UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Quarter Ended Commission File Number
SEPTEMBER 30, 1999 33-26109
AMAZON NATURAL TREASURES, INC.
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(Exact name of registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation or organization)
87-0460880
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(I.R.S. Employer Identification No.)
4011 W. OQUENDO ROAD, SUITE C
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LAS VEGAS, NEVADA 89118
(Address of principal executive offices)
(702) 795-4333
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12 (b) of the Act:
None
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 for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes (X) No ( )
State the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
As of October 31, 1999, 17,784,255 shares of common stock were outstanding.
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AMAZON NATURAL TREASURES, INC.
Table of Contents
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PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets - September 30, 1999 and December 31, 1998 4
Condensed Statements of Operations for the Nine Months
and the Three Months Ended September 30, 1999 and 1998 5
Condensed Statements of Cash Flows for the Nine Months
and the Three Months Ended September 30, 1999 and 1998 6
Notes to Condensed Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operation 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 2. Changes in Securities and Use of Proceeds 17
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The unaudited financial statements of the Registrant required
to be filed with this 10-QSB Quarterly Report were prepared by
management, and commence of the following page, together with
Related Notes. In the opinion on management, the Financial
Statements fairly present the financial condition of the Registrant.
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AMAZON NATURAL TREASURES, INC.
BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(Unaudited)
ASSETS
<CAPTION> September December 31,
1999 1998
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<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,014 $ 2,161
Accounts receivable 13,189 6,017
Inventories 476,252 444,983
Prepaid expenses 6,408 1,345
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Total Current Assets 497,863 454,506
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PROPERTY AND EQUIPMENT, NET 680,204 560,210
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OTHER ASSETS
Deposits 23,731 23,731
Organization costs 41,646 41,646
Licenses and trademarks 128,000 128,000
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Total Other Assets 193,377 193,377
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TOTAL ASSETS $1,371,444 $1,208,093
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank overdraft $ 27,533 $ 15,733
Notes payable-Current 195,183 -
Accounts payable 355,269 354,269
Payroll and other accrued liabilities 179,088 148,153
Shareholder loans and related
parties payable 225,423 140,758
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Total Current Liabilities 982,496 658,913
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Long-term debt - 105,947
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Deferred revenue 76,000 76,000
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STOCKHOLDERS' EQUITY:
Preferred stock 52,795 52,795
Capital stock 17,784 15,965
Additional paid-in capital 15,330,155 14,943,955
Stock subscription receivable (1,000,000) (1,000,000)
Retained earnings (deficit) (14,087,786) (13,645,482)
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Total Stockholders' Equity 312,948 367,233
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,371,444 $1,208,093
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AMAZON NATURAL TREASURES, INC.
STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
For the For the For the For the
Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
SALES $ 103,034 $ 491,662 $ 24,881 $ 305,538
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COST OF SALES 4,915 11,627 2,086 4,566
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GROSS PROFIT 98,119 480,035 22,795 300,972
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EXPENSES:
General and administrative 536,700 522,586 151,821 222,662
Depreciation and
amortization - - - -
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TOTAL OPERATING EXPENSES 536,700 522,586 151,821 222,662
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Net (loss) before
other items (438,582) (42,551) (129,027) 78,310
OTHER INCOME (EXPENSE)
Interest expense 3,723 - 932 -
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NET (LOSS) BEFORE TAXES (442,304) (42,551) (129,958) 78,310
PROVISIONS FOR
INCOME TAXES - - - -
------------- ------------- ------------- -------------
NET (LOSS) $ (442,304) $ (42,551) $ (129,958) $ 78,310
============= ============ ============ ============
EARNINGS (LOSS) PER SHARE $ (0.02) $ (0.00) $ (0.01) $ 0.00
============= ============ ============ ============
WEIGHTED AVERAGE
SHARES OUTSTANDING 17,784,255 37,888,648 17,784,255 37,888,648
============= ============ ============ ============
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AMAZON NATURAL TREASURES, INC.
STATEMENT OF CASH FLOWS
(Unaudited)
<CAPTION>
For the For the For the For the
Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (442,304) $ (42,551) $ (129,958) $ 78,310
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization - - - -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (7,172) 123 (6,153) (723)
(Increase) decrease in employee advances - (700) - 506
(Increase) decrease in inventories (31,269) (69,615) (4,488) (49,974)
(Increase) decrease in notes receivable - - - (2,325)
(Increase) decrease in prepaid expenses (5,063) - - (3,000)
(Increase) decrease in deposits - (117,229) - (35,564)
Increase in accounts payable and accrued
liabilities 31,935 119,357 20,513 69,143
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Net cash used in operating activities (453,873) (110,615) (120,086) 56,373
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CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in organization costs - - - -
Purchase of property and equipment (119,994) (229,557) (55,245) (107,881)
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Net cash used in investing activities (119,994) (229,557) (55,245) (107,881)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 388,019 297,153 17,500 118,730
Increase in loans and affiliate advances 173,901 (39,729) 139,987 (45,375)
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Net cash provided by financing activities 561,920 257,424 157,487 73,355
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Net Increase (decrease) in Cash (11,947) (82,748) (17,844) 21,847
CASH AT BEGINNING PERIOD (13,572) 128,332 (7,675) 23,737
------------- ------------- ------------- -------------
CASH AT END OF PERIOD $ (25,519) $ 45,584 $ (25,519) $ 5,584
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SUPPLEMENTAL CASH FLOW INFORMATION:
Interest expense $ 3,723 $ - $ 932 $ -
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AMAZON NATURAL TREASURES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Unaudited)
1. The unaudited condensed financial statements printed herein have
been prepared in accordance with the instructions to Form 10-QSB and
do not include all the information and disclosures required by
generally accepted accounting principles. Therefore, these financial
statements should be read in conjunction with the financial statements
and related footnotes included in the Company's Form 10-KSB for the
year ended December 31, 1998. These financial statements reflect all
adjustments that are, in the opinion of management, necessary to fairly
state the results for the interim periods reported.
2. The results of operations for the nine months ended September 30,
1999 are not necessarily indicative of the results to be expected for
the full year.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL STATEMENTS
INTRODUCTION
The character and holdings of the Company has remained substantially
the same since the preceding fiscal year. During the first three
quarters of the current fiscal year the company has sought to expand
its business by obtaining and securing clients in the nutritional
products market. This is the primary business and focus of the
Company. The readers of the current unaudited statements are
referred to the Company's Annual Report as filed for the calendar
year ended December 31, 1998, for a more in-depth view of the
Company's financial position, results of operations and changes
in cash flows. Accordingly, management's discussion as set forth
below focuses primarily on the quarter ended September 30, 1999.
LIQUIDITY
During the three months ended September 30, 1999, the Company's
working capital decreased by approximately $167,703. The Company
does not currently have sufficient capital in its accounts, nor
sufficient firm commitments for capital to assure its ability to
meet its current obligations or to continue its planned operations.
The Company is continuing to pursue working capital and additional
revenue through existing and new clients, but there is no assurance
that any of the planned activities will be successful.
CAPITAL RESOURCES
As a result of its limited liquidity, the Company has limited access
to additional capital resources. The Company does not have the
capital to totally fund the obligations that have matured or debts
that remain currently payable or other debts incurred during the
most recent fiscal quarter.
The Company currently has been funded by loans from outside parties
and through the sale of newly issued restricted common stock of the
company.
The Company has received additional capital through the expansion
of vendor financing.
The Company has met its current obligations and been funding the
operating losses from this outside capital. The management of the
Company is seeking addition private financing from certain outside
parties to continue to pursue the business activities of the Company.
Though the obtaining of the additional capital is not guaranteed, the
management of the Company believes it will be able to obtain the
capital required to meet its current obligations and pursue its
business activities.
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OPERATIONS
In the previous year ended December 31, 1998, the Company has been
seeking to obtain new clients, distributors and an increase in its
Internet traffic to increase sales. During the most recent quarter,
these efforts have continued and the Company expects a substantial
increase in the sales of its nutritional products.
In the previous year the Company had substantial gem sales, and
though the Company still offers this product line, minimal gem sales
have occurred in 1999.
The Company has sought to reduce its operating overhead until it is
successful in securing new client business and the related cash flows
from such activities. However, due to the legal costs for current
litigation, general and administrative costs have continued to
increase.
Until such time as the Company is able to obtain the revenues needed
from its operations to meet its obligations, the Company will be
dependent upon sources other than operating revenues to meet its
operating and capital needs. Operating revenues may never satisfy
these needs.
The current market the Company operates under is a very competitive
market and there exists many other competitors with greater capital
and contacts in the industry seeking the same clients. The company
believes it will obtain a certain percentage of such clients to
generate the revenues needed to continue its business plans. Until
then, the Company will need additional capital other than that
provided through its operations.
PLAN OF OPERATION
Amazon Natural Treasures, Inc., is a multi-faceted company which is
a Phytogenics Health Maintenance Company along with bringing the
treasures of the Brazilian Amazon Rain Forest to the rest of the
world. They produce and distribute health supplements derived from
plants and related species for the cure and treatment of human
illnesses and disease. The Board of Directors feel this will offer
shareholders a viable business opportunity now and for the future.
Amazon Natural Treasures, Inc. or A.N.T., as it is also known, was
incorporated in Nevada, during 1995. It is a company with a unique
mission. To bring the Amazon's naturally produced treasures, in
their purest form, to the people of the world. To this end, A.N.T.
has obtained the rights to export products from the Amazon area to
the United States, Canada and the rest of the world. These products
include herbs, roots, plants and teas. Along with these products
come their associated benefits. A.N.T. also produces and exports
a bevy of additional product lines.
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For many years people have looked for alternative treatments for
their diseases and maladies. People all over the world have had
unpleasant experiences with modern (allopathic) medical treatments,
that in many cases are made up of man-made chemicals that produce
unwanted, if not dangerous side effects. Health food stores have
made billions of dollars catering to this ever-increasing segment
of the population. Many of their products are beneficial, but far
too many of them contain a small percentage (usually under 10%) of
their advertised ingredients. Ninety percent is filler. All of
Amazon Natural Treasures, Inc. Phytogenics products are 100% pure
and natural without any fillers. Our customers get the full potency
of the product they purchase and at competitive prices. Key
personnel have been actively working in the research and development
phase of our Phytogenics products since 1972. In 1995, a decision
was made to enter A.N.T. products into the world market.
Amazon Natural Treasures' business plan for the next twelve (12)
months contemplates the utilization of an aggressive multi-dimensional
marketing campaign. The company will use direct mail to qualified
leads. Also planned is the placement of advertising in established
and widely circulated health-related, as well as general interest
publications. An "infomercial" is planned to further disseminate
information into the marketplace. It is anticipated this will
result in strong revenue in the first quarter of 1998 and increasing
sales thereafter. This assertive plan will be implemented at the
conclusion of the private placement offering.
The company contemplates entering into advertising contracts with
magazines. The plan is to place full-page ads, in those magazines
eventually selected, at a monthly cost of approximately fifteen thousand
($15,000.00) Dollars each. We expect each magazine will run an
article detailing the company and its unique products. Most
important, we expect the publications will provide a list of
their subscribers for follow-up direct mailing.
The acquisition of a total lead base of approximately seven
million (7,000,000) leads is envisioned through marketing with
publications. An additional one million (1,000,000) leads will
be purchased from lead based companies.
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Amazon Natural Treasures, Inc. will purchase leads of individuals
who have regularly purchased, at a minimum, two hundred fifty ($250)
dollars worth of health supplements per month for the last twelve
(12) months. Amazon Natural Treasures, Inc. has been informed that
there are five million (5,000,000) leads available. Utilizing
magazines, "infomercials", direct mail, and lead based companies,
Amazon Natural Treasures, Inc. will continue to build their lead
base so that potential customers will number in the millions.
The company eventually plans to publish its own catalog/magazine.
The cover will feature a full color photograph of the Amazon Rain
Forest with the company's logo prominently displayed. Inside, there
will be messages from the principals of the company, a history of
the rain forest, and a history of the company. An explanation of
the company's purpose and adoption of "Phytogenics" or the
treatment of ailments through plants and other naturally occurring
products will also be included.
The magazine will contain a chart consisting of possible symptoms/
ailments people may be suffering from and corresponding product(s)
customers can purchase for their treatment. Each product will be
individually presented and explained on its own page. The benefits
of each product, how it works, and how it should be used will be
illustrated.
It is anticipated articles by respected researchers and medical
professionals will be included. These articles will correspond to
the natural theme of the company. There will be other attractions
in the magazine for the consumer, such as monthly pullout calendars
and full-color pictures of the rain forest will be featured. These
photographs will be unique and collectable. To this end all the
photographs will be numbered and in a limited quantity.
Customer testimonials, with photographs, will be included each month.
There will be a "Letter to the Editor" selection each month with
answers to customer's questions. Amazon Natural Treasures, Inc.
is pleased to announce that the construction of the "WEBSITE OF THE
FUTURE" is now well underway. This "WEBSITE OF THE FUTURE" will be
a fully interactive Internet website.
It has been said that Amazon Natural Treasures, Inc.'s "WEBSITE OF
THE FUTURE", once fully implemented, will be a major contender for
a variety of awards dealing with Internet site and graphic designs.
Not only will the "WEBSITE OF THE FUTURE" be an immense educational
source, but will also be a major selling tool for all of Amazon
Natural Treasures, Inc.'s unique Phytogenic products. There are
now over 127 spectacular Phytogenic nutritional supplements
available from the Brazilian Amazon Rain Forest. Amazon Natural
Treasures, Inc. will continuously add new supplements to their
product line.
<PAGE>
Precious stoned carved birds, figurines and top quality gemstones
such as rubies, emeralds, aquamarines, etc. will also be available
for sale on the "WEBSITE OF THE FUTURE".
We invite you to view our Website now as it is under construction
at WWW.AMAZON-TREASURES.COM.
The site can be expanded upon at any time, but initial development
will include the following attributes:
On Line Customer Service: Customers will be able to ask for help on
product information, etc. They will also be able to access this
information either via keyboard, voice or video conferencing
depending on their computer capabilities.
On Line Secure Ordering: Customers can order products with "peace
of mind" that their credit cards will be safe using AT&T Buy/Safe
secured ordering. All orders will be processed for immediate shipment.
Order Phytogenic Products on Line: Customers can access Amazon
Natural Treasures Phytogenic products and ordering information in
a variety of manners.
Ask the Indian: Customers will be able to ask the Indian a specific
question in regards to their health or one of Amazon Natural Treasures
100% pure natural PhytogenicTM products either through use of their
voice control or their keyboard. The Indian will answer them in his
own voice while the text of his speech is being printed on the screen
for easy downloading.
Product by Name: When the customer is looking for a specific 100%
pure and natural Amazon Natural Treasures PhytogenicTM product, they
can easily access all the information on the product by double clicking
on the name or by speaking the name into their microphone.
Product by Product Number: Many of our customers prefer to order or
access information on Amazon Natural Treasures 100% pure and natural
PhytogenicTM products by product number. This is easily done by double
clicking on the product or by speaking the product number into their
microphone.
Ailments and Recommended Products: For the customer who does not have
a lot of time, they can easily access the products and ordering
information on Amazon Natural Treasures 100% pure and natural
PhytogenicTM products by double clicking on their ailment or by
speaking their ailment into their microphone. The recommended 100%
pure and natural PhytogenicTM product will then immediately pop-up
onto the screen.
<PAGE>
Specialty Listing: This list of Amazon Natural Treasures 100% pure and
natural PhytogenicTM products is for customer's specialized needs.
Here, they will find products for specialized needs such as
aphrodisiacs, antacids, antidepressants, anti-inflammatories,
antioxidants, antiseptics, estrogens, finger nail hardener, hair
and skin formulas, premature aging, skin wrinkles, tranquilizers
and many more. When the customer has located their specific
specialized need, they can easily access the information by
doubleclicking on the specialized need or by speaking the name of
the specialized need into the microphone. The complete listing of
all the products for that particular specialized need will pop-up
onto the screen. By the saying the name of a particular product,
the customer can either access the information via voice or via text.
See Your Order on Line: Through video conferencing, the customer will
be able to actually see all the products, the precious and semi-
precious stone birds, and stone figurines. The customer will be able
to pick and choose the color, size, shape, type, etc. while talking
on line with one of our certified gemologists before their purchase.
Ordering Through Video Conferencing: Through video conferencing, the
customer will be able to pick and choose the actual gem stone by
color, size, weight and quality.
Discussion Forums: Customers will be able to check on line for times
and dates when noted doctors from Amazon Natural Treasures medical
advisory board will be on line ready to answer their questions
about their medical queries or our PhytogenicTM products. The noted
professionals will be viewed by the customer via video conferencing.
Customer Interacting: 24 hours a day, customers will be able to log
onto the interactive discussion group. Here, customers will be able
to compare notes, discuss the merits of Amazon Natural Treasures'
products either through the keyboard or their voice pad. This will
all be integrated through Amazon Natural Treasures' own in-house
server.
Real Time Audio and Video: Amazon Natural Treasures "state of the
art" website will feature the latest technology available on the
Internet utilizing "Real Player Plus" and "MegaPeg" for the
ultimate in on line communication.
On Line Multi-Media: The website will feature a vast array of
"one of a kind" photographs of the Brazilian Amazon Rain Forest.
Our photographs will be accompanied by a cover story and can
easily be down loaded. The art gallery will also include
spectacular photographs of thousands of "one of a kind" Indian
artifacts. The sub text will explain their origins, uses, and
tribes in which they originated from. These artifacts may
personally be viewed at Amazon Natural Treasures retail store
showroom and museum located in Las Vegas, Nevada.
You will also be able to listen to the sounds of the jungle in
beautiful hi-fi stereo via real audio that is available for
free downloading.
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Investors Corner: Here, visitors to the "Website of the Future"
will be able to follow the latest stock quotes, retrieve fundamental
financial information, read press releases, and can also link to
other sites for on line stock transactions.
E-Mail: With just one click of the mouse, customers will have the
ability to send us standard keyboard or voice e-mail which will be
answered immediately 24 hours a day!
Screen Savers: Visitors to the Amazon "state of the art" website
will have the ability to download the most exquisite, never seen
before, screen savers. Some of which will include live action
along with its own audio.
Amazon Natural Treasures plans to harness the expansive growth and
interest of the Internet worldwide and plans to use its website as
a major revenue producer for the sale of the company's products.
The company anticipates the website to generate hundreds of millions
of dollars in revenue annually.
It has been proven that the excitement of the Internet, properly
promoted, can be a tremendous tool for stock market relations,
broker dealers, and underwriters. There are many companies
that just utilize the Internet for their total sales and have
based their initial public offerings around the sale of their
products on the Internet.
We, at Amazon Natural Treasures, plan to take this one step further
by utilizing the immense power of the Internet as a sales tool along
with the direct marketing catalog sales and magazine advertising
campaign to capture all spectrums of the over one hundred billion
dollar annual consumer market for these products. This may also
be the basis for a future public offering that will no doubt bring
broker dealer and underwriter enthusiasm and support.
The benefit and effectiveness of our products have been demonstrated,
throughout the ages, by people who continue to use them. The
inhabitants of the Amazon, as well as many others have taken
the products for their ailments and achieved astonishing results.
Amazon Natural Treasures, Inc. can be characterized as a leader in
bringing to the world Phytogenic products. The company believes in
complete control from the harvesting of the products through sale
to the end user. Only through this business principle (vertical
integration) can high quality standards be controlled and enforced.
NATURES TASTETM PRODUCT NO. AR0124GR:
"NATURES TASTE" is a 100% pure natural product derived from the sap
and leaves of a small tree found in the Brazilian Amazon Rainforest.
This variety of tree has been named "Natures Taste" by one of the
Company's founders, Dr. Domingos Loricchio. The sap, necessary for
the product, is extracted from the Natures Taste tree in much the
same manner as maple sap is obtained from maple trees in the
United States and Canada. The leaves are then crushed to extract
essential ingredients, which are combined with the sap in a process
which ultimately, results in this wonderful product. "NATURES TASTE"
has characteristics, which allow it to be used in the same application
as sugar (saccharose or sucrose).
The Nutritional Facts analysis found that "NATURES TASTE" per
serving has 0 fat, 0 cholesterol, 0 sodium, 0 carbohydrates and 0
protein. It also leaves no after taste as do some synthetic
sweeteners, is also non-fermentable, yet is equal or better in taste
than cane sugar. "NATURES TASTE" possesses natural properties that
permit its use as an ideal sugar substitute for calorie restricted
diets or for those suffering with diabetes.
<PAGE>
As a result, "NATURES TASTE" may have applications in treatment
programs for all forms of diabetes. This product is a delightfully
surprising alternative for those individuals who prefer not to use
regular sugar or do not wish to use artificial sweeteners. These
qualities allow for its use as a sugar substitute in all drinks,
hot or cold, as well as your favorite cooking recipes.
The Company has chosen five of the best moving and most popular
dietary supplements recognized throughout the United States, which
are:
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<CAPTION>
Product Number Product Name
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<S> <C>
AW0040PA Zuedon
AW0043PR Pau D'Arco
AW0072PA Una de Gato
AD0100PA Akana
AD0127PA Super Amazon Guarana
</TABLE>
These products will also be sold in retail store chains.
YEAR 2000 ASSESSMENT
The Company has begun its assessment of the potential effects of the
Year 2000 issue on the Company's operations. The assessment is in
two parts. First, an evaluation of the Company's computer systems
and equipment with embedded computer chips for Year 2000 compliance.
The majority of the Company's computers and software have been
acquired within the last two years. Therefore, management
anticipated only minor Year 2000 compliance problems with its
computer systems.
The second part of the assessment process involves the Year 2000
readiness of third parties. There are two primary issues related to
the evaluation of the potential impact on the Company.
First, interruption of the services provided by local public
utilities, namely power and telephone service, would have a material
negative impact on the Company's operations. Based on attendance at
seminars and public reports, management believes that the local
utility service providers are actively working on their Year
2000 compliance issues. At this time, management believes that
no interruption of service will occur.
Second, significant Year 2000 problems with the Company's major
customers and suppliers could have a material negative impact on
the Company's operations. At the present time, the Company does
not have any one major customer that it believes would have a major
impact from the Year 2000 problems. Certain shipping may cause
delays in sending the Company's products to customers, but this
will be the same impact that all manufacturers will incur from
shipping companies, postal services and other transportation
companies.
<PAGE>
As to the suppliers, most of the raw materials purchased from the
natives of the Amazon jungle. Any negative impact would be caused
by the shipping of the products to the United States through
transportation companies as mentioned in the previous paragraph.
The Company does not expect any major shipping delays and believes
it will have enough raw materials on hand to deal with any impact
from the Year 2000 problems.
Based on current information, management does not anticipate the
Year 2000 issue will have a material impact on the Company's
operations.
Forward Looking Statements
The statements in this Form 10-QSB that are not historical facts
or statements of current status are forward-looking statements (as
defined in the Private Securities Litigation Reform Act of 1995)
that involve risks and uncertainties. Actual results may differ
materially.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
As of December 31, 1998, the Company was involved in several lawsuits.
The first lawsuit was related to securities transactions. The Company
has received a default judgment against several investors who were
issued stock in exchange for a promise to pay the Company
$1,000,000.00, calling for the return of the stock and damages as a
result of stock fraud.
The Company has been ordered to issue 224,000 shares of stock,
initially issued to a former consultant, which was subsequently
cancelled by the Company due to a recession of the transaction
resulting in the initial issuance. These shares were pledged as
collateral for a loan to the former consultant.
The second lawsuit involves a breach of contract suit. An arbitration
award of $88,000.00 has been entered against the Company regarding a
breach of contract lawsuit. The Company is currently appealing the
decision.
<PAGE>
ITEM 2. CHANGES IN SECURITIES
Recent Sales of Unregistered Securities:
Following is a summary of sales of unregistered securities for the
three months ending September 30, 1999. All securities were issued
as restricted common shares, which are subject to Rule 144 of the
Securities and Exchange Commission. Generally, Rule 144 required
shareholders to hold the shares for a minimum of one year before sale.
In addition, officers, directors and more than 10% shareholders are
further restricted in their ability to sell such shares. There have
been no underwriters of these securities and no commission or
underwriting discounts have been paid.
<TABLE>
<CAPTION>
Transaction Description Shares Issued Value Received
- ----------------------- ------------- --------------
<S> <C> <C>
Sale of 144 common stock for cash 27,000 $ 9,000
Consulting and operating expenses 85,000 $ 8,500
</TABLE>
The above transactions qualified for exemption from registration under
Sections 3(b) or 4 (2) of the Securities Act of 1933. Private
placements for cash were non-public transactions. The Company
believes that all such investors are either accredited or, either
alone or with their purchaser representative, have such knowledge
and experience in financials and business matters that they are
capable of evaluating the merits and risks of the prospective
investment.
Cancellation of Securities
Based on the lawsuit mentioned above under legal proceedings,
the Company has sought to cancel close to 13,000,000 shares of its
issued and outstanding common stock. This will result in the
remaining shares of common stock issued and outstanding to be
fewer than 5,000,000.
SIGNATURES
Pursuant of the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this to be signed on its behalf by the
undersigned thereto duly authorized.
AMAZON NATURAL TREASURES, INC.
Date: November 12, 1999
By: /S/ MICHAEL A. SYLVER
Michael A. Sylver
President and Chief Financial Officer
Date: November 12, 1999
By: /S/ DOMINGOS LORICCHIO II
Domingos Loricchio II
Secretary/Treasurer
