INTERNET STOCK EXCHANGE CORP.
F/K/A SEA VENTURE CRUISES, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
May 31, 1998 and 1997
C O N T E N T S
PAGE
Independent Auditor's Report 1
Balance Sheets 2
Statements of Loss and Accumulated Deficit
during the Development Stage 3
Statements of Cash Flows 4
Statements of Deficiency in Assets 5
Notes to Financial Statements 6 - 7
Independent Auditor's Report
Board of Directors
Internet Stock Exchange Corp.
f/k/a Sea Venture Cruises, Inc.
(A Development Stage Company)
St. Petersburg, Florida
We have audited the accompanying balance sheets of Internet Stock Exchange
Corp. f/k/a Sea Venture Cruises, Inc. (a development stage company) at May 31,
1998 and 1997, and the related statements of loss and deficit during the
development stage 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 audits.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Internet Stock Exchange Corp.
f/k/a Sea Venture Cruises, Inc. (a development stage company) as of
May 31, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 4 to the financial
statements, the Company has suffered losses from operations that raises
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Miami, Florida
June 1, 1998
INTERNET STOCK EXCHANGE CORP.
F/K/A SEA VENTURE CRUISES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
May 31, 1998 1997
ASSETS
ASSETS $ - $ -
TOTAL ASSETS $ - $ -
LIABILITIES AND DEFICIENCY IN ASSETS
LIABILITIES
Accrued expenses $ 3,192 $ 4,000
Due to related parties (Note 2) 2,808 -
TOTAL CURRENT LIABILITIES 6,000 4,000
DEFICIENCY IN ASSETS (NOTE 5)
Common stock, $.1 par value, 500,000
shares authorized, 496,087
shares issued and outstanding 49,609 49,609
Additional paid-in capital 3,405,103 3,405,103
Accumulated deficit during the
development stage (Note 4) (3,460,712) (3,458,712)
TOTAL DEFICIENCY IN ASSETS (6,000) (4,000)
TOTAL LIABILITIES AND DEFICIENCY
IN ASSETS $ - $ -
See accompanying notes.
INTERNET STOCK EXCHANGE CORP.
F/K/A SEA VENTURE CRUISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT DURING THE DEVELOPMENT STAGE
For the years ended May 31, 1998 1997 Cumulative
EXPENSES
Professional fees $ 2,000 $ 2,000 $ 6,000
LOSS FROM CONTINUING OPERATION $ (2,000) $ (2,000) $ (6,000)
DISCONTINUED OPERATIONS,
NET OF INCOME TAXES
Discontinued development
stage activities - - (3,454,712)
LOSS FROM DISCONTINUED OPERATIONS - - (3,454,712)
NET LOSS $ (2,000) $ (2,000) $ (3,460,712)
BASIC NET LOSS PER SHARE $ (0.004) $ (0.004) $ (6.976)
See accompanying notes.
INTERNET STOCK EXCHANGE CORP.
F/K/A SEA VENTURE CRUISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the years ended May 31, 1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (2,000) (2,000)
Adjustments to reconcile net income
to net cash provided by operating activities:
Increase (decrease) in liabilities:
Accrued expenses (808) 2,000
Due to related parties 2,808 -
NET CASH USED BY DEVELOPMENT STAGE
OPERATING ACTIVITIES - -
NET INCREASE IN CASH AND EQUIVALENTS
FOR THE PERIOD AND CUMULATIVE
DURING THE DEVELOPMENT STAGE - -
CASH AND EQUIVALENTS - BEGINNING OF PERIOD - -
CASH AND EQUIVALENTS - END OF PERIOD $ - $ -
See accompanying notes.
INTERNET STOCK EXCHANGE CORP.
F/K/A SEA VENTURE CRUISES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF DEFICIENCY IN ASSETS
Additional
Common Stock Paid-in Accumulated Total
Description Shares Amount Capital Deficit Deficiency
Balance May 31, 1996 496,087 $ 49,609 $ 3,405,103 $ $ (2000)
(3,456,712)
(2,000)
Net loss for the year ended (2,000) (2,000)
Balance May 31, 199 496,087 49,609 3,405,103 (4,000)
(3,458,712)
Net loss for the year ended (2,000) (2,000)
Balance May 31, 1998 496,087 $ 49,609 $ 3,405,103 $ (6,000)
(3,460,712) $
See accompanying notes.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Business Activity
Internet Stock Exchange Corp. f/k/a Sea Venture Cruises, Inc. (Company)
is a Delaware corporation. The Company is a corporation, organized by
virtue of a merger with Trans America Enterprises, Inc., a Texas corporation,
and Sea Venture Cruises, Inc. Trans America Enterprises, Inc. was the
surviving company, which changed its name to Sea Venture Cruises, Inc.
The Company obtained its certificate of merger from the State of Delaware
on February 9, 1989. The Company changed its name to Internet Stock Exchange
Corp. as of March 26, 1998.
The Company has been inactive since 1989, when it discontinued its luxury
passenger and one-day cruises business. From 1989 to the present time,
the Company has not actively engaged in a specific business, however,
management is pursuing possible business opportunities.
Basic Net Loss Per Share
Basic per share information is computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding.
No warrants or options were outstanding.
Income Taxes
The Company follows Statement of Financial Accounting Standards No. 109
(FAS 109), "Accounting for Income Taxes". FAS 109 is an asset and liability
approach that requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of the difference in events that
have been recognized in the Company's financial statements compared to the
tax returns.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual
results could differ from those estimates.
Development Stage Company
The Company has been inactive for the past several years thus has not yet
generated any revenues and, as such, it is considered a development stage
company.
NOTE 2. RELATED PARTY TRANSACTIONS
On March 15, 1990, the Company issued 443,988,735 restricted common shares
to M.C.K. Marine Enterprises, Inc. in exchange for a loan of $1,605,800.
M.C.K. Marine Enterprises, Inc. was owned by one of the major shareholders
of the Company.
Partial payment of accrued expenses were paid by an affiliated company,
through common ownership in the amount of $2,808 and is included in the
"Due to related parties."
NOTE 3. INCOME TAXES
Deferred income taxes (benefits) are provided for certain income and
expenses, which are recognized in different periods for tax and financial
reporting purposes. Sources of temporary differences and the resulting
assets and liabilities are as follows:
Deferred Tax
Asset
Net operating loss carryforward $ 59,941
Effective tax rate 17%
__________
10,190
Valuation allowance ( 10,190)
__________
$ -
Statement of Financial Accounting Standard No. 109 requires the use of
an asset and liability method of accounting for income taxes. Statement
No. 109 provides for the recognition and measurement of deferred income
tax benefits based on the likelihood of their realization in future years.
A valuation allowance has been established since it is likely that a
portion of the deferred income tax benefits will not be realized.
The Company has a net operating loss carryforward of $59,941 for federal
and state income tax purposes to offset future taxable income. These
losses expire in 2018.
NOTE 4. REVERSE STOCK SPLIT
On March 15, 1998, the Board of Directors authorized a 1 for 1,000
reverse stock split, to be effective as of April 14, 1998, for all of
the then issued and outstanding shares of the Company's common stock.
As a result of the reverse stock split, the Company's issued and
outstanding shares of common stock were reduced from 494,405,953 to 494,406.
The financial statements give retroactive effect to this reverse stock split.
NOTE 5. GOING CONCERN
As shown in the accompanying financial statements, the Company incurred
net losses of $6,000 for the three years ended May 31, 1998 and has been
inactive since 1989. As a result the Company has a negative working
capital and a deficiency in assets. The financial statements do not
include any adjustments that might be necessary should the Company be
unable to continue as a going concern.
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