SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: March 31, 2000
Commission File Number: 000-30234
MILLENNIUM PLASTICS CORPORATION
(Exact name of registrant as specified in our charter)
Nevada 88-0422242
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5631 S. Pecos Rd.,
Las Vegas, Nevada 89120
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (702) 454-2121
Aurora Corporation, 525 South 300 East, Salt Lake City, Utah 84111
(Former name and former address of Registrant)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$0.001 par value
(Title of Class)
Indicate by check mark whether the registrant (a) 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 _____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not 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-K. [ ]
The aggregate market value of the voting and non-voting common stock
held by non-affiliates of the Registrant, based upon the average bid and
asked price of the common stock on March 31, 2000, as reported on the OTC
Bulletin Board, was $53,919,485.
The number of shares of Common Stock, $0.001 par value, outstanding on
June 1, 2000, was 23,978,000 shares, held by approximately 300 stockholders.
<PAGE>
MILLENNIUM PLASTICS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FOR THE FISCAL PERIOD ENDED
March 31, 1999
Index to Report
on Form 10-KSB
PART I Page
Item 1. Business 3-6
Item 2. Properties 6
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matter 6
Item 6. Management's Discussion and Analysis of Financial
Condition and Results ofOperation 7
Item 7. Financial Statements and Supplementary Data 9
Item 8. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 9
PART III
Item 9. Directors and Executive Officers of the Registrant 10
Item 10. Executive Compensation 12
Item 11. Security Ownership of Certain Beneficial Owners and
Management 12
Item 12. Certain Relationships and Related Transactions 13
PART IV
Item 13. Exhibits, Financial Statement Schedules and Reports
on Form 8-K 13
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This form 10KSB contains forward-looking statements within the meaning
of the federal securities laws. These forward-looking statements are
necessarily based on certain assumptions and are subject to significant risks
and uncertainties. These forward-looking statements are based on management's
expectations as of the date hereof, and the Company does not undertake any
responsibility to update any of these statements in the future. Actual future
performance and results could differ from that contained in or suggested by
these forward-looking statements as a result of factors set forth in this
Form 10KSB (including those sections hereof incorporated by reference from
other filings with the Securities and Exchange Commission), in particular as
set forth in the "Management's Discussion and Analysis" under Item 6.
In this form 10KSB references to "MILLENNIUM", "we", "us", and "our"
refer to MILLENNIUM PLASTICS CORPORATION.
PART I
ITEM 1. BUSINESS
(a) General Business Development
Millennium Plastics Corporation ("Millennium" or the "Company") a Nevada
corporation, formerly Aurora Corporation, through its merger with Graduated
Plastics Corporation, acquired the United States patent rights to new and
innovative polymer and coating technology invented in 1995 by Solplax Ltd. of
Ireland. International patent attorneys in Europe and the United States have
confirmed that the patent is comprehensive and durable, having been written
by the developers of the technology and a scientific team with specialization
in PVA polymers. Independent evaluations carried out in London, and Trinity
College of Dublin has also endorsed these conclusions. The plastics have the
unique and very marketable characteristic of dissolving in water and leaving
only non-toxic water and atmospheric gases. Public perception and
governmental pressures for plastics which are environmentally friendly are
projected to propel the commercial demand for this product. Millennium is a
development stage company, has no revenues to date and has raised capital for
initial development through the issuance of its securities.
Millennium has an authorized capitalization of 50,000,000 shares of
common stock, $.001 par value per share, and as of June 1, 2000 there were
23,978,000 shares outstanding.
Effective July 30, 1999, Aurora Corporation, an Oregon corporation,
formed on April 2, 1986, merged with and into Echo Services, Inc., a Nevada
corporation, formerly Clover Crest, Inc. formed in Nevada on March 31, 1999.
Echo Services, Inc. concurrent with the merger with Aurora, changed its name
to Aurora Corporation. Aurora filed its form 10SB with the Securities and
Exchange Commission on August 30, 1999, and on October 30, 1999 became
subject to the reporting requirements of the Securities Exchange Act of 1934.
On October 25, 1999 Aurora Corporation changed its name to Millennium
Plastics Corporation.
Pursuant to an Agreement and Plan of Merger dated November 23, 1999 and
effective December 6, 1999 between Graduated Plastics Corporation
("Graduated") and Millennium, all of the outstanding shares of common stock
of Graduated were exchanged for 6,750,000 shares of common restricted stock
of Millennium in a transaction in which Millennium was the surviving company.
The officers, directors, and by-laws of Millennium continued without
change as the officers, directors, and by-laws of the surviving issuer
following the merger with Graduated.
<PAGE>
On April 30, 2000 Millennium reached an agreement in principle to
acquire 100 percent of Solplax Limited, a subsidiary of SCAC Holdings Corp.
("SCAC"). Millennium will receive back the 8,000,000 restricted shares it
issued to SCAC in December of 1999 and will issue 12,000,000 restricted
shares to SCAC. It is anticipated that the acquisition will be consummated in
July of 2000. Subject to compliance with the provisions of the Securities Act
of 1933, as amended, Millennium shall take the necessary steps to enable SCAC
to distribute the 12,000,000 shares of Millennium to SCAC shareholders as a
dividend on a pro-rata basis. Because Solplax Limited currently holds the
worldwide rights (except for the United States and Ireland) to the
proprietary Solplax technology for the manufacture and sale of biodegradable
plastic products, then Millennium through this acquisition would control the
worldwide rights, with the exception of Ireland, to supplement its holding of
the U.S. rights to the Solplax technology.
Millennium is engaged in one reportable industry segment. Financial
information regarding this segment is contained in Millennium's financial
statements included in this report.
(b) Description of Business
To date and subsequent to the merger with Graduated, Millennium has
focused on the development of biodegradable plastic materials.
Product Chemistry and Characteristics
The new plastic product, termed Solplax, has its technological basis in
an improved method for the manufacture of thermoplastic polyvinyl alcohol
(PVA) in combination with other approved food grade additives which are
commonly used in commercial and consumer plastic products. Because all of the
individual components in Solplax formulations have been in commercial and
consumer products for so long, their physical properties and impacts (actual
or potential) on the environment have been globally researched and assessed.
These components have uniformly been found to be safe, non-toxic and
environmentally friendly. The chemical and biological interaction of PVA is
therefore well understood and a wide range of reference documents dating back
to the 1940's are available for consultation.
All plastic products manufactured with Solplax polymers are, and will
be, entirely biodegradable when disposed of through landfill or into the
wider environment. In the biodegradation process, the Solplax plastic
decomposes entirely into environmentally benign substances: water (H20), gas
(C02) and air (02) - the molecules necessary for photosynthesis in plants.
Articles made from Solplax polymers will biodegrade within a chemically
pre-set time frame (several weeks). At the time of disposal, the article need
only to be brought into contact with either hot or cold water depending on
the basic materials chosen to cause it to dissolve. In about four weeks the
dissolved plastic would undergo total biodigestion to carbon dioxide and
water, leaving no residues in the environment.
Pure PVA rapidly degrades in contact with water or moisture which would
render it useless for typical industrial, consumer, food and medical uses.
Therefore, Solplax is coated with a PVA polymer having novel properties. The
patented Solplax process bonds a special coating to one or both sides of the
PVA film. This coating makes the overall product impervious to liquid
dissolution for its desired-product lifetime. Solplax base polymers offer
clients an attractive range of specifications which can be tailored to their
planned end use or product application. Chemists can vary the "recipe" for
polymers using different combinations and ratios of seven basic constituent
ingredients to manufacture eight similar, but different, polymers, which
posses distinctive characteristics. This allows the granular polymer that is
produced to be specifically tailored to the end-use product which will be
manufactured from it. The characteristics which are common to all of the
Solplax polymers include:
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Water resistance until dissolution is required;
Excellent barrier to most odors and non-aqueous liquids;
Excellent characteristics for heat-sealing applications;
Patented time-controlled degrading process; and
Non-toxic, non-carcinogenic and fully biodigestible.
Solplax Manufacturing and Product Applications
The Solplax polymers can be produced on generic production machinery and
production scaled-up efficiently and economically. The Solplax plastics can
be fabricated into articles using known, standard manufacturing processes
(e.g., blow molding, injection molding, and cast extrusion) with no risk of
thermal degradation.
The Solplax family of biodegradable plastic polymers have different
physical properties and can be used to produce a variety of disposable items,
ranging from gossamer shrouds for clothing to firm eating utensils. These
also include, amongst many other items; diaper liners, slow release
fertilizer pellets, dry goods containers, garbage and compost bags, golf
tees, a wide variety of packaging products, shot gun ammunition wadding,
swizzle sticks and yokes for beverage cans. Major market sectors who are
projected to have a high level of interest in the use of Solplax products
include the retail food and beverage industry, food packaging industry, and
the military.
Marketing Approach
Plastic products are essential and pervasive in the functioning of
modern societies - even in the least economically developed countries. As the
use of plastic products, and the resulting mountains of plastic waste grow
inexorably, the challenge facing producers, consumers and governments is to
find ways to reduce the rate of growth of the "mountains" as well as to find
safe, practical methods for disposal of the plastic waste that does
accumulate. Because Solplax is degraded and rendered into harmless
by-products (dispersed water and C02) and non-toxic organic residues, it is
well positioned to play a constructive and profitable role as these problems
are faced by the responsible government authorities, and concerned
manufacturers and consumers.
Competition
The Company competes with numerous other plastic suppliers. Many of
these competitors have substantially greater resources than the Company. The
Company has been successful in finding a niche in the market based upon the
biodegradable nature of its product. Should a larger and better financed
company decide to directly compete with the Company, and be successful in its
competitive efforts, the Company's business could be adversely affected.
Trademarks and Patents
Millennium's United States Patent No. 5,948,848 was acquired under the
terms of a merger with Graduated Plastics, Inc. on December 6, 1999.
Graduated Plastics, Inc. had acquired the US Patent under the terms and
conditions of a "Patent Assignment and Royalty Agreement" entered into on
September 30, 1999 with Solplax Limited. The Patent relates to a
biodegradable plastics material and to a method for its manufacture. In
particular, the patent relates to a biodegradable plastics material
comprising a polyvinylacetate/polyvinylalcohol copolymer.
On April 30, 2000, Millennium entered into an informal agreement to
acquire 100% of the shares of Solplax Limited, an Ireland company owning
international patent rights for biodegradable plastics, with the exception of
Ireland. Upon completion of the transaction with Solplax Limited, Millennium
would have control of the international rights of Solplax Limited, excluding
Ireland, for biodegradable plastics.
In addition to the patented technology, all testing by Millennium or
others permitted to utilize Millennium's technology is subject to strict
privacy and confidentiality controls.
<PAGE>
Research and Development
Extensive research and development has been completed by Solplax Limited
prior to the acquisition by Graduated and the subsequent acquisition by
Millennium. It is anticipated that additional significant research and
development will be required to determine the applicability of Millennium
biodegradable plastic material to specific uses.
Employees
Millennium has two part time employees. The management of Millennium
believes the relationship with its employees is satisfactory.
ITEM 2. PROPERTIES
Millennium Plastics maintains its administrative offices at 5631 S.
Pecos Rd., Las Vegas 89120 under an annual lease of $7,000 per month for
approximately 6,000 square feet.
ITEM 3. LEGAL PROCEEDINGS
We are not presently a party to any material litigation, nor to the
knowledge of management is any litigation threatened against us which may
materially affect us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of our fiscal
year ended March 31, 2000.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
(a) Market Information
Our Common Stock is traded in the over-the-counter securities market
through the National Association of Securities Dealers Automated Quotation
Bulletin Board System, under the symbol "MPCO". The following table sets
forth the quarterly high and low bid prices for our Common Stock as reported
by the National Quotations Bureau. The quotations reflect inter-dealer
prices, without retail mark-up, markdown or commission, and may not
necessarily represent actual transactions.
Average Bid Average Ask
December 1999 $6.34 $7.90
January 2000 $6.56 $6.93
February 2000 $4.09 $4.56
March 2000 $3.69 $4.18
Note: The Company started trading in December 1999
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(b) Holders of Common Stock
As of March 31, 2000, we had approximately 300 stockholders of the
23,900,000 shares outstanding. The closing bid stock price on June 1, 2000
was $1.25.
(c) Dividends
We have never declared or paid dividends on our Common Stock. We intend
to follow a policy of retaining earnings, if any, to finance the growth of
the business and do not anticipate paying any cash dividends in the
foreseeable future. The declaration and payment of future dividends on the
Common Stock will be the sole discretion of the Board of Directors and will
depend on our profitability and financial condition, capital requirements,
statutory and contractual restrictions, future prospects and other factors
deemed relevant.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Actual results and events could differ materially from
those projected, anticipated, or implicit, in the forward-looking statements
as a result of the risk factors set forth below and elsewhere in this report.
With the exception of historical matters, the matters discussed herein
are forward looking statements that involve risks and uncertainties. Forward
looking statements include, but are not limited to, statements concerning
anticipated trends in revenues and net income, the date of introduction or
completion of our products, projections concerning operations and available
cash flow. Our actual results could differ materially from the results
discussed in such forward-looking statements. The following discussion of our
financial condition and results of operations should be read in conjunction
with our financial statements and the related notes thereto appearing
elsewhere herein.
Overview
Millennium Plastics Corporation ("Millennium" or the "Company"),
formerly Aurora Corporation, was incorporated on March 31, 1999 as Clover
Crest, Inc. in the State of Nevada. Millennium, through its merger with
Graduated Plastics Corporation, acquired the United States patent rights to
new and innovative polymer and coating technology invented in 1995 by Solplax
Ltd. of Ireland. International patent attorneys in Europe and the United
States have confirmed that the patent is comprehensive and durable, having
been written by the developers of the technology and a scientific team with
specialization in PVA polymers. Independent evaluations carried out in
London, and Trinity College of Dublin have also endorsed these conclusions.
Results of Operations
Period for the year ending March 31, 2000
Prior to the December 6, 1999 merger between Millennium and Graduated,
Millennium was considered a Blank Check company with virtually no operations,
and thus no financial history for the prior relevant periods.
Revenues. The Company is a development stage enterprise as defined in
Statement of Financial Accounting Standards- No. 7, and has yet to generate
any revenues. The Company is devoting substantially all of its present
efforts to: (1) developing its strategic plan of operation, (2) developing
its market, (3) obtaining sufficient capital to commence full operations, and
(4) completing research and development to determine the applicability of the
product to various uses.
<PAGE>
General and Administrative. General and administrative expenses for the
year ended March 31, 2000 were $329,924. These costs were primarily the
result of expenses related to: (i) going public, and (ii) common stock issued
in lieu of cash payments to employees and consultants. Wages were $16,000,
professional fees $199,702, travel expenses of $52,183, and administrative
expenses of $62,039.
Net loss for the Company was $485,318 for the year ended March 31, 2000.
This increase was the result of increasing activity and related additional
expenses discussed above associated with being a development stage
enterprise. $166,667 of the $485,318 was allocated to the amortization of
patent expense.
Liquidity and Capital Resources
A critical component of Millennium's operating plan impacting the
continued existence of Millennium is the ability to obtain additional
capital through additional equity and/or debt financing. We do not
anticipate generating a positive internal cash flow until such time as
Millennium can generate revenues from either license fees from its
biodegradable plastic product and/or direct sales of its product, either or
both of which may take the next few years to realize. In the event we cannot
obtain the necessary capital to pursue our strategic plan, Millennium may
have to cease or significantly curtail its operations. This would materially
impact our ability to continue operations.
The receipt of funds to the Company from Private Placement Offerings
and loans obtained through private sources are anticipated to offset the
near term cash requirements of the Company. Since inception, the Company has
financed its cash flow requirements through debt financing, issuance of
common stock for cash and services. As the Company expands its operational
activities, it may continue to experience net negative cash flows from
operations, pending receipt of sales revenues, and will be required to
obtain additional financing to fund operations through common stock
offerings and bank borrowings to the extent necessary to provide its working
capital.
Over the next twelve months, the Company intends to develop its revenues
by releasing its products under development to its target markets. However,
the Company will continue the research and development of its products,
increase the number of its employees, and expand its facilities where
necessary to meet product development and completion deadlines. The Company
believes that existing capital and anticipated funds from operations will not
be sufficient to sustain operations and planned expansion in the next twelve
months. Consequently, the Company will be required to seek additional capital
in the future to fund growth and expansion through additional equity or debt
financing or credit facilities. No assurance can be made that such financing
would be available, and if available it may take either the form of debt or
equity. In either case, the financing could have a negative impact on the
financial condition of the Company and its Stockholders.
The Company anticipates that it will incur operating losses in the next
twelve months. The Company's lack of operating history makes predictions of
future operating results difficult to ascertain. The Company's prospects
must be considered in light of the risks, expenses and difficulties
frequently encountered by companies in their early stage of development,
particularly companies in new and rapidly evolving markets such as
technology related companies. Such risks for the Company include, but are
not limited to, an evolving and unpredictable business model and the
management of growth. To address these risks, the Company must, among other
things, obtain a customer base, implement and successfully execute its
business and marketing strategy, continue to develop and upgrade its
technology and products, provide superior customer services and order
fulfillment, respond to competitive developments, and attract, retain and
motivate qualified personnel. There can be no assurance that the Company
will be successful in addressing such risks, and the failure to do so can
have a material adverse effect on the Company's business prospects,
financial condition and results of operations.
<PAGE>
New Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133 "Accounting for Derivatives
and Hedging Activities," which establishes accounting and reporting standards
for derivative instruments, including certain derivative instruments embedded
in other contracts, (collectively referred to as derivatives) and for hedging
activities. SFAS No. 133 is effective for years beginning after June 15, 2000
and requires comparative information for all fiscal quarters of fiscal years
beginning after June 15, 2000. Millennium does not expect the adoption of
this statement to have a significant impact on its results of operations,
financial position or cash flows.
Year 2000 Matters
We have had no noticeable impact as the result of the year 2000 problem.
As is the case with most other Companies using computers in their operations,
we recognize the need to ensure that our operations will not be adversely
impacted by software and/or system failures related to such "Year 2000"
noncompliance. Within the past twelve months, we have been upgrading
components of our own internal computer and related information and
operational systems and continue to assess the need for further system
redesign and believe we are taking the appropriate steps to ensure Year 2000
compliance. Based on information currently available, we believe that the
costs associated with Year 2000 compliance, and the consequences of
incomplete or untimely resolution of the Year 2000 problem, will not have a
material adverse effect on our business, financial condition and results of
operations in any given year. However, even if our internal systems are not
materially affected by the Year 2000 problem, our business, financial
condition and result of operations could be materially adversely affected
through disruption in the operation of the enterprises with which we
interact. There can be no assurance that third party computer products used
by us are Year 2000 compliant.
Since we have not commenced substantial operations, third parties non-
compliance with the Year 2000 issue will have minimal impact on us. When
contracting with new vendors, manufactures, and plants we intend to pre-
establish the third party's compliance with Year 2000 issues.
The Company has incurred minimal expenses associated with the Year 2000
Problem. As a result the Company being a Development Stage Enterprise, the
Company's computer equipment is being purchased as Year 2000 compliant, where
possible.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial Statement Schedules
appearing on page F-1 through F-8 of this Form 10-KSB
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
No Changes to Report
<PAGE>
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT.
The following table sets forth the names and positions with the Company
of the executive officers and directors of the Company. Directors will be
elected at the Company's annual meeting of stockholders and serve for one
year or until their successors are elected and qualify. Officers are elected
by the Board and their terms of office are, except to the extent governed by
employment contract, at the discretion of the Board.
NAME AGE POSITION
Paul T. Branagan 56 President, Secretary/Treasurer and
Director
William E. Lennon 54 Vice President of Product
Development and Director
James L. Arnold 66 Vice President of Operation and
Director
Donato Grieco 64 Director
Duties, Responsibilities and Experience
Paul T. Branagan (age 56) is the President, Secretary/Treasurer and a
member of the Board of Directors of the Company. Mr. Branagan graduated from
the University of Las Vegas Nevada with a B.S. in physics. From 1993 to the
present Mr. Branagan has been the President and Senior Scientist of Branagan
& Associates, Inc. From 1975 to 1993 he was the Project Manager, Assistant
Oil and Gas Division Manager and Senior Scientist of CER Corporation of Las
Vegas, Nevada.
William E. Lennon (age 54) is the Vice President of Development and a
member if the Board of Directors of the Company. Mr. Lennon was on the Dean
of Students' staff at DePauw University. After leaving DePauw he became the
Chairman of the Business Department at Davenport College. Mr. Lennon is
presently the CEO and founder of F & L Investment Corporation.
James L. Arnold (age 66) is the Vice President of Operations and a
member of the Board of Directors of the Company. Mr. Arnold graduated from
Northeastern University with a B.S. in industrial engineering. From 1997 to
the present he has worked as a management consultant. From 1993 until 1997,
Mr. Arnold served as President and CEO of Ebtron, Inc.
Donato A. Grieco (age 64) is a member of the Board of Directors of the
Company. Mr. Grieco holds a B.S. in Business & Engineering Administration
from the Massachusetts Institute of Technology of Cambridge, Massachusetts.
Since 1986, Mr. Grieco has been Vice-President of Mollenberg-Betz, Inc. of
Buffalo, New York, a major contractor in the mechanical construction
industry, specializing in refrigeration, air conditioning, heating, and
industrial process piping systems. Primarily responsible for project cost
estimating, along with vendor and sub-contractor soliciting, leading to total
project bid presentations.
Limitation of Liability of Directors
Pursuant to the Nevada General Corporation Law, our Articles of
Incorporation exclude personal liability for our Directors for monetary
damages based upon any violation of their fiduciary duties as Directors,
except as to liability for any breach of the duty of loyalty, acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, or any transaction from which a Director receives
an improper personal benefit.
<PAGE>
This exclusion of liability does not limit any right which a Director may
have to be indemnified and does not affect any Director's liability under
federal or applicable state securities laws. We have agreed to indemnify
our directors against expenses, judgments, and amounts paid in settlement
in connection with any claim against a Director if he acted in good faith
and in a manner he believed to be in our best interests.
Board of Directors Committees and Compensation
Compensation Committee Interlocks and Insider Participation
The Board of Directors does not have a Compensation Committee. Paul
Branagan, President, oversaw the compensation of our executive officers.
Board of Director's Report on Executive Compensation
General. As noted above, our Board of Directors does not have a
Compensation Committee and, accordingly, during the year ended March 31,
2000, the Board of Directors, through the President, reviewed and approved
the compensation of our executive officers.
Overall Policy; Significant Factors. The compensation decisions made by
the Board of Directors in respect of our executive officers were influenced
by two major factors. First, our start-up nature brings with it all of the
normal capital requirements to sustain growth, therefore certain stock
compensation was granted in lieu of salaries, commissions and for services
rendered. This practice may be extended into the future on a case-by-case
basis and accordingly filed with the Securities and Exchange Commission.
Finally, as we continue to mature, certain additions to the executive staff
will be required. As we are required to seek talent in outside market, we
will be required to provide a competitive compensation package.
As overall policy, however, the Board continues to believe that long-
term compensation tied to the creation of stockholder value should constitute
a significant component of the compensation to be earned by our executive
officers. In this respect, it will be the Board's policy to attempt to
restrain base cash compensation (subject to competitive pressures), while
providing the incentive for Management to increase stockholder value by
providing such officers with significant numbers of market-price stock that
will not confer value upon the officers unless and until the Company's share
price rises. The Board of Directors expects that stock options will
constitute a significant component of the compensation package provided to
executive officers.
The Board believes that cash bonuses are, at times, appropriate based
upon the performance of the Company's business compared to our internal
expectations and general business conditions.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires Millennium executive officers and directors,
and persons who beneficially own more than ten percent of Millennium's common
stock, to file initial reports of ownership and reports of changes in
ownership with the SEC. Executive officers, directors and greater than ten
percent beneficial owners are required by SEC regulations to furnish
Millennium with copies of all Section 16(a) forms they file. Based upon a
review of the copies of such forms furnished to Millennium and written
representations from Millennium executive officers and directors, Millennium
believes that during fiscal 2000 all forms 3 and 4 were filed on a timely
basis for Millennium executive officers and directors.
<PAGE>
ITEM 10. EXECUTIVE COMPENSATION
The following table sets forth the cash compensation of the Company's
executive officers and directors during the fiscal year since inception of
the Company. The remuneration described in the table does not include the
cost to the Company of benefits furnished to the named executive officers,
including premiums for health insurance and other benefits provided to such
individual that are extended in connection with the conduct of the Company's
business. The value of such benefits cannot be precisely determined, but the
executive officers named below did not receive other compensation in excess
of the lesser of $50,000 or 10% of such officer's cash compensation.
Summary Compensation Table
Long Term
Annual Compensation Compensation
Other Annual Restricted
Name and Principal Year Salary Bonus Compensation Stock Options
Position
Paul T. Branagan 2000 $16,000 -0- -0- -0- -0-
William E. Lennon 2000 -0- -0- -0- -0- -0-
James L. Arnold 2000 -0- -0- -0- -0- -0-
Donato Grieco 2000 -0- -0- -0- -0- -0-
Compensation of Directors
All directors will be reimbursed for expenses incurred in attending Board
or committee meetings.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners.
The following table sets forth certain information as of March 31, 1999
with respect to the beneficial ownership of common stock by (i) each person
who to the knowledge of the Company, beneficially owned or had the right to
acquire more than 5% of the Outstanding common stock, (ii) each director of
the Company and (iii) all executive offices and directors of the Company as a
group.
Number Percent
Name of Beneficial Owner of Shares Of Class
(1) (2)
Paul T. Branagan 538,500 2%
William E. Lennon 120,000 1%
James L. Arnold 100,000 0%
Donato Grieco 150,000 1%
SCAC Holdings Corp 8,000,000 33%
All Directors & Officers 908,500 4%
as a Group
(1) As used in this table, "beneficial ownership" means the sole or shared
power to vote, or to direct the voting of, a security, or the sole or
shared investment power with respect to a security (i.e., the power to
dispose of,or to direct the disposition of, a security). In addition, for
purposes of this table, a person is deemed, as of any date, to have
"beneficial ownership" of any security that such person has the right to
acquire within 60 days after such date.
(2) Figures are rounded to the nearest percentage. Less than 1% is reflected
as 0%.
<PAGE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 30, 1999, Aurora Corporation, an Oregon corporation, merged with
and into Echo Services, Inc., a Nevada corporation, (formerly Clover Crest,
Inc.) with Echo Services, Inc. being the survivor. Echo Services, Inc.
concurrent with the merger with Aurora, changed its name to Aurora
Corporation. On October 25, 1999 Aurora Corporation changed its name to
Millennium Plastics Corporation.
Pursuant to an Agreement and Plan of Merger dated November 23, 1999 and
effective December 6, 1999 between Graduated Plastics Corporation
("Graduated") and Millennium, all of the outstanding shares of common stock
of Graduated were exchanged for 6,750,000 shares of common restricted stock
of Millennium in a transaction in which Millennium was the surviving company.
Graduated owned the patent rights to biodegradable plastic, which rights were
obtained from Solplax Limited, a wholly owned subsidiary of SCAC Holdings on
September 30, 1999. Concurrent with the merger, Paul Branagan a director of
SCAC was nominated a director and elected president of Millennium. Under the
Graduated/Solplax agreement, Graduated was to pay a royalty fee of 5% of the
net receipts received by Graduated. On December 1, 1999 Solplax and Graduated
entered into an "Addendum to Patent Assignment and Royalty Agreement" wherein
Graduated would cause the transfer of $300,000 and 8,000,000 shares of
Millennium common stock in exchange for the termination of the 5% royalty
provision in the Agreement of September 30, 1999.
Millennium uses the management and office services of a company owned by
Paul Branagan, President and a director. Amounts paid for the year ended
March 31, 2000 were $29,200, which approximated the fair market value of
those services.
Subsequent Event
On April 30, 2000 Millennium reached an agreement in principle to
acquire 100 percent of Solplax Limited, a subsidiary of SCAC Holdings Corp.
("SCAC"). Millennium will receive back the 8,000,000 restricted shares it
issued to SCAC in December of 1999 and will issue 12,000,000 restricted
shares to SCAC, subject to registration rights. It is anticipated that the
acquisition will be consummated in July of 2000. Subject to compliance with
the provisions of the Securities Act of 1933, as amended, Millennium shall
take the necessary steps to enable SCAC to distribute the 12,000,000 shares
of Millennium to SCAC shareholders as a dividend on a pro-rata basis. Because
Solplax Limited currently holds the worldwide rights (except for the United
States and Ireland) to the proprietary Solplax technology for the manufacture
and sale of biodegradable plastic products, then Millennium through this
acquisition would control the worldwide rights, with the exception of
Ireland, to supplement its holding of the U.S. rights to the Solplax
technology.
Millennium entered into an agreement to issue 63,000 shares of stock
(7,000 shares a month for April through December 2000) to a company that will
provide professional services.
<PAGE>
ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this Report
1. Financial Statements:
A. INDEX TO FINANCIAL STATEMENTS
1. Independent Auditors Report F-1
2. Financial Statements:
Balance Sheet F-2
Statement of Operation F-3
Statement of Changes in Stockholders' F-4
Statement of Cash Flows F-5
Notes to Financial Statements F-6 - F-7
All schedules are omitted because they are not applicable or
the required information is shown in the financial statements or
notes thereto.
2. During the fiscal year March 31, 2000 the Company filed the
following 8-K's.
8-K filed December 6, 1999
8-K filed December 8, 1999
3. Subsequent to the end of the fiscal year, the Company filed the
following reports on Form 8-K
NONE
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on our behalf by the undersigned, thereunto duly authorized.
MILLENNIUM PLASTICS CORPORATION DATED: June 30, 2000
By: /s/ Paul Branagan
Paul Branagan, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Paul Branagan President June 30, 2000
Paul Branagan
/s/ William Lennon Director June 30, 2000
William Lennon
/s/ James Arnold Director June 30, 2000
James Arnold
/s/ Donato Grieco Director June 30, 2000
Donato Grieco
<PAGE>
Millennium Plastics Corporation
Index To Financial Statements
Report of Independent Certified Public Accountants F-1
Balance Sheets, March 31, 2000 and 1999 F-2
Statement of Operations for the Years Ended March 31, 2000, 1999,
and 1998 and from inception (April 2, 1986) to March 31, 2000 F-3
Statement of Stockholders' Equity from inception (April 2, 1986)
to March 31, 2000 F-4
Statement of Cash Flows for the Year Ended March 31, 2000, 1999,
and 1998 and from inception (April 2, 1986) to March 31, 2000 F-5
Notes to Financial Statements F-6 - F10
<PAGE>
Report of Independent Certified Public Accountants
Stockholders and Directors
Millennium Plastics Corporation
(A Development Stage Company)
We have audited the accompanying balance sheets of Millennium Plastics
Corporation (A Development Stage Company) as of March 31, 2000 and 1999 and
the related statements of operations, stockholders' equity and cash flows for
each of the years in the three year period ended March 31, 2000 and for the
period from inception (April 2, 1986) to March 31, 2000. These financial
statements are the responsibility of the management of the Company. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Millennium Plastics
Corporation (A Development Stage Company) as of March 31, 2000 and 1999 and
the results of their operations and their cash flows for each of the years in
the three year period ended March 31, 2000 and for the period from inception
(April 2, 1986) to March 31, 2000 in conformity with generally accepted
accounting principles.
Weaver & Martin, LLC
Kansas City, Missouri
June 13, 2000
<PAGE>
<TABLE>
Millennium Plastics Corporation
(A Development Stage Company)
Balance Sheets
March 31, March 31,
2000 1999
----------- ----------
<S> <C> <C>
Assets
Current assets:
Cash $ 585,854 $ --
----------- ------------
Total current assets 585,854 --
----------- ------------
Equipment 1,005 --
Accumulated depreciation 201 --
----------- ------------
804 --
----------- ------------
Other assets:
Intangible asset-patent, net of
accumulated amortization of
$166,667 in 2000 9,833,333 --
----------- ------------
Total assets $10,419,991 $ --
============ ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 154,138 $ --
Accrued liabilities 7,672 --
------------ ------------
Total current liabilities 161,810 --
------------ ------------
Stockholders' equity:
Common stock $.001 par value,
50,000,000
Shares authorized; 23,900,000 at
3/31/00
and 17,000,000 at 3/31/99 shares 23,900 17,000
issued and outstanding
Paid in capital 10,736,599 --
Deficit accumulated during the (502,318) (17,000)
development stage ---------- ---------
Total stockholders' equity 10,258,181 --
---------- ---------
Total liabilities and
stockholders' equity $10,419,991 $ --
=========== ============
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Millennium Plastics Corporation
(A Development Stage Company)
Statement Of Operations
From
Inception
April 2,
1986
to March
Year Ended March 31, 31,
---------------------------------- -------
2000 1999 1998 2000
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Revenues $ -- $ -- $ -- $ --
Amortization 166,667 -- -- 166,667
of patent
Wages 16,000 -- -- 16,000
Professional 199,702 -- -- 199,702
fees
Travel 52,183 -- -- 52,183
Administrative 62,039 -- -- 79,039
expense -------- ---------- ----------- -----------
Loss from 496,591 -- -- 513,591
operations
Interest 11,273 -- -- 11,273
income
-------- ---------- ----------- -------------
Net loss $ (485,318) $ -- $ -- $ (502,318)
============ =========== ============ =============
Net loss per
share of
common stock-
basic and
diluted $ (0.02) $ -- $ -- $ (0.03)
=========== ============ ============= ============
Weighted
average shares
outstanding 20,462,500 17,000,000 17,000,000 17,363,000
=========== ============ ============= ============
</TABLE>
<PAGE>
<TABLE>
See notes to financial statements
Millennium Plastics Corporation
(A Development Stage Company)
Statement of Stockholders' Equity
Common Stock Paid In Treasury Deficit
--------------- Capital Stock Accumu-
-------- --------- lated
During
The
Develop-
ment
Stage
Per Shares Amount -------
Share
-------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Inception -- $ -- $ -- $ -- $ --
Shares issued for
Marketing $ 0.001 17,000,000 17,000 -- -- --
Net loss for the
years ended
March 31, 1987 -- -- -- -- (17,000)
----------- -------- --------- -------- --------
Balance March 31, 17,000,000 17,000 -- -- (17,000)
1999
Activity to March -- -- -- -- --
31, 1998
------------ -------- --------- -------- --------
Balance March 31, 17,000,000 17,000 -- -- (17,000)
Activity to March -- -- -- -- --
31, 1999
Balance March 31, 17,000,000 17,000 -- -- (17,000)
1999
Shares issued for $0.050 100,000 100,000 4,900 -- --
services
Shares issued for
acquisition
Of Graduated $0.152 6,750,000 6,750 1,019,249 -- --
Plastics, Inc.
Shares
contributed by a
Shareholder -- -- 8,000 (8,000) --
Shares issued for $1.213 -- -- 9,692,000 8,000 --
patent
Shares issued for $0.250 50,000 50 12,450 -- --
services
Net loss for the
year ended
March 31, 2000 -- -- -- -- (485,318)
---------- -------- ----------- ----- ---------
Balance March 31, 23,900,000 $ 23,900 $10,736,599 $ -- $(502,318)
2000 ========== ======== =========== ===== =========
</TABLE>
<PAGE>
<TABLE>
See notes to financial statements
Millennium Plastics Corporation
(A Development Stage Company)
Statement Of Cash Flows
Year Ended March 31, From
--------------------- Inception
April 2,
1986
to March
2000 1999 1998 31,2000
----------- ----------- -------- ---------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net loss $ (485,318) $ -- $ -- $ (502,318)
Adjustments to
reconcile net loss to
cash used by
operating activities:
Depreciation and 166,868 -- -- 183,868
amortization
Issuance of stock 17,500 -- -- 17,500
for services
Changes in assets and
liabilities-
Accounts payable 74,808 -- -- 74,808
Accrued liabilities 7,672 -- -- 7,672
--------- --------- ----------- ----------
Cash used in operating (218,470) -- -- (218,470)
activities --------- ---------- ------------- ----------
Investing activities:
Purchase of equipment (1,005) -- -- (1,005)
Cash used in investing (1,005) -- -- (1,005)
activities
Financing activities:
Payments on acquired (220,670) -- -- (220,670)
patent
Stock issued for 1,025,999 -- -- 1,025,999
acquisition
----------- ------------- -------- ----------
Cash provided from 805,329 -- -- 805,329
financing activities
---------- ------------- --------- -----------
Increase in cash and cash 585,854 -- -- 585,854
equivalents
Cash and cash -- -- -- --
equivalents, beginning
----------- ------------- ---------- ----------
Cash and cash $ 585,854 $ -- $ -- $ 585,854
equivalents, end
========== ============= ========== ==========
Interest paid $ -- $ -- $ -- $ --
Income tax paid -- -- -- --
</TABLE>
See notes to financial statements
<PAGE>
Millennium Plastics Corporation
(A Development Stage Company)
Notes to Financial Statements
Note 1 - Summary of Significant Accounting Policies
Organization
Effective July 30, 1999, Aurora Corporation, an Oregon corporation,
formed on April 2, 1986, merged with and into Echo Services, Inc., a
Nevada corporation, formerly Clover Crest, Inc. formed in Nevada on
March 31, 1999. Echo Services, Inc., concurrent with the merger with
Aurora, changed its name to Aurora Corporation. Aurora filed its form
10SB with the Securities and Exchange Commission on August 30, 1999, and
on October 30, 1999 became subject to the reporting requirements of the
Securities and Exchange Act of 1934. On October 25, 1999, Aurora
Corporation changed its name to Millennium Plastics Corporation.
The Company owns patent rights to market, manufacture, and distribute
Solplax, a fully biodegradable plastic product.
Use of Estimates
The preparation of 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 notes. Actual results could differ from those estimates, but
management does not believe such differences will materially affect the
Company's financial position, results of operations, or cash flows.
Cash Equivalents
The Company's cash equivalents consist principally of any financial
instrument with maturities of generally three months or less.
Equipment
Equipment is carried at cost. Depreciation is on the straight-line
method, based on the useful life (5 years) of the asset.
Maintenance and repairs are charged to operations as incurred.
Accounting Method
The Company recognizes income and expense on the accrual method of
accounting.
Income Taxes
The Company accounts for its income taxes using Statement of Financial
Accounting Standards (SFAS) No. 109, Accounting for Income Taxes, which
requires recognition of deferred tax liabilities and assets for expected
future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the differences between
the financial statements and tax bases of assets and liabilities using
enacted tax rates in effect for the year in which the differences are
expected to reverse.
<PAGE>
Millennium Plastics Corporation
(A Development Stage Company)
Notes to Financial Statements
Intangible Asset - Patent
The cost of the patent acquired is being amortized on the straight-line
method over fifteen years.
Estimated Fair Value of Financial Instruments
The information set forth below provides disclosure of the estimated
fair value of the Company's financial instruments presented in
accordance with the requirements of Statement of Financial Accounting
Standards (SFAS) No. 107. Fair value estimates discussed herein are
based upon certain market assumptions and pertinent information
available to management as of March 31, 2000. Since the reported fair
values of financial instruments are based upon a variety of factors,
they may not represent actual values that could have been realized as of
March 31, 2000 or that will be realized in the future.
The respective carrying value of certain on-balance sheet financial
instruments approximated their fair values. These financial instruments
include cash and accounts payable. Fair values were assumed to
approximate carrying values for these financial instruments since they
are short-term in nature and their carrying amounts approximated fair
values or they are receivable or payable on demand.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of cash. At various
times during the year, the Company has cash balances in excess of
federally insured limits. The Company maintains its cash, which
consists primarily of demand deposits, with high quality financial
institutions, which the Company believes limits risk.
Net Loss Per Common Share
The Company computes loss per share in accordance with SFAS No. 128,
Earnings Per Share. This standard requires dual presentation of basic
and diluted earnings per share on the face of the income statement for
all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the diluted earnings
per share computation. Net loss per common share (basic and diluted) is
based on the net loss divided by the weighted average number of common
shares outstanding during the year.
The Company's potentially issuable shares of common stock pursuant to an
outstanding payable (see Note 5) that will be paid in stock are excluded
from the Company's diluted computation, as their effect would be anti-
dilutive.
<PAGE>
Millennium Plastics Corporation
(A Development Stage Company)
Notes to Financial Statements
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. SFAS
No. 133 requires companies to recognize all derivatives contracts as
either assets or liabilities in the balance sheet and to measure them at
fair value. If certain conditions are met, a derivative may be
specifically designated as a hedge, the objective of which is to match
the timing of the gain or loss recognition on the hedging derivative
with the recognition of (i) the changes in the fair value of the hedged
asset or liability that are attributable to the hedged risk or (ii) the
earnings effect of the hedged forecasted transaction. For a derivative
not designated as a hedging instrument, the gain or loss is recognized
in income in the period of change. On June 30, 1999, the FASB issued
SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133.
SFAS No. 133 as amended by SFAS No. 137 is effective for all fiscal
quarters of fiscal years beginning after June 15, 2000. Historically,
the Company has not entered into derivatives contracts to hedge existing
risks or for speculative purposes. Accordingly, the Company does not
expect adoption of the new standard to affect its financial statements.
Note 2 - Development Stage Company
The Company is a development stage company. It is concentrating
substantially all of its efforts in raising capital and establishing
business operations in order to generate significant revenues.
Note 3 - Acquisition
On December 6, 1999, MPCO acquired Graduated Plastics, Inc. (GPI) in a
business combination accounted for as a purchase. GPI was a
developmental stage company with no business operations. The total cost
of acquisition was $1,025,999 which represented the fair market value of
assets acquired. MPCO issued 6,750,000 shares of stock for the
outstanding stock of GPI and the majority shareholder of MPCO
contributed as paid in capital 8,000,000 shares of MPCO. The difference
between the par value of MPCO stock and the assets acquired was recorded
as paid in capital for MPCO. GPI was dissolved after the merger.
If the acquisition would have occurred on April 1, 1997 there would be
no activity in fiscal year ending March 31, 1998, and 1999. Fiscal year
ending March 31, 2000 would have a loss of $486,819 and loss per share
basic and diluted would be $.02.
<PAGE>
Millennium Plastics Corporation
(A Development Stage Company)
Notes to Financial Statements
Note 4 - Intangible Asset - Patent
On September 30, 1999, Graduated Plastics, Inc. entered into a mandatory
agreement with SCAC Holdings, Corp. assigning a United States patent in
consideration for a fee equal to 5% of the net receipts received by the
assignee.
On December 1, 1999 MPCO added an addendum to the patent assignment and
royalty agreement whereas SCAC Holdings, Corp. received 8,000,000 shares
of MPCO stock and a $300,000 payable for consideration for the
termination of the 5% royalty.
The assigned value to the transaction of $10,00,000 ($8,000 stock,
$9,692,000 paid in capital, and $300,000 payable) was determined by
management after discounts by determining the estimated fair market
value of the publicly traded market and the value that would be received
if the shares were sold.
At March 31, 2000, approximately $79,000 remained unpaid in the payable
to SCAC Holdings Corp.
Note 5 - Stock Transactions
Stock was issued for consulting services for an assigned value of $5,000
for 100,000 shares. Stock was issued for legal services for an assigned
value of $12,500 for 50,000 shares.
Pursuant to an agreement in December 1999, MPCO will place in escrow
120,000 shares of stock to be issued to a Company performing investment
relations. The agreement called for the immediate vesting of 36,000
shares and 7,000 shares each month for 12 month to be issued based on
the performance of services. At March 31, 2000 no shares were issued,
although 57,000 shares were earned. The shares were issued subsequent
to year-end. A payable was recorded for the earned shares. The
services were assigned a value equal to $1.25 per share. If the shares
would have been issued prior to March 31, 2000, the loss per share would
remain at $.02 per basic and diluted outstanding share.
Note 6 - Income Taxes
The Company accounts for income taxes under the provision of Statement
of Financial Accounting Standards (SFAS) No. 109, Accounting for Income
Taxes. SFAS No. 109 is an asset and liability approach for computing
deferred income taxes.
<PAGE>
Millennium Plastics Corporation
(A Development Stage Company)
Notes to Financial Statements
As of March 31, 2000 the Company had a net operating loss carry forward
for Federal income tax reporting purposes amounting to approximately
$318,000 which expire in to 2015.
The components of the deferred tax asset as of March 31, 2000 was as
follows:
2000
----------
Benefit of net operating loss carry forwards. $ 108,000
Less valuation allowance. 108,000
----------
Net deferred tax assets. $ --
==========
As of March 31, 2000 sufficient uncertainty exists regarding the
realizability of these operating loss carry forwards and, accordingly, a
valuation allowance has been established.
Note 7 - Contingency
The company has an agreement to issue 63,000 shares of stock (7,000
shares a month for April through December 2000) to a company that will
provide professional services.
Note 8 - Related Party Transactions
The Company uses the management and office services of a company owned
by an officer. Amounts paid for the services for the year ended March
31, 2000 was $29,200, which approximated the fair market value of those
services.
Note 9 - Subsequent Events
On April 30, 2000 MPCO entered into an agreement with SCAC Holdings
Corp. (SCAC) to acquire all of the outstanding stock of Solplax Limited,
a wholly owned subsidiary of SCAC. MPCO will receive back the 8,000,000
restricted shares they issued to SCAC in December 1999 and will issue
12,000,000 restricted shares to SCAC. For the six month period ended
April 30, 2000 Solplax had no revenue, a loss of approximately $28,000,
and assets of approximately $100,000. It is anticipated the acquisition
will be consummated in the second quarter of fiscal year 2001.
