U.S. 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 for the Fiscal Year Ended December 31, 1999.
Commission File No. 0-20598
e Personnel Management.com
(Name of Small Business Issuer as specified in its Charter)
NEVADA 75-2293489
(State or other jurisdiction of (IRS Employer
incorporation organization) Identification No.)
120 St. Croix Avenue
(Address of principle executive offices, including zip code)
321-799-3842
(Registrant's telephone number, including area code)
Securities Registered under Section 12(b) of the Act: None
Securities Registered under Section 12(g) of the Act:
Common Stock, $0.001 par value, traded on the OTC Electronic Bulletin Board
Preferred Stock, $0.01 par value
Indicate by check mark whether the registrant (1) has filed all reports
required 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 of such filing
requirements for the past 90 days. Yes [x ] No [ ]
Indicate by check by mark if disclosure of delinquent filers in response 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-KSB. [ ]
Registrant's revenues for its most recent fiscal year were $82,972.
Aggregate market value of Common Stock, $0.001 par value, held by
non-affiliates of the registrant as of May 12, 2000: $9,979,613. Number
of shares of Common Stock, $0.001 par value, outstanding as of May 12, 2000:
19,959,225.
<PAGE>
ANNUAL REPORT ON FORM 10-KSB
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
TABLE OF CONTENTS
PAGE
PART I
Item 1. Business
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders
PART II
Item 5. Market for the Registrants' Common Equity and Related
Stockholder matters
Item 6. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 7. Financial Statements
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
PART III
Item 9. Directors and Executive Officers of the Registrant
Item 10. Executive Compensation
Item 11. Security Ownership of Certain Beneficial Owners and Management
Item 12. Certain Relationships and Related Party Transactions
PART IV
Item 13. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
<PAGE>
PART I
Item 1. Description of Business
e Personnel Management.com (formerly Definition, Ltd.) (the "Company") was
incorporated in 1989 under the name "Stone Grill International, Inc.", under
the laws of the State of Nevada. The authorized capital stock of the
Corporation consists of 50,000,000 shares of Common Stock, $0.001 par value
per share and 5,000,000 shares of Preferred Stock, $0.01 par value per share.
On May 5, 2000, the Company filed amended articles of incorporation with the
State of Nevada to change its name to e Personnel Management.com.
The Company currently is an active acquisition company recently directed in
the Professional Employment Services Industry. There is, of course, no
assurance that the Company will be successful in its business.
The Company's wholly owned subsidiary, Definition Technologies,Inc., (DTI) a
Texas corporation, operates a community (low-power) television station
transmitting from West Palm Beach, Florida, WINQ-TV (WINQ) Channel 19. WINQ
also operates as a traditional television station, deriving revenues through
sales of advertising time.
Business Development
References to the "Company" include, WINQ-TV and DTI unless the context
indicates otherwise.
WINQ-TV. Through is subsidiary, DTI, the Company operates a community
(low power) television station, transmitting from West Palm Beach, Florida,
WINQ-TV Channel 19. The transmitter has an effective radius of approximately
25 miles, and a household audience of approximately 260,000 homes in a
population area containing approximately 1,000,000 people. WINQ-TV operates
under a permit granted by the Federal Communications Commission. WINQ-TV
broadcasts 24 hours a day, offering a broad line of programming, which
includes catalog sales, infomercials, movies and sitcoms. The Company's
signal is carried by the local cable operator. WINQ-TV sells television
broadcast time and advertising time, produces infomercials and arranges for
their production by third parties. Additionally, the Company makes
duplicates of, and edits, film from its film library for sale of footage,
documentaries, movies, newsreels and educational film. Effective June 30,
1999, the Company's management elected to discontinue the operations of this
business.
Industry History of Community Television. Community, or low power,
television is a relatively new broadcasting category created by the FCC in
the early 1980s. Community television stations, with their narrow geographic
coverage, usual unaffiliated status and local programming focus, are becoming
a more important part of the current broadcasting mix. While able to cover,
on average, only between five and 20 miles with their signals, community
television stations have been able to expand greatly their coverage by having
their signals included in local and regional cable systems. Entry into the
community television industry requires substantially less capital than entry
into the high-power television industry. There are currently approximately
1,700 community television stations licensed by the FCC, with approximately
the same number of applications for new licenses now pending with the FCC.
Community television stations may be either affiliated with one of the
national networks (ABC, NBC, CBS, FOX, UPN or WB) or may be independent.
The Company does not anticipate that its community television station will
become a network affiliate.
Programming. Lacking a national network affiliation, independent community
television stations, in general, depend heavily on independent third parties
for programming. Programs obtained from independent sources consist
primarily of syndicated television shows, many of which have been shown
previously on a network, and syndicated feature films, which were either
made for network television or have been exhibited previously in motion
picture theaters (most of which films have been shown previously on network
and cable television). Syndicated programs are sold to individual stations to
be broadcast one or more times. Independent television stations generally
have large numbers of syndication contracts; each contract is a license for
a particular series or program that usually prohibits licensing the same
programming to other television stations in the same market. A single
syndication source may provide a number of different series or programs.
Licenses for syndicated programs are often offered for cash sale or on a barter
or cash-plus-barter basis to stations. In the case of a cash sale, the station
purchases the right to broadcast the program or a series of programs, and sells
advertising time during the broadcast. The cash price of such programming
varies, depending on the perceived desirability of the program and whether it
comes with commercials that must be broadcast (a cash-plus-barter basis).
Bartered programming is offered to stations without charge, but comes with a
greater number of commercials that must be broadcast, and, therefore, with
less time available for sale by the station. Recently, the amount of
bartered and cash-plus-barter programming broadcast industry-wide has
increased substantially.
WINQ-TV has, to date, relied on the use of its film library and the use of a
third party's film library free-of-charge, rather than acquiring programming
from third parties. It can be expected that this method of programming will
continue as the Company's Internet Video Streaming business matures. It is
contemplated that WINQ-TV would, at some time in the future, employ a
broadcast format featuring segments of 5 to 15 minutes in length, ranging
from abridged movies to documentaries to standard commercials to
infomercials, some of which can be expected to be produced by the Company and
to promote products being marketed by the Company.
Business Strategy. It is the Company's current intention for WINQ-TV's
programming to evolve over the next two years. That is, the Company expects
that WINQ-TV would, in the future, employ a broadcast format featuring
segments of 5 to 15 minutes in length, ranging from abridged movies to
documentaries to standard commercials to infomercials, some of which can be
expected to be produced by the Company and to promote products being marketed
by the Company.
Regulation
Community (Low Power) Television
General Television broadcasting operations are subject to the jurisdiction of
the FCC under the Communications Act. The Communications Act empowers the
FCC, among other things, to issue, revoke or modify broadcast licenses, to
assign frequencies, to determine the locations of stations, to regulate the
broadcasting equipment used by stations, to establish areas to be served, to
adopt such regulations as may be necessary to carry out the provisions of the
Communications Act and to impose certain penalties for violation of its
regulations. The Company's currently operating community television station,
as well as any future stations, is subject to a wide range of technical,
reporting and operational requirements imposed by the Communications Act and
by FCC rules and policies.
The Communications Act provides that a license may be granted to any applicant
if the public interest, convenience and necessity will be served thereby,
subject to certain limitations, including the requirement that the FCC
allocate licenses, frequencies, hours of operation and power in a manner that
will provide a fair, efficient and equitable distribution of service
throughout the United States. Television licenses generally are issued for
five-year terms. Upon application, and in the absence of a conflicting
application that would require the FCC to hold a hearing, or questions as to
the licensee's qualifications, television licenses have usually been renewed
for additional terms without a hearing by the FCC. An existing license
automatically continues in effect once a timely renewal application has been
filed until a final FCC decision is issued.
Under existing FCC regulations governing multiple ownership of broadcast
stations, a license to operate a television or radio station generally will
not be granted to any party (or parties under common control) if such party
directly or indirectly owns, operates, controls or has an attributable
interest in another television or radio station serving the same market or
area. The FCC, however, is favorably disposed to grant waivers of this rule
for certain radio station, television station combinations in the top 25
television markets, in which there will be at least 30 separately owned,
operated and controlled broadcast licenses, and in certain other circumstances.
FCC regulations further provide that a broadcast license will not be granted
if that grant would result in a concentration of control of radio and
television broadcasting in a manner inconsistent with the public interest,
convenience or necessity. FCC rules generally deem such concentration of
control to exist if any party, or any of its officers, directors or
shareholders, directly or indirectly, owns, operates, controls or has an
attributable interest in more than 12 television stations, or in television
stations capable of reaching, in the aggregate, a maximum of 25% of the
national audience. This percentage is determined by the DMA market ranking
of the percentage of the nation's television households considered within
each market. Because of certain limitations of the UHF signal, however, the
FCC will attribute only 50% of a market's DMA reach to owners of UHF
stations for the purpose of calculating the audience reach limits. The
Company will not approach such limits for the foreseeable future. To
facilitate minority group participation in radio and television broadcasting,
the FCC will allow entities with attributable ownership interests in stations
controlled by minority group members to exceed the ownership limits.
The FCC's multiple ownership rules require the attribution of the licenses
held by a broadcasting company to its officers, directors and certain of its
shareholders, so there would ordinarily be a violation of FCC regulations
where an officer, director or such a shareholder and a television broadcasting
company together hold interests in more than the permitted number of stations
or more than one station that serves the same area. In the case of a
corporation controlling or operating television stations, such as the
Company, there is attribution only to shareholders who own 5% or more of the
voting stock, except for institutional investors, including mutual funds,
insurance companies and banks acting in a fiduciary capacity, which may own
up to 10% of the voting stock without being subject to such attribution,
provided that such entities exercise no control over the management or
policies of the broadcasting company.
The FCC has recently begun a proceeding to consider liberalization of the
various TV ownership restrictions described above, as well as changes (not
all of which would be liberalizing in effect) in the rules for attributing
the licenses held by an enterprise to various parties. The Company is unable
to predict the outcome of these proceedings.
The Communications Act and FCC regulations prohibit the holder of an
attributable interest in a television station from having an attributable
interest in a cable television system located within the coverage area of
that station. FCC regulations also prohibit the holder of an attributable
interest in a television station from having an attributable interest in a
daily newspaper located within the predicted coverage area of that station.
The Communications Act limits the amount of capital stock that aliens may own
in a television station licensee or any corporation directly or indirectly
controlling such licensee. No more than 20% of a licensee's capital stock
and, if the FCC so determines, no more than 25% of the capital stock of a
company controlling a licensee, may be owned or voted by aliens or their
representatives. Should alien ownership exceed this limit, the FCC may
revoke or refuse to grant or renew a television station license or approve
the assignment or transfer of such license.
The Communications Act prohibits the assignment of a broadcast license or
the transfer of control of a licensee without the prior approval of the FCC.
Legislation was introduced in the past that would impose a transfer fee on
sales of broadcast properties. Although that legislation was not adopted,
similar proposals, or a general spectrum licensing fee, may be advanced and
adopted in the future. Recent legislation has imposed annual regulatory fees
applicable to the Company.
The foregoing does not purport to be a complete summary of all of the
provisions of the Communications Act or regulations and policies of the FCC
thereunder. Reference is made to the Communications Act, such regulations
and the public notices promulgated by the FCC.
Other Regulations. The Federal Trade Commission, among other regulatory
agencies, imposes a variety of requirements that affect the business and
operations of broadcast stations. From time to time, proposals for
additional or revised requirements are considered by the FCC, numerous other
Federal agencies and Congress. The Company is unable to predict future
Federal requirements or what impact, if any, any such requirements may have
on the Company's television station.
Competition
Community (Low Power) Television. Community television stations compete for
advertising revenue in their respective markets, primarily with other
broadcast television stations and cable television channels, and compete with
other advertising media, as well. Such competition is intense. In addition,
competition for programming and management personnel is severe. The Company
expects that WINQ-TV will continue to be able to operate successfully in such
an environment, although there is no assurance that such will be the case.
Employees
The Company employed approximately twenty persons at its television station
until its operations were discontinued in June 1999, and three persons at
corporate headquarters, all of whom are officers of the Company. Currently,
the Company contracts with outside parties for other services required to be
performed by the Company, as needed.
Risk Factors
Continued Control by Existing Management
The Company's management currently owns a substantial stake in the Company's
outstanding Common Stock. Accordingly, new shareholders will lack an
effective vote with respect to the election of directors and other corporate
matters.
Dependence on Executive Officers
The Company is highly dependent on the services of its officers. Attracting
and retaining qualified personnel is critical to the Company's business plan.
No assurances can be given that the Company will be able to retain or attract
such qualified personnel or agents. Should the Company be unable to attract
and retain qualified personnel necessary, the ability of the Company to
implement its business plan successfully would be limited.
Potential Fluctuations in Quarterly Results
The Company's operating results have varied on a quarterly basis during its
limited operating history, and the Company expects to experience significant
fluctuation in future quarterly operating results. Such fluctuations have
been and may in the future be caused by numerous factors, many of which are
outside of the Company's control. The Company believes that period to period
comparisons of its results of operations will not necessarily be meaningful
and should not be relied upon as an indication of future performance. Also,
if is likely that in some future quarter or quarters, the Company's operating
results will be below the expectations of public market analysts and investors.
In such an event, the price of the Company's Common Stock would be materially
and adversely affected.
Risks Concerning Community (Low Power) Television
Competition. Community (low power) television stations compete for
advertising revenue in their respective markets, primarily with other
broadcast television stations and cable television channels, and compete with
other advertising media, as well. Such competition is intense. In addition,
competition for programming and management personnel is severe. Nevertheless,
the Company expects that WINQ-TV will continue to be able to operate
successfully in such an environment, although there is no assurance that such
will be the case.
Government Regulation. Television broadcasting operations are subject to the
jurisdiction of the FCC under the Communications Act. The Communications Act
empowers the FCC to issue, revoke or modify broadcast licenses, to assign
frequencies, to determine the locations of stations, to regulate the
broadcasting equipment used by stations, to establish areas to be served, to
adopt such regulations as may be necessary to carry out the provisions of the
Communications Act and to impose certain penalties for violation of its
regulations. The Company's television station is subject to a wide range of
technical reporting and operational requirements. There is no assurance that
the Company will be able to comply with such requirements in the future.
Similarly, the FTC, among other regulatory agencies, imposes a variety of
requirements that affect the business and operations of broadcast stations.
Proposals for additional or revised requirements are considered from to time
by the FCC, other regulatory agencies and Congress. The Company is unable to
predict what new or revised Federal requirements may result from such
consideration or what impact, if any, such requirements might have upon the
operation of a television station operated by the Company.
Item 2. Description of Property
None.
Item 3. Legal Proceedings
The Company is not currently engaged in any legal proceeding, nor, to the
Company's knowledge, is any suit or other legal action pending or threatened.
Item 4. Submission of Matters to Vote of Security Holders
No matters were submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year ended December 31, 1999.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters
(a) Market Information
The Common Stock of the Company is traded on the OTC Electronic Bulletin
Board under the symbol "DFNL". The range of high and low bid quotations for
each quarterly period during the years ended December 31, 1999 and 1998, and
the quarter ended March 31, 2000, as reported by the OTC Electronic Bulletin
Board, is set forth in the table below.
Quarter Ended High Low
- ------------------ ------ ------
March 31, 1998 .38 .41
June 30, 1998 .26 .29
September 30, 1998 .09 .10
December 31, 1998 .04 .05
March 31, 1999 1.125 1.18
June 30, 1999 1.06 1.34
September 30, 1999 0.81 0.62
December 31, 1999 0.81 0.43
March 31, 2000 0.81 0.43
On May 12, 2000, the last reported bid and ask prices for the Company's
Common Stock, as reported by the OTC Electronic Bulletin Board, were $0.50
and $0.56 per share, respectively. Such quotations reflect inter-dealer
prices, without retail markup, retail markdown or commission, and may not
represent actual transactions.
(b) Holders
As of May 12, 2000, there were approximately 1,200 stockholders of record of
the Company's Common Stock.
(c) Dividends
The Company has never paid a dividend and does not anticipate paying any
dividends in the foreseeable future. It is the present policy of the Board
of Directors to retain the Company's earnings, if any, for the development of
the Company's business.
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the financial
statements and notes thereto included in Item 7 of this Form 10-KSB. Except
for the historical information contained herein, the discussion in this
annual report on Form 10-KSB contains certain forward-looking statements that
involve risk and uncertainties, such as statements of the Company's plans,
objectives, expectations and intentions. The cautionary statements made in
this document should be read as being applicable to all related forward-
looking statements wherever they appear in this document. The Company's
actual results could differ materially from those discussed here. Factors
that could cause differences include those discussed below in "Risk Factors",
as well as discussed elsewhere herein.
(1) Results of Operations
Revenues. The Company's revenues for 1999 were generated solely from its
television station (WINQ-TV 19) operations. Revenues for 1999 were $82,972
compared to 1998 of $234,373, a decrease of $151,401, or 65%. Effective
June 30, 1999, the Company's management elected to discontinue the operations
of the television station, currently its sole source of revenue, due to the
financial drain on the Company. The results are discussed below in
Discontinued Operations.
General and Administrative Expenses. General and Administrative costs
increased from $2,150,980 in 1998 to $2,569,858, an increase of $418,878, or
19%. The Company continues to issued common stock for services rendered,
which contributed to loss from operation during 1999 of $1,596,905 and
$1,245,000 during 1998, an increase of $351,905, or 28%. The services
rendered are primarily attributable to costs associated with business
development of advertising and marketing programs, public relations, and
legal and accounting services, resulting from Company's attempt to inquire
into the possible acquisition or merger with other similar lines of business.
Also included in general and administrative expenses is $596,842 of bad debt
expense representing the accumulated retained earnings of its subsidiary,
DTI. The Company entered into an agreement on December 1, 1999, with Borco
Equipment Company, Inc. to spin-off its subsidiary, DTI. Following the
spin-off, current shareholders of the Company will hold 150,000 units of
common stock of DTI. The Company recognized a loss of $596,842 on the sale
of this subsidiary in the form of bad debt expense arising from accumulated
retained earnings of the subsidiary.
Other Income/Expense. Included in other income is a gain on the sale of its
film library in the amount of $321,882. The Company sold its film library in
exchange for a $3,000,000 note, with interest from May 5, 2000, on the unpaid
principal balance at the rate of 8% per annum. All principal and interest is
due in full on December 29, 2002. The principal on the note (and accrued
interest at the Company's discretion) is convertible into fully paid and
nonassessable shares of Preferred Stock at the rate of 10% of the then
designated Preferred Stock by the Board of Directors.
Included in other expense is a loss of $111,505, representing a loss on the
sale of all of the assets of the television operations business. On
November 17, 1999, the Company entered into an agreement with Turner
Productions, Inc., William Turner (Turner), and Jan Orazio, to transfer its
television operations, WINQ-TV 19 in West Palm Beach, Florida, in exchange
for the issuance of 150,000 shares of common stock (Orazio, 100,000 shares
and, Turner, 50,000 shares), certain equipment, and the repayment in full of
certain loans made by Turner. The stock was valued at $0.05 per share, or
$7,500.
Discontinued Operations. Loss on Disposition of Discontinued Operations
represent the results of the Company's television operations through June 30,
1999, the effective date of the disposition. Revenues were $82,972, Costs of
Revenues were $77,719, General and Administrative Expenses were $260,833, for
a net loss on discontinued operations of $255,680.
(2) Liquidity and Capital Resources
At December 31, 1999, the Company had a negative working capital of $169,078,
as compared to a negative working capital at December 31, 1998 of $221,621.
The decrease is a result of net advances forgiven as part of the sale of
assets from the Company's television operations as described above. These
advances were made to the Company due to a lack of working capital to help
fund the Company's ongoing expenses.
During 1999, the Company used $132,368 of net cash from operating activities
as compared to $284,609 in 1998. The Company used $49,109 of working capital
funds during 1998 to purchase television, video, and related equipment to
support its television station operations. To raise money for ongoing
business development, the Company obtained $200,000 during 1998 from the sale
of common stock and was advanced $164,383 from related parties. During 1999,
the Company obtained $56,932 from related parties for these same purposes.
Management intends to seek additional funding from private or public equity
investments to meet the increased working capital needs in the next 12 months.
The Company's future funding requirements will depend upon numerous factors,
including the Company's ability to acquire and successfully run newly
acquired companies. There is no guarantee the Company will be successful in
obtaining additional funding.
(3) Year 2000
The Year 2000 issue arose because many existing computer programs use only the
last two digits to refer to a year. Therefore, these computer programs do not
properly recognize a year that begins with 20 instead of 19. If not corrected,
many computer applications could fail or create erroneous results.
Management is in the process of evaluating the Company's exposure to
date-sensitive computer software programs that may not operate subsequent to
1999, in order to implement a course of action to minimize costs and
disruption of normal business operations in the year 2000. However, because
there is no guarantee that all systems of outside vendors, or other entities
affecting the Company's operations, will be year 2000 compliant, the Company
is susceptible to consequences of the year 2000 issue.
Item 7. Financial Statements
Consolidated Financial Statements for the years ended December 31, 1999 and
1998. F-1 to F-17
C O N T E N T S
Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . F-1
Consolidated Balance Sheet at December 31, 1999 and 1998 . . . .. . . F-2 F-3
Consolidated Statement of Operations For the Years Ended
December 31, 1999 and 1998 . . . . . . . . . . . . . .. . . . . . F-4
Consolidated Statement of Changes in Stockholders' Equity For the
Years Ended December 31, 1999 and 1998 . . . . . . . . . . . . . . F-5 F-7
Consolidated Statement of Cash Flows For the Years Ended
December 31, 1999 and 1998 . . . . . . . . . . . . . .. . . . . . F-8 F-9
Notes to the Consolidated Financial Statements . . . . . . . . . . . F-10 F-16
All schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
INDEPENDENT AUDITORS' REPORT
Board of Directors
e Personnel Management.com
Palm Springs, California
We have audited the consolidated balance sheet of e Personnel Management.com
(formerly Definition, Ltd.) (the Company), as of December 31, 1999 and 1998,
and the related consolidated statements of operations, stockholders' equity
and cash flows for the years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the consolidated financial position of the Company at December 31,
1999 and 1998, and the consolidated results of their operations and their
consolidated cash flows for the years then ended, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has incurred substantial net
losses for the periods indicated. These factors raise substantial doubt
about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Clancy and Co., P.L.L.C.
Phoenix, Arizona
May 5, 2000
F-1
<PAGE>
E PERSONNEL MANAGEMENT.COM
(FORMERLY DEFINITION, LTD.)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
ASSETS 1999 1998
----- -----
<S> <C> <C>
Current Assets
Cash and Cash Equivalents $ 406 $ 31,144
Property and Equipment, Net (Note 3) 0 1,239,363
Other Assets
Note Receivable (Note 4) 3,000,000 0
Other Receivables 1,150 0
Prepaid Airtime (Note 5) 0 146,250
--------- ----------
Total Other Assets 3,001,150 146,250
--------- -----------
Total Assets $ 3,001,556 $ 1,416,757
========= ==========
</TABLE>
F-2
The accompanying notes are an integral part of these financial statements.
<PAGE>
E PERSONNEL MANAGEMENT.COM
(FORMERLY DEFINITION, LTD.)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1999 1998
---- ----
<S> <C> <C>
Current Liabilities
Mortgage Payable, Current
Portion (Note 6) $ 0 $ 1,847
Accounts Payable, Trade 40,000 62,835
Payroll Tax Liabilities 23,700 23,700
Due to Related Party (Note 7) 105,784 164,383
------- -------
Total Current Liabilities 169,484 252,765
Long-Term Liabilities
Mortgage Payable, Noncurrent
Portion (Note 6) 0 76,777
------- -------
Total Liabilities 169,484 329,542
Stockholders' Equity
Preferred Stock: Authorized $0.01
Par Value, 5,000,000 Shares;
Issued and Outstanding, 150,000 1,500 None
Common Stock: Authorized $0.001 Par
Value, 50,000,000 Shares;Issued
and Outstanding, 12,351,227 Shares
and 1,254,929, respectively 12,351 1,255
Additional Paid In Capital 16,489,181 12,737,049
Retained Earnings (Deficit) (13,670,960) (11,651,089)
----------- ----------
Total Stockholders' Equity 2,832,072 1,087,215
----------- ----------
Total Liabilities and Stockholders' Equity $ 3,001,556 $ 1,416,757
=========== =========
</TABLE>
F-3
The accompanying notes are an integral part of these financial statements.
<PAGE>
E PERSONNEL MANAGEMENT.COM
(FORMERLY DEFINITION, LTD.)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Year Ended December 31, 1999 1998
---- ----
Revenues $ 0 $ 234,373
Cost of Revenues 0 224,415
-------- -------
Gross Profit 0 9,958
Operating Expenses
General and Administrative 2,569,858 2,150,980
--------- ---------
Operating Loss (2,569,858) (2,141,022)
Other Income (Expense)
Loss on Sale of Assets (Note 8) (111,505) 0
Gain on Sale of Film Library (Note 4) 321,882 0
Interest Expense (1,552) (12,326)
---------- ---------
Total Other Expense 208,825 (12,326)
---------- ---------
Loss From Operations (2,361,032) (2,153,348)
Discontinued Operations
Loss on Disposition of Discontinued
Operations (Note 8) (255,680) 0
--------- ---------
Net Loss Available to Common Stockholders $(2,616,713) $(2,153,348)
========== ==========
Basic Loss Per Common Share
Loss From Operations $ (0.22) $ (0.17)
Discontinued Operations (0.02) 0
----------- -----------
Net Loss Available to Common Stockholders $ (0.24) $ (0.17)
====== ======
Basic Weighted Average Common Shares
Outstanding 10,702,658 12,801,913
========== ===========
</TABLE>
F-4
The accompanying notes are an integral part of these financial statements.
<PAGE>
E PERSONNEL MANAGEMENT.COM
(FORMERLY DEFINITION, LTD.)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Preferred Stock Common Stock Additional Retained
Shares Amount Shares Amount Paid In Earnings Total
Capital (Deficit)
------- ------- ------ ------ ------- --------- -------
Balance, December 31, 1997 0 $ 0 388,676 $ 389 $ 11,097,915 $ (9,497,741) $ 1,600,563
Issuance of Common Stock
For Cash, March 1,000 1 19,999 20,000
Cancellation of Shares Issued
For Legal Services, September 1997 (15,000) (15) (59,985) (60,000)
Issuance of Common Stock For
Legal Services Rendered,
April 30,000 30 209,970 210,000
Issuance of Common Stock
For Legal Services Rendered, April 45,000 45 314,955 315,000
Issuance of Common Stock For Services
Rendered, May 16,250 16 194,984 195,000
Issuance of Common Stock For Cash 1,500 2 29,998 30,000
Issuance of Common Stock For Services
Rendered, July 50,000 50 49,950 50,000
Issuance of Common Stock For
Cash, July 2,500 2 49,998 50,000
Issuance of Common Stock For
Cash, September 2,500 2 49,998 50,000
Issuance of Common Stock For
Cash, September 2,500 3 49,997 50,000
Issuance of Common Stock For
Services Rendered, October 575,000 575 574,425 575,000
Issuance of Common Stock For
Services Rendered, November 5,000 5 4,995 5,000
Issuance of Common Stock
For Services Rendered, November 150,000 150 149,850 150,000
Fractional Shares 3
Loss, Year Ended December 31, 1998 (2,153,348) (2,153,348)
------ ------- ---------- ------- ---------- ---------- ---------
Balance, December 31, 1998 0 0 1,254,929 1,255 12,737,049 (11,651,089) 1,087,215
Issuance of Common Stock
For Cancellation of Debt, January 30,000 30 30
Issuance of Common Stock
For Services Rendered, February 9,627,500 9,628 471,747 481,375
Issuance of Common Stock
For Services Rendered, March 940,000 940 1,127,060 1,128,000
Issuance of Common Stock
For Conversion of Debt to
Equity, March 10,000 10 11,965 11,975
Cancellation of Common
Stock Issued For Services
Rendered, 1998 (11,646) (12) (139,738) (139,750)
Cancellation of Common Stock
Issued For Services
Rendered, February (400,000) (400) (19,600) (20,000)
Issuance of Common Stock
For Services Rendered, November 150,000 150 7,350 7,500
Issuance of Common Stock
and Preferred Stock In
Exchange For Film Library 150,000 1,500 750,000 750 2,247,750 2,250,000
Capital Contributions 45,598 45,598
Fractional Shares 444
Removal of Subsidiary
Retained Earnings 596,842 596,842
Loss, December 31, 1999 (2,616,713) (2,616,713)
----- ----- ------- ------ ------------ --------- ----------
Balance, December 31, 1999 150,000 $1,500 12,351,227 $12,351 $16,489,181 $(13,670,960) $ 2,830,572
======= ===== ========== ====== =========== ============ =========
</TABLE>
<PAGE>
E PERSONNEL MANAGEMENT.COM
(FORMERLY DEFINITION, LTD.)
CONSOLIDATED STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Year Ended December 31, 1999 1998
---- ----
Cash Flows From Operating Activities
Net Loss $ (2,616,713) $ (2,153,348)
Adjustments to Reconcile Net Loss
to Net Cash Used In Operating Activities
Depreciation and Amortization 512,985 529,654
Other Noncash Items 0 48,750
Loss on Sale of Assets (Note 8) 111,505 0
Gain on Sale of Film Library (Note 4) (321,882) 0
Bad Debt Expense-Sale of Subsidiary (Note 1) 596,842 0
Common Stock Issued for Services 1,596,905 1,245,000
Changes in Assets and Liabilities
(Increase) Decrease in Other Receivables (1,150) 0
Increase (Decrease) in Accounts Payable (10,860) 45,335
--------- --------
Total Adjustments 2,484,345 1,868,739
--------- ---------
Net Cash Used In Operating Activities (132,368) (284,609)
Cash Flows From Investing Activities
Purchase of Property and Equipment 0 (49,109)
--------- ---------
Net Cash Flows Used In Investing Activities 0 (49,109)
Cash Flows From Financing Activities
Principal Payment on Mortgage Payable (900) (1,511)
Proceeds From the Issuance of Common Stock 0 200,000
Capital Contributions 45,598 0
Net Advances From Related Party 56,932 164,383
--------- --------
Net Cash Provided By Financing Activities 101,630 362,872
--------- --------
Increase (Decrease) in Cash and Cash
Equivalents (30,738) 29,154
Cash and Cash Equivalents at Beginning of Year 31,144 1,990
--------- --------
Cash and Cash Equivalents at End of Year $ 406 $ 31,144
========= ========
</TABLE>
F-8
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Year Ended December 31, 1999 1998
---- ----
Supplemental Disclosure of Cash Flow Information:
Cash paid for:
Interest $ 1,552 $ 11,242
Income taxes $ 0 $ 0
Supplemental Schedule of Noncash Investing
and Financing Activities:
Issuance of Common Stock for Services
Rendered $1,596,905 $1,245,000
Issuance (Cancellation) of Common Stock
for Prepaid Airtime $ (139,750) $ 195,000
Issuance of Common Stock For Conversion
of Debt to Equity $ 11,975 $ 0
Acquisition of Film Library in Exchange
For Common/Preferred Stock $2,250,000 $ 0
Sale of Film Library in Exchange For
Note Receivable $3,000,000 $ 0
Gain on Sale of Film Library $ 321,882 $ 0
Bad Debt Expense - Sale of Subsidiary $ 596,842 $ 0
Loss on Sale of Assets $ 111,805 $ 0
</TABLE>
F-9
The accompanying notes are an integral part of these financial statements.
<PAGE>
E PERSONNEL MANAGEMENT.COM
(FORMERLY DEFINITION, LTD.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION
------------
e Personnel Management.com (formerly Definition, Ltd.) (the "Company") was
incorporated in 1989 under the name "Stone Grill International, Inc.", under
the laws of the State of Nevada. The authorized capital stock of the
Corporation consists of 50,000,000 shares of Common Stock, $0.001 par value
per share and 5,000,000 shares of Preferred Stock, $0.01 par value per share.
On January 8, 1999, the Board of Directors approved a 20:1 reverse stock
split at $0.001 par value (no affect to par value). All per share and per
share information have been adjusted retroactively.
The Company's wholly owned subsidiary, Definition Technologies, Inc., (DTI) a
Texas corporation, operates a community (low-power) television station
transmitting from West Palm Beach, Florida, WINQ-TV (WINQ) Channel 19. WINQ
also operates as a traditional television station, deriving revenues through
sales of advertising time. The operations of this subsidiary were
discontinued in June of 1999. See Note 8.
On December 1, 1999, the Company entered into an agreement with Borco
Equipment Company, Inc. to spin-off its subsidiary, DTI. Following the
spin-off, current shareholders of the Company will hold 150,000 units of
common stock of DTI. Each unit consists of one share of common stock,
$0.001 par value, one Class A common stock purchase warrant, and one Class B
common stock purchase warrant. Each Class A warrant entitles the holder to
purchase one share of common stock at a price of $5.00, for a 180 day period,
from 90 days until 180 days from the effective date of the merger. Each
Class B warrant entitles the holder to purchase one share of common stock at
a price of $5.00, at any time from 365 days to 730 days from the effective
date of the merger. The Company recognized a loss of $596,842 on the sale
of this subsidiary in the form of bad debt expense arising from accumulated
retained earnings of the subsidiary.
The Company is an active acquisition company recently directed in the
Professional Employment Services Industry. There is, of course, no
assurance that the Company will be successful in its endeavors.
The financial statements have been prepared on the basis of accounting
principles applicable to a going concern. Accordingly, they do not purport
to give effect to adjustments, if any, that may be necessary should the
Company be unable to continue as a going concern. The Company has incurred
substantial net losses in recent years and used substantial amounts of
working capital in its operations. These factors raise substantial doubt
about its ability to continue as a going concern. The continuation of the
Company as a going concern is dependent upon the Company's ability to
establish itself as a profitable business. The Company's ability to achieve
these objectives cannot be determined at this time. It is the Company's
belief that it will continue to incur losses for the next 12 months, and as a
result, will require additional funds. The additional funding will be
accomplished by seeking funds from private or public equity investments to
meet such needs. There are no guarantees the Company will be successful in
obtaining these funds.
F-10
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Accounting Method
- -----------------
The Company's financial statements are prepared using the accrual method of
accounting.
Cash and Cash Equivalents
- -------------------------
The Company considers all highly liquid instruments with a maturity of three
months or less when acquired to be cash and cash equivalents.
Principles of Consolidation
- ---------------------------
The accompanying consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary Definition Technologies, Inc.
Intercompany transactions have been eliminated in consolidation.
Purchase Method
- ---------------
Investments in companies have been included in the financial report using the
purchase method of accounting on the basis of the fair value of the acquired
assets less liabilities assumed. The Company retains the acquired company as
a subsidiary.
Property and Equipment
- ----------------------
Property and equipment, stated at cost, is depreciated under the
straight-line method over their estimated useful lives, ranging from three to
thirty-nine years. Expenditures for repairs and maintenance are expense as
incurred.
Revenue Recognition
- -------------------
Revenue is recognized when earned.
Cost Recognition
- ----------------
Selling, general, and administrative costs are expensed as incurred.
Advertising costs are expensed as incurred. Research and development
expenses are expensed as incurred.
Use of Estimates
- ----------------
Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. Actual results may differ from these estimates.
Income Taxes
- ------------
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes." Under SFAS No. 109, deferred tax liabilities and assets are
determined based on the difference between the financial statement and tax
bases of assets and liabilities, using enacted tax rates in effect for the
year in which the differences are expected to reverse.
F-11
<PAGE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
-------------------------------------------
Long-Lived Assets
- -----------------
The Company accounts for long-lived assets in accordance with SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of," which requires impairment losses to be recorded on long-
lived assetsused in operation when indicators of impairment are present and
the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. SFAS No. 121 also addresses the
accounting for long-lived assets that are expected to be disposed of.
Per Share of Common Stock
- -------------------------
Effective January 1, 1997, basic earnings or loss per share has been computed
based on the weighted average number of common shares outstanding. All
earnings or loss per share amounts in the financial statements are basic
earnings or loss per share, as defined by SFAS No. 128, "Earnings Per Share."
Diluted earnings or loss per share does not differ materially from basic
earnings or loss per share for all periods presented. Diluted weighted
average shares outstanding exclude the potential common shares from warrants
and stock options because to do so would have been antidilutive. All per
share and per share information are adjusted retroactively to reflect stock
splits and changes in par value.
Stock-Based Compensation
- ------------------------
The Company accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees." Compensation cost for stock options, if any,
is measured as the excess of the quoted market price of the Company's stock
at the date of grant over the amount an employee must pay to acquire the
stock. SFAS No. 123, "Accounting for Stock-Based Compensation," established
accounting and disclosure requirements using a fair-value-based method of
accounting for stock-based employee compensation plans. The Company has
elected to remain on its current method of accounting as described above, and
has adopted the disclosure requirements of SFAS No. 123, effective January 1,
1997.
Capital Structure
- -----------------
The Company has implemented SFAS No. 129, "Disclosure of Information about
Capital Structure," effective January 1, 1998, which established standards
for disclosing information about an entity's capital structure. The
implementation of SFAS No. 129 had no effect on the Company's financial
statements.
Comprehensive Income
- ---------------------
The Company has implemented SFAS No. 130, "Reporting Comprehensive Income,"
effective January 1, 1998, which requires companies to classify items of
other comprehensive income by their nature in a financial statement and
display the accumulated balance of other comprehensive income separately from
retained earnings and additional paid in capital in the equity section of a
statement of financial position. The implementation of SFAS No. 130 had no
effect on the Company's financial statements.
F-12
<PAGE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
------------------------------------------
Business Segment Information
- ----------------------------
The Company implemented SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," effective January 1, 1998. The
implementation of SFAS No. 131 had no effect on the Company's financial
statements.
Start-Up Costs
- --------------
Effective January 1, 1998, the Company also adopted the provisions of the
American Institute of Certified Public Accountants' Statement of Position
(SOP) 98-5, "Reporting on the Costs of Start-Up Activities." SOP 98-5
provides guidance on the financial reporting of start-up and organization
costs and requires such costs to be expensed as incurred. This new
requirement had no effect on the Company's financial statements.
Reclassifications
- -----------------
Certain prior period amounts have been reclassified to conform to the current
year presentation.
Pending Accounting Pronouncements
- ---------------------------------
It is anticipated that current pending accounting pronouncements will not
have an adverse impact on the financial statements of the Company.
NOTE 3 - PROPERTY AND EQUIPMENT
----------------------
Property and equipment consists of the following at December 31, 1998:
Broadcast Resource Library $ 2,985,536
Computer, Production and Broadcast Equipment 310,508
Building and Improvements 469,153
---------
Total 3,765,197
Accumulated Depreciation (2,525,834)
---------
Net Book Value $ 1,239,363
=========
Depreciation expense charged to operations during 1999 and 1998 was
$506,482 and $529,654, respectively.
NOTE 4 - NOTE RECEIVABLE
---------------
On December 29, 1999, the Company sold its film library in exchange for a
$3,000,000 note, with interest from May 5, 2000, on the unpaid principal
balance at the rate of 8% per annum. All principal and interest is due in
full on December 29, 2002. The principal on the note (and accrued interest
at the Company's discretion) is convertible into fully paid and nonassessable
shares of Preferred Stock at the rate of 10% of the then designated Preferred
Stock by the Board of Directors. The Company recognized a $321,882 gain on
the sale of the library. Net book value of the film library sold was
$2,678,118.
F-13
<PAGE>
NOTE 5 - PREPAID AIRTIME
---------------
On May 6, 1998, the Company issued 325,000 shares of common stock at $0.60
per share, or $195,000, to Omni-Lingual Broadcasting Corp. (Omni) in
exchange for airtime of The Ed Taxin Show for the period from October 1,
1997 to February 26, 1999. As of December 31, 1998, 15/60 of the airtime
has elapsed. The balance represents prepaid airtime at December 31,1998 of
$146,250.
On February 23, 1999, Omni and the Company mutually agreed to cancel the
airtime agreement. Omni agreed to return the original 325,000 shares of
common stock issued and the Company agreed to issue 92,083.34 shares of
common stock representing 17/60 of the airtime used. The transaction was
completed in August 1999.
NOTE 6 - MORTGAGE PAYABLE
----------------
Mortgage Payable of $78,624 at December 31, 1998, represents a note payable
in the original amount of $84,000, for the purchase of an office condominium
located in Lake Park, Florida. The note is payable in monthly installments
of approximately $867, including interest at an initial rate of 11%. The
interest rate is adjustable on March 1, 2000 and is calculated using the
Average Weekly Yield of United States Treasury Securities adjusted to a
constant maturity of one year plus 3.5%. The minimum interest rate for the
life of the loan will be 11% and the maximum interest rate for the life of
the loan will be 17.0%. Additionally, the lender has a call option during a
30-day period commencing on the tenth anniversary of the loan whereby the
entire unpaid balance can be called as due and payable within 90 days of the
date that the lender exercises the call option. The loan is secured by the
office condominium and the guarantee of the Company.
NOTE 7 - RELATED PARTY TRANSACTIONS
--------------------------
From time to time, certain related parties advance monies to fund the
operating expenses of the Company as needed. At December 31, 1999 and 1998,
the Company was indebted to certain related parties in the amount of $105,784
and $164,383, bearing no interest, and due on demand.
NOTE 8 - DISCONTINUED OPERATIONS
------------------------
Effective June 30, 1999, the Company's Board of Directors approved
management's plan to dispose of the Company's television operations due to
the financial drain on the Company. Certain information with respect to
discontinued operations is summarized as follows:
F-14
<PAGE>
NOTE 8 - DISCONTINUED OPERATIONS (CONTINUED)
----------------------------------
Revenues $ 82,972
Cost of Revenues 77,819
General and Administrative Expenses 260,833
-------
Costs and Expenses 338,652
-------
Net Loss $ 255,680
=======
The Company also sold all of the assets of the television operations
business. On November 17, 1999, the Company entered into an agreement with
Turner Productions, Inc., William Turner (Turner), and Jan Orazio, to
transfer its television operations, WINQ-TV 19 in West Palm Beach, Florida,
in exchange for the issuance of 150,000 shares of common stock (Orazio,
100,000 shares and, Turner, 50,000 shares), certain equipment, and the
repayment in full of certain loans made by Turner. The stock was valued at
$0.05 per share, or $7,500. The Company recognized a $111,505 loss on the
disposal of the assets.
NOTE 9 - INCOME TAXES
------------
The deferred tax consequences of temporary differences in reporting items for
financial statement and income tax purposes are recognized, as appropriate.
Realization of the future tax benefits related to the deferred tax assets is
dependent on many factors, including the Company's ability to generate taxable
income within the net operating loss carryforward period. Management has
considered these factors in reaching its conclusion as to the valuation
allowance for financial reporting purposes. The income tax effect of
temporary differences comprising the deferred tax assets and deferred tax
liabilities on the accompanying consolidated balance sheet is a result of the
following:
Deferred Tax Asset 1999 1998
-------- --------
Net Operating Loss Carryforwards $ 915,849 $ 1,722,467
Valuation Allowance (915,849) (1,722,467)
------- --------
Net Deferred Tax Asset $ 0 $ 0
======= ========
At December 31, 1999, the Company has available net operating loss
carryforwards of approximately $2,600,000 for tax purposes to offset future
taxable income, which expire principally in the year 2012.
Pursuant to the Tax Reform Act of 1986, annual utilization of the Company's
net operating loss carryforwards may be limited if a cumulative change in
ownership of more than 50% is deemed to occur within any three-year period.
F-15
<PAGE>
NOTE 10 - STOCK OPTION PLAN
-----------------
The Company adopted the 1999 KEY EMPLOYEE/DIRECTOR STOCK OPTION PLAN (the
"Plan") effective October 19, 1999, and has reserved 1,000,000 shares for
issuance thereunder. The objectives of the plan include attracting and
retaining the best personnel, providing for additional performance
incentives, and promoting the success of the Company by providing employees
the opportunity to acquire common stock. Options outstanding under the
Company's plan are granted at prices which are either equal to or above the
market value of the stock on the date of grant and expire at various dates
after the grant date. As of the date of issuance of these financial
statements, no options have been granted.
NOTE 11 - SUBSEQUENT EVENTS
-----------------
(1) On January 7, 2000, the Company entered a consulting agreement with
Kevin Smith for a period of one year commencing immediately and
renewable for a successive six-month period by mutual agreement. The
Company agreed to issue 250,000 shares of common stock as compensation.
(2) On January 7, 2000, the Company agreed to issue a total of 750,000
shares of common stock to its directors for services rendered.
(3) On March 9, 2000, the Company agreed to issue 75,000 shares of common
stock to Jack F. Fitzmaurice, attorney, for services in connection with
the acquisition of IMSC and any disputes arising therefrom. The term of
the contract is for one year.
(4) On March 14, 2000, the Company entered into a "Stock Exchange Agreement"
with Russell P. Ferry (Ferry), owner of 15,000 shares of Interstate
Management Services Company (IMSC) common stock, a Company incorporated
in the State of Nevada with an authorized capital of 25,000 shares of
common stock, no par value, of which 20,000 shares are duly and validly
issued and outstanding. The Company issued 750,000 shares of common
stock in exchange for Ferry's 15,000 shares of IMSC common stock.
(5) On April 1, 2000, the Company entered into an Employment Agreement with
Russell P. Ferry to act as Chief Executive Officer and to serve as a
member of the Board of Directors to the Company, for a period of
twenty-four (24) months, effective April 1, 2000. Compensation for
services is $65,000 per annum, payable monthly.
(6) On April 5, 2000, the Board of Directors agreed to issue 199,998 shares
of common stock to certain individuals representing RTS Investor
Relations to provide investor relations under a one year contract.
(7) On April 9, 2000, the Company agreed to issue 4,468,000 shares of common
stock to certain individuals or entities as compensation for current and
future services to the Company.
F-16
<PAGE>
NOTE 11 - SUBSEQUENT EVENTS (CONTINUED)
-----------------------------
(8) On April 12, 2000, the Company agreed to issue 350,000 shares of common
stock in partial consideration under a settlement agreement to which
Russell P. Ferry was a party.
(9) On May 5, 2000, the Company filed amended articles of incorporation
with the State of Nevada to change its name to e Personnel Management.com.
F-17
<PAGE>
Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
Directors and Executive Officers
The following table sets forth the names of the current officers
and directors of the Company.
Name Age Position
- -------------- ----- -----------
Donna Anderson 63 President
Charles Kiefner 61 Secretary
No family relationships exist among the officers and directors of the Company.
Compensation of Directors
During the fiscal year ended December 31, 1999 and 1998, the Company had no
standard or other arrangement pursuant to which directors of the Company were
compensated for any services as a director or for committee participation or
special assignments.
Compliance with Section 16(a) of the Securities Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and persons who beneficially own more than ten percent
of a registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission. Officers, directors and greater-than-ten-percent shareholders
are required by regulation of the Securities and Exchange Commission to
furnish the Company with copies of all Section 16(a) forms which they file.
The Company believes that none of the reports required to be made under
Section 16(a) have been filed by the persons required to file such reports.
The Company has received assurances from the persons required to file such
reports that all required reports will be filed as soon as possible.
Item 10. Executive Compensation
No executive of the Company received compensation, in total salary or bonus,
exceeding $100,000 during each of the last three fiscal years.
Employment Contracts and Termination of Employment and Change-in-Control
Agreements
The Company does not have any written employment contracts with respect to
any of its executive officers. The Company has no compensatory plan or
arrangement that results or will result from the resignation, retirement or
any other termination of an executive officer's employment with the Company
and its subsidiaries or from a change in control of the Company or a change
in an executive officer's responsibilities following a change-in-control.
Option/SAR Grants in Last Fiscal Year
The Company did not grant any options to any person during the fiscal year
ended December 31, 1999. The Company has never granted any stock
appreciation rights ("SARs"), nor does it expect to grant any SARs in the
foreseeable future.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information as of May 12, 2000, with
respect to the beneficial ownership of the Company's Common Stock (1) by the
Company's officers and directors, (2) by shareholders known to the Company to
own five percent or more of the Company's Common Stock and (3) by all
officers and directors of the Company, as a group. On May 12, 2000, there
were approximately 19,959,225 shares of Common Stock issued and
outstanding.
Number of Shares
Name and Address of of Common Stock
5% Beneficial Owners, Beneficially Owned Percent of
Officers and Directors at May 12, 2000 Class (1)
----------------------- ------------------ -----------
Charles Kiefner
120 St. Croix Avenue
Cocoa Beach, FL 32931 2,500,000 13%
Elmer J. Jones
120 St. Croix Avenue
Coca Beach, FL 32931 1,050,000 5%
William B. Turner
429 Seaview Avenue
Palm Beach, FL 33480-4109 1,160,000 6%
Donna Anderson
120 St. Croix Avenue
Cocoa Beach, FL 32931 2,500,000 13%
_______________________
All Officers and Directors
as a Group (5 persons)
Item 12. Certain Relationships and Related Transactions
The Company has engaged in no transaction required to be described herein.
Item 13. Exhibits and Reports on Form 8-K.
1. 8-K/A filed October 12, 1999, for Change in Registrant's Certifying
Accountant.
2. 8-K filed December 7, 1999 for Disposition of Assets per agreement
dated November 17, 1999.
SIGNATURES
In accordance with 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 11th day of May, 2000.
e Personnel Management.com
(formerly DEFINITION, LTD.)
By:_______________________
/s/ Donna Anderson
President
Pursuant to the requirements of the Securities and Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 406
<SECURITIES> 0
<RECEIVABLES> 3,000,00
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,001,556
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,001,556
<CURRENT-LIABILITIES> 169,484
<BONDS> 0
0
1,500
<COMMON> 12,351
<OTHER-SE> 2,818,221
<TOTAL-LIABILITY-AND-EQUITY> 3,001,556
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
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<INCOME-PRETAX> (2,361,302)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,361,302)
<DISCONTINUED> (255,680)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,616,713)
<EPS-BASIC> (0.24)
<EPS-DILUTED> (0.24)
</TABLE>
