SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended March 31, 1999
Commission File No. 0-25810
ISO BLOCK PRODUCTS USA, INC.
(Exact name of registrant as specified in its charter)
COLORADO 84-1026503
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8037 South Datura Street
Littleton, Colorado 80120 (303) 795-9729
(Address of Principal's Executive Offices) (Registrant's Telephone No.
incl. Area code)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
.0001 par value.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for at least the past 90 days.
Yes No X
Indicate by check mark if no disclosure of delinquent filers in response
to Item 405 of Regulation S-B will be contained in this form, and no
disclosure will be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in
Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
Yes No X
The registrant's revenues for its most recent fiscal year were $362,085.
The aggregate market value of the voting and non-voting common
stock held by non-affiliates of the registrant, was not determinable.
At June 30, 1999, a total of 4,051,484 shares of common stock were
outstanding.
PART I
Item 1. Prior Business
On March 28, 1994, the Company entered into an Agreement and Plan
of Reorganization ("Reorganization Agreement") with R-S Iso-Block
Produktions GmbH, a German limited liability company ("Iso-Block
GmbH"), Josef Ratey, an individual ("Ratey"), Helge Seidel, an
individual ("Seidel"), and R-S Plus Investment Corp., a Florida
corporation ("R-S PLUS"). Pursuant to the Reorganization Agreement,
on March 31, 1995 the Company purchased from Ratey and Seidel all
of the equity interest in Iso-Block GmbH, and purchased from R-S Plus
all of its right, title and interest in and to Iso-Block GmbH, including all
R-S Plus property heretofore contributed to Iso-Block GmbH and all
R-S Plus's rights to Iso-Block profits, in exchange for the issuance of an
aggregate of 2,000,000 shares of the Company's authorized but
heretofore unissued common stock, no par value (the "Exchange
Shares"). In addition, Mr. Ratey, Mr. Seidel and R-S Plus were
entitled to receive options for a two-year period to purchase an
aggregate of not more than 1,000,000 shares of the Company at a
nominal price in order too prevent their aggregate equity interest in the
Company from being diluted below 57%. In 1995, Iso-Block GmbH
changed its name to R-S ISO-Block Produktions und Bautrager
GmbH, which permitted it to engage in the business of constructing
buildings as well as manufacture and production of building materials.
In fiscal years ended 1995 and 1996, Iso-Block GmbH had certain
operations in Germany. The Company wound down such operations in
the closing months of 1996. See Part II, Item 6 below.
Current Business of the Company
The Company now functions entirely as a US company engaged in the
business of residential home construction as general contractor as well
as the holding company of Franchise Connection, Inc., ("Franchise
Connection") a strategic conglomerate of new and emerging
franchise companies and a team of franchise experts that work together
to match the aspirations of entrepreneurs with viable analogous
franchise concepts.
Residential Home Building
The demand for housing in Colorado has exploded during the 1990s
because of the migration to Colorado of numerous large corporations as
well as the expansion of Colorado domiciled businesses due to the
current excellent economic climate. Metro Denver's January 1998 home
sales were the highest on record and were up almost 10% over the
previous year. March, 1998 home sales in the Denver Metro area soared
in which 3,730 homes were placed under contract in contrast with
February, 1992 in which there were 3,436 homes placed under contract.
The monthly sales rate is currently 6.91% as compared to a 6.13% sales
rate for 1997. It is estimated that the only factor, which could slow
home sales in the Denver area, would be rising mortgage interest
rates. The Company believes the strong housing market will allow it
to build custom homes very profitably.
Franchising Operations
Franchise Connection, Inc. was incorporated in Colorado in 1996 with
headquarters in Denver, Colorado. The Company plans to form
strategic partnerships with prospective or existing franchise operations
("Franchisers")under which it will provide them with marketing and
sales services plus business and legal services in return for an equity
interest in, and/or a portion of their royalties. It is targeting private
companies, which are seeking to franchise expertise or financial
capacity to successfully engage in franchising. The Company
will offer comprehensive franchise marketing and consulting services
to its Franchisers companies including operations, personnel,
management, training, legal and financial advice. In addition,
Franchise Connection will assume total responsibility for the
recruitment of franchisees. This will include national
media advertising, trade show attendance, and other forms of
promotion supported by a commissioned sales staff.
In the evaluation of a prospective Franchiser, the Company will
generally be guided by a number of factors, including analysis of a
prospect's financial position, the experience of its management,
the product, service and/or concept offered and the identification of its
competitors, as well as its ability to show a profit at the franchisee level.
To date, Franchise Connection has established a strategic partnership
with several companies which will be the initial base franchises.
Franchise Connection receives a franchise sales commission plus has
varying interests in each company ranging from full ownership to a
royalty agreement. The initial base franchises include
Performance Marketing, Inc., a small business marketing and training
firm wholly owned by Franchise Connection which offers a
step-by-step, comprehensive, consistent marketing system
that is custom designed for each client.
Currently the principal focus of Franchise Connection, Inc. is the
development of Magna Dry LLC. Franchise Connection, Inc. has
formed a Colorado Limited Liability Company "Magna-Dry USA,
LLC" of which it is the sole member. Magna -Dry USA has purchased
the exclusive license to operate and franchise the Magna-Dry concept
in total cleaning throughout the United States. Franchise Connections,
Inc. has executed a five-year license agreement with continuos
two-year renewal options and has paid the master franchise fee.
Franchise Connection, Inc .has agreed to pay an ongoing license fee
throughout the agreement. The principal business is the manufacturing,
re-packaging, distribution and licensing of leading edge
environmentally safe-cleaning services developed by Australian
formulator Charles C. Borg. Franchise Connection, Inc. enjoys
exclusive territorial rights to manufacture and distribute
Magna-Dry products in the United States. Specifically, the operational
aims and proposed development plans are as follows: (1). Increase
resources for the sales and operations team and strengthen middle
management to support future growth of Magna-Dry (2). Magna-Dry
sub-franchising, forming synergistic services with other up-market
carpet retailers, existing laundry and cleaning businesses, upholstery
and soft furnishings businesses, car distributors and manufactures and
rapid numerical growth of the sales and operational teams (3). Magna-Dry
Area Franchising. Franchise Connection, Inc. has spent an additional
$175,000 in marketing and operational development costs for its
Magna-Dry subsidiary. The Magna-Dry carpet and drape cleaning
system has expanded to 22 countries around the world including the
United Kingdom, Germany, France, Belgium, the Netherlands,
Luxembourg, Italy and Asia. Magna-Dry has over one thousand units
operating internationally, which produce gross revenues in excess of
$300,000,000. In many areas Magna-Dry has captured over 60% of the
market. Unlike competitors using conventional wet or shampoo
cleaning methods, Magna-Dry employs a revolutionary cleaning
process with magnetic ionization technology that cleans faster and
more efficiently. It is a proven system that is safe, fast and reliable and
suitable for cleaning carpets, curtains, upholstery and mattresses of all
material types. There are many firms engaged in the business of
franchising small companies, and competition is fierce. Franchise
Connection believes that its particular marketing orientation (the
marketing of less expensive franchises of low-entry cost businesses)
combined with Johnny Wilson's experience and background will enable
it to be successful. Franchise Connection and its subsidiaries currently
employ 2 people in full-time positions and employ others as needed.
Staff will be added only as needed, and there is a labor pool or persons
with experience in the business of Franchise Connection available at a
reasonable cost.
Employees
The Company's only employees are its executive officers, who devote
most of their time to Company affairs, and the two employees of
Franchise Connection, Inc.
Item 2. Description of Property.
The Company occupies facilities provided at no charge by its President,
Mr. Egin Bresnig in his residence; these facilities are expected to be
adequate in the near term, through fiscal 2000. Franchise Connection
leases from unaffiliated parties approximately 2,300 square feet of
space at 10691 East Bethany Drive, Unit 800, Aurora, Colorado
80014. Management of Franchise Connection believes that these
facilities will be sufficient for their needs for at least the next
twelve months.
Item 3. Legal Proceedings.
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to the Company's security holders during
the fiscal year ended March 31, 1999.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.
Market Information
The Company's outstanding Common Shares are publicly quoted and
traded on the OTC Bulletin Board with the symbol ISOB. There is no
assurance that an active market will arise in the Company's common
shares.
Holders
The Company had 346 shareholders of record as of March 31, 1999,
which does not include shareholders whose shares are held in street or
nominee names.
Dividends
The Company does not expect to pay a cash dividend upon its capital
stock in the foreseeable future. Payment of dividends in the future will
depend on the Company's earnings (if any) and its cash requirements at
that time.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Business Operations
The Company's principal business operations through March 31, 1992
consisted of leasing out computers, peripheral products and software.
The Company realized only nominal revenues through March 31,
1992.Due to lack of significant revenues or operations, the Company
remained in the developmental stage, as defined in Financial
Accounting Standards Board Statement No. 7 until fiscal year ended
March 31, 1994.
The first half of the business year of 1994 was occupied in establishing
the infra structure to gear up for the planned operational activities
of the German subsidiary, ISO-Block GmbH. The Company had a very
difficult time trying to raise capital to start single-family and
multi-family developmental projects as a general contractor. The
Company decided to begin building single family custom homes at
first, using the Company's proprietary building system, before
attempting larger and more aggressive projects. Not until the first
quarter of 1995 was the Company able to raise sufficient additional
capital to begin operations.
The Company had a difficult but promising start, and the wholly owned
subsidiary Iso-Block GmbH began custom home construction in
Germany in the second quarter of 1995. A proof-of-concept home was
built to demonstrate the Company's proprietary building system,
several homes were completed for customers and others were initiated.
Bigger projects were planned, some with partial financing from local
governments. The weather in Germany in the fall and winter of 1995
(third and fourth quarter 1995) did turn so bad that it was practically
impossible, under those circumstances, to build anything for several
months. Also a very negative business climate developed in Germany
with an abnormally high unemployment rate, the highest since Word
War II. The weather improved but the business climate in Germany did
not. The construction industry, in general, in Germany hit bottom in
1995.
The Company had operating losses for 1995 through 1998 of
approximately $2,861,000 of which the major amount was due to the
very adverse business climate in Germany as outlined above. The Company
explored other business opportunities in the United States. Management
of the Company decided to cease all operational activities in Germany.
The better part of 1996 and 1997 was spent winding down and closing
the German operation.
Results of Operations Fiscal Year 1998
The Company realized a loss of $308,106 on total revenue of
$362,085 for the fiscal year ended March 31, 1999. As of March 31,
1999 the Company had accumulated a deficit since inception of
$3,168,615. The loss realized was primarily due to an extra ordinary
item , related to the non performance of the "German Grundschulden"
(mortgages) which are being presented for foreclosure, the construction
costs for the homebuilding activities and costs associated with the
beginning operations of Franchise Connection and the initial development
of Magna-Dry LLC.
Results of Operations - Fiscal Year 1997
The Company realized a loss of $1,503,069 on total revenue of $213,205
for the fiscal year ended March 31, 1998. As of March 31, 1998, the
Company had accumulated a deficit since inception of $2,860,509. The
loss realized was primarily due to beginning operations in the U.S., the
closing of operations in Germany (non performance of the "German
Grundschulden" mortgages) and general and administrative expenses
incurred to date.
Liquidity and Capital Resources
Cash totaled $4,234 at March 31, 1998 compared with $5,135 at
March 31, 1999. The $901 increase in cash was from operating
activities. The Company considers its startup franchise business to
be dependent upon its ability to raise money from the sale of its stock
and or complete the sale of its residential home.
Income Taxes and Net Operating Losses
At March 31, 1999, the Company had net operating loss carryforwards
for United States and German income tax purposes totaling $3,168,615,
which are available to offset future taxable income. These NOL's
expire through 2008.
Plan of Operation
The Company intends to continue its construction program as long as the
residential real estate business climate continues its intensity in
Colorado and capital remains available.
The Company also intends to continue its franchising efforts. Franchising
has been responsible for over 35% of the United State's total retail
sales in the 1990s and is projected too grow to over 50% of all
retail sales in the twenty-first century. Franchising has proved to be
an outstanding method of distribution and market penetration.
If the Company is not able to find the necessary capital to grow the
"general contractor" or franchising businesses, the Company will consider
either sale or merger. Every effort will continue to raise the necessary
capital or move into the industry with available capital to expand and
grow the business.
Year 2000 Compliance
General Description of the Year 2000 Issue and the Nature and Effects
of the Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 issue is the result of computer programs being written
using two digits rather than four digits to define the applicable year.
Any of the Company's computer programs or hardware that have
date-sensitive software or embedded chips may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business
activities.
The Company presently leases one computer hardware and related
software. The Company also uses services from other company's and
does believe that all related computers are Year 2000 compliant.
Computer Hardware
The Company believes that the one leased computers hardware is Year
2000 compliant.
Computer Software
The Company believes that the one leased computers software is Year
2000 compliant.
Operating Equipment
The Company does not own any related operating equipment.
Nature and Level of Importance of Third Parties and Their Exposure to
the Year 2000
The Company continues to conduct surveys of its banking and other
vendor relationships to assess risks regarding their Year 2000 readiness.
The Company has banking relationships all of which have indicated
their compliance efforts will be complete before September 1999. The
Company's contingency plan in this regard is to move accounts from
any institution that cannot be certified Year 2000 compliant by October
1, 1999.
The Company does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors
who share information systems with the Company (external agents). To
date, the Company is not aware of any external agent with a Year 2000
compliance issue that would materially impact the Company's results of
operations, liquidity, or capital resources. However, the Company has
no means of ensuring that external agents will be Year 2000 compliant.
Management does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will
have a material impact on the financial position or results of operations
of the Company. However, the effect of non-compliance by external
agents is not readily determinable.
Costs to Address Year 2000
The total cost of the Year 2000 project is $0. To date, the Company has
incurred $0 related to all phases of the Year 2000 project. Of the total
remaining project costs, approximately $0 is attributable to the purchase
of new software and operating equipment.
Risks Associated with the Year 2000
Management believes it has no risk associated with the Year 2000.
Item 7. Financial Statements.
See index to financial statements at page F-1. The financial statements
included as part of this report immediately follow that index. No
supplementary financial data is required or included.
Item 8. Changes in and Disagreements with Accountants or
Accounting and Financial Disclosure.
On June 21, 1999, the Company engaged Larry O'Donnell, CPA, PC as its
independent auditor, replacing R. Scott Hall CPA, who was dismissed
as the Company's auditors effective June 21, 1999, as reported
on Form 8-K dated such date.
Mr. O'Donnell has reported on the Company's financial statements for
the fiscal year ended March 31, 1999. Such report did not contain
Either an adverse opinion or a disclaimer of opinion, and were not
qualified or modified as to uncertainty, audit scope or accounting
principles. There were no disagreements on any matters of accounting
principle or practices, financial statement disclosure, or auditing
scope or procedure in connection with Mr. O'Donnell's audit of the
Company's financial statements for such fiscal year which, if not
resolved to his satisfaction, would have caused him to make reference
in his report on the subject matter of the disagreement.
Mr. Hall has reported on the Company's financial statements for the
fiscal years ended March 31, 1998. Such report did not contain either
an adverse opinion or a disclaimer of opinion, and were not qualified
or modified as to uncertainty, audit scope or accounting principles.
There were no disagreements on any matters of accounting principle or
practices, financial statement disclosures, or auditing scope or
procedure in connection with Mr. Hall's audits of the Company's
financial statements for such fiscal year which, if not resolved to
his satisfaction, would have caused him to make reference in his
reports on the subject matter of the disagreement.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
Identification of Directors and Executive Officers The present directors
and executive officers of the Company, their ages, positions held in and
tenure with the Company, are listed below. Each director will serve
until the next annual meeting of shareholders, or until his respective
successor has been elected and duly qualified. Directors serve one-year
terms. Officers hold office at the pleasure of the Board of Directors,
absent any employment agreement, of which none currently exist or are
contemplated. There are no family relationships between any director
or executive officer.
Name Age Position Since
- ---- ----- ---------- ------
Egin Bresnig 63 Director, (since Dec. 1993) June 1995
President,
Chief Executive Officer
Dean Wicker 59 Director and Secretary June 1995
(since Dec. 1993),
Chief Financial and
Accounting Officer
Johnny M. Wilson 56 Director June 1997
The following is a brief account of the business experience during at
least the past five years of each director and executive officer,
indicating the principal occupation and employment during that period,
and the name and principal business of the organization in which such
occupation and employment were carried out.
Egin Bresnig. Mr. Egin Bresnig was raised and educated in Austria.
He has a doctor degree in Physical Education and Modern Languages
from the Karl Franzens University in Graz, Austria. He has been a
resident in the USA for over 37 years. Mr. Bresnig spent many years in
the winter ski industry as a ski school owner, business owner, importer
of equipment and clothing. He has been a real estate developer in
Colorado ski resort areas and has had 18 years experience in the
financial securities industry. He was a licensed securities broker, branch
manager, director of European operations, national sales manager and
the president of various investment banking firms. For several years he
owned his own branch office with up to 25 brokers. Mr. Bresnig was
the successful owner and president of a NASD member firm. He is
fluent in several European languages. He is an officer and director of
East Slope Funding Corp., a Colorado financial consulting firm, Eurous
Funding, Inc. a Colorado public relations firm, Eurous Investments
Holding Company, a non-active Colorado corporation , Arista
Corporation, a non-active Colorado company and REWIPAC
Worldwide Corporation, a non-active Nevada company.
Dean Wicker. Dean Wicker has lived in the Denver, Colorado area for
44 years. He graduated from the University of Colorado, Boulder, CO
in 1961 with a BA degree in American History. He has done advanced
degree work in financial accounting and merger and acquisition
negotiations. Mr. Wicker was the youngest Public Finance negotiator in
the Rocky Mountain region with the New York Member firm, J.A.
Hogle and CO. He changed careers in 1967 by developing retail winter
sports and apparel operations until 1981. Mr. Wicker reentered the
security industry with the position of Senior Institutional Sales with
George K. Baum and Co., Member of the New York Stock Exchange.
In 1984 he became a vice-president and Partner of Boettcher and Co.,
Inc., Member of the New York Stock Exchange and then, the largest
investment banking firm in the western United States. In 1991 he
became an independent financial consultant specializing in merger and
acquisitions. He is an officer and director of East Slope Funding Corp.,
a Colorado financial consulting firm, Eurous Funding, Inc., a Colorado
public relations company, Eurous Investments Holding Company a
non-active Colorado corporation, Arista Corporation, a non-active
Colorado company, and REWIPAC Worldwide Corporation, a
non-active Nevada company.
Johnny Wilson. Johnny M. Wilson has 25 years experience in the
franchise industry. Mr. Wilson received a BA degree from the
University of Missouri, Columbia, Mo and a J.D. degree
from the Missouri School of Law in Columbia, MO. He served as
Assistant Prosecuting Attorney of Scott County, MO for two years and
became President of Missouri Health and Medical Organization, a
non-profit corporation to organize and structure a prepaid health
delivery system for rural areas in Missouri. From 1972 to 1976 he
managed forty people and administrated a six million dollar grant from
the US Department of Health and Welfare. In 1976 Mr. Wilson started
Savings Plus Systems combining Savings and Loan associations, retail
merchants and consumers into automatic discount/savings programs.
In four years the Company grew to over 150 financial institutions,
thousands of merchants and hundred of thousands of consumers. Mr.
Wilson initiated and completed a private placement offering with
investors representing Massy Investment Group, ITT International, and
Citicorp Bank among others. Mr. Wilson sold his interest in the
company in 1979 to the investment partners. From 1980 until
1983 Mr. Wilson was in private law practice specializing in franchise
development. In 1983 he joined with investors in Denver, CO to
develop franchises in the packaging and shipping industry. He formed
Pack Mail Centers of America, Inc. He served as President, Chairman
of the Board until 1990. Under his direction the company grew to over
250 franchises and 25 million dollars in gross sales. He guided the
company through a public offering in 1986 and completed a friendly
buy-out by the executives of Beatrice Foods in 1989. Mr. Wilson
returned to franchise consulting through his own company, The
International Franchise Company from 1990 to 1996. In 1996 Mr.
Wilson formed The Franchise Connection, Inc. in which he serves as
President. Compliance with Section 16(a). Section 16(a) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"),
requires the Company's executive officers, directors and
persons who beneficially own more than 10% of a class of the
Company's equity securities registered under the Exchange Act to file
reports of ownership and changes in ownership with the
Securities and Exchange Commission. Because the Company was not
subject to the reporting requirements of the Exchange Act during the
fiscal year ended March 31, 1995, no filings under Section 16(a) were
required.
Item 10. Executive Compensation.
Cash Compensation and Compensation Pursuant to Plans
For the fiscal year ended March 31, 1999, Mr. Egin Bresnig, CEO and
Mr. Dean Wicker, Secretary received cash compensation of $0 and
received $45,000 and $42,500 in fiscal year 1998, respectively
plus reimbursement of out-of-pocket expenses incurred on behalf of
the Company in 1998 and 1999. The Company does not have in effect
any pension, profit-sharing, stock appreciation or bonus plans.
The Board of Directors authorized a Medical Insurance Plan for its
President, Mr. Egin Bresnig, effective January 3, 1997. Other
benefit plans are described below.
Employee Stock Compensation Plan
The Company has adopted the 1993 Employee Stock Compensation
Plan for employees, officers, directors of the Company and advisors to
the Company (the "ESC Plan"). The Company has reserved a
maximum of 500,000 Common Shares to be issued upon the grant of
awards under the ESC Plan. Employees will recognize taxable income
upon the grant of Common Stock equal to the fair market value of the
Common Stock on the date of the grant and the Company will
recognize a compensating deduction at such time. The ESC Plan
will be administered by the Board of Directors or Compensation
Committee. No Common Stock has been awarded under the ESC Plan.
Compensatory Stock Option Plan
The Company has adopted the 1993 Compensatory Stock Option Plan
for officers, employees, potential key employees, non-employee
directors and advisors (the "CSO Plan"). The Company
has reserved a maximum of 1,000,000 Common Shares to be issued
upon the exercise of options granted under the CSO Plan. The CSO
Plan is intended to qualify as an "incentive stock option" plan under
Section 422 of the Internal Revenue Code of 1986, as amended.
Options will be granted under the CSO Plan at exercise prices to be
determined by the Board of Directors or other CSO Plan administrator.
With respect to options granted pursuant to the CSO Plan,
optionees will not recognize taxable income upon the grant of options,
but will realize income (or capital loss) at the time the options are
exercised to purchase Common Stock. The amount of income will be
equal to the difference between the exercise price and the fair market
value of the Common Stock on the date of the exercise. The Board of
Directors or a Compensation Committee of directors will administer the
CSO Plan. Subsequent to year-end, an aggregate of 600,000 common
shares subject to purchase under options has been granted under the
CSO Plan.
See Item 11 below.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding compensation paid
to the Company's Chief Executive Officer and Secretary during the last
two fiscal years. The CEO's total annual salary and bonus did not
exceed $100,000, nor did that of any other executive officer.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
- --------------------------------
Annual Compensation Awards Payouts
(a) (b) (c ) (d) (e) (f) (g) (h) (i)
Name and Restricted No. Of $ All
Principal Stock Ops & LTIP Other ($)
Position Year Salary Bonus Other Awards ($) SARs Payouts Comp.
- --------- ---- ------ ----- ----- ---------- ---- ------- ------
Egin
Bresnig
CEO 1999 $0 -0- N/A -0-
1998 $45,000 -0- N/A -0-
Dean
Wicker
CFO,
Sec. 1999 $0 -0- N/A -0-
1998 $42,500 -0- N/A -0-
OPTIONS GRANTED DURING THE 1997 FISCAL YEAR
Individual Grant
- --------------------
(a) (b) (c ) (d) (e)
Number of % of Total Options
Securities Granted To
Underlying Employees Exercise or Base
Name Options Granted in Fiscal Year Price ($ / Share) Expiration Date
- ---- --------------- --------------- ----------------- ---------------
Egin
Bresnig - - - -
Dean
Wicker - - - -
OPTIONS EXERCISED IN LAST FISCAL YEAR and FISCAL YEAR-END OPTION
VALUES
(a) (b) (c ) (d) (e)
Number of $
Securities Value of
Underlying Unexercised In-
Unexercised The-money
Number of Options at FY Options at FY
Shares Acquired $ End Exercisable/ End Exercisable/
Name on Exercise value Realized Unexercisable Unexercisable
- ---- ----------- -------------- ------------- -------------
Egin
Bresnig None None 200,000 / None None / None
Dean
Wicker None None 200,000 / None None / None
The Company has no stock appreciation rights (SAR) plan in place and
has not awarded SAR's to any person. The Company has no long-term
incentive plans, as that term is defined in the rules and regulations of the
Securities and Exchange Commission. During the fiscal year ended
March 31, 1999, the Company did not amend or re-price the exercise
price of any stock options granted to any executive officer.
Compensation of Directors
No person was compensated by the Company for serving as a director
during the fiscal year ended March 31, 1999. While no such compensation
is currently anticipated, the Company believes that directors in the
future will be paid for serving on the Board of Directors and on committees
of directors.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
(a)(b) Security Ownership. The following table sets forth as of April 1,
1999, the names of persons who own of record, or were known by the
Company to own beneficially, more than five percent of its total issued
and outstanding common stock and the beneficial ownership of all such
stock as of that date by officers and directors of the Company and all
such officers and directors as a group. Except as otherwise noted, each
person listed below is the sole beneficial owner of the shares and has
sole investment and voting power as to such shares No person listed
below has any option, warrant or other right to acquire additional
securities of the Company, except as may be otherwise noted.
Name and Address Amount & Nature of
Title of Class Of Beneficial Owner Beneficial Ownership
- -------------- ------------------- --------------------
Common Stock * Egin Bresnig
no par value 8037 So. Datura Street
Littleton,
Colorado 80120 356,500
SAME * Dean Wicker
5176 East Davis Drive
Littleton, Colorado 80122 367,500
SAME * Johnny M. Wilson
1885 S. Evanston
Aurora, Colorado 80012 462,500
SAME Cilla Berndt
Mering, Germany 291,128
SAME Paul Schneider
Klingstepen 12
D-31688 Wipperfurth,
Germaany 600,000
SAME John D. Brasher
90 Madison Street, Suite 707
Denver, Colorado 80206 165,000
* All officers and directors
Item 12. Certain Relationships and Related Transactions.
Exchange Agreement
In January, 1997 the Company completed an Exchange Agreement and
Plan of Reorganization for the purchase of 100% ownership of
Franchise Connection, Inc., a Colorado corporation and its wholly
owned subsidiary Brilliant Marketing, Inc. In full payment for the
control shares of Franchise Connection, Inc., and Brilliant Marketing,
Inc. the Company issued and delivered the shareholders an aggregate of
Five Hundred Thousand (500,000) shares of the authorized but
unissued shares of Iso Block Products USA, Inc.'s common stock and
One Million Five Hundred Thousand (1,500,000) shares of the Series
1996 Non-Voting Convertible Preferred Stock subject to adjustment as
outlined below. The preferred Exchange Shares shall be convertible
into shares of the no-par value common stock of the Company three (3)
years from the date of issuance at the following conversion rate:
(1) if Franchise Connection has by then sold an aggregate of 150
franchises, consisting of all or any franchises marketed by Franchise
Connection, each preferred Exchange Share will be convertible into one
(1) Conversion share; or
(2) if Franchise Connection has by then sold an aggregate of less than
150 franchises, the number of Conversion Shares into which the
preferred Exchange Shares are convertible will be proportionally
reduced.
(3) if Franchise Connection has sold an aggregate of less than 100
franchises by the third anniversary of the closing under the definitive
agreement, then in addition to the adjustment set forth above, the
Company may at its election demand the surrender and cancellation of
and may unilaterally cancel a percentage of the 500,000 common
Exchange Shares.
Employment Agreement
The Company entered into an Employment Agreement by and among
Franchise Connection, Brilliant Marketing Inc. ("BMI") and Johnny M.
Wilson for a three year period. Under the terms of the Employment
Agreement, Mr. Wilson will be employed by both BMI and the
Franchise Connection as Chief Executive Officer and President and
will serve as Chairman of the board of directors of both companies. He
also will serve in any other capacity as designated by either company'
board of directors. He will not compete with Franchise Connection or
BMI or any franchise project now or later undertaken by Franchise
Connection or BMI or engage in any franchise-related business
whatsoever, as consultant, employee or otherwise, except those
operated by Franchise Connection and BMI.
Otherwise, there were no transactions, or series of transactions, for the
fiscal year ended March 31, 1999, nor are there any currently proposed
transactions, or series of transactions, to which the Company is a party,
in which the amount exceeds $60,000, and in which to the knowledge
of the Company any director, executive officer, nominee, five percent
or greater shareholder, or any member of the immediate family of any
of the foregoing persons, have or will have any direct or indirect
material interest other than as described above or elsewhere in this
report.
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT F-1
CONSOLIDATED COMPARATIVE FINANCIAL STATEMENTS
Balance Sheet. F-2
Statement of Operations F-3
Statement of Shareholder's Equity F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6-8
INDEPENDENT AUDITOR'S REPORT
Board of Directors
ISO BLOCK PRODUCTS USA, INC.
I have audited the accompanying consolidated comparative balance sheet
of ISO Block Products USA, Inc., as of March 31, 1999 and the related
consolidated comparative statements of operations, shareholders' equity
and cash flows for the year then ended. These consolidated comparative
financial statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these consolidated
comparative financial statements based on my audit. The financial
statements of ISO Block Products USA, Inc. as of March 31, 1998 were
audited by another auditor whose report dated April 16, 1999 expressed
an unqualified opinion on these statements.
I conducted my audit in accordance with generally accepted auditing
standards. These standards require that I 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 the significant estimates made by management, as
well as evaluating the overall financial statement presentation. I
believe that my audit provides a reasonable basis for my opinion.
In my opinion, the consolidated comparative financial statements
referred to above, present fairly, in all material respects, the
financial position of ISO Block Products USA, Inc., at March 31, 1999
and the results of its operations and cash flows for the years then
ended in conformity with generally accepted accounting principles.
Larry O'Donnell, CPA, PC
July 12, 1999
Aurora, Colorado
F-1
ISO BLOCK PRODUCTS USA, INC.
CONSOLIDATED COMPARATIVE BALANCE SHEET
ASSETS March 31,
Current Assets 1999 1998
- -------------- ---- ----
Cash $5,135 $4,234
Accounts receivable-officer - 2,000
Accounts receivable- trade - 135,850
Mortgage receivable 16,200 16,200
Inventory-work in progress 34,540 235,494
----------- ----------
Total Current Assets 55,875 393,778
Property & Equipment
- ----------------------------
Office equipment 9,071 9,071
Vehicle 14,273 14,273
Less: accumulated depreciation (4,333) (2,333)
----------- ----------
Net Property & equipment 19,011 21,011
Other Assets
- ---------------
Deposits - 2,551
Franchise & License - 114,233
----------- ----------
Total Other Assets - 116,784
TOTAL ASSETS $74,886 $531,573
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
- ----------------------
Accounts payable 54,383 81,381
Payroll taxes payable - -
Notes payable 150,360 310,360
Accrued Interest payable 26,304 14,349
Capitalized lease payable - 3,838
---------- ----------
Total Current Liabilities 231,047 409,928
Stockholders' Equity
- -------------------------
Preferred Stock, No Par Value,
10,000,000 Shares Authorized,
116,370 Shares Outstanding 114,690 114,690
Common Stock, 50,000,000 Shares
Authorized, 4,041,484 and
3,854,730 Shares Outstanding 2,897,764 2,867,464
Accumulated deficit (3,168,615) (2,860,509)
---------- ----------
Total Stockholders' Equity (156,161) 121,645
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY 74,886 531,573
The accompanying notes are an integral part of these financial statements.
Page F-2
ISO BLOCK PRODUCTS USA, INC.
CONSOLIDATED COMPARATIVE
STATEMENT OF OPERATIONS
March 31,
INCOME 1999 1998
- ------ ---- ----
Sales $362,085 $190,867
Interest Income - 22,338
---------- -----------
Total Income 362,085 213,205
Operating Expenses
- ------------------------
Cost of Goods Sold 311,032 -
General and Administrative 359,159 562,337
---------- -----------
670,191 562,337
Income (loss) From Operations (308,106) (349,132)
Other Extraordinary Income (loss)
- ---------------------------------
Mortgage Bad Debts - (1,153,937)
---------- ------------
Net Loss $(308,106) $(1,503,069)
Loss Per Common Share $(0.08) $(0.39)
Weighted Average Shares 3,996,292 3,854,730
The accompanying notes are an integral part of these financial statements.
Page F-3
ISO BLOCK PRODUCTS USA, INC.
CONSOLIDATED COMPARATIVE STATEMENT OF
STOCKHOOLDERS' EQUITY
Preferred Common Accumu-
Stock Stock lated
Shares Amount Shares Amount Deficit Total
------ ------ ------ ------ ------- -----
Balance at
March 31,
1997 1,448,610 1,427,700 2,070,821 1,472,556 (1,357,440) 1,542,816
Issue of
Preferred
Shares 32,370 31,898 31,898
Issue of
Common
Shares 419,299 50,000 50,000
Conversion
of Preferred
Shares to
Common
Shares (1,364,610) (1,344,908)1,364,610 1,344,908 -
Net (loss)
for Year - - - - (1,503,069) (1,503,069)
Balance at
March 31,
1998 116,370 $114,690 3,854,730 $2,867,464 $(2,860,509) $121,645
Issue of
Common
Shares 186,754 30,300 30,300
Net (loss)
for Year - - - (308,106) - (308,106)
Balance at
March 31,
1999 116,370 $114,690 4,041,484 $2,897,764 $(3,168,615) $(156,161)
The accompanying notes are an integral part of these financial
statements.
Page F-4
ISO BLOCK PRODUCTS USA, INC.
CONSOLIDATED COMPARATIVE
STATEMENT OF CASH FLOWS
March 31,
Cash Flow From Operating Activities 1999 1998
- ------------------------------------ ---- ----
Net Income (loss) $(308,106) $(1,503,069)
Depreciation 2,000 2,154
Write down of investment franchise 114,233 -
Write down of mortgages receivable - 1,160,390
Common stock issued for expenses 30,300 -
(Increase) Decrease in:
Accounts receivable- trade 135,850 (135,850)
Accounts receivable- officer 2,000 -
Inventory-work in process 200,954 (163,461)
Deposits 2,551 (2,551)
Increase (Decrease) in:
Accounts payable (26,998) 67,962
Accrued interest-payable 8,117 14,349
----------- ------------
Net Cash Used in Operating
Activities 160,901 (560,076)
Cash Flows Investing Activities
- -------------------------------
Purchase of Property & Equipment - (20,484)
Purchase of Franchise & License Rights - (114,233)
----------- -------------
Net Cash Flows From
Investing Activities - (134,717)
Cash Flows From Financing Activities
- ------------------------------------
Proceeds From Preferred Stock - 31,898
Proceeds From Common Stock - 50,000
Proceeds From Notes Payable 24,300 310,360
Payments on Notes Payable (184,300) -
Proceeds From Capitalized Lease - 14,871
Payments on Capitalized Lease - (11,033)
----------- -----------
Net Cash Provided by (used in)
Financing activities (160,000) 396,096
Net Increase (decrease) in Cash 901 (298,697)
Cash-Beginning of Year $4,234 $302,931
Cash-End of Year $5,135 $4,234
Supplemental disclosure of cash flow information
Cash paid during the year for Interest $16,101
Noncash investing and financing activities:
Common stock issued for expenses $30,300
The accompanying notes are an integral part of these financial statements.
Page F-5
ISO BLOCK PRODUCTS USA, INC.
NOTES TO CONSOLIDATED
COMPARATVIE FINANCIAL STATEMENTS
For the Years Ended March 31, 1999 and 1998
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company Description
The Company was incorporated on April 28, 1986 under the laws of the
State of Colorado under the name of Champion Computer Rentals, Inc.
The Company's Articles of Incorporation were amended to change the name
of the corporation to ISO Block Products USA, Inc. from Champion Computer
Rentals, Inc. effective on September 21, 1994.
Franchising Operations
Effective January 24, 1997, ISO acquired 100% stock of Franchise
Connection, Inc. and its wholly owned subsidiary Brilliant Marketing,
Inc. The Acquisition was accounted for as a purchase by ISO and the
accompanying financial statements present historical results of ISO
and include Franchise Connection, Inc. and Brilliant Marketing, Inc.
activities from the effective date of the acquisition.
Franchise Connection, Inc. was incorporated in Colorado in 1996 with
headquarters in Denver, Colorado. The Company plans to form strategic
partnerships with prospective or existing franchise operations
(Franchisers) under which it will provide them with marketing and sales
services plus business and legal services in return for an equity
interests in, and / or a portion of their royalties
Settlement Agreement
The Company and its President, Egin Bresnig, had been named as defendants
in Texas Finance, Incorporated v. ISO Block Products USA, Inc., et al,
filed in the United States District Court for the District of Colorado,
Civil Action No.96-WM-1961. On October 7, 1997, Texas Finance Incorporated
and ISO Block Production USA, Inc. et al entered into a settlement
agreement in which the Company agreed to pay part of plaintiff's attorney
fees of $5,000 and additionally to issue plaintiff et al shares of the
Company's restricted common stock. On October 9, 1997, the United
States Districts Court for the District of Colorado issued Notice of
Dismissal. The case was dismissed with prejudice, with each of the
parties bearing its own costs and attorney fees. The Company is not
subject to any pending or threatened legal proceedings.
Consolidation
The financial statements include the accounts of ISO and its wholly-
owned subsidiaries Franchise Connection, Inc.,, Brilliant Marketing, Inc.,
and Magna Dry, Inc. All significant inter-company balances have been
eliminated in consolidation.
Concentrations of Credit Risk
The Company's financial instruments that are exposed to concentrations
of credit risk consist primarily of mortgages receivable.
The Company's mortgages receivable are concentrated in German real estate
and are concentrated in a limited number of borrowers. The mortgages
are from high quality entities and secured by high value real estate
to limit the Company's exposure to concentrations of credit risk.
During 1998, the Company began foreclosure proceedings in Germany on most
of its mortgages receivable. Although legal counsel handling the case
for the Company believes that a favorable outcome will be reached, no
one can say when or if all of the approximately $1,153,000 will be
recovered. Therefore the Company has decided to treat the mortgages
as bad debts until such time as the foreclosure has been settled.
F-6
ISO BLOCK PRODUCTS USA, INC.
NOTES TO CONSOLIDATED
COMPARATVIE FINANCIAL STATEMENTS
For the Years Ended March 31, 1999 and 1998
Cash
All amounts are stated in U.S. dollars.
Property & Equipment
Property & equipment are recorded at cost. Depreciation is provided
over the estimated useful lives of the assets.
Income Taxes
The Company has no current or deferred income tax liability due to
accumulated losses during the development stage. The Company has net
operating losses totaling $3,168,615 and $2,860,509, respectively,
which are available to offset future taxable income. These NOL's
expire through 2008. Since realization of the tax benefits of these
net operating losses is not assured beyond any reasonable doubt, no
recognition has been given to possible future tax benefits in
the financial statements. A deferred tax benefit is of $1,170,000
has been offset by a valuation allowance.
Foreign Currency Translation
The functional currency for the Company's foreign operations is the
applicable local currency. The translation of the applicable foreign
currency into U.S. Dollars is performed for the balance sheet accounts
using current exchange rates in effect at the balance sheet date and
for revenue and expense accounts using a weighted average exchange rate
during the period. The gains or losses resulting from such translation
are included in shareholders, equity.
Income (Loss) Per Common Stock
Income (loss) per common share is based upon the weighted average
number of common shares outstanding during each period.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results differ from those estimates.
NOTE 2. SHAREHOLDERS' EQUITY
Effective December 31, 1993, the Company adopted a 1993 Compensatory
Stock Option Plan ("CSO") with 1,000,000 common shares reserved for
issuance and a 1993 Employee stock Compensation Plan with 500,000
common shares reserved for issuance. As of March 31, 1999, the CSO
plan has 600,000 options outstanding.
F-7
ISO BLOCK PRODUCTS USA, INC.
NOTES TO CONSOLIDATED
COMPARATVIE FINANCIAL STATEMENTS
For The years Ended March 31, 1999, and 1998
NOTE 3. INVENTORY WORK IN PROCESS
Inventory is recorded at cost, on a first-in, first-out basis.
Inventory consists of two lots and construction costs located in
Broomfield, Colorado where the Company has constructed and sold
one home.
NOTE 4. NOTES PAYABLE
The Company had notes payable with interest at 15% per annum payable
to Mr. Hal Schavet. The notes were due upon completion of the house
constructed by the Company in Broomfield, Colorado. The notes were
secured by property and house. The balance outstanding at March 31,
1998 was $135,000. The note was retired during the year ended
March 31, 1999.
On December 1, 1997, The Company executed a promissory note payable
with interest at 15% per annum payable to Mr. Hal Schavet and Phyllis
Schavet. The Company commits to the payment of $50,000 of the first
$125,000 received from the sale of any country, area or local Magna-Dry
franchises as principal payment. The Company also commits to the
payment to the Payee of 10% of the net proceeds received from the sale
of any country, area or local Magna-Dry Franchise until these payments
total 20% or $20,000 which shall be designated as interest payments.
After such event, the Promisor commits to the payment of 5% of the
net proceeds received' from the sale of any country, area or local
Magna-Dry franchise until these payments total 10% or $10,000 which
shall be designated as interest payments. The note was due in full on
November 30, 1998.
The Promisor shall retain Payee as a Financial Consultant for a minimum
of twelve months and shall pay a financial consultant fee of $250 per
month.
The Promisor shall issue to Payee, Options to purchase 50,000 shares of
ISO Block Products USA, Inc. common stock (restricted under Rule 144
as designated by the United States Securities and Exchange Commission) at
an option price of $.80 per share.
The total principal outstanding at March 31, 1999 was $100,000.
On October 6, 1997, the Company signed a promissory note payable to
Elaine Wicker with interest payable at 20% Per annum. The note is
secured by the house and lot the Company constructed in Broomfield,
Colorado. The note was due upon the completion and sale of the house.
The balance outstanding at March 31, 1998 was $25,000. The note was
retired during the year ended March 31, 1999.
The Company has executed two notes payable to Ada Wilson totaling
$50,360 payable with interest at 15% per annum.
Total notes payable at March 31, 1999 and 1998 were $150,360 and
$310,360, respectively.
F-8
PART IV
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits. The following exhibits are filed with this report, except
those indicated as having previously been filed with the Securities and
Exchange Commission and which are incorporated by reference to another
report, registration statement or form. As to any shareholder of record
requesting a copy of this report, the Company will furnish any exhibit
indicated in the list below as filed with this report (not incorporated
by reference) upon payment to the Company of its expenses in furnishing
the information. References to the "Company" mean ISO-BLOCK
PRODUCTS USA, INC. (formerly named Champion Computer Rentals, Inc.).
Page 11
2.0 Plan of Acquisition, Reorganization, Arrangement, Liquidation or
Succession
2.1 Agreement and Plan of Reorganization dated March 28, 1994
(incorporated by reference to Exhibit 2.1 to Form 8-K dated March
28, 1994)..................................................... *
3.0 Articles and Bylaws
3.1 Articles of Incorporation of the Company (incorporated by
reference to Exhibit 3.1 to registration statement on Form S-18 of
Champion Computer Rentals, Inc., file no. (33-23257-D)......... *
3.3 Bylaws of the Company (incorporated by reference to Exhibit on
Form 10-KSB for fiscal year ended 1993)...................... *
3.4 Certificate of Amendment and Restatement to Articles of
Incorporation (incorporated by reference to Exhibit 3.4 to Form
8-K dated February 10, 1994)................................... *
3.5 Certificate of Amendment to Articles of Incorporation, changing
the Company's name to Iso-Block Products USA, Inc.
(incorporated by reference to Exhibit 2 to registration
statement on Form 8-A, file no. 0-25810)...................... *
3.6 Certificate of Designation Establishing Series A, Non-Voting
Convertible Preferred Stock, as filed with the Colorado Secretary
of State on May 19, 1995 ...................................... 1
3.7 Certificate of Designation Establishing Series B, Non-Voting
Convertible Preferred Stock, as filed with the Colorado Secretary
of State on May 26, 1995 ...................................... 1
3.8 Certificate of Amendment to Certificate of Designation
Establishing Series C, Non-Voting Convertible Preferred Stock, as
filed with the Colorado Secretary of State on June 26,
1995.......................................................... 1
3.9 Certificate of Designation Establishing Series 1996, Non-Voting
Convertible Preferred Stock (incorporated by reference to Exhibit
3.1 to Form 8-K dated January 24, 1997)....................... *
4.0 Instruments Establishing Rights of Security Holders
4.1 Specimen common stock certificate of the Company (incorporated
by reference to Exhibit 4.1 to registration statement on Form S-18
of Champion Computer Rentals, Inc., file no. 33-23257-D)...... *
4.2 Specimen Series A, Non-Voting Convertible Preferred Stock
certificate................................................... 1
4.3 Specimen Series B, Non-Voting Convertible Preferred Stock
certificate .................................................. 1
4.4 Specimen Series C, Non-Voting Convertible Preferred Stock
certificate................................................... 1
4.5 Specimen Series 1996, Non-Voting Convertible Preferred Stock
certificate .................................................. 1
Page 12
10.0 Material Exhibits
10.1 1993 Compensatory Stock Option Plan (incorporated by
reference to Exhibit 10.1 to Form 8-K dated February 10,
1994)........................................................ *
10.2 1993 Employee Stock Compensation Plan (incorporated by
reference to Exhibit 10.2 to Form 8-K dated February 10,
1994)........................................................ *
10.3 Settlement Agreement dated November 19, 1996 (incorporated by
reference to Exhibit 10 to Form 8-K dated November 22,
1996)........................................................ *
10.4 Stock Option dated November 19, 1996 (incorporated by
reference to Exhibit 4 to Form 8-K dated November 22,
1996)........................................................ *
10.5 Exchange Agreement and Plan of Reorganization dated December
27, 1996 (incorporated by reference to Exhibit 2.1 to Form 8-K
dated January 24, 1997)...................................... *
10.6 Employment Agreement dated December 27, 1996
(incorporated by reference to Exhibit 10.1 to Form
8-K dated January 24, 1997).................................. *
EX-27 FINANCIAL DATA SCHEDULE
* - Incorporated by reference to another registration statement, report
or document.
1 - Includes Exhibits filed as part of this Report.
(b) Reports on Form 8-K.
None.
(c ) Financial Statements.
The index to the financial statements appears at page F-1.
SIGNATURES
In accordance with section 13 or 15(d) of the Securities Exchange Act
of 1934, the Registrant caused this Annual Report on Form 10-KSB to
be signed on its behalf by the undersigned, thereto duly authorized
individual.
ISO BLOCK PRODUCTS USA, INC.
/s/ Egin Bresnig
By:______________________________
Egin Bresnig
President
and Chief Executive Officer
In accordance with the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
NAME TITLE DATE
---- ----- ----
/s/ Egin Bresnig Dir, President,
Egin Bresnig Chief Executive Officer July 13. 1999
/s/ Dean Wicker Director,
Dean Wicker Chief Financial Officer July 13, 1999
/s/ Johnny M. Wilson Director July 13, 1999
Johnny M. Wilson
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM 10-KSB FOR THE PERIOD
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FORM 10-KSB.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 5,135
<SECURITIES> 0
<RECEIVABLES> 16,200
<ALLOWANCES> 0
<INVENTORY> 34,540
<CURRENT-ASSETS> 55,875
<PP&E> 9,071
<DEPRECIATION> 4,333
<TOTAL-ASSETS> 74,886
<CURRENT-LIABILITIES> 231,047
<BONDS> 0
0
114,690
<COMMON> 2,897,764
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 74,886
<SALES> 362,085
<TOTAL-REVENUES> 362,085
<CGS> 311,032
<TOTAL-COSTS> 311,032
<OTHER-EXPENSES> 359,159
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (308,106)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (308,106)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
</TABLE>
