand. 69,535 66,646
1,338,737 1,314,882
Less current portion (74,000) (101,000)
$ 1,264,737 1,213,882
Notes and capitalized leases mature as follows:
2000 $ 74,000
2001 54,000
2002 10,000
Thereafter 1,200,700
$ 1,338,700
The convertible subordinated debentures were issued in connection
with the leveraged buyout of the Company in October 1996. The
debentures were scheduled to mature on 1991, however, the Company,
in accordance with the terms of the debentures, extended the
maturity of the debentures to September 2005. At any time prior to
the maturity of the debentures, they may be converted at 50% of the
face value of the debentures into shares of the Company's common
stock. At no time can the conversion exceed 3% of the outstanding
shares of the Company. The conversion price is specified in the
terms of the debentures. (As of the date of the auditors' report
these debentures were unpaid and none have been converted to common
stock.)
NOTE 6 INCOME TAXES
Components of the provision (credit) for income taxes are as follows:
1999 1998
Taxes currently paid or payable $ 800 $ 800
Deferred income taxes consist of the following:
1999 1998
Deferred tax asset $ 720,000 $ 521,000
Valuation allowance (720,000) (521,000)
$ - $ -
The Company has a net operating loss of approximately $2,177,000
that may be used to offset future income through 2018
NOTE 7 LEASE COMMITMENTS
The Company conducts its operations from facilities that are leased
under an operating lease which expires June 2000. The base rent is
currently $5,441 per month, adjustable by the increase in the
consumer price index, not to exceed 6% per annum. Under the terms
of the lease, the Company is obligated for its allocated share of
operating costs as defined in the lease agreement. Total payments
made under this lease for each of the years ended September 30, 1999
and 1998 were $65,289.
The Company also conducts operations from facilities leased under an
operating lease expiring September 2001. At September 30, 1999, the
base rent was $2,035. Under the terms of the lease, the Company is
obligated for repairs and maintenance. Total payments made under
this lease for the years ended September 30, 1999 and 1998 was $24,420.
The Company also leases office and transportation equipment under
operating leases which expire on various dates in 1998 and 2000.
The following is a schedule, by year, of future minimum lease
payments for all non-cancelable operating leases:
YEAR ENDING SEPTEMBER 30,
2000 $ 52,079
2001 24,420
$ 76,499
NOTE 8 CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the Company to
concentrations of credit risk consist of trade accounts receivable.
The Company routinely assesses the financial strength of its
customers and, as a consequence, believes that its trade accounts
receivable credit risk exposure is limited.
NOTE 9 GOING CONCERN
As reflected in the accompanying financial statements, the Company
has had continuing losses, and at September 30, 1999, has a working
capital deficiency of $964,162 and a stockholders' deficiency of
$1,897,265. The ability of the Company to continue as a going
concern is dependent on the Company's ability to raise additional
capital and implement its business plan. The financial statements
do not include any adjustments that might be necessary if the
Company is unable to continue as a going concern.
The Company anticipates an increase in revenues during 2000 and
intends to continue raising additional capital during 2000.
Management believes that actions presently taken to improve its
future operations and obtain additional funding provide the
opportunity for the Company to continue as a going concern (See Note
10).
NOTE 10 SUBSEQUENT EVENTS
Subsequent to September 30, 1999, the Company entered into an
agreement with the principal stockholder of Baroque Corporation (see
below) whereby the principal stockholder will provide certain
stipulated services with regard to the Company becoming a Securities
and Exchange Commission reporting company. The consideration paid
was $225,000.
On March 21, 2000 pursuant to an agreement and plan of
reorganization (the "Acquisition") the Company acquired
all the outstanding shares of common stock of Baroque
Corporation, a Delaware Corporation from the shareholder
thereof in exchange for an aggregate of 410,510 shares of
common stock of the Company. As a result, Baroque became
a wholly-owned subsidiary of the Company. The Acquisition
was effective on March 22, 2000 and was intended to
qualify as a reorganization within the meaning of Section
368(A)(1)(b) of the Internal Revenue Code of 1986, as
amended. Upon effectiveness of the Acquisition, pursuant
to 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, the Company became the
successor issuer to Baroque for reporting purposes under
the Securities and Exchange Act of 1934. The Company had
8,503,462 shares of common stock issued and outstanding
prior to the Acquisition, and 8,913,972 shares issued and
outstanding immediately following the Acquisition period.
Subsequent to September 30, 1999, the Company issued
3,483,333 common shares for cash of $500,000.
QUIK PIX, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
ASSETS
CURRENT ASSETS
Cash $ 40,277
Trade accounts receivable, net 300,158
Inventories 17,085
Total Current Assets 357,520
PROPERTY & EQUIPMENT NET -
OTHER ASSETS
Goodwill, net 232,276
Multi-image technology, net 15,960
Other receivables 4,000
Deposits 5,186
Total Other Assets 257,422
TOTAL ASSETS $ 614,942
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 703,448
Accrued interest 473,957
Payroll payable 46,079
Current portion of long term debt 97,648
Total Current Liabilities 1,321,132
LONG TERM LIABILITIES 1,189,510
TOTAL LIABILITIES 2,510,642
STOCKHOLDERS' DEFICIENCY
Common stock, $0.001 par value,
50,000,000 shares authorized,
9,897,305 shares issued and outstanding 9,897
Additional paid-in capital 696,709
Accumulated deficit (2,602,306)
Total Stockholders' Deficiency (1,895,700)
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIENCY $ 614,942
see accompanying notes to consolidated financial statements.
QUIK PIX, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
MARCH 31, 2000
UNAUDITED
SALES $ 489,909
COST OF GOODS SOLD 410,372
GROSS PROFIT 79,537
SELLING, GENERAL AND ADMINISTRATIVE 506,746
LOSS FROM OPERATIONS (427,209)
OTHER INCOME (EXPENSE)
Interest income 8
Interest expense (46,235)
Net Other Income (Expense) (46,227)
LOSS BEFORE PROVISION FOR INCOME TAX (473,436)
PROVISION FOR INCOME TAXES -
NET LOSS $ (473,436)
Net loss per share $ (0.06)
Weighted average number of shares
outstanding basic and diluted 7,604,772
See accompanying notes to consolidated financial statement.
QUIK PIX, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED
MARCH 31, 2000
UNAUDITED
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (473,436)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 74,063
Changes in assets and liabilities:
Accounts receivable (92,118)
Inventories 12,915
Prepaid expense 8,097
Accounts payable and accrued expenses 66,759
Accrued interest 20,017
Payroll payable (3,205)
Net Cash Used In Operating Activities (386,908)
CASH FLOWS FROM INVESTING ACTIVITIES:
Deposits 149
Net cash provided by investing activities 149
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from private placement, net of offering cost 475,000
Payment of notes payable and capital leases (51,579)
Net cash provided by financing activities 423,421
INCREASE IN CASH AND CASH EQUIVALENTS 36,662
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 3,615
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 40,277
See accompanying notes to consolidated financial statement.
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles and the rules and
regulations of the Securities and Exchange Commission for
interim financial information. Accordingly, they do not
include all the information and footnotes necessary for a
comprehensive presentation of financial position and
results of operations.
It is management's opinion, however, that all adjustments
(consisting of normal recurring adjustments) have been
made which are necessary for a fair financial statement
presentation. The results for the interim period are not
necessarily indicative of the results to be expected for
the year.
For further information, refer to the financial statements
and footnotes included in the Company's Form 10-K filed on
April 14, 2000 and Form 8-K filed on April 21, 2000.
Note 2 RECAPITALIZATION
On March 21, 2000, pursuant to an agreement and plan of
reorganization (the "Acquisition") the Company acquired
all the outstanding shares of common stock of Baroque
Corporation, a Delaware Corporation, from the shareholder
thereof in exchange for an aggregate of 410,510 shares of
common stock of the Company. As a result, Baroque became
a wholly-owned subsidiary of the Company. The Acquisition
was effective on March 22, 2000 and was intended to
qualify as a reorganization within the meaning of Section
368(A)(1)(b) of the Internal Revenue Code of 1986, as
amended. Upon effectiveness of the Acquisition, pursuant
to 12g-3(a) of the General Rules and Regulations of the
Securities and Exchange Commission, the Company became the
successor issuer to Baroque for reporting purposes under
the Securities and Exchange Act of 1934. The
reorganization was treated as a recapitalization of the
Company with the $411 par value of the common stock issued
charged to additional paid-in capital.
NOTE 3 INVENTORIES
Inventories are stated at the lower of cost (first in
first out method) or market and consist new film and other
photo processing stock.
NOTE 4 EQUITY
During the six months ended March 31, 2000, the Company
issued 3,483,333 shares of common stock for proceeds of
$475,000.
NOTE 5 SUBSEQUENT EVENTS
During April 2000, the Company issued 250,000 common
shares for future services to be performed by consultants.
The shares were valued at $0.20 per share, the quoted
trading price on the agreement date, which aggregated
$50,000.
