P.M. MANAGEMENT SYSTEMS, INC.
(Formerly named Process Based Management,
Inc.)
(A development stage company)
AUDIT REPORT
Consolidated Financial Statements
December 31, 1995
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver Colorado 80237
INDEX TO FINANCIAL STATEMENTS
P.M. MANAGEMENT SYSTEMS, INC.
(A development stage company)
TABLE OF CONTENTS
ITEM
PAGE
Report of Certified Public
Accountant...................... 2
Consolidated Balance Sheet, December 31,
1995.............. 3
Consolidated Statement of Loss,
for the year ended December 31,
1995....................... 4
Consolidated Statement of Stockholders
Equity,
for the year ended December 31,
1995....................... 5
Consolidated Statement of Cash Flows,
for the year ended December 31,
1995....................... 6
Notes to Financial
Statements.............................. 7-8
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver, Colorado 80237
303-220-0227
Board of Directors
P.M. Management Systems, Inc.
(Formerly named Process Based Management,
Inc.)
404 Scott Point Drive
Salt Spring Island, BC Canada V8K2R2
I have audited the accompanying consolidated
balance sheet of P.M. Management Systems,
Inc. (a development stage company) as of
December 31, 1995, and the related
consolidated statements of Loss,
Stockholders Equity and Cash Flows for the
year ended December 31, 1995.
I conducted my audit in accordance with
generally accepted auditing standards. These
standards require that I plan and perform the
audit to obtain reasonable assurance about
whether the financial statements are free of
material misstatement. An audit also
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. I believe that my
audit provides a reasonable basis for my
opinion.
In my opinion, the consolidated financial
statements referred to above present fairly,
in all material respects, the financial
position of P.M. Management Systems, Inc. as
of December 31, 1995, and the results of its
operations and its cash flow for the year
ended December 31, 1995.
Janet Loss, C.P.A., P.C.
February 20, 1999
2
P.M. MANAGEMENT SYSTEMS, INC.
(A development stage company)
CONSOLIDATED BALANCE SHEET
December 31, 1995
ASSETS
CURRENT ASSETS:
License rights ( note 2) $ 1,924,999
Investment in
Ad-A-Cab Canada, Inc. 1
TOTAL ASSETS $
1,925,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES: $
0
STOCKHOLDERS' EQUITY(DEFICIT):
Common stock, no par value per share,
Authorized, issued and outstanding
10,000,000 shares
1,999,150
Preferred stock, no par value,
Authorized, issued and outstanding
1,000,000 shares 1,000
Sub-total: $ 2,000,150
Deficit accumulated during the
Development Stage ( 75,000)
Treasury stock ( 150)
TOTAL STOCKHOLDERS' EQUITY:
1,925,000
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY: $
1,925,000
The accompanying notes are an integral part
of
these financial statements.
3
P.M. MANAGEMENT SYSTEMS, INC.
(A development stage company)
CONSOLIDATED STATEMENT OF LOSS
For the year ended December 31, 1995
REVENUES: $
0
GENERAL AND ADMINISTRATIVE EXPENSES:
Automobile expenses 1,726
Travel and promotion 22,474
Office facilities and rent 23,876
Consulting fees 24,862
Professional fees 1,610
Product testings 751
TOTAL GENERAL AND ADMINISTRATIVE
EXPENSES: 75,299
INCOME (LOSS) FROM OPERATIONS ( 75,299)
OTHER INCOME AND (EXPENSES):
Forgiveness of debt 94,418
Write-off obsolete materials
and product development costs ( 24,106)
TOTAL OTHER INCOME AND (EXPENSES):
70,312
NET INCOME (LOSS): $(
4,987)
NET INCOME (LOSS) PER
SHARE OF COMMON STOCK: N/A
The accompanying notes are an integral part
of the financial statements.
4
P.M. MANAGEMENT SYSTEMS, INC
(A development stage company)
CONSOLIDATED STATEMENT of STOCKHOLDERS
EQUITY
For the year ended December 31, 1995
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
<C>
Deficit
Number of Number of Accumulated
shares shares Amount Amount
Treasury during the
common Preferred Common Preferred stock
Development Total
Balance,
January 1,
1995 10,000,000 1,000,000 1,999,150 1,000 ( 150) (70,013)
1,929,987
Net (Loss)
For the
year ended
December
31,1995 0 0 0 0 0 (4,987)
(4,987)
Balance,
December
31,1995 10,000,000 1,000,000 1,999,150 1,000 (150)
(75,000) 1,925,000
</TABLE>
The accompanying notes are an integral part
of the financial statement.
5
P.M. MANAGEMENT SYSTEMS, INC
(A development stage company)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended December 31, 1995
Cash Provided By (Used For)
Operating Activities:
(Loss) For the year ended
December 31, 1995 $( 4,987)
Net decrease in accounts payable
and accrued liabilities ( 9,800)
Sub-total: (14,787)
Investing Activities:
Decrease in Product development
costs 8,806
Financing activities:
Advances from a director (2,160)
Net (decrease) in cash
for the period ( 8,141)
Cash, beginning of the period: 8,141
Cash, End of the period: $ 0
The accompanying notes are an integral part
of these financial statements.
6
P.M. MANAGEMENT SYSTEMS. INC.
(A Development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1995
NOTE 1 - ORGANIZATION OF P.M. MANAGEMENT
SYSTEMS, INC.:
P.M. Management Systems, Inc. is a Colorado
Corporation and is currently in the
development stage. On May 6,1994, the
Company changed its name from Process Based
Management, Inc. to P.M. Management Systems,
Inc.
On September 5, 1994, the Company acquired
all of the outstanding ownership interests in
Ad-A-Cab America, L.L.C., a Wyoming limited
liability company. To effect the
reorganization pursuant to Section
368(a)(1)(B) of the Internal Revenue Code,
the Company issued 7,980,000 shares of its
previously authorized, but unissued, no par
value common stock.
In January of 1996, the Company terminated
its ownership interests in Ad-A-Cab America,
L.L.C.. The above mentioned 7,980,000 common
shares that were issued on September 5, 1994
were returned by Ad-A-Cab America, L.L.C. and
canceled by the company.
NOTE 2 - ORGANIZATION AND LICENSE RIGHTS OF
AD-A-CAB AMERICA, INC. L.L.C.:
The Company was formed as a limited liability
company under the laws of the state of
Wyoming on November 23, 1993, and is in the
development stage.
The Company has entered into a license
agreement with Ad-A-Cab America Limited, a
Hong Kong Corporation(AAC Hong Kong),
granting the Company the exclusive North
American rights for the Ad-A-Cab-rooftop-
mounted taxi advertising system ( the North
American License Rights).
The North American license rights are for a
term of three years, commencing May 14, 1994,
and require the Company to pay a royalty on
revenues earned by the Company from the
rooftop-mounted advertising units as follows:
(a) in the two-year period immediately
after the Companys purchase of a
rooftop-mounted advertising unit- 15%
(b) after such two-year period - 10%
The North American License rights are
renewable, pursuant to the terms of the
agreement, upon mutual agreement between the
Company and AAC Hong Kong.
In exchange for the right to enter into the
license agreement with AAC Hong Kong, the
Company issued two ownership units, valued at
$1 million per unit, representing a
reimbursement of notes issued by those
parties to the third parties in exchange for
the exclusive North American License Rights.
7
P.M. MANAGEMENT SYSTEMS, INC.
(A development stage company)
NOTES TO CONSOLIDATED FINANCIAL STATMENTS
December 31, 1995
NOTE 2 - CONTINUED:
On March 15, 1994, the Company entered into
an agreement Ad-A-Cab, Canada, Ltd. (AAC
Canada) granting AAC Canada the exclusive
Canadian rights for the Ad-A-Cab rooftop-
mounted taxi advertising system(the Canadian
License Rights). AAC Canada paid Cdn.
$100,000 and issued 2,400,000 AAC Canada
common shares(50% of its outstanding shares).
A royalty on the revenues earned by AAC
Canada (which are to be paid directly to AAC
Hong Kong) from the rooftop-mounted
advertising units is as follows:
(a) during the two-year period immediately
after AAC Canadas purchase of rooftop-
mounted advertising unit - 15%
(b) after such two-year period - 10%
The Canadian License Rights are for a term of
three years, commencing March 15, 1994, and
are renewable, pursuant to the terms of the
agreement, upon mutual agreement between the
Company and ACC Canada.
NOTE 3 - GOING CONCERN:
Since its formation, the Company has incurred
losses of $75,000. The ability of the
Company to achieve its development plans and
recover the carrying value of license rights
is dependent upon the support of its unit
holders and creditors to provide the
necessary funding for ongoing operations.
These financial statements have been prepared
on a going concern basis and do not reflect
adjustments which would be necessary if the
Company were unable to continue as a going
concern.
NOTE 4 - INVESTMENT IN AD-A-CAB CANADA, INC.:
During the period, the Company incurred and
paid management fees of $24,862 and rent of
$23,876 to a director who is related to one
of the ownership unit holders. The other
ownership unit holder has a minority interest
in ACC Hong Kong.
NOTE 5 - CURRENCY EXCHANGE:
The financial statements are presented in
dollar amounts based on the United States
Currency Exchange.
NOTE 6 - SUBSEQUENT EVENTS:
In January of 1996, the Company terminated
its ownership interests in Ad-A-Cab America,
L.L.C. and then canceled the 7,980,000 common
shares that were issued on September 5, 1994
for the reorganization purchase agreement.
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