UNITED STATES
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 the fiscal year ended December 31, 1998
Commission File Number: 33-26109
Amazon Natural Treasures, Inc.
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(Name of small business issuer in its charter)
Nevada 87-0460880
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State of Incorporation IRS Employer ID Number
4011 West Oquendo Avenue, Suite C, Las Vegas, Nevada 89118
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(Address of Principal Executive Offices) Zip Code
Registrant's Telephone Number: (702) 795-4333
Securities Registered Pursuant to Section 12 (b) of the Exchange Act:
None
Securities Registered Pursuant to Section 12 (g) of the Exchange Act:
Common Stock
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to filing requirements for the past 90 days.
Yes (X) No ( )
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not 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. (X)
Issuer's revenues for its most recent fiscal year: $392,061
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked prices of such common
equity, as of a specified date within the past 60 days. $19,498,881 a/o
8/20/99.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. 17,726,255 a/o 8/20/99.
<PAGE>
Amazon Natural Treasures, Inc.
1998 Form 10-KSB ANNUAL REPORT
TABLE OF CONTENTS
Page
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PART I
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ITEM 1 - Description of Business 3
ITEM 2 - Description of Property 10
ITEM 3 - Legal Proceedings 10
ITEM 4 - Submission of Matters to a Vote of Security Holders 11
PART II
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ITEM 5 - Market for Common Equity and Related Stockholder Matters 11
ITEM 6 - Management's Discussion and Analysis or Plan of Operation 12
ITEM 7 - Financial Statements 16
ITEM 8 - Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 16
PART III
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ITEM 9 - Directors, Executive Officers, Promoters and Control
Persons; Compliance With Section 16 (a) of the Exchange
Act 17
ITEM 10 - Executive Compensation 19
ITEM 11 - Security Ownership of Certain Beneficial Owners
and Management 20
ITEM 12 - Certain Relationships and Related Transactions 20
ITEM 13 - Financial Statements, Exhibits and Reports
on Form 8-K 21
<PAGE>
PART I
ITEM 1. Description of Business
Background
Amazon Natural Treasures, Inc. (the "Company") was incorporated under the
laws of the State of Utah on November 23, 1988, as Concord Capital, Inc., to
acquire or merge with an existing business. On March 28, 1996, the Company
acquired all of the issued and outstanding shares of common stock of Amazon
Natural Treasures, Inc., a Nevada corporation and changed its business
purpose to that of importing, developing, manufacturing and selling products
derived from plants grown in Brazilian Amazon Rain Forest.
General
The Company is engaged in the business of importing phytogenic(as defined
by the Company) products for processing and selling in the United States and
countries throughout the world. The products are developed and/or derived
from plants and other natural occurring objects, which grow in the Amazon
Rain Forest of Brazil.
<PAGE>
Acquiring the Plants
The Company acquires its plants from Amazon Natural Treasures Commercial
Inportadora Exportadora LTDA ("ANTCIE"), a Brazilian corporation which is
owned by Michael Sylver, the Company's President and Treasurer, Domingos
Loricchio Jr., the Company's Senior Executive Vice-President, Director and
Secretary, and Carlos Franco, a Brazilian native. The transactions between
the Company and ANTCIE are more favorable to the Company than can be obtained
from independent third parties. ANTCIE acquires its plants from Brazilian
Indians and other sources who the Company understands gather and/or acquire
the same in or from the Brazilian Rain Forest where the plants grow wild.
Certain products are obtained from Brazilian plantations where specific
plants are grown. Some plants/ingredients in the company's products are
obtained from independent manufacturers.
ANTCIE is a Brazilian corporation formed for the purpose of transacting
business in Brazil. As the Company has been instructed, under Brazilian law,
only Brazilian corporations can export or import products with Brazil.
Because of the complicated nature of the laws in Brazil, it was expeditious
for the Company to have individual shareholders for ANTCIE rather than
incorporating ANTCIE as a wholly-owned subsidiary of the Company. No fees or
compensation, other than disclosed herein, are paid to ANTCIE for transacting
business in Brazil on behalf of the Company. The Company only reimburses
ANTCIE for its out of pocket expenses.
The Company also acquires semi-processed products through ANTCIE from
native Brazilians(known as Coboclos).
Some of these product formulations (in pill or tea form) have been
developed by Dr. Loricchio individually, or in a collaborative process. Dr.
Loricchio presently sits as Chairman of the Board of Directors of the
Company. Dr. Loricchio granted a license to the Company to manufacture and
sell products with his assistance in exchange for 5,000,000 shares of
preferred stock (voting only). There are no patents for formulas and the
same are considered proprietary trade secrets. The Company and Dr. Loricchio
have executed an agreement which prohibits divulging the formulas for the
products. It is believed that, in the event that the formulas are released to
the public, such action could have an adverse impact upon the financial
development of the Company in that third parties, over whom the Company has
no control, would be able to manufacture the pills, teas and other products,
subject to acquiring the critical raw materials from Brazil.
Importing and Manufacturing
After the plants are acquired by ANTCIE, they are crushed, sterilized,
and shipped to the Company's Las Vegas clean room. Once in the clean room,
the plants and semi-processed products are processed into the final form such
as capsules, globules, gel caps, and teas. The finished products are then put
in their final packaged form for sale. The Company processes a majority of
its products on site at its facilities in Las Vegas, Nevada. After completion
of the foregoing, the products are sold and distributed on a retail and
wholesale basis.
Retail Distribution
The Company bottles, boxes and shrink wraps its products at its
facilities in Las Vegas, Nevada. The products are then shipped directly to
its customers.
<PAGE>
Products and Regulation
The Company currently manufactures, distributes and/or formulates in
excess of one hundred different phytogenic products. The Company intends for
a majority of its products to be 100% pure (no fillers are added). The
products are designed for human consumption. There is no scientific evidence
to establish that the products are safe or beneficial for human consumption.
The formulation, manufacturing, packaging, storing, labeling,
advertising, distribution and sale of the Company's products are subject to
regulation by one or more governmental agencies, including, but possibly not
limited to: the Food and Drug Administration ("FDA"), the Federal Trade
Commission("FTC"), the Consumer Product Safety Commission ("CPSC"), the
United States Department of Agriculture ("USDA"), the Environmental
Protection Agency("EPA"), and the United States Postal Service.
The Company's activities are regulated by additional agencies of the
states, localities, and foreign countries in which the Company's products
are manufactured, distributed, and/or sold. The government regulations
require the Company and its suppliers to meet relevant good manufacturing
practice("GMP") regulations for the preparation, packing and storage of these
products. GMP for dietary supplements have yet to be promulgated but are
expected to be proposed.
The 1994 Dietary Supplement Health and Education Act ("DSHEA") revised
the provisions of the Federal Food, Drug and Cosmetic Act ("FFDCA")concerning
composition and labeling of dietary supplements. The legislation created
a new statutory class of "dietary supplements". This new class includes:
vitamins, minerals, herbs, amino acids and other dietary substances for human
use to supplement the diet and, the legislation "grandfathered", with certain
limitations, dietary ingredients that were on the market before October 15,
1994. A dietary supplement which contains a new dietary ingredient (i.e.,
not on the market before October 15, 1994) will require evidence of a
historical use or other evidence of safety establishing that it is reasonably
expected to be safe. Manufacturers of dietary supplements which make a
"statement of nutritional support" must have substantiation that the
statement is truthful and not misleading.
As a marketer of dietary supplements and other products that are ingested
by consumers, the Company is subject to the risk that one or more of the
ingredients in its products may become the subject of adverse regulatory
action.
Certain products sold by the Company may be labeled or be classified as
over-the-counter ("OTC") drugs, as opposed to dietary supplements,
conventional foods and personal care items. Many OTC drug products do not
require pre-approval by the FDA, but must comply with applicable OTC
monographs which prescribe ingredients and appropriate labeling language. In
addition, the Company may have to register and file annual drug listing
information with the FDA. Because the FDA could take the position that claims
made with respect to any product of the Company falls within the OTC
monograph, the regulatory status of some of the Company's products is or
could become unclear. If any enforcement were undertaken, the Company could
be required to re-label or reformulate such products, which the Company
believes could have a material adverse effect on the Company and the sale of
such products.
<PAGE>
The FTC, which exercises jurisdiction over the advertising of all of the
Company's products, has in the past several years instituted enforcement
actions against several dietary supplement companies for false or misleading
advertising of certain products. These enforcement actions have resulted in
consent decrees and monetary payments by the companies involved. In addition,
the FTC has increased its scrutiny of the use of testimonials, which are
utilized by the Company. While the Company has not been the target of FTC
enforcement action for the advertising of its products, there can be no
assurance that the FTC will not question the Company's advertising or other
operations in the future.
The Company is unable to predict the nature of any future laws,
regulations, interpretations, or applications nor can it predict what effect
additional governmental regulations or administrative order, when and if
promulgated, would have on its business in the future. They could, however,
require the reformulation of certain products which the Company may not be
able to reformulate. Imposition of additional record keeping requirements,
expanded documentation of the properties of certain products, expanded or
different labeling and scientific substantiation regarding product
ingredients, safety or usefulness could occur and the Company may not have
the ability to comply with such changes. Any, or all, of these requirements
would have a material adverse effect on the Company's results of operations
and financial condition.
Product Liability
The Company maintains product liability insurance. Because the Company's
products are ingested and are/or applied to the customer's body, the
potential for injury and resulting claims exists.
Compliance Procedures
The Company has no compliance procedures, however, it does from time to
time, consult attorneys and undertakes to utilize its own diligence in
seeking to comply with regulations set forth under the 1994 Dietary
Supplement Health and Education Act ("DSHEA").
Marketing
The Company's marketing plan remains the same as it has been since the
Company's inception, in that, as permitted by available capital, it will pro-
mote the sale of its products with advertisements placed in one or more of
the widely circulated health magazines. It is anticipated, that the magazines
may furnish the Company with a list of their subscribers which will allow the
Company to personally approach those individuals through direct mail. The
Company also proposes to market its products through the publication of its
own catalog.
As permitted by available capital, the Company's marketing plan envisions
the implementation of a multi-dimensional marketing campaign. This campaign
is to include the use of direct mail to qualified leads. Additionally, the
Company plans to place advertising in established and widely circulated
health-related publications. Subsequently, this will be broadened to include
general and other special interest publications.
Further, plans include the placing of television and radio advertisements
and the sales of products with one or more of the television shopping
networks.
<PAGE>
The present "web-site" will be upgraded to be more user friendly. The
Company anticipates increased sales revenue will be realized through "on-
line" ordering.
Competition
The Company competes with other health and food providers, many of which
have established markets and can rely on greater resources than is presently
available to the Company.
Material Contracts
The Company has not entered into any contracts.
Risk Factors
1. Lack of Compliance with Federal Laws and Regulations. The Company is
subject to oversight by the Securities and Exchange Commission as well as
other federal agencies. A risk factor associated with the Company, as with
the commencement of any new company or business can be up to and including,
cessation of the business due to lack of sufficient revenue or funding.
Additionally, as to the Company's products, it believes that they may
be exempt from many of the regulations of one or more government agencies,
including the Food and Drug Administration ("FDA"), the Federal Trade
Commission, the Consumer Product Safety Commission, the United States
Department of Agriculture, the Environmental Protection Agency, United States
Department of Customs and the United States Postal Service. The Company
further believes it does not have to comply with some, but not all of the
regulations of various agencies of the states, localities and foreign
countries in which the Company's products are manufactured, distributed, and
sold. The FDA, in particular, may regulate the formulation, manufacture and
labeling of foods and dietary supplements, such as those distributed by the
Company, if applicable, unless exempted pursuant to the Dietary Supplement
Health and Education Act of 1994 ("DSHEA"). The Company's legal basis for
such is the DSHEA and accordingly, if the Company is incorrect in its
position, the Company could be subjected to civil suits, which could result
in the termination of the Company's operations.
2. Going Concern Uncertainty. The auditors of the financial statements
of the Company have stated that the financial statements have been prepared
on a going concern basis for the year ended December 31,1998. That basis of
accounting contemplates the realization of assets and the satisfaction of
liabilities in the normal course of conducting business operations. As shown
in the financial statements, operations for the year ended December 31, 1998
resulted in a net loss of $4,815,331. Operations for the year ended December
31, 1998 includes a non-cash loss of $3,763,100 due to a loss on stock issued
for consulting fees and the accrual of officer's compensation. As of that
date the Company had an accumulated deficit of $13,645,482. The Company's
future is dependent on its ability to continue to obtain additional capital
or adequate financing in order to achieve a level of sales adequate to
support its operations and meet its financial obligations.
<PAGE>
3. No Patents. The Company has not applied for a patent for any of its
products. Even if it does, there can be no assurance that the patent
application will be issued as a patent, or the issued patent will provide the
Company with significant competitive advantages, or that challenges will not
be instituted against the validity or enforceability of any patents owned by
the Company, or, if instituted, that such challenges will not be successful.
See Item 1 - Description of Business.
4. Additional Financing Will be Necessary. The adequacy of funds will
depend upon (a) the ability of the Company to successfully market its
products,(b) the ability of the Company to attain profitable operations, and
(c) obtain additional capital needs that may arise to satisfy product demand
or company needs. There can be no assurance that the Company will be
successful in obtaining any additional required financing or that, if such
financing is obtained, its terms and conditions will be favorable.
5. Dependence Upon Management. The success of the Company is dependent
upon the efforts of the Company's directors and executive officers. The
Company has not obtained key-man life insurance coverage on any of its
officers, directors, or employees. The Company's business could be adversely
affected if Dr. Loricchio, his son, Domingos Loricchio, or Mr. Sylver; the
Chairman of the Board, Senior Executive Vice-President, and President,
respectively, became unable or unwilling to continue to serve in their
respective capacities. See "Management" and "Conflict of Interest".
6. No Dividends Anticipated. At the present time the Company does not
anticipate paying dividends, cash or otherwise, on its shares of Common Stock
or Preferred Stock in the foreseeable futures. Future dividends will depend
on earnings, if any, of the Company, its financial requirements, and other
factors.
7. Conflicts of Interest. One or more of the Directors are associated
with Amazon Natural Treasures Commercial Importadora Exportadora LTDA
("ANTCIE"), a Brazilian corporation which is owned by Michael Sylver, the
Company's President and Treasurer, Domingos Loricchio, Jr., the Company's
Director, Secretary and Senior Executive Vice-President, and Carlos Franco.
Further, Domingos Loricchio and Michael Sylver are associated with Abracel
USA Ltd. which has loaned money to the Company and/or been provided short-
term financing by the Company. See Item 1 - Description of Business. Further,
the Company has hired or utilized certain of the Company's officers and/or
Directors relatives to perform work or provide materials to the Company.
8. Suitability Standards. The Company recommends that its shares of
Common Stock be purchased only by persons who have the knowledge, experience
and capacity to evaluate the merits of such a purchase, and who can afford
the loss of their entire investment in the shares of Common Stock.
<PAGE>
9. Limited Public Market for Securities. At present, only a limited
public market exists for the Company's securities and there is no assurance
that a regular trading market will develop. A shareholder may, therefore, be
unable to resell the shares of Common Stock should he or she desire to do so
or he or she may receive a substantially reduced amount from that which was
initially paid for the shares of Common Stock. Furthermore, it is unlikely
that a lending institution will accept the Company's shares of Common Stock
as pledged collateral for loans unless a regular trading market develops.
10. No Cumulative Voting and Preemptive Rights of Control. There are no
preemptive rights in connection with the Company's shares of Common Stock.
Shareholders may be further diluted in their percentage ownership of the
Company's shares of Common Stock in the event additional shares are issued by
the Company in the future. Cumulative voting in the election of Directors is
not allowed. Accordingly, the holders of a majority of the shares of Common
Stock and/or Preferred Stock, present in person or by proxy, will be able to
elect all of the Company's Board of Directors.
11. Possible Contingent Liability for Prior Securities Sales of
Unregulated Securities. The shares of Common Stock sold to certain of the
Company's shareholders were not registered under the act or any state
securities laws. The Company believes that such sales did not involve a
public offering within the meaning of Section 4(2) of the Act. In the event
that an exemption for such sales is later determined not to be available to
the Company or that such offerings should be integrated with the public
offering, the Company may be required to rescind such sales as are not
entitled to any exemption or take such other steps as may be necessary to
comply with federal and state securities laws for such sales. The Company
does not intend to rescind such sales.
<PAGE>
12. Control by Management. Management of the Company controls 100% of
the Company's outstanding shares of Preferred Stock and accordingly, will be
able to elect all of the directors and thereby direct the policies of the
Company. See "Principal Shareholders".
ITEM 2. Description of Properties
The Company owns no real property. It leases its office space, warehouse
space and laboratory facilities from third parties at 4011 West Oquendo
Avenue and 3977 West Oquendo Avenue, Las Vegas, Nevada 89118. The Company
also leases space at 470 No. Rivermeade Dr., #7, Concord, Ontario, Canada L4K
3R8.
The Company owns the equipment, which it uses to manufacture, package,
and ship products.
ITEM 3. 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 judgement against several investors who were issued
stock in exchange for a promise to pay the Company $1,000,000, 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 canceled 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 has been entered against the Company regarding a breach of
contract lawsuit. The Company is currently appealing the decision.
Item 4. Submission of Matters to a Vote of Security Holders.
None
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholders
Matters.
(a) Market Information.
The Registrant's securities are traded over-the-counter on the Bulletin
Board operated by the National Association of Securities Dealers, Inc. under
the symbol AZNT. The table shows the high and low bids of Registrant's Common
Stock during the last two fiscal years. Quotations reflect inter-dealer
prices without retail markup, markdown, or commissions and may not
necessarily represent actual transactions. The Registrant's securities began
trading actively in April 1996. Since the foregoing date, the high bid has
been $3.50 and the low bid has been $.15625.
<TABLE>
<CAPTION> Bid
--------------------------
Quarter Ended High Low
<S> <C> <C>
June 30, 1999 $0.59375 $0.53125
March 31, 1999 $1.00 $0.9375
December 31, 1998 $1.625 $0.625
September 30, 1998 $2.00 $0.15625
June 30, 1998 $1.25 $0.25
March 31, 1998 $3.125 $0.625
December 31, 1997 $3.50 $1.875
September 30, 1997 $3.25 $1.75
June 30, 1997 $3.50 $1.75
March 31, 1997 $2.50 $1.875
December 31, 1996 $1.00 $0.625
September 30, 1996 $1.00 $0.625
June 30, 1996 $1.50 $1.375
March 31, 1996 $ -0- $ -0-
</TABLE>
These quotations reflect inter-dealer prices without retail markup,
markdown, or commissions, and may not represent actual transactions.
(b) The number of record holders of the Common Shares on December 31,
1998 was approximately 300.
(c) Dividends.
The Company has paid no dividends.
<PAGE>
Recent Sales of Unregistered Securities:
Following is a summary of sales of unregistered securities through the
date of filing of this Form 10-KSB. All securities were issued as restricted
common shares, which are subject to Rule 144 of the Securities and Exchange
Commission. Generally, Rule 144 requires 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
commissions or underwriting discounts have been paid.
<TABLE>
<CAPTION> Shares Value
Transaction Description Issued Received
- --------------------------------- --------- ------------
<S> <C> <C>
Sale of 144 common stock for cash 1,345,920 $360,510
Consulting and operating expenses 425,300 $ 42,530
</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 financial and business
matters that they are capable of evaluating the merits and risks of the
prospective investment.
Item 6. Management's Discussion and Analysis or Plan of Operation.
General
The Company acquired all of the issued and outstanding shares of Common
Stock of Amazon Natural Treasures, Inc., a Nevada corporation, on March 28,
1996 in exchange for 6,100,000 shares of the Company's Common Stock. The
acquisition effectively changed the Company's operation from a blank check
entity to a corporation engaged in business of importing, developing,
manufacturing, and selling products derived from plants grown in the
Brazilian Amazon Rain Forest.
Liquidity and Capital Resources
For the years ended December 31, 1998 and 1997, operating activities
provided (used) $(241,222) and $(1,330,867) respectively; financing
activities provided (used) $354,071 and $2,125,814 respectively; and
investing activities provided (used) $(243,443) and $(663,582) respectively.
Working capital for the same periods was $(204,407) and $162,501, a
(decrease) from 1998 to 1997 of $(366,908). This was primarily a result of an
increase in accounts payable and other short-term debt to finance the
operating losses incurred in 1998. For 1998 and 1997 the Company was indebted
to Directors, Officers, and other related parties in the amounts of $140,758
and $185,110 respectively.
<PAGE>
The Company intends to raise additional capital, which is needed to
maintain current operating activities, through the sale of Common Stock.
There can be no assurance that the Company will be successful in the sale of
its Common Stock. In the event that the Company does not generate sufficient
sales or raise additional capital, it will have to curtail operations.
The Company has no outside line of credit available and is dependent on
cash from operations (which it anticipates to be negative for the coming
year), contributions by officers and directors, and other financing
arrangements to meet its obligations; however, there is no assurance such
financing will be available when needed.
As of December 31, 1998 the Company did not have any commitments
for significant capital expenditures.
Results of Operations
The Company was a dormant blank check entity on December 31, 1995 and
accordingly had limited revenues from brief operations. The Company began
operations on March 28, 1996. The Company had a net loss in 1996 of
$7,715,709. The loss for 1996 was previously reported as $220,710. The
increased loss, as shown in the restated financial statements incorporated
herein, resulted from the correction of the treatment given to the Company's
obtaining certain intangible assets in exchange for stock. The major factors
contributing to the "hard" loss of $220,710 were: 1) insufficient revenues,
2) substantial operating expenses, 3) cost of goods sold, and 4) lack of
adequate sales and marketing.
Revenues were $34,975; cost of goods sold was $13,409; operating expenses
were $3,318; and other expenses, exclusive of the $7,495,000 loss on
impairment of intangible assets, were $239,051. The primary components of the
other expenses were Consulting fees-$68,950; Rent/Lease expense-$32,248;
Meals/Entertainment/Travel expense-$47,342; and Amortization and
Depreciation-$24,139.
For the year ended December 31, 1997 the Company experienced a net loss
of $1,096,465. The primary components resulting in that loss were: revenues -
$44,849; cost of goods sold - $22,078; operating expenses - $19,270; and
other expenses of $5,444. While revenues only increased slightly, other
expenses showed dramatic increases. This was primarily a result of the
increased tempo in finding and developing markets and in the increased
production process to get finished goods ready for sale. The major components
of other expenses were Meals/Travel - $107,966; Amortization/Depreciation -
$73,023; Professional Fees - $124,530; Salaries/Wages/Payroll Taxes -
$237,586; and Consulting Fees of $144,823.
For the year ended December 31, 1998 the Company experienced a net loss
of $4,815,331. The primary components resulting in that loss were: revenues -
$392,061; cost of goods sold - $92,275; operating expenses - $5,120,982; and
other expenses of $(5,865). While revenues increased by almost nine fold,
general and administrative expenses showed dramatic increases. This was
primarily a result of the recording of the sweat equity for shares issued
based on a prior consulting agreement with certain officers and directors of
the company. Additionally, certain salaries were accrued for officers for
1998. Lastly, as in 1997, the increased activities in finding and developing
markets and in the increased production process to get finished goods ready
for sale and the increased administrative costs.
The Company believes that it will have to start paying salaries to
existing officers who have to date, worked without receiving cash
compensation.
<PAGE>
Working Capital/Liquidity
As of December 31, 1999, the Company had a deficit in working capital of
$204,407. The Company has from its inception continued to use working
capital to finance its operations and does not expect to attain profitable
operations for the next twelve month period.
During this period the company intends to continue to finance its
operations and other activities through private placements of common shares,
conversion of debt to common shares, and payment of consulting and labor
services with common shares.
See Item 5 as to the recent sales of unregistered securities in 1999.
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 anticipates 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.
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.
<PAGE>
Forward-Looking Statements
The statements in this Form 10-KSB 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.
Common Stock Cancellation
On November 10, 1998, the Company cancelled the following shares of
Common Stock issued to the Principals (and related parties) and exchanged
them for preferred voting only shares:
<TABLE>
<CAPTION>
Name Number of Shares Exchanged
<S> <C>
Michael A. Sylver 17,169,813
Gary Sylver 1,999,000
Morris Sylver 10,000,000
Darral Sylver 152,000
Phillip Sylver 152,000
Robert S. Qualey 5,222,000
Domingos Loricchio 7,110,000
Domingos Loricchio Jr. 5,500,000
Denise Loricchio 3,000,000
Roc and Sherri Pucci Jt Ten 1,814,300
Allan Sylver 305,000
Benita Sylver 371,000
----------
Total Shares Exchanged 52,795,113
==========
</TABLE>
The aforementioned common shares were cancelled in exchange for preferred
voting only shares for the reason that the Principals of the Corporation, as
previously arranged in early 1998, wished to decrease the number of
outstanding common shares seeing that the principals have no intention of
selling any of their shares.
<PAGE>
The Company has also cancelled the following certificates in 1999:
<TABLE>
<CAPTION>
Name Number of Shares
- --------------------------------- ----------------
<S> <C>
Attorney Business Advisors 100,000
J. Thomas Bonner III 1,000
Rose Mary Cabassa 2,125
Veronica Ann Cabassa 1,000
Michael Zappara 390,000
Danny Doumanis 85,000
Dick Dubrule 250,000
Hemisphere Holding Co., Inc. 50,000
Whitecliffe Investment Fund Ltd. 500,000
Whitecliffe Investment Fund Ltd. 500,000
Whitecliffe Investment Fund Ltd. 500,000
Whitecliffe Investment Fund Ltd. 500,000
Shoreline Securities Ltd. 500,000
Shoreline Securities Ltd. 500,000
Shoreline Securities Ltd. 500,000
Shoreline Securities Ltd. 500,000
Charles Kricfalusi 2,000,000
Wanda Kricfalusi 1,000
Wanda Joyce Kricfalusi 224,000
CW Kricfalusi 2,000,000
<PAGE>
Linda McGee 1,650
Dr. Amazonimo Mendes 5,000
Gilberto Baptista Miranda 3,000
Pacific International Securities 50,000
James F. Palecek 250,000
Debra Reidl 1,000
Kevin Vader Kelen 100,000
---------
Total 9,514,775
=========
</TABLE)
The above cancellation was related to the current litigation against
prior consultants of the corporation.
Item 7. Financial Statements and Supplementary Data.
The response to this Item is submitted under Item 13.
Item 8. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
In early 1999, the Company changed its auditors for two reasons. One was
that due to prior fees due to the auditor, they would lack independence for
the current year audit. Secondly, due to the current litigation against the
prior financiers of the Company and with new sources of capital, the new
capital raising agents and consultants of the Company deemed it appropriate
to change to new auditors.
To the company's and its management's knowledge, there is no accounting
or financial disclosure dispute involving any present or former accountant.
<PAGE>
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 following table sets forth the names and nature of all positions and
offices held by all directors and executive officers of the company for the
calendar year ending December 31, 1998, and to the date hereof, and the
period or periods during which each such director or executive officer served
in his or her respective positions.
Position Term of
NAME Age Held Office
Domingos Loricchio 69 Chairman of the
Board 3/96 to Present
Michael Sylver 42 President, CEO,
Director 3/96 to Present
Treasurer 2/99 to Present
Domingos Loricchio II 34 Secretary 2/99 to Present
Director 12/97 to Present
<PAGE>
Term of Office
The terms of office of the current directors continue until the annual
meeting of stockholders, which the Bylaws provide shall be held on the third
Friday of November of each year; officers are elected at the annual meeting
of the board of directors, which immediately follows the annual meeting of
stockholders.
Business Experience
Domingos Loricchio - Chairman of the Board of Directors.
Mr. Loricchio has been Chairman of the Board of Directors of the Company
since March 1996. Since 1975, Mr. Loricchio has been the President of
Abracel Industria E Commercio, LTDA, in Sao Paulo, Brazil. Prior to 1975, Mr.
Lorcchio was employed by Carborundum Company, in research and development in
their Sao Paulo plant. Mr. Lorcchio holds a degree in Chemistry from the
Sorbonne - University of Paris.
Michael A. Sylver - President, Treasurer, CEO, and a member of the Board of
Directors.
Mr. Sylver has over 20 years of executive level management, having formed
and operated several innovative companies in the United States and Canada.
His management expertise created and developed Energy Management Corporation
into, what was at one time, the largest independent company in Nevada.
Domingos Loricchio II - Senior Executive Vice President, Director and
Secretary.
In March, 1996, Mr. Loricchio became the Senior Executive Vice President
of the Company. Since July, 1985, Mr. Loricchio has been the manager of
Abrace, Ltd., of Brazil. Abracel manufactures products primarily designed for
road surface applications. Mr. Loricchio graduated from the University of Sao
Paulo, Brazil with a degree in Chemical Engineering.
Family Relationships.
There is a family relationship between directors Domingos Loricchio and
his son, Domingos Loricchio II and no other relationship of executive
officers of the Company, either by blood or happenstance of marriage, other
the Domingos Loricchio, the Company's Chairman of the Board of Directors, who
is the father of Domingos Loricchio II, the Company's Senior Executive Vice
President and Director.
Involvement in Certain Legal Proceedings.
During the past five years, no present or former director, executive
officer, or person nominated to become a director or an executive officer of
the Company has been the subject matter of any relevant legal proceedings,
including bankruptcy, criminal proceedings, or civil proceedings. Further,
no legal proceedings are known to be contemplated by governmental authorities
against any director, executive officer and person nominated to become a
director.
Compliance With Section 16(a) of the Exchange Act.
No securities of the Company are registered pursuant to Section 12(g) of
the Securities Exchange Act of 1934, and the Company files reports under
Section 15(d) of the Securities Exchange Act of 1934; accordingly, directors,
executive officers and ten percent stockholders are not required to make
filings under Section 16 of the Securities Exchange Act of 1934.
<PAGE>
Item 10. Executive Compensation.
Summary of Cash and Certain Other Compensation
The following table sets forth information as to the compensation of the
four most highly compensated officers whose compensation for the year ended
December 31, 1998 exceeded $100,000.
</TABLE>
<TABLE>
<CAPTION>
Name and Annual Compensation
Principal Calendar ------------------------
Position Year Salary Bonus
----------------- -------- --------- ------------
<S> <C> <C> <C>
Michael A. Sylver 1998 $468,000 $-0-
President and
Treasurer
Domingos Loricchio II 1998 $208,000 $-0-
Secretary
</TABLE>
For the year ended December 31, 1998, certain officers' were granted
annual salaries as per the above table. As of December 31, 1998, none of the
salaries that were granted have been paid. None of the compensation accrued
will be paid until the Company is profitable and has positive cash flows.
No cash compensation, deferred compensation or long-term incentive plan
awards were issued or granted to the Company's management during the calendar
years ended December 31, 1997 and 1996. Further, no member of the Company's
management has been granted any option or stock appreciation right;
accordingly, no tables relating to such items have been included within this
item.
Compensation of Directors
The Company's Board of Directors unanimously resolved that the directors
receive no compensation for their services; however, they are reimbursed for
travel expenses incurred in serving on the Board of Directors. No additional
amounts are payable to the Company's directors for committee participation or
special assignments.
Termination of Employment and Change of Control Arrangements
There are no compensatory plans or arrangements, including payments to be
received from the Company, with respect to any person holding an officer or
director position which would in any result in payments to any such person
because of his or her resignation, retirement, or other termination of such
person's employment with the Company or its subsidiaries, or any change in
control of the Company, or a change in the person's responsibilities
following a change in control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth the ownership interest of all current or
former officers, directors, or family members. There are no unrelated parties
owning 5% or more of the company's Common stock. The Company has two classes
of stock. The two classes are common stock and preferred stock. There are no
options, warrants, or other rights to acquire shares outstanding. The below
data reflects ownership as of December 31, 1998. Relationships are described
in Note 1 below.
<PAGE>
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of
of Beneficial Owner of Beneficial Owner Class
<S> <C> <C>
Domingos Loricchio 7,110,000* 13.47%
4011 W. Oquendo Ave.
Suite C
Las Vegas, NV 89118
Michael Sylver 17,169,813* 32.52%
4011 W. Oquendo Ave.
Suite C
Las Vegas, NV 89118
Robert Qualey 5,222,000* 9.89%
4011 W. Oquendo Ave.
Suite C
Las Vegas, NV 89118
Domingos Loricchio II 5,500,000* 10.42%
4011 W. Oquendo Ave.
Suite C
Las Vegas, NV 89118
Gary Sylver 1,999,000* 3.79%
P.O. Box 96083
Las Vegas, NV 89183
Denise Loricchio 3,000,000* 5.68%
4011 W. Oquendo Ave.
Suite C
Las Vegas, NV 89118
Total 40,000,813* 75.77%
*Denotes Preferred Stock
No Officer or Director owns 5% or more of the Company's common stock.
</TABLE>
Note 1:
Domingos Loricchio - Chairman of the Board of Directors
Michael Sylver - President, CEO, and Director, and Treasurer (since 12/97)
Robert Qualey - Secretary/Treasurer (to 12/97) and Director Domingos
Loricchio II - Senior Executive Vice President, Director and Secretary.
Rocque Pucci - Vice President to 12/97 Gary Sylver - Father of Michael Sylver
Denise Loricchio - Daughter of Domingos Loricchio
Changes in Control
To the knowledge of management, there are no present arrangements or
pledges of securities of the Company which may result in a change in control
of the Company.
Item 12. Certain Relationships and Related Transactions.
None
<PAGE>
Item 13. Financial Statements, Exhibits and Reports on Form 8-K.
Financial Statements and Supplementary Data begin on the following page.
List of Financial Statements:
----------------------------
(a) Balance Sheets as of December 31, 1998 and 1997
(b) Statements of Operations for the Years ended
December 31, 1998 and 1997
(c) Statements of Stockholders' Equity for the Years
ended December 31, 1998, 1997, and 1996
(d) Statements of Cash Flows for the Years ended
December 31, 1998 and 1997
(e) Notes to Financial Statements
Reports on Form 8-K:
-------------------
None
<PAGE>
Albright, Persing & Associates, Ltd.
Certified Public Accountants
Independent Auditor's Report
To the Board of Directors and
Stockholders of Amazon Natural
Treasures, Inc.
We have audited the balance sheet of Amazon Natural Treasures, Inc. as of
December 31, 1998, and the related statements of comprehensive income,
stockholder's equity, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit. The financial statements of Amazon Natural Treasures, Inc. as
of December 31, 1997, were audited by other auditors whose report dated July
17, 1998 expressed an unqualified opinion with a going concern uncertainty on
those statements.
We did not observe the physical inventory in 1998 stated in the accompanying
financial statements at $444,983. The Company's records do not permit the
application of other auditing procedures to inventories. In addition, the
Company does not maintain certain customary accounting records and supporting
documents relating to transactions with suppliers and customers, nor, in our
opinion, is the system of internal control adequate to provide safeguards of
assets and to assure proper recording of transactions. Accordingly, it was
impracticable to extend our procedures sufficiently to determine the extent
to which the financial statements may have been affected by these conditions.
Since inventory at December 31, 1998 enters significantly into the
determination of financial position, results of operations, and cash flows,
and since the Company does not maintain certain customary accounting records
or documents, or an adequate system of internal control, as described in the
preceding paragraph, the scope of our work was not sufficient to enable us to
express an opinion, and we do not express an opinion on the financial
statements referred to above.
As discussed in Note 3, the Company has numerous related party transactions
and is dependent upon a related party supplier for its phytogenics products.
In addition, as discussed in Note 1, the Company is dependent on its ability
to continue to operate within United States Government guidelines for
nutritional supplements
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5, the
Company had been in the development stage in years prior to 1998, and the
Company's ability to generate sufficient cash flows to meet its obligations
and sustain its operations, either through future revenues and/or additional
debt or equity financing, cannot be determined at this time. Further, the
Company has sustained losses of $13,645,482 since its inception on June 27,
1995 and has experienced cash flow problems. These uncertainties raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also discussed in Note 5.
The financial statements do not include any adjustments that might arise from
the outcome of this uncertainty.
/s/ Albright, Persing & Associates, Ltd.
Reno, Nevada
August 19, 1999
<PAGE>
<TABLE>
<CAPTION>
AMAZON NATURAL TREASURES, INC.
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
ASSETS
1998 1997
----------- -----------
<S> <C> <C>
Current Assets
Cash $ 2,161 $ 132,755
Related party receivables - 64,768
Trade receivables 6,017 -
Inventories 444,983 388,214
Prepaid expenses 1,345 13,414
----------- -----------
Total Current Assets 454,506 599,151
----------- -----------
Fixed Assets, net of
accumulated depreciation 560,210 480,049
----------- -----------
Other Assets
Licenses and trademarks 128,000 128,000
Refundable deposits 23,731 63,209
Organization Costs 41,646 41,646
----------- -----------
Total Other Assets 193,377 232,855
----------- -----------
Total Assets $ 1,208,093 $ 1,312,055
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 354,269 $ 208,014
Bank overdraft 15,733 4,423
Payroll taxes payable 33,117 7,993
Accrued salaries and wages 13,083 -
Other accrued expenses 101,953 23,083
Notes payable - current portion - 8,027
Accounts payable - related parties 140,758 185,110
----------- -----------
Total Current Liabilities 658,913 436,650
----------- -----------
Long-Term Debt 105,947 13,289
----------- -----------
Deferred Revenue 76,000 -
----------- -----------
Stockholders' Equity (Deficit)
Preferred stock 52,795 -
Common stock 15,965 31,547
Additional paid-in-capital 14,943,955 9,660,720
Stock subscription receivable (1,000,000) -
Accumulated deficit (13,645,482) (8,830,151)
----------- -----------
Total Stockholders' Equity 367,233 862,116
----------- -----------
Total Liabilities and
Stockholders' Equity $ 1,208,093 $ 1,312,055
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMAZON NATURAL TREASURES, INC.
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
----------- -----------
<S> <C> <C>
Net Sales $ 392,061 $ 44,849
Cost of Sales 92,275 22,078
----------- -----------
Gross Profit 299,786 22,771
Operating Expenses 5,120,982 1,113,792
----------- -----------
Loss from Operations (4,821,196) (1,091,021)
----------- -----------
Other Income (Expense)
Interest income 576 2,467
Interest expense - (7,942)
Other revenue 5,289 31
----------- -----------
Total Other Income (Expense) 5,865 (5,444)
----------- -----------
Net Loss Before Taxes and
Comprehensive Income (4,815,331) (1,096,465)
Income Tax Expense - -
----------- -----------
Net Loss After Taxes (4,815,331) (1,096,465)
Other Comprehensive Income, net
of tax - -
----------- -----------
Comprehensive Income (Loss) $ (4,815,331) $ (1,096,465)
=========== ===========
Loss Per Share $ (0.15) $ (0.04)
Weighted Average Number of
Common Shares Outstanding 31,351,442 27,357,705
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMAZON NATURAL TREASURES, INC.
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
1998 1997
----------- -----------
<S> <C> <C>
Cash Flow From Operating Activities
Net income (loss) $ (4,815,331) $(1,096,465)
----------- -----------
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 163,282 70,871
Noncash salaries for capital
contribution 676,000 -
Common stock for consulting 243,555 -
Preferred stock for consulting 3,087,100 -
Decrease (Increase) in accounts receivable 58,751 (2,325)
(Increase) in inventories (56,768) (350,065)
Decrease (Increase) in prepaid expenses 12,069 (13,414)
Decrease (Increase) in deposits 39,478 (57,539)
(Increase) in other current assets - (60,443)
Increase in accounts payable 146,255 150,650
Increase in bank overdraft 11,310 4,423
Increase in accrued expenses 117,077 28,440
(Decrease) in customer deposits - (5,000)
Increase in deferred revenue 76,000 -
----------- -----------
Total adjustments 4,574,109 (234,402)
----------- -----------
Net Cash (Used) by Operating Activities (241,222) (1,330,867)
----------- -----------
Cash Flows from Investing Activities
Purchase on intangibles - (175,000)
Purchase of property, plant and equipment (243,443) (488,582)
----------- -----------
Net Cash (Used) by Investing Activities (243,443) (663,582)
----------- -----------
Cash Flows from Financing Activities
Issuance of long term debt 127,994 11,077
Payment of long term debt (43,363) -
Issuance of common stock 313,792 1,864,874
Stock payment for debt - 96,458
Related party payables (44,352) 153,405
----------- -----------
Net Cash Provided by Financing Activities 354,071 2,125,814
----------- -----------
Net (Decrease) Increase in Cash (130,594) 131,365
Cash at Beginning of Period 132,755 1,390
----------- -----------
Cash at End of Period $ 2,161 $ 132,755
=========== ===========
Interest Expense $ - $ 7,942
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
AMAZON NATURAL TREASURES, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
From Inception (June 27, 1995) to December 31, 1998
<S> <C> <C> <C> <C>
Preferred Stock Common Stock
Shares Amount Shares Amount
Balance, June 27, 1995 - $ - 97,151 $ 97
Shares issued for accounts payable - - 1,760 2
Capital contributed by shareholders - - - -
Net loss for year ended December 31, 1995 - - - -
Shares issued for cash
retroactively restated - - 116,161 116
Shares issued for services
retroactively restated - - 10,913 11
Shares issued for recission agreement
retroactively restated - - 21,121 21
Shares issued for consulting fees
retroactively restated - - 52,894 53
Shares issued for effect reverse acquisition
of Amazon Natural Treasures, Inc. - - 6,100,000 6,100
Reverse purchase acquisition - - - -
Balance, December 31, 1995 - - 6,400,000 6,400
Shares issued for cash at $.05/share - - 500,000 500
Shares issued for cash at $.50/share - - 54,000 54
Shares issued to acquire licenses - - 5,000,000 5,000
Shares issued in satisfaction of debt - - 12,060,360 12,060
Shares issued for services - - 650,000 650
Net loss for year ended December 31, 1996 - - - -
Balance, December 31, 1996 - - 24,664,360 24,664
Shares issued for cash:
at $.001/share - - 25,000 25
at $.50/share - - 225,100 225
at $.5714/share - - 17,500 18
at $.6667/share - - 6,000 6
at $7692/share - - 6,500 7
at $.8333/share - - 6,000 6
at $.9091/share - - 15,400 15
at $.9901/share - - 2,020 2
at $.9950/share - - 5,000 5
at $.9999/share - - 6,788 7
at $1.00/share - - 2,561,153 2,561
Other equity transactions:
Convert debt to equity - - 514,303 514
Cash commissions paid and other
selling expense - - - -
Shares canceled - - (540,000) (540)
Employee bonuses - - 23,000 23
Pre-merger agreement issues - - 4,000,000 4,000
Commissions (Investor finding fees) - - 8,825 9
Net loss for year ended December 31, 1997 - - - -
Balance, December 31, 1997 - - 31,546,949 31,547
Shares converted to preferred stock 21,924,113 21,924 (21,924,113) (21,924)
Preferred shares issued for consulting 30,871,000 30,871 - -
Common shares issued for consulting - - 2,435,550 2,436
Common shares issued for cash - - 1,383,041 1,383
Stock subscription receivable - - 4,000,000 4,000
Shares canceled - - (1,476,892) (1,477)
Officer salaries - - - -
Net loss for year ended December 31, 1998 - - - -
Balance, December 31, 1998 - - $52,795 $15,965
Stock
Subscription Paid-In Accumulated
Receivable Capital Deficit
Balance, June 27, 1995 $ - $71,743 ($82,800)
Shares issued for accounts payable - 48 -
Capital contributed by shareholders - 626 -
Net loss for year ended December 31, 1995 - - (16,337)
Shares issued for cash retroactively restated - 16,384 -
Shares issued for services
retroactively restated - 299 -
Shares issued for recission agreement
retroactively restated - 579 -
Shares issued for consulting fees
retroactively restated - - 1,450
Shares issued for effect reverse acquisition -
of Amazon Natural Treasures, Inc. - 99,850 (17,977)
Reverse purchase acquisition - (96,529) 99,137
Balance, December 31, 1995 - 94,450 (17,977)
Shares issued for cash at $.05/share - 24,500 -
Shares issued for cash at $.50/share - 26,946 -
Shares issued to acquire licenses - 7,495,000 -
Shares issued in satisfaction of debt - 55,242 -
Shares issued for services - 9,949 -
Net loss for year ended December 31, 1996 - - (7,715,709)
Balance, December 31, 1996 - 7,706,087 (7,733,686)
Shares issued for cash:
at $.001/share - - -
at $.50/share - 112,325 -
at $.5714/share - 9,982 -
at $.6667/share - 3,994 -
at $7692/share - 4,993 -
at $.8333/share - 4,994 -
at $.9091/share - 5,993 -
at $.9901/share - 1,998 -
at $.9950/share - 4,970 -
at $.9999/share - 6,780 -
at $1.00/share - 2,503,057 -
Other equity transactions:
Convert debt to equity - 17,184 -
Cash commissions paid and other
selling expense - (788,016) -
Shares canceled - - -
Employee bonuses - 70,378 -
Pre-merger agreement issues - (4,000) -
Commissions (Investor finding fees) - - -
Net loss for year ended December 31, 1997 - - (1,096,465)
Balance, December 31, 1997 - 9,660,720 (8,830,151)
Shares converted to preferred stock - - -
Preferred shares issued for consulting - 3,056,229 -
Common shares issued for consulting - 241,119 -
Common shares issued for cash - 312,410 -
Stock subscription receivable (1,000,000) 996,000 -
Shares canceled - 1,477 -
Officer salaries - 676,000 -
Net loss for year ended December 31, 1998 - - (4,815,331)
Balance, December 31, 1998 $(1,000,000) $14,943,955 $(13,645,482)
</TABLE>
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 1 - COMPANY HISTORY/ENVIRONMENT
The Company was organized under the laws of the State of Nevada on June 27,
1995, using the name Amazon Natural Treasures, Inc. The Articles of
Incorporation authorize the Company to engage in any lawful activity. In
March, 1996, the Company exchanged all of its issued and outstanding shares
for shares of a public company known as Concord Capital, Inc., a Utah
Corporation. The exchange was accounted for using the purchase method of
accounting. The stockholders of Amazon Natural Treasures, inc. controlled
the entity after the purchase. Concord Capital, Inc. was incorporated in
1988, in the State of Utah and was a public entity reporting to the
Securities and Exchange Commission. In December, 1996, the Company amended
its Articles of Incorporation and re-domiciled the Company in the State of
Nevada.
The Company's primary focus currently is the development, production and
marketing of dietary supplements and phytogenics products from plants and
herbs found within the Amazon Rain Forest in Brazil. Production and
marketing of these products is dependent on the Company's ability to continue
to operate within U.S. Government guidelines for nutritional supplements.
In addition to the dietary supplements the Company markets figurines made in
part from semiprecious gemstones and also markets limited quantities of
semiprecious and precious gems. Brazil and the Amazon Rain Forest are the
source of all of these products. All of these products require inspection by
various U.S. Government agencies at the port of entry including the
Department of Agriculture and the Customs Service.
The Company was in the development stage through December 31, 1997. The
year 1998 is the first year during which it is considered an operating entity.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The Company uses the accrual method of accounting.
Revenue Recognition
Revenues and cost of sales are recognized when sales are consummated
Cash and Cash Equivalents
The Company considers all short term, highly liquid investments that are
readily convertible to cash (within three months) as cash equivalents. The
Company currently has no cash equivalents.
Inventories
Inventories are stated at the lower of cost (determined under the FIFO
method) or market.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - Continued
Financial Statement Estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Concentrations
Concentration of Credit Risk - Financial instruments which potentially
subject the Company to credit risk consist primarily of cash in bank, trade
receivables, and receivables from officers and stockholders. The Company
maintains its cash in various bank deposit accounts. Accounts at each bank
are insured by the Federal Deposit Insurance Corporation (FDIC) up to
$100,000 per bank. The Company's accounts at these institutions, at times,
may exceed federally insured limits. The Company has not experienced any
losses in such accounts.
Concentrations of Operations - All of the Company's current products are
designed for operation in the consumer market for nutritional supplements.
Any recessionary pressures or other disturbances in the national consumer
market could have an adverse effect on the Company's operations.
Concentration of Suppliers - The related party phytogenics product supplier
discussed in Note 3 is the sole source of the Company's primary raw
materials. Further, this supplier is located in Brazil and is dependent on
the Brazilian Government for its authority to export its products.
Income Taxes
The Company accounts for income taxes by the asset/liability approach in
accordance with the provisions of Statement of Financial Accounting Standard
("SFAS") No. 109, "Accounting for Income Taxes". Under this pronouncement,
deferred income taxes, if any, reflect the estimated future tax consequences
when reported amounts of assets and liabilities are recovered or paid.
Deferred income tax assets and liabilities are determined based on
differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that are
scheduled to be in effect when the differences are expected to reverse. The
provision for income taxes, if any, represents the total income taxes paid or
payable for the current year, plus the change in deferred taxes during the
year. The tax benefits related to operating loss carry-forwards are
recognized if management believes, based on available evidence, that it is
more likely than not that they will be realized.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - Continued
Net Loss Per Share
In February, 1997, the Financial Accounting Standards Board issued SFAS No.
128, Earnings per Share. SFAS No. 128 simplifies the standards for computing
earnings per share ("EPS") and was effective for financial statements issued
for periods ending after December 15, 1997, with earlier application not
permitted. Upon adoption, all prior EPS data was restated.
Basic EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing
net income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued.
Since the fully diluted loss per share for 1998 and 1997 was antidilutive,
and the Company has not issued any options, warrants, or other common stock
equivalents, basic and diluted earnings per share are the same.
Advertising
The Company periodically places advertisements on the radio, in newspapers
and magazines, and through television media. Costs of advertising are
expensed when incurred. Total advertising costs for the years ended December
31, 1998 and 1997 were $1,257 and $68,460, respectively.
New Accounting Standards
In June, 1997, the Financial Accounting Standards Board issued SFAS No. 130,
Reporting Comprehensive Income. SFAS No. 130 establishes standards for
reporting and presentation of comprehensive income and its components in a
full set of general-purpose financial statements. This statement does not,
however, require a specific format for the disclosure but requires the
Company to display an amount representing total comprehensive income for the
period in its financial statements. Comprehensive income is determined by
adjusting net income by other items not included as a component of net
income, such as the unrealized loss on marketable securities. The Company
implemented SFAS No. 130 for its year ended December 31, 1998, but had no
items of comprehensive income.
In June, 1997, the Financial Accounting Standards Board issued SFAS No. 131,
Disclosures about Segments of an enterprise and Related Information. SFAS
No. 131 establishes standards for the manner in which public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information
about operating segments in interim financial reports issued to shareholders.
This statement also requires that a public business enterprise report
financial and descriptive information about its reportable operating
segments. The Company has determined that segment disclosures are not
appropriate because the Company operates in only one segment.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 3 - RELATED PARTY TRANSACTIONS
The Company currently has numerous related party transactions and
relationships. The Company's President and CEO and its Chairman are also the
owners of its primary supplier of phytogenics products. The Company's
President and CEO is also the owner of a specialized equipment distributor
from whom the Company purchased much of its laboratory equipment. In
addition, the Company entered into an agreement with another related party
(an entity owned by the Company's Chairman and his family) wherein the
Company was licensed to use certain proprietary information in producing and
marketing homeopathic products. In exchange for this licensing, the Company
has issued approximately 5,000,000 shares of its restricted Common Stock and
agreed to pay $8,000 per month for a minimum of five years. See Notes 13 and
17 for details of this transaction. There are also significant amounts due
to Officers and employees of the Company. Summarized transactions for the
years ended December 31, 1998 and 1997 follow (amounts are rounded):
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Inventory purchased from related party $ - $ 240,000
Equipment and supplies purchased from related
party - 30,000
Receivable from a related party - 62,400
Employee advances - 2,300
Accounts payable to related parties 140,800 185,100
Note payable to related party (Note 10) 105,900 6,000
</TABLE>
NOTE 4 - RELIANCE ON SINGLE SUPPLIER
The related party phytogenics product supplier discussed in Note 3 is the
sole source of the Company's primary raw materials. Further, this supplier
is located in Brazil and is dependent on the Brazilian Government for its
authority to export its products.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 5 - DEVELOPMENT STAGE ACTIVITIES/GOING CONCERN UNCERTAINTY
The Company was in the development stage through December 31, 1997.
The year 1998 is the first year during which it is considered an operating
entity. The Company's activities since inception have consisted of
establishing sources of supply and financing as well as product and market
development. Facilities for production have been established in Las Vegas,
Nevada. Various items and amounts of raw materials have been received and
processed into finished products. The Company's primary efforts through
December 31, 1998 have been in the areas of obtaining financing and
developing its markets.
The Company has sustained losses of $4,815,331 in 1998 and $1,096,465 in
1997. Revenues totaled $392,061 and $44,849 in 1998 and 1997, respectively.
The Company, through 1998, has been unable to generate enough revenues to
meet expenses and has funded its operation primarily through the issuance of
equity. Accordingly, the Company's ability to accomplish its business
strategy and to ultimately achieve profitable operations is dependent upon
its ability to obtain additional financing and to execute its business plan.
There can be no assurance that the Company will be able to obtain additional
funding, and, if available, will be obtained on terms favorable to, or
affordable by, the Company. The Company's management is exploring several
funding options and expects to raise additional capital in 1999 and it
expects to continue to develop the Company's operations around its products.
Ultimately, however, the Company will need to achieve profitable operations
in order to continue as a going concern. Through December 31, 1998, this has
not occurred.
NOTE 6 - OPERATING LOSSES
The Company has incurred losses since it inception and has consequently not
been liable for any federal income taxes. There is no corporate income tax
in the State of Nevada. The accumulated losses to date are as follows:
<TABLE>
<CAPTION>
Year of Loss Amount
-------------- -----------
<S> <C>
1995 $ 17,977
1996 7,715,709
1997 1,096,465
1998 4,815,331
-----------
Total Operating Losses $13,645,482
===========
</TABLE>
The amount of these losses which may be used to offset future taxable
income is uncertain. None of these losses have been examined by the
Internal Revenue Service. Their availability to offset future revenues
for tax purposes is dependent upon their acceptance following such
examination.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT AND RELATED DEPRECIATION
The policy of the Company is to expense all purchases under $1,000.
Purchases in excess of these amounts are capitalized at cost and depreciated
over their estimated useful lives. Depreciation is recorded on a tax basis
which approximates accepted methods and timing of depreciation for accounting
purposes. The various classes of assets, their costs, depreciable lives,
depreciation expense for each year shown on the Balance Sheet, and
accumulated depreciation to December 31, 1998 are as follows:
<TABLE>
<CAPTION>
Cost Depreciation Expense
------------------- Depreciable -------------------- Accumulated
Asset Group 1998 1997 Life 1998 1997 Depreciation
--------- --------- ------------ ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Furniture/Fixtures $ 176,128 $ 82,383 5-7 $ 20,929 $ 5,404 $ 30,708
Laboratory equipment 40,648 37,440 5 9,652 14,764 24,416
Clean room 335,816 295,218 5-7 92,734 16,161 126,994
Warehouse equipment 102,580 101,860 7 25,354 13,121 38,475
Computer equipment 80,702 23,526 5 11,980 3,991 15,972
Leasehold improvements 36,525 - 30 339 - 339
Vehicles 29,061 17,590 5 2,294 2,052 4,346
--------- --------- ------------ ---------- ------- ---------
$ 801,460 $ 558,017 $163,282 $22,475 $ 241,250
========= ========= ========== ======= =========
</TABLE>
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 8 - LEASES
The Company is party to several leases. None of these leases meet criteria
for capitalization and are therefore all classified as operating leases.
Specific information on these leases is as follows:
Property leased - Corporate offices/processing facility
Lease Term - 3 years commencing October, 1996
Base Rent - $2,835/month through 12th month
$2,977/month 13th through 24th month
$3,125/month 25th through 36th month
Additional Required Payments - Real property tax increases during lease term,
utilities, prorata share of common area maintenance expenses.
The lease is silent with regard to renewal or purchase options.
Property leased - Passenger vehicle
Lease Term - 3 years commencing June, 1997
Rental Payments - $850 per month
Additional Required Payments - Excess mileage charges, if applicable, at
termination ($.20/mile on all mileage over 30,024).
Purchase option available at end of lease for $29,200.
Property Leased - Offices/Warehouse
Lease Term - 3 years commencing February, 1997
Rental Payments - $1,860/month, 5% annual increase.
Additional Required Payments - None
Renewal option available at end of lease for an additional 36 months. Rental
payment under renewal will be the last months rent plus a CPI increase.
Property Leased - Copier
Lease Term - 60 months commencing October, 1997
Rental Payments - $358.01 per month
The lease is silent with regard to renewal or purchase options.
Property Leased - Warehouse/processing facility
Lease Term - 3 years commencing September, 1998
Base Rent - $4,026/month through 12th month
$4,239/month 13th through 24th month
$4,450/month 25th through 36th month
Additional Required Payments - Real property tax increases during lease term,
utilities, prorata share of common area maintenance expenses.
The lease is silent with regard to renewal or purchase options.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 8 - LEASES - Continued
Property Leased - Passenger Vehicle
Lease Term - 36 months commencing August, 1997
Rental Payments - $281.26 per month
Additional Required Payments - Excess mileage payment, if applicable, at
termination ($.15/mile on all mileage over 36,030). Purchase option available
at lease end for $11,657.
Minimum future rental payments under non-cancelable operating leases having
remaining terms in excess of one year as of December 31, 1998, for each of the
next five years and in the aggregate are:
<TABLE>
<CAPTION>
Year Ended Amount
- ---------- -----------
<S> <C>
1999 $ 119,668
2000 65,296
2001 39,896
2002 3,222
2003 and Thereafter -
-----------
$ 228,082
===========
</TABLE>
NOTE 9 - INVENTORIES
Inventories at the Balance Sheet date consisted of the following:
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Finished goods $ 86,976 $ 97,136
Work in progress 30,457 20,375
Raw materials 163,674 146,563
Figurines/artifacts 40,262 40,261
Gems 14,525 14,525
Overhead applied 109,089 69,354
----------- -----------
Total Inventory $ 444,983 $ 388,214
=========== ===========
</TABLE>
Inventory values are stated at cost under the FIFO method and include
all direct costs and those indirect costs attributable to inventory.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 10 - NOTES PAYABLE
<TABLE>
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Various demand notes payable to related parties,
interest at 5% per annum, payable weekly, payment
amount varies based on monies collected by the
Company in excess of $20,000, no stated maturity
date, unsecured. $ 105,947 $ -
Demand promissory note to a related party at 8%,
no stated required periodic payment. No stated
maturity date. Uncollateralized - 6,000
Collateralized note with an unstated interest rate,
imputed to be 17%, payable in monthly installments
of $372 to American Express for 60 months,
unspecified furniture is the collateral. - 15,316
------------ -----------
105,947 21,316
Less: current portion - (8,027)
------------ -----------
Long-Term Portion $ 105,947 $ 13,289
============ ===========
</TABLE>
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 11 - LICENSES/TRADEMARDS AND ORGANIZATION COSTS
Balances in these accounts represent costs incurred for the acquiring of
certain proprietary formulas for the processing of dietary supplement products
(see also Notes 3, 14 and 17), the development of labels for those products,
organizational costs associated with establishing the Company, and development
of its website.
Valuation is based on actual costs incurred. Balance Sheet amounts are shown
net of amortization. For 1998 and 1997, it is believed that the assets acquired
will have a longer useful life and are therefore being amortized over a fifteen
year period on a straight-line basis.
Amortization Expense - 1998 -
- 1997 15,377
---------
Accumulated Amortization to
December 31, 1998 $ 19,209
=========
No intangibles were acquired prior to November 1, 1970 and consequently
the additional disclosures required for such intangibles are not applicable.
NOTE 12 - STOCKHOLDERS' EQUITY
Preferred Stock ($.001 par) - 500,000,000 shares authorized, shares are
not convertible into common stock and are voting shares only. Shares issued
and outstanding as of December 31, 1998 - 52,795,113.
Common Stock ($.001 par) - 500,000,000 shares authorized. Shares issued
and outstanding as of December 31, 1998 and 1997 were 15,964,535 and
31,546,949, respectively.
There are no other classes authorized and there are no options or warrants
issued. Stock issues to employees were authorized by the Board of Directors,
the Company authorized a total of approximately 60,000,000 shares to be issued
over a three to four year period to various individuals. This transaction
was subsequently determined to be invalid and as of December 31, 1997 all but
4,000,000 of the shares already issued were cancelled. The 4,000,000 shares
are recorded at par value.
Commissions in the form of stock were paid to several individuals as
compensation for having found other investors.
During 1998 and as part of a financing arrangement with a private company,
the Company issued 4,000,000 shares of stock in exchange for a promise to
receive $1,000,000. No monies were ever received by the Company. As a result
of the default, the Company filed suit against the investors whereby it
demanded the return of the 4,000,000 shares of common stock. To date, none of
the stock has been returned.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 13 - LICENSING AGREEMENT
In May, 1996, the Company entered into a licensing agreement with a
non-public corporate entity (Licensor) owned by the Company's Executive
Vice President and his family. The agreement states that principals of
the licensing entity are the proprietors, manufacturers, distributors,
and/or inventors/developers of homeopathic medicines. The agreement
called for the Licensor to grant an exclusive license to Amazon (User)
to use the unique products, licensed patents, and all know-how in the
operation and to sell all products internationally.
As consideration for the rights obtained, the Company agreed to:
Provide suitable housing accommodations for the family of the Licensor's
principal for a temporary period of time.
Pay $8,000 per month for an initial period of five years.
Provide the Licensor (designated to the principal and family) 5,000,000
shares of the Company's common stock.
Provide the Licensor with an automobile for a period of five years plus
extensions if necessary.
Provide the Licensor with necessary legal support for five years plus
extensions if necessary.
Reimburse the Licensor for operational costs (travel, hotels, etc.)
The agreement continues in force for a minimum of 99 years and carries a
substantial termination penalty for both parties.
Beginning in 1996, the Licensor transferred certain proprietary formulas
and processes to the Company. In 1996, the Company issued approximately
5,000,000 shares of its common stock to the principals of the Licensor.
This stock issue was recorded (based on an audit of the Company's financial
statements for the year ended December 31, 1996) in the accounting records
at a value of $5,000. This value was based on the par value of the stock
($.001). It was subsequently determined that this treatment was incorrect.
The details of the adjustments necessary to correctly show the effect of
this transaction are contained in Note 17.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 14 - CURRENT LEGAL MATTERS
The Company was involved in several lawsuits at the Balance Sheet date,
as follows:
Securities Transactions
The Company has received a default judgement against several investors
who were issued stock in exchange for a promise to pay the Company
$1,000,000, 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 canceled by the
Company due to a recision of the transaction resulting in the initial
issuance. These shares were pledged as collateral for a loan to the
former consultant.
Breach of Contract
An arbitration award of $88,000 has been entered against the Company
regarding a breach of contract lawsuit. The Company is currently appealing
the decision.
NOTE 15 - YEAR 2000 ISSUES
Because many computer systems and programs use only two digits to record
the year in date fields, such systems may not be able to accurately process
dates including the year 2000 and after. The effects of this problem will
vary from system to system and may result in a major system failure, or
adversely affect a company's operations as well as the ability to prepare
financial statements.
In order to determine the impact that Year 2000 issues have on the
Company, (1) a complete assessment of all systems potentially affected
by Year 2000 issues needs to be completed, and (2) management needs to
determine the consequences that its Year 2000 issues would have on its
business, results of operations, and financial condition. The Company's
assessment of its Year 2000 issues includes addressing whether third
parties with whom the Company has a material relationship are Year 2000
compliant.
At the current time, the Company has conducted a comprehensive review
of its computer systems to identify the systems that could be affected
by the Year 2000 issue, and is in the process of identifying all third
parties with whom the Company has a material relationship so that they
may determine if such parties are Year 2000 compliant. The Company
presently believes that its existing software is Year 2000 compliant.
Additionally, if the Company's customers and vendors are
unable to resolve such processing issues in a timely manner, it
could result in material financial risk.
NOTE 16 - SUBSEQUENT EVENTS
In the period between December 31, 1998 and the audit report date there
were no known events which would require adjustments to the financial
statements.
The Company entered into a capital lease obligation subsequent to
December 31, 1998 for computer equipment in the amount of $40,560.
<PAGE>
AMAZON NATURAL TREASURES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998
NOTE 17 - 1996 RESTATEMENT
As indicated in the auditors' report, the 1996 financial statements were
audited by other accountants. During the course of performing the audit of
1997, it became evident that certain transactions completed in 1996 required
adjustment. In 1996, the Company entered into a licensing agreement with a
related party. Under the agreement the Company received the exclusive right
to utilize certain technologies in the production of its phytogenics products.
As consideration for these rights, the Company agreed to issue approximately
5,000,000 shares of its common stock. At the time of the signing of this
agreement, the Company's stock was trading at approximately $1.50 per share.
Since there was no quantifiable value for the technologies obtained, the
transaction was recorded at the par value of the stock issued ($.001 per
share) or $5,000. The Company subsequently determined that this transaction
should have been recorded at the fair value of the stock rather than
the par value. This resulted in an increase to assets and equity of
$7,495,000. During the audit of the 1997 financial statements, management
of the Company concluded that while the valuation of this transaction complied
with generally accepted accounting principles, the underlying assets obtained
could not be objectively valued. An adjustment was consequently posted to
reflect this inability to objectively quantify any value. The net effect
of these transactions was to increase Additional Paid-In Capital by $7,495,000
and increase the 1996 loss by the same amount resulting in no change to total
equity or total assets. The transaction did however, generate additional
operating losses. These adjustments have been audited by the current year
auditors and the 1996 financial statements presented herein reflect these
adjustments. A summary of the accounts affected in 1996 is as follows:
<TABLE>
<CAPTION>
Before Restatement After Restatement
------------------ -----------------
<S> <C> <C>
Balance Sheet Accounts
- ----------------------
Licenses and Trademarks $ 5,000 $ 5,000
Additional Paid-In Capital 211,088 7,706,087
Accumulated Deficit (238,687) (7,733,686)
Income Statements Accounts
- --------------------------
Loss on Impairment - 7,495,000
Net Loss for 1996 (220,709) (7,715,709)
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, on this
day of
AMAZON NATURAL TREASURES, INC.
(Registrant)
BY: MICHAEL A. SYLVER
President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following person on
behalf of the Registrant and in the capacities and on this 19th day
of November, 1998.
SIGNATURES TITLE
DOMINGOS LORICCHIO
- ------------------------------------- Chairman of the Board of
Domingos Loricchio Directors
MICHAEL A. SYLVER
- ------------------------------------- President, Chief Executive
Michael A. Sylver Officer, and member of the
Board of Directors
DOMINIGOS LORICCHIO II
- ------------------------------------- Senior Executive Vice
Domingos Loricchio II President, Director, and Secretary
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH
REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY
REGISTRANTS WHICH HAVE NOT REGISTERED SECUREITIES
PURSUANT TO SECTION 12 OF THE ACT.
No annual report material has been forwarded to securities holders
of the Registrant during the period covered by this report or for the
previous five calendar years ended December 31; however, if any annual
report or proxy material is furnished to security holders in connection
with the annual meeting of stockholders to be held in 1999, a copy of any
such annual report or proxy materials shall be forwarded to the Commission
when it is forwarded to security holders.
