SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended December 31, 1998.Commission File No. 000-
19693
RANES INTERNATIONAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Nevada 87-0485320
(State of organization) (I.R.S. Employer Identification No.)
8360 E. Via de Ventura, Bldg. L-200, Scottsdale, AZ 85258
(Address of principal executive offices)
Registrant's telephone number, including area code (480) 994-3513
Securities registered under Section 12(g) of the Exchange Act:
Common stock, $0.001 par value per share
Registrant's Attorney: Daniel G. Chapman, Esq., 2080 E. Flamingo
Road, Suite 112, Las Vegas, NV 89119, (702) 650-5660
Check whether the issuer (1) filed all reports required to be
file by Section 13 or 15(d) of the Exchange Act during the past
12 months and (2) has been subject to such filing requirements
for the past 90 days. Yes X
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B not contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendments to this Form 10-KSB. [ X ]
Issuer's Revenue during the year ended December 31, 1998: $ 0
As of January 29, 1999, the registrant had 8,426,647 shares of
its common stock, $0.001 par value, outstanding. Aggregate market
value of the voting and non-voting common equity held by non-
affiliates based on the price of N/A per share (the selling or
average bid and asked price) as of January 29, 1999: $386,750.
Computed at the closing price on that date.
NOTE: The company's stock is not, and has not, been traded or
quoted, and the book value is negative. Therefore, there is no
way to ascertain a market value for the stock.
DOCUMENTS INCORPORATED BY REFERENCE:
None
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Background
Ranes International Holding, Inc. ("the Company") is a
development stage company that was incorporated under the laws of
the state of Nevada on February 15, 1990, as Partisan
Corporation. The Company was inactive through February 1995 and
prior to such time the Company had no activity other than that of
capitalization efforts by transfer of shares of common stock in
private placements. On March 10, 1995, the Company's name was
changed to Bio Fluorescent Technologies, Inc. as it targeted the
medical and health care industry. On March 6, 1998, the Company
abandoned this business and changed its name to Ranes
International Holding, Inc. The current business plan involves
the Company searching for an industry in which to become a
participant.
The Company's initial business plan was based on developing,
licensing or otherwise acquiring state-of-the-art advanced
diagnostic testing and screening technology and equipment capable
of early detection of human immune system disorders such as HIV-
1, HIV-2 and Hepatitis B. From February 1995 to July 1996 the
Company supported a development stage diagnostic technology
through a license agreement, which ended September 25, 1997,
through a series of lawsuits and counter-claims. The development
project costs have been written off. In May 1996 the Company
reorganized its management team and revised its business plan to
include expansion of the Company's core market and technology
application for a broader range of products and industries. The
Company selected and engaged the services of scientists and other
technical advisors to assist in its search to acquire other
products or businesses compatible with the Company's primary goal
to become operational as soon as possible. Since its management
reorganization in May 1996, the Company's business development
plan has been focused on a "growth by acquisition" strategy and
the Company has been actively pursuing acquisition possibilities.
The Company has not selected any company as an acquisition target
or merger partner and does not intend to limit potential
candidates to any particular field or industry, but does retain
the right to limit candidates, if it so chooses, to a particular
field or industry. The Company's plans are in the conceptual
stage only.
The Company's agreement dated February 11, 1997, to acquire all
of the assets of Immune Network Research, Ltd. ("INR") was
terminated two months later when management decided to restrict
its solicitations of business opportunities. The Company adopted
a plan of quiet review of possible mergers or product adoption;
this plan was maintained until December 1997. Since that time
the Company has been vigorously pursuing industries and other
possible merger candidates.
The proposed business activities described herein classify the
Company as a "blank check" company. Many states have enacted
statutes, rules, and regulations limiting the sale of securities
of "blank check" companies in their respective jurisdictions.
Management does not intend to undertake any efforts to cause a
market to develop in the Company's securities until such time as
the Company has successfully implemented its business plan.
As the Company began to position itself for the pursuit of
opportunities, it discovered that the maximum capital limit had
been inadvertently reduced with the one for three reverse split
on December 2, 1996. A majority of the stockholders held a
meeting and approved the maximum capitalization of 50,000,000
shares of common stock. The Company also issued 16,452,731
Shares of Regulation 144 stock to its major creditors in exchange
for $665,108 of the debts owed to them as part of a planned
structuring plan to make the Company more attractive for possible
merger opportunities.
On January 17, 1998, the Company authorized a 1 for 100 reverse
stock split. This policy was activated on March 6, 1998, the
authorized stock remained at 50,000,000 shares of common stock.
On March 31, 1998, the Company issued 5,000,000 shares of
regulation 144 stock to a related company creditor in exchange
for $100,000 of accrued liability.
The Company plans to continue with its efforts to license or
otherwise acquire products, technology or businesses compatible
with its corporate strategies.
Employees
The Company has conducted its office administration and support
services by means of service and management agreements with
service and consulting companies. These agreements (other than
the Chief Executive's management agreement) concluded on March
31, 1998 and were not renewed. The Company has issued only
temporary service agreements pending the location of products or
merger possibilities. On August 31, 1998, the Company entered
into a public relations agreement with a company controlled by
the Chief Executive Officer to provide investment public
relations consulting for 36 months beginning September 1, 1998.
No employees are subject to a collective bargaining agreement.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company has maintained its principal executive office in
rented office facilities in Scottsdale Arizona as a portion of
the Public Relations Agreement. All office activities including
telephone, mail, and office services are provided under this
Agreement. Management believes that this arrangement will be
sufficient for the Company's operations for the current
foreseeable future.
ITEM 3. LEGAL PROCEEDINGS
The Company is not involved in any litigation other than minor
collection efforts and judgments that are being satisfied as
funds are available.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
As referred to in Item 1, the Company held a shareholders'
meeting on January 20, 1998, at which a majority of the Company's
outstanding shares were represented and authorized the board of
directors to initiate a 1:100 reverse stock split effective
January 20, 1998. This reverse changed the then current
outstanding shares from 22,669,240 shares to 226,695 shares.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Market Information
Trading activity with respect to the Company's common stock has
been limited. A public trading market having the characteristics
of depth, liquidity and orderliness depends upon the existence of
market makers as well as the presence of willing buyers and
sellers, which are circumstances over which the Company has no
control.
Prior to May 1, 1995, there was no public market for the
Company's common stock. Since May 1, 1995, the National Quotation
Bureau, Inc has quoted the Company's common stock in the National
Daily Quotation Service ("Pink Sheets") published daily. The
Company's trading symbol was changed from "BFTI" to "BFTK" in
connection with the Company's December 2, 1996, reverse stock
split; then again to "RIHI" with the name change referred to in
Item 1 and the 1:100 reverse stock split in January 1998.
Quotations are now available through the Electronic Bulletin
Board operated by the National Association of Securities Dealers,
Inc. under the symbol "RIHI".
Holders
The number of stockholders of record for the common stock of the
Company at the close of business on January 29, 1999, was
8,426,675, including brokerage houses holding stock for an
unknown number of stockholders. The Company estimates that there
are approximately 700 beneficial owners of the Company's common
stock.
Dividends
The Company's present policy is to apply available working
capital to expansion and acquisition; consequently, the Company
has not previously declared or paid any dividends on its common
stock and does not expect to pay dividends on its common stock
within the foreseeable future.
ITEM 6. MANAGEMENT'S PLAN OF OPERATION
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and
"forward-looking statements" as that term is defined in Section
27A of the Securities Act of 1933 as amended (the "Securities
Act"), and Section 21E of the Securities Exchange Act of 1934 as
amended (the "Exchange Act"). All statements that are included in
this filing, other than statements of historical fact, are
forward-looking statements. Although Management believes that
the expectations reflected in these forward-looking statements
are reasonable, it can give no assurance that such expectations
will prove to have been correct. Important factors that could
cause actual results to differ materially from the expectations
are disclosed in this Statement, including, without limitation,
in conjunction with those forward-looking statements contained in
this Statement.
Plan of Operation
The Company is presently concentrating its efforts on becoming
operational by licensing or otherwise acquiring technologically
advanced state-of-the-art products, which respond to the
international market. The Company is also exploring the
possibility of acquiring other technologies, products or
businesses compatible with its goal to become operational in the
shortest period of time possible.
The Company's management team has investigated and pursued a
number of products and companies in an effort to fulfill the
Company's strategies. Subsequent to this report the Company
issued a letter of intent on January 25, 1999, to purchase
WorldNet Gaming, Inc. and on June 2, 1999, this intent was
canceled due to the fact that the Company could not agree on any
material terms. The Company's management team plans to continue
to aggressively pursue the acquisition of other products and
technology through licensing and/or acquiring businesses with
market ready products and/or development stage technology with
market potential that is compatible with corporate strategies to
become operational.
To date, the Company's operations have consisted primarily of
pursuing various product opportunities, assembling a management
team and raising capital. From the Company's inception to
December 31, 1998, the Company's business development costs have
totaled approximately $4,498,000. These expenditures have been
funded primarily with the proceeds from the private sales of the
Company's equity securities as well as with the issuance of its
common stock in exchange for services and assets.
During the year ended December 31, 1998, the Company's
development stage activities resulted in an increase in cash flow
of approximately $289. This increase was primarily the result of
the net operating loss of approximately $1,076,088 offset by
noncash charges totaling approximately $500,000. Additionally
the issue of Common Regulation 144 stock reduced the accrued
liabilities of approximately $500,000. The Company's financing
activities provided cash flow of approximately $5,000 from an
issue of a note payable during the year ended December 31, 1998.
The Company has raised approximately $1,484,000 of operating
capital since inception and plans to continue its efforts to
raise additional capital needed to fund operating expenses of the
business through various financing methods including private
placements of its common stock. Funding of future operations is
dependent on management's ability to raise additional capital.
Failure by the Company to obtain additional financing would have
a material adverse effect on the Company.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Management's discussion and analysis should be read in
conjunction with the financial statements and the notes hereto.
RESULTS OF OPERATIONS
Results of the year ended December 31, 1998 compared with year
ended 1997.
Net loss from operations increased 66% to ($1,076,088) for the
year ended December 31, 1998 due mainly to a 14% decline in
selling, general and administrative expenses of $94,994 from
$675,557 in 1997 to $580,563 in 1998 and a provision for the
realization of the media products receivable of $500,000.
Revenues were $0 for the year compared to $1,624 in 1997.
$637,500 or 95% of the administrative expense in 1997 was payable
to an Officer of the Company. In 1998 over 50% of the
administrative expense was payable to this same Officer. The
Company relies upon its ability to raise capital by the sale of
stock, to barter stock for required operating and promotional
product and services, and to incur indebtedness to fund
operations.
Losses per share declined from ($11.042) per share to ($.137) per
fully diluted share in the current year. The improved earnings
performance resulted primarily from the dilution effect of
issuing 8,200,000 additional shares of stock, to an increase in
interest income of $4,429, and to the decline in expenses as
discussed above,
Note 2 of the financial statements and reports of the auditor and
former auditor raise substantial doubt about the Company's
ability to continue as a going concern. However, management
continues to seek an operating company as a candidate for a
merger. Management believes that such a merger is probable and
will ultimately result in the Company achieving profitability.
Revenues:
Revenues were $0 for the year ended 1998 compared to $1,624 in
1997. Management is seeking a suitable operating company as a
candidate for a merger. Management believes that such a merger
is probable and will ultimately result in the Company achieving
profitability. Management will continue plans to follow a
'growth by acquisition' strategy.
Operating Income / (Loss):
Operating loss (defined as income before interest expense and
taxes) for the year ended December 31, 1998 increased 66% to
($1,076,088) for the year ended December 31, 1998 due mainly to a
14 % decline in selling, general and administrative expenses from
$675,557 in 1997 to $580,563 in 1998 and a provision for
realization of the media products receivable of $500,000.
$637,500 or 95% of the administrative expense in 1997 was payable
to an Officer of the Company. In 1998 over 50% of the
administrative expense was payable to this same Officer.
Interest and Taxes:
No interest expense was incurred during the year or in 1997. The
Company has a net operating loss carryover as of December 31,
1998 of approximately $1,526,000 available to offset future
taxable income, if any. In the event of ownership changes
aggregating 50% or more in any three-year period, the amount of
loss carryovers that become available for utilization in any year
may be limited. If not utilized against future taxable income,
the net operating loss carryovers will expire between the years
2005 and 2013.
EARNING OUTLOOK
Management continues to seek an operating company as a candidate
for a merger. Management believes that such a merger is probable
and will ultimately result in the Company achieving
profitability. Management plans to continue to follow a 'growth
by acquisition' strategy.
FINANCIAL POSITION & LIQUIDITY AND CAPITAL RESOURCES:
Since December 31, 1997, operating working capital (defined as
receivables and inventories less accounts payable and accrued
liabilities) decreased $576,088.
CHANGE IN OPERATING WORKING CAPITAL
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$289
Cash
(43,436)
Trade receivables barter
(500,000)
Receivables Media products
175,000
Prepaid expenses
47
Checks outstanding in excess of
cash
12,532
Accounts payable trade
(215,520)
Payable to related parties
(5,000)
Notes payable
$(576,088)
Change in Operating Working
Capital
</TABLE>
Cash increased $289 as a result of an increase of $5,000 in note
payable and $100,000 proceeds from the issuance of stock. Cash
used in operations was $104,711.
The Company fully provided for the possibility that the Media
product receivable will not be realized. Media products
receivables consists of radio production and air time to be used
in advertising during 1999. Prepaid expenses consist of un-
amortized consulting fees. Payable to related parties consisting
of $40,919 in 1997 increased to $256,439 in 1998. The amount is
due to an Officer of the Company who has provided a substantial
part of the operating administrative expenses.
The Company relies upon its ability to raise capital by the sale
of stock, to barter stock for required operating and promotional
product and services, and to incur indebtedness to fund
operations.
Management is seeking a suitable operating company as a candidate
for a merger. Management believes that such a merger is probable
and will ultimately result in the Company achieving
profitability. Management will continue plans to follow a
`growth by acquisition' strategy.
Note 2 of the financial statements and reports of the auditor and
former auditor raise substantial doubt about the Company's
ability to continue as a going concern.
PREPAREDNESS FOR CENTURY DATE CHANGE
The year 2000 issue results from computer programs that do not
differentiate between the year 1900 and the year 2000 because
they were written using two digits rather than four to define the
applicable year accordingly computer systems that have
time-sensitive calculations may not properly recognize the year
2000. The Company has conducted an initial review of its
computer systems to identify whether the system is year 2000
compliant. The computer equipment and software currently used by
the Company is an older generation and will be effected by the
year 2000 problem. The Company has purchased a current
generation system and new software, and will replace the existing
system before December 31, 1999.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Effective March 26, 1999, the Company engaged Timothy L. Steers,
Certified Public Accountant, LLC as its independent auditor for
the fiscal year ended December 31, 1998 to replace the firm of J.
Paul Kenote, CPA, P.C., who discontinued offering auditing
services. The decision to change accountants was approved by the
Board of Directors of the Company.
The reports of J. Paul Kenote, CPA, P.C. on the Company's
financial statements for the fiscal years ended December 31, 1997
and 1996 did not contain an adverse opinion or a disclaimer of
opinion and were not qualified or modified as to uncertainty,
audit scope, or accounting principles.
In connection with the audit of the Company's financial
statements for the fiscal years ended December 31, 1997 and 1996
and the subsequent interim periods, there were no disagreements
with J. Paul Kenote, CPA, P.C. on any matters of accounting
principles or practices, financial statement disclosures, or
auditing scope and procedures which, if not resolved to the
satisfaction or J. Paul Kenote, CPA, P.C. would have caused J.
Paul Kenote, CPA, P.C. to make reference of the matter in their
report.
The prior fiscal year ended December 31, 1995 was audited and
reported on by Arthur Andersen LLP and in the subsequent interim
period ending March 15, 1996, there were no disagreements with
Arthur Andersen LLP on any matters of accounting principles or
practices, financial statement disclosures or auditing scope and
procedures which, if not resolved to the satisfaction of Arthur
Andersen LLP would have caused Arthur Andersen LLP to make
reference to the matter in their report.
The prior two fiscal years, years ended December 31, 1994 and
1993 were audited and reported on by Smith & Company. The
reports of Smith & Company on the Company's financial statements
for the fiscal years ended December 31, 1994 and 1993 did not
contain an adverse opinion or a disclaimer of opinion and were
not qualified or modified as to uncertainty, audit scope, or
accounting principles.
In connection with the audits of the Company's financial
statements for each of the fiscal years ended December 31, 1997,
1996, 1995, 1994 and 1993 and in the subsequent interim periods,
there were no disagreements with J. Paul Kenote, CPA, P.C.,
Arthur Andersen LLP, and Smith & Company on any matters of
accounting principles or practices, financial statement
disclosures or auditing scope and procedures which, if not
resolved to the satisfaction of Smith & Company would have caused
the prior auditors to make reference to the matter in their
reports.
The Company has authorized its prior auditors to respond fully to
any inquires from their successors.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
DIRECTORS AND EXECUTIVE OFFICERS.
The following table sets forth the names and positions of the
directors and executive officers of the Company as of March 26,
1999. A summary of the background and experience of each of
these individuals is set forth after the table.
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Name Position
Jan J. Olivier President; Chief Executive Officer;
Director
Ray A. Triphahn Secretary/Treasurer; Director
Dr. Claus G. J. Director
Wagner-Bartak
</TABLE>
JAN J. OLIVIER has been a Director and the President and Chief
Executive Officer of the Company since April 1996 and has served
as a business consultant to the Company since March 1995. Since
1989 and 1993, respectively, Mr. Olivier has owned Your Choice
International, Inc., a marketing consulting company, and Cactus
Consultants International, Inc., a financial consulting firm.
From April 1983 until July 1987, Mr. Olivier was the President of
Olivier Management Corp., a NASDAQ listed company that conducted
international merchant banking activities and had offices in New
York, Zurich, Miami and Seattle. Mr. Olivier has over 30 years
of national and international business experience and has served
on the boards of directors of several companies.
RAY A. TRIPHAHN has been a Director, a Vice President and
Assistant Secretary of the Company since February 1995 and on
June 15, 1998 resigned as Vice President and Assistant Secretary
and assumed the responsibilities of Company Secretary/Treasurer.
Mr. Triphahn is a retired businessman. Prior to his retirement,
Mr. Triphahn held various offices with entities engaged in
various aspects of the construction industry.
DR. CLAUS G.J. WAGNER-BARTAK has been a Director of the Company
since September 28, 1998. Dr. Wagner-Bartak is listed in the
Canadian Who's Who as an accomplished, internationally
- -recognized scientist and business executive. He currently holds
positions with B.A. Technologies as Director and Chief Operating
Officer (previously President and CEO), Energy Dynamics Inc. as
President, and with Manco Information Technology, Inc. as
Managing Director, and as Director with CasinoBuilders.com. In
addition to multiple career executive positions in the business
arena. Dr. Wagner-Bartak has received international recognition
and acclaim for his scientific leadership. Personal achievement
awards include the Engineering Medal of the Professional
Engineering Association of Ontario, multiple awards from NASA
including the hallmark Public Service Medal, and the prestigious
Dauphin Award.
MANAGEMENT CONSULTANTS
The Company has retained ten individuals to assist it in the
search for companies and or technologies that would be compatible
with the Company's goals of becoming an operational company in
the shortest possible time frame.
The Company has contracted with Cactus Consultants International,
Inc. ("CCI") for the management services of Mr. Olivier as
President, Chief Executive Officer and Manager of the Company.
It has also contracted the public relation and investor relation
activities with CCI.
ITEM 10. EXECUTIVE COMPENSATION
The following table summarizes all compensation paid to the
persons who served in the capacity of president during the three
most recently completed fiscal years. The Company did not have
any executive officers whose total annual salary and bonus
exceeded $100,000 for services rendered in all capacities to the
Company during the during the fiscal years from inception to year
ended December 31, 1998, except for its president in 1996, 1997
and 1998.
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Name and Principal Fiscal Salary Bonus Other
Position Year Annual
Compensatio
n(1)
Jan J. Olivier, 1998 $198,000.00 $0.00 $0.00
President; Chief 1997 $198,000.00 $0.00 $0.00
Executive Officer; 1996 $132,000.00 $0.00 $0.00
Director (1) (2)
Clayton M. Hardman, 1995 $0.00 $0.00 $0.00
President; Chairman of
the Board (1)
Matthew M. Zuckermann, 1995 $0.00 $0.00 $0.00
President; Director (1)
Krista Castleton, 1995 $0.00 $0.00 $0.00
President; Director (1) 1994 $0.00 $0.00 $0.00
1993 $0.00 $0.00 $0.00
</TABLE>
1. Krista Castleton served as the President (The Chief
Executive Officer of the Company) from its inception until her
resignation in February 1995 in connection with the Company's
acquisition of the licensing rights to the Mehica GP120 System.
In February 1995, Matthew M. Zuckermann became the President of
the Company and he resigned in December of 1995. Clayton M.
Harman was appointed President and Chairman of the Board in
December 1995. In April 1996, Mr. Hardman resigned as President
and Chairman of the Board and Mr. Jan J. Olivier was appointed to
the office of President, Chief Executive Officer and Director.
2. Compensation for being President and Chief Executive Officer
by Mr. Jan J. Olivier was billed and paid to Cactus Consultants
International, Inc.
Directors do not receive compensation for services on the Board
of Directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following table sets forth the beneficial ownership of shares
of common stock of the Company on January 29, 1999 by each
director and executive officer, by all directors and executive
officers as a group and by all persons known by the Company to be
the beneficial owners of more than five percent (5%) of the
Company's common stock.
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Name and Address Number of Shares Percent of
Beneficially held Ownership
Ray A. Triphahn 205,708 2.4%
27426 Lakeview Drive
Sun Lakes, AZ 85248
Crystal Securities 791,000 9.4%
PO Box N-8920
Nassau, Bahamas
Hawkshead Securities 990,000 11.7%
PO Box N-4821
Nassau, Bahamas
Keswick Securities 990,000 11.7%
PO Box N-4821
Nassau, Bahamas
Puffin Corp. 990,000 11.7%
PO Box N-8862
Nassau, Bahamas
Ravensworth Securities Corp. 990,000 11.7%
PO Box N-8318
Nassau, Bahamas
Cactus Consultants 160,604 1.9%
International, Inc.
8360 East Via de Ventura, Bldg
L-200
Scottsdale, AZ 85258
All directors and executive 366,312 4.3%
officers as a group
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Cactus Consulting International, Inc. ("CCI") provided
substantially all of the Company's corporate management and
administrative services during the years ended December 31, 1998,
1997, 1996 and 1995, for which the Company paid to CCI $342,820;
$497,388; $404,395 and $211,561, respectively. The Company paid
CCI 5,000,000; 108,460 (10,846,000 before reverse split) and
2,000 (200,000 before reverse split) shares of Common Stock for
settlement of $100,000; $390,848 and $120,000 in accumulated
payables during 1998, 1997 and 1996, respectively. The payments
represent payment for services rendered and expenses advanced by
CCI. The Company owed an additional $256,439; $40,919; $27,090
and $134,297 on December 31, 1998, 1997, 1996 and 1995,
respectively, for services and or expenses advanced by CCI for
the Company. The Company's President, Jan J. Olivier, owns CCI.
ITEM 13. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
(a) EXHIBITS
27 - Financial Data Schedule
16 Letter on change in certifying accountant
November 24, 1999
Securities and Exchange Commission
450 5th. N.W.
Washington, D.C. 20549
Gentlemen:
This letter is to confirm that the reason I am no longer the
auditor of record for Bio-Flourescent Technologies, Inc. is due
to the fact that I have redirected the focus of my professional
practice and as such I no longer perform audits of publicly
traded companies.
At no time have I ever had a disagreement with Bio-Flourescent
Technologies, Inc. or its management and I have issued no adverse
opinions about the Company. I agree with the statements made
regarding the change of accountants in Bio-Flourescent's Form 10-
SB, item 14, Changes in and Disagreements with Accountants.
Sincerely,
J. PAUL KENOTE, CPA, P.C.
/s/ J. Paul Kenote
J. Paul Kenote, CPA
(b) The following financial statements are filed as part of this
report as pages b-1 through b-14 following the signature page:
Report of Independent Certified Public Accountants
Balance Sheets
Statements of Operations
Statements of Changes in Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
Ranes International Holding, Inc.
(A Development Stage Company)
Condensed Balance Sheet
September 30, 1999
(Unaudited)
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ASSETS
CURRENT ASSETS:
Cash 30
Prepaid expenses 110,250
Total assets 110,280
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable - trade 45,155
Accounts payable - related party 538,339
Note payable - related party 44,306
Note payable 5,000
Total current liabilities 632,800
STOCKHOLDERS' EQUITY:
Common stock, $0.001 par value, 8,727
50,000,000 shares Authorized, 8,726,647
issued and outstanding
Additional paid-in Capital 4,440,905
Deficit accumulated during the (4,972,152)
development stage
Total stockholders' equity (522,520)
Total liabilities and stockholders' 110,280
equity
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
Ranes International Holding, Inc.
(A Development Stage Company)
Condensed Statements of Operations For the Three and Nine Month
periods ended
September 30, 1999, 1998 and 1997 and
For the Period From Inception of Development Stage (February 15,
1990 to September 30, 1999)
(Unaudited)
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Three Month Three Month Three Month
period ended period ended period ended
Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 1997
Net Sales
Selling, general 161,739 203,022 122,354
and administrative
expenses
Loss from 0161,739 -203,022 -122,354
operations
Interest income 4,475 46
(net)
Loss before -161,739 -198,547 -122,308
provision for
income taxes
Provision for
income taxes
Net loss -161,739 -198,547 -122,308
Loss per common $-0.02 $-0.02 $-21.66
share
Weighted average 8,726,647 8,378,821 5,646
number of common
shares outstanding
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
Ranes International Holding, Inc.
(A Development Stage Company)
Condensed Statements of Operations For the Three and Nine Month
periods ended
September 30, 1999, 1998 and 1997 and
For the Period From Inception of Development Stage (February 15,
1990 to September 30, 1999) (Unaudited) (continued)
<TABLE>
<C> <C> <C> <C>
<S>
Nine month Nine month Nine month Cumulative From
period ended period ended period ended the Inception of
Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 1997 Development
Stage (February
15, 1990 to
Sept. 30, 1999)
Net Sales 1,624 1,624
Selling, general 480,277 453,074 516,951 4,978,404
and administrative
expenses
Loss from -480,277 -453,074 -515,327 -4,976,780
operations
Interest income 4,475 46 4,628
(net)
Loss before -480,277 -448,599 -515,281 -4,972,152
provision for
income taxes
Provision for
income taxes
Net loss -480,277 -448,599 -515,281 -4,972,152
Loss per common $-0.06 $-0.08 $-91,26
share
Weighted average 8,626,647 5,329,211 5,646
number of common
shares outstanding
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
Ranes International Holding, Inc.
(A Development Stage Company)
Condensed Statements of Cash Flows
For the Three and Nine Month periods ended September 30, 1999,
1998 and 1999 and
For the Period From Inception of Development Stage (February 15,
1990 to September 30, 1999)
(Unaudited)
<TABLE>
<S> <C> <C> <C>
Three month Three month Three month
period ended period ended period ended
Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 1997
Cash flows from operating
activities:
Net loss $-161,739 $-198,547 $-122,308
Adjustments to reconcile net
loss to net cash used in
operating activities
Provision for losses on
Media receivable
Write down to artwork
Amortization
Common stock issued for
services
Write off of labor contract
Deferred income taxes
Valuation allowance for
deferred income taxes
Change in assets and
liabilities:
Decrease/(increase) in trade 43,316 6,196
account receivable
Decrease/(increase) in 65,125 37,500
prepaid expenses
Increase in checks issued in
excess of cash in bank
Increase/(decrease) in 95,850 18,020 116,097
accounts payable
Net cash used in operations -764 -99,711 -15
Cash flows from financing
Proceeds from issuance of
note
Proceeds from issuance of 100,000
common stock (net)
Net increase/(decrease) in -764 289 -15
cash funds
Cash, beginning of period 794 0 15
Cash, end of period $30 $289 $0
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
Ranes International Holding, Inc.
(A Development Stage Company)
Condensed Statements of Cash Flows
For the Three and Nine Month periods ended September 30, 1999,
1998 and 1999 and
For the Period From Inception of Development Stage (February 15,
1990 to September 30, 1999)
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three month Three month Three month Cumulative From
period ended period ended period ended the Inception of
Sept. 30, 1999 Sept. 30, 1998 Sept. 30, 1997 Development
Stage (February
15, 1990 to
Sept. 30, 1999)
Cash flows from operating
activities:
Net loss $-480,277 $-448,599 $-515,281 $-4,972,152
Adjustments to reconcile
net loss to net cash used
in operating activities
Provision for losses on 500,000
Media receivable
Write down to artwork 400,000
Amortization 136,000
Common stock issued for 100,500 400,000 1,878,855
services
Write off of labor 55,000
contract
Deferred income taxes -1,526,000
Valuation allowance for 1,526,000
deferred income taxes
Change in assets and
liabilities:
Decrease/(increase) in 43,436 6,286
trade account receivable
Decrease/(increase) in 64,750 -212,500 -110,250
prepaid expenses
Increase in checks issued -47
in excess of cash in bank
Increase/(decrease) in 270,462 112,999 377,668 583,494
accounts payable
Net cash used in -44,565 -104,711 -131,327 -1,529,053
operations
Cash flows from financing 44,306 5,000 49,306
Proceeds from issuance of 100,000 125,000 1,479,777
note
Proceeds from issuance of 100,000 125,000 1,479,777
common stock (net)
Net increase/(decrease) -259 289 -6,327 30
in cash funds
Cash, beginning of period 289 0 6,327 0
Cash, end of period $30 $289 $0 $30
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
Ranes International Holding, Inc.
(A Development Stage Company)
Notes to Condensed Financial Statements
September 30, 1999
1. Operations and summary of significant accounting policies
Operations: Ranes International Holdings, Inc. (the
"Company") was incorporated under the laws of the state of
Nevada on February 15, 1990 as Partisan Corporation. On
March 10, 1995, the Company's name was changed to Bio-
Fluorescent Technologies, Inc. then to Ranes International
Holdings, Inc. on March 10, 1998.
Development stage enterprise: The Company is currently
considered to be in the development stage and therefore has
adopted the accounting and reporting standards of Financial
Accounting Standards Board Statement No. 7, "Accounting and
Reporting by Development Stage Enterprises".
The Company's initial business plan was based on developing,
licensing or otherwise acquiring state-of-the-art advanced
diagnostic testing and screening technology and equipment
capable of early detection of human immune system disorders
such as HIV-1, HIV-2 and Hepatitis B. In February 1995, the
Company licensed development stage diagnostic technology
designed to detect AIDS, described as the Mehica GP 120
system.
In July 1996, the Company filed a complaint against the
licenser of the technology. Development activities were
suspended and the Company wrote-off the un-amortized costs
of the Mehica GP 120 project as of July 1, 1996.
In May 1996, the Company reorganized its management team and
revised its business development plan to focus on a "growth
by acquisition" strategy. The Company has been actively
pursuing acquisition possibilities.
Cash and cash equivalents: The company considers all highly
liquid investments with a maturity of three months or less
at the date of acquisition to be cash equivalents.
Supplemental disclosure of non-cash transactions were as
follows for the three month period ended March 31, 1999:
Issuance of common stock in exchange
for services $100,500
Income taxes: Income taxes are accounted for and reported
using an asset and liability approach. Deferred income tax
assets and liabilities are computed annually for differences
between the financial statement and tax basis of assets and
liabilities that will result in taxable or deductible
amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are
expected to effect taxable income.
Operations and summary of significant accounting policies
(continued)
Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable or
refundable for the period plus or minus the change during
the year in deferred tax assets and liabilities.
Deferred tax assets result from net operating losses not yet
utilized for tax purposes. Valuation allowances have been
provided for those deferred tax assets as their utilization
are uncertain.
Reporting Comprehensive Income: In June 1997, Statement of
Financial Accounting Standards ("SFAS") No. 130, " Reporting
Comprehensive Income" was issued, which established
standards for reporting and display of comprehensive income
and its components as separate amounts in the financial
statements. Comprehensive income includes all changes in
equity during a period of an enterprise that results from
recognized transactions and other economic events other than
transactions with owners. This statement requires all items
that are to be recognized under accounting standards as
components of comprehensive income be reported in a
financial statement that is displayed with the same
prominence as other financial statements. This statement
affects only financial statement presentation. As of
December 31, 1998, the Company does not carry any items
required to be disclosed as other comprehensive income in
accordance with the statement.
Net loss per common share: Net loss per share is computed by
dividing net loss by the weighted average number of common
shares outstanding during the periods. The weighted average
number of common stock shares outstanding was 7,865,052 for
the year ended December 31, 1998; 58,676 for the year ended
December 31, 1997; and 860,278 for the cumulative period
from February 15, 1990 (inception) through December 31,
1998.
Significant risks and uncertainties: The process of
preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates
and assumptions regarding certain types of assets,
liabilities, revenues and expenses. Management of the
Company has made certain estimates and assumptions regarding
the realization of receivables and the utilization of net
operating losses for income tax purposes. Such estimates
and assumptions primarily relate to unsettled transactions
and events as of the date of the financial statements.
Accordingly, upon settlement, actual results may differ from
estimated amounts.
Recently Issued Accounting Pronouncements:
Accounting for Derivative Instruments and Hedging
Activities: In June 1998, SFAS No. 133, " Accounting for
Derivative Instruments and Hedging Activities" was issued.
The Statement requires that all derivatives be carried on
the balance sheet at fair value and changes in the fair
value of derivatives be recognized in income when they
occur, unless the derivatives qualify as hedges in
accordance with the standard. If a derivative qualifies as
a hedge, a company can elect to use hedge accounting. The
type of accounting to be applied varies
Operations and summary of significant accounting policies
(continued)
Recently Issued Accounting Pronouncements (continued):
depending on the nature of the exposure that is being
hedged, and the standard defines three hedge risks: change
in fair value, change in cash flows and change in foreign
currency.
A fair-value hedge represents the hedge of an exposure to
changes in the fair value of an asset, liability or an
unrecognized firm commitment. Changes in fair value hedges
are recognized in earnings, as well as the gain or loss on
the hedged item attributable to the hedged risk. Certain
criteria must be met in order for a hedging relationship to
qualify as a fair-value hedge.
A cash-flow hedge is a hedge of an exposure to variability
in cash flows that is attributable to a particular risk.
That exposure may be associated with an existing recognized
asset or liability or a forecasted transaction. The
effective portion of a hedging instrument's gain or loss is
initially reported as a component of other comprehensive
income and is reclassified as a component of earnings in the
same period or periods during which the hedge forecasted
transaction affects earnings. As in fair value hedges,
certain criteria must be met in order for a hedging
relationship to qualify as a cash-flow hedge. foreign-
currency hedge can be a fair-value hedge or a cash-flow
hedge of the foreign currency exposure, therefore it follows
the same principles as those that apply to the accounting
for non-foreign hedges with some particularities defined in
the statement.
This statement is effective for fiscal years beginning after
June 15, 1999 and cannot be applied retroactively.
Management believes that the adoption of this statement will
not have a material effect on the Company's financial
position or results of operations.
Accounting for the Cost of Computer Software Developed for
Internal Use: In March 1998, the American Institute of
Certified Public Accountants issued Statement of Position 98-
1, " Accounting for the Cost of Computer Software Developed
for Internal Use" ("SOP 98-1"), which will become effective
for financial statements for the year beginning January 1,
1999, with early adoption encouraged. SOP 98-1 requires the
capitalization of eligible costs of specified activities
related to computer software developed or obtained for
internal use. Management does not believe the impact of
adoption will have a material effect on the Company's
financial position or results of operations.
Reclassifications: Certain amounts in the 1997 financial
statements have been reclassified to conform to the 1998
presentation.
2. Continued operations
The Company has incurred net operating losses since
inception, and through December 31, 1998 business
development costs have totaled approximately $4,500,000.
These expenditures have been funded primarily with the
proceeds from the private sales of equity securities as well
as with the issuance of common stock in exchange for
services and indebtedness. Since inception, management
activities have been devoted substantially to raising
capital, identifying business opportunities, or acquiring
assets in order to generate revenues. These factors raise
substantial doubt about the Company's ability to continue as
a going concern.
The Company continues to actively pursue acquisition
possibilities.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
The financial statements do not include any adjustments
relating to the recoverability and classification of assets
or the amount and classification of liabilities that might
result should the Company be unable to continue as a going
concern.
3. Reverse common stock spit
Effective January 17, 1998, the Board of Directors approved
a one share for 100 shares reverse stock split. All common
stock shares, weighted average shares, and per share amounts
have been restated in the accompanying financial statements
to reflect the reverse stock split.
4. Media products and services receivable
In October 1995, the Company issued 2,000 shares of its
common stock in exchange for script writing, music scoring,
radio commercial production and radio advertising time to be
received in the future valued at approximately $500,000.
During 1998, the Company provided an allowance of $500,000
against this asset.
5. Stock compensation plans
On August 29, 1996, the Company adopted fixed and
performance based stock compensation plans. The Company
accounts for the fair value of its grants under those plans
in accordance with Statement of Financial Accounting
Standards No. 123, "Accounting for Stock Based
Compensation". The compensation cost that was charged
against income for these plans was $50,000 for the year
ended December 31, 1997.
Fixed stock option plan: Under the 1996 Incentive Stock
Option Plan, the Company may grant options to its employees,
directors, consultants and advisors for up to 8,667 shares
of its $0.001 par value common stock. The exercise price
for stock granted pursuant to a tax-qualified option plan is
to be greater than or equal to the market price of the
Company's stock on the date of grant. The exercise price of
stock granted pursuant to a non-qualified stock option plan
is to be greater than or equal to 85% of the market price of
the Company's common
Business and summary of significant accounting policies
(continued)
Stock compensation plans (continued) stock on the date of grant.
The maximum term for an option is ten years. Options are granted
at the discretion of the Board of Directors. No options were
granted during the year ended December 31, 1998 or 1997.
Performance based stock plan: The Company may grant selected
executives and other key individuals deferred stock awards whose
vesting is contingent upon the future performance of services
under terms and conditions specified by the Board of Directors.
The number of shares subject to grant under this plan together
with the number of shares subject to option under the fixed stock
option plan cannot exceed 8,667.
A summary of the status of the Company's stock option plans as of
December 31, 1998 and 1997 and changes during the years then
ended are presented below:
<TABLE>
<C> <C>
<S>
Shares Weighted average
exercise price
Outstanding at January 6,634 $165
1, 1997
Granted
Exercised
Forfeited (167) $450
Expired
6,467 $156
Outstanding at December
31, 1997
Granted
Exercised
Forfeited
Expired (1,967) $(159)
4,500 $154
Outstanding at December
31, 1998
</TABLE>
The following table summarized information about stock options
outstanding at December 31, 1998:
<TABLE>
<S> <C> <C> <C> <C> <C>
Option Exercise price Options Weighted Options Aggregate
grant outstanding average exercisable proceeds
date 12/31/98 remaining 12/31/98 12/31/98
contractu
al life
8/29/9 $134 3,000 2.67 3,000 $
6 years 4
0
2
,
0
0
0
8/29/9 $180 1,333 2.67 1,333 $239,940
6 years
8/29/9 $375 167 32.33 167 51,375
6 years
4,500 4,500 $693,315
</TABLE>
6. Income taxes
The benefit for income taxes consisted of the following:
<TABLE>
<S> <C> <C> <C>
Year ended 1998 December 31, Cumulative
1997 activity during
development
stage February
15, 1990
(inception)
through December
31, 1998
Federal:
Currently payable
Deferred (195,699) (260,641) (1,526,000)
(195,699) (260,641) (1,526,000)
Change in valuation 195,699 260,641 (1,526,000)
allowance
Benefit for income
taxes
</TABLE>
Deferred income taxes consisted of the following at December 31:
<TABLE>
<C> <C>
<S>
1998 1997
Deferred tax assets - net 1,526,000 1,330,30
operating loss carryovers 1
Valuation allowance (1,526,000)
</TABLE>
The Company has a net operating loss carryover as of
December 31, 1998 of approximately $1,526,000 available to
offset future taxable income, if any. In the event of
ownership changes aggregating 50% or more in any three-year
period, the amount of loss carryovers that become available
for utilization in any year may be limited. If not utilized
against future taxable income, the net operating loss
carryovers will expire between the years 2005 and 2013.
7. Legal proceedings
The Company had secured worldwide rights to manufacture,
market and sell the Mehica GP 120 ("Mehica") System in
February 1995. On July 19, 1996, the Company filed a
complaint in the United States District Court for the
District of Maryland against the licenser, and others,
seeking declaratory relief, damages and other relief in
respect to certain agreements relating to the rights to a
proprietary automated system for detection of the HIV virus
and for use in mass screening of individuals, the Packaged
Antigen Kit and the Mehica.
On July 30, 1996, the defendants filed an answer, counter-
claim, and third party complaint, seeking declaratory relief
with respect of the agreements and damages. A settlement
order issued by the court to dismiss the case was entered
into on September 25, 1997. Both parties elected to not
reopen the case within the allowable 30 days following the
order and the case was dismissed.
8. Contingency
The State of Nevada's Revised Statue provides that a
corporation that has been reinstated to a status of good
standing continues to be liable for past acts and errors and
omissions, whether engaged in directly or through its former
officers and directors. Management of the Company does not
believe any past acts, errors and omissions or unasserted
claims' and assessments exist or have occurred, however they
are continently liable for such matters. No provisions for
losses, if any, have been provided in the accompanying
finical statements because of the uncertainty of such
matters.
9. Related party transactions
On August 31, 1998, the Company entered into a three-year
agreement with a company owned by an Officer of the Company
for public relation services. Under the terms of the
agreement, the Company is obligated to pay this public
relations company $15,000 per month, plus certain other
costs. The agreement contains renewal provisions.
This same Officer provides management services and office support
services to the Company. Such services include office personnel,
supplies and the maintenance of the Company's principal executive
office in Scottsdale, Arizona. During 1998, the Company issued
5,000,000 shares of their common stock in exchange for $100,000
of indebtedness it owed this Officer for management and office
support services. The Company also paid this Officer
approximately $94,600 during 1998 ($637,500 during 1997). As of
December 31, 1998, the Company owed this Officer $256,439
($40,919 at December 31, 1997), which is included in the
accompanying balance sheets as payable to related parties.
During the nine month period ended September 30, 1999, The
Company incurred an additional $288,90000 in consulting fees and
in addition a note of $44,306 for cash advances to the Company.
The net accrued liability to the related company in addition to
the Cash Note amounted to $538,339 at September 30, 1999.
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange
Act, the Registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: November 3, 1999 RANES INTERNATIONAL HOLDING, INC.
(Registrant)
By: /s/ Jan J. Olivier
Jan J. Olivier, President/Director
By: /s/ Wynn J. Bott
Wynn J. Bott, Controller
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-END> DEC-31-1998 DEC-31-1997
<CASH> 289 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 175,000 543,436
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 175,289 543,436
<CURRENT-LIABILITIES> 318,032 110,091
<BONDS> 0 0
0 0
0 0
<COMMON> 4,349,132 3,849,132
<OTHER-SE> (4,491,875) (3,415,787)
<TOTAL-LIABILITY-AND-EQUITY> (142,743) 433,345
<SALES> 0 1,624
<TOTAL-REVENUES> 0 1,624
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 1,080,563 676,557
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (1,076,088) (674,887)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (1,076,088) (674,887)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 4,475 46
<EPS-BASIC> 0 0
<EPS-DILUTED> 0 0
