SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JANUARY 16, 2001
FLORAN INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
FLORIDA 339868-10-1 06-1562447
(State or other jurisdiction Commission (IRS Employer
of incorporation) File Number) Identification No.)
501 West Monroe St. Springfield IL 62701
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (217) 698-6060
--------------
3045 CORPORATION
3045 N. Federal Highway, Suite 60,
Fort Lauderdale, Florida
33306
(Former name or former address, if changed since last report.)
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
On January 17, 2001 Kim Naimoli sold 925,000 of her 950,000 shares of the
Company's common stock and Brenda Hamilton sold 30,000 of her shares of the
Company's common stock to Michael Mitchell, Apollo Holdings LTD., and Todd
Moore. Kim Naimoli sold the aforementioned 925,000 shares for $425,000, and
Brenda Hamilton sold her aforementioned 30,000 shares for $50,000. Michael
Mitchell now owns 4.9% of the Company. Apollo Holdings LTD. is principally
owned by Chris Bonzini- who now controls 4.9% of the Company. Likewise, Todd
Moore also now owns 4.9% of the Company. On January 16, 2001, Messrs. Lyndell F.
Parks, Fred Jarosz, Terry L. Pancake, Dennis Grodon, Dr. Javaid Sheik and G.
Bryan Thomas were appointed to the Company's Board of Directors, and Kim
Naimoli resigned her positions as Director and President of the Company. The new
President of the Company is Fred Jarosz.
ITEM 2.
On January 16, 2001, the Company entered into an agreement with H2O
International Inc. (H2O) and its shareholders, whereby the Company acquired H2O
and H2O become the Company's wholly-owned subsidiary. The Company acquired H2O
in exchange for 5,000,000 shares of the Company's no par value common stock,
shares which were in turn issued to the shareholders of H2O. H2O currently holds
the license for the chemicals used to clean and disinfect components of portable
water storage systems. The Company plans to pursue cleaning processes for
large-scale water treatment and storage facilities through the license held by
H2O, the Company's wholly-owned subsidiary.
H2O International, Inc., ("H20"), was formed to market proprietary chemicals
that are used to clean and disinfect components of portable water systems. The
principal business of the Company is selling chemical products, and the
principal products of the Company are FLORAN TOP and FILTER FIT. The proprietary
technology is owned by Waterhole International, Inc., d/b/a Floran Technologies,
Inc. with whom the Company has a licensing agreement.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA INFORMATION AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
(b) Pro Forma Financial Information. Not required.
(c) Exhibits. None.
H2O INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
DECEMBER 31, 2000
H2O International, Inc.
(A Development Stage Company)
Contents
Page(s)
Independent Auditors' Report 1
Balance Sheet at December 31, 2000 2
Statement of Operations from August 1, 2000 (Inception) to December 31, 2000 3
Statement of Changes in Stockholders' Deficiency from August 1, 2000 (Inception) 4
to December 31, 2000
Statement of Cash Flows from August 1, 2000 (Inception) to December 31, 2000 5
Notes to Financial Statements 6 - 14
Independent Auditors' Report
To the Board of Directors of:
H2O International, Inc.
(A Development Stage Company)
We have audited the accompanying balance sheet of H2O International, Inc. (a
development stage company) as of December 31, 2000 and the related statements of
operations, changes in stockholders' deficiency and cash flows from August 1,
2000 (inception) to December 31, 2000. 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 auditing standards generally accepted
in the United States of America. 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 referred to above present fairly in all
material respects, the financial position of H2O International, Inc. (a
development stage company) as of December 31, 2000, and the results of its
operations and its cash flows from August 1, 2000 (inception) to December 31,
2000, in conformity with accounting principles generally accepted in the United
States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 10 to the
financial statements, the Company's operating losses of $151,383, default on a
payment due under a license agreement, and need for additional cash to fund
operations over the next year raise substantial doubt about its ability to
continue as a going concern and realize its assets. Management's Plan in regards
to these matters is also described in Note 10. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
SALBERG & COMPANY, P.A.
Boca Raton, Florida
March 5, 2001
H2O International, Inc.
(A Development Stage Company)
Balance Sheet
December 31, 2000
Assets
License and rights $ 1,547,500
----------------
Total Other Assets 1,547,500
----------------
Total Assets $ 1,547,500
================
Liabilities and Stockholders' Deficiency
Current Liabilities
Bank overdraft $ 464
Accounts payable 37,215
Due to investors 86,000
Payable under license agreement 1,450,000
----------------
Total Current Liabilities 1,573,679
----------------
Total Liabilities 1,573,679
----------------
Stockholders' Deficiency
Common stock, no par value, 100,000,000 shares authorized,
50,000,000 shares issued and outstanding 125,100
Common stock issuable (41,667 shares) 104
Deficit accumulated during development stage (151,383)
----------------
----------------
Total Stockholders' Deficiency (26,179)
----------------
Total Liabilities and Stockholders' Deficiency $ 1,547,500
================
See accompanying notes to financial statements.
2
H2O International, Inc.
(A Development Stage Company)
Statement of Operations
From August 1, 2000 (Inception)
To December 31, 2000
Operating Expenses
Compensation and consulting 98,486
General and administrative 20,371
Professional fees 21,844
Demonstration Supplies 10,682
----------------
Total Operating Expenses 151,383
----------------
Net Loss $ (151,383)
================
================
Net loss per share - basic and diluted $ (0.003)
================
Weighted average number of shares outstanding during the period - basic and diluted 50,016,777
================
See accompanying notes to financial statements.
3
H2O International, Inc.
(A Development Stage Company)
Statement of Changes in Stockholders' Deficiency
From August 1, 2000 (Inception) to
December 31, 2000
Deficit
Accumulated
Common Stock During Development
------------------------------------
--------------- --- ----------------
Shares Amount Stage Total
--------------- ---------------- ------------------- ---------------------
--------------- ---------------- ------------------- ---------------------
Common stock issued for services to
founders 11,000,000 $ 27,500 $ - $ 27,500
Common stock issued to founder as
expense reimbursement 20,000,000 50,100 - 50,100
Common stock issued for license and
rights 19,000,000 47,500 - 47,500
Common stock issuable for services 41,667 104 - 104
Net loss from inception to December 31,
2000 - - (151,383) (151,383)
--------------- ---------------- ------------------- ---------------------
--------------- ---------------- ------------------- ---------------------
Balance, December 31, 2000 50,041,667 $ 125,204 (151,383) $ (26,179)
=============== ================ =================== =====================
=============== ================ =================== =====================
See accompanying notes to financial statements.
4
H2O International, Inc.
(A Development Stage Company)
Statement of Cash Flows
From August 1, 2000 (Inception)
To December 31, 2000
Cash flows from operating activities
Net loss $ (151,383)
Adjustments to reconcile net loss to net cash used in operating activities:
Common stock issued for services 27,604
Expenses paid by founder 50,100
Changes in operating assets and liabilities:
Increase (decrease) in:
Bank overdraft 464
Accounts payable 37,215
------------------
------------------
Net cash used in operating activities (36,000)
------------------
Cash flows from investing activities
Payment for license (50,000)
------------------
------------------
Net cash used in investing activities (50,000)
Cash flows from financing activities
Proceeds from investor loans 86,000
------------------
------------------
Net cash provided by financing activities 86,000
------------------
Net increase in cash -
Cash at beginning of period -
------------------
Cash at end of period $ -
==================
Non-cash investing and financing activities:
Common stock issued for license (19,000,000 shares) $ 47,500
License agreement in exchange for payable $ 1,450,000
See accompanying notes to financial statements.
5
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
Note 1 Summary of Significant Accounting Policies and Organization
(A) Nature of Operations
H2O International, Inc. (the "Company"), an Illinois corporation, was
incorporated on December 8, 2000. The Company acted as a defacto
corporation from August 1, 2000 the date that the Company entered into
its first contracts.
The Company is in the development stage and was formed for the purpose
of marketing a cleaning process for large-scale water and fluid
treatment, filtering, and storage facilities. The Company licenses the
marketing, sale, and distribution rights from the owner of the
technology (see Note 2).
On January 9, 2001, the Company was acquired by an inactive Florida
corporation, which is traded on the OTCBB and reports to the
Securities and Exchange Commission under the Securities Exchange Act
of 1934. Pursuant to Accounting Principles Board Opinion No. 16 ("APB
16"), the acquisition was treated as a recapitalization of the
Company. Accordingly, all share and per share data in the accompanying
financial statements reflects the recapitalization retroactively. The
authorized shares and capital structure reflect those of the legal
parent, Floran International, Inc. Pro-forma financial disclosure is
not presented since the transaction is treated as a recapitalization
rather than a business combination.
Activities during the development stage include raising capital,
negotiations of various contracts and agreements, development of the
Company's infrastructure, and implementation of the Company's business
plan.
(B) Use of Estimates
In preparing financial statements, management is required to make
estimates and assumptions that effect the reported amounts of ssets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and revenues and expenses during
the reported period. Actual results may differ from these estimates.
(C) Cash Equivalents
For purposes of the cash flow statement, the Company considers all
highly liquid investments with original maturities of three months or
less at the time of purchase to be cash equivalents.
(D) Long-Lived Assets
Statement of Financial Accounting Standards No. 121, "Accounting for
the Impairment of Long-lived Assets and for Long-lived Assets to be
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
Disposed Of" ("SFAS 121"), requires the Company to review long-lived
assets, certain identifiable intangible assets, and goodwill related
to those assets for impairment whenever circumstances and situations
change such that there is an indication that the carrying amounts may
not be recoverable. If the non-discounted future cash flows of the
enterprise are less than their carrying amount, their carrying amounts
are reduced to fair value and an impairment loss is recognized. The
adoption of this pronouncement did not have a significant impact on
the Company's financial statements as of December 31, 2000.
(E) Intangible Assets
Intangible assets consist of a license and manufacturers
representative rights, which will be amortized utilizing the
straight-line method over the estimated useful life of 10 years
beginning on January 1, 2001, the date the asset was placed in service
and the Company began providing services.
(F) Stock-Based Compensation
The Company accounts for stock options issued to employees in
accordance with the provisions of Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and
related interpretations. As such, compensation cost is measured on the
date of grant as the excess of the current market price of the
underlying stock over the exercise price. Such compensation amounts
are amortized over the shorter of the option vesting periods or
defined service periods. The Company adopted the disclosure provisions
of SFAS No. 123, "Accounting for Stock-Based Compensation," which
permits entities to provide pro-forma net income (loss) and pro-forma
earnings (loss) per share disclosures for employee stock option grants
as if the fair-valued based method defined in SFAS No. 123 had been
applied.
The Company accounts for stock and stock options issued to
non-employees for goods or services in accordance SFAS 123 and related
interpretations.
(G) Revenue Recognition
Revenues will be recognized upon completion of services.
(H) Income Taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109
"Accounting for Income Taxes" ("Statement 109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are expected to be
recovered or settled. Under Statement 109, the effect on deferred tax
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
assets and liabilities of a change in tax rates is recognized in
income in the period which includes the enactment date.
(I) Net Loss Per Common Share
Basic net income (loss) per common share (Basic EPS) excludes dilution
and is computed by dividing net income (loss) available to common
stockholder by the weighted-average number of common shares
outstanding for the period. Diluted net income per share (Diluted EPS)
reflects the potential dilution that could occur if stock options or
other contracts to issue common stock were exercised or converted into
common stock or resulted in the issuance of common stock that then
shared in the earnings of the Company. There were no common stock
equivalents outstanding at December 31, 2000. In February 2001, the
Company authorized the issuance of 300,000 common stock options, which
may dilute future earning per share.
(J) Fair Value of Financial Instruments
Statement of Financial Accounting Standards No. 109, "Disclosures
about Fair Value of Financial Instruments," requires disclosures of
information about the fair value of certain financial instruments for
which it is practicable to estimate that value. For purposes of this
disclosure, the fair value of a financial instrument is the amount at
which the instrument could be exchanged in a current transaction
between willing parties, other than in a forced sale or liquidation.
The carrying amounts of the Company's short-term financial
instruments, including accounts payable and the payable under the
license agreement, approximate fair value due to the relatively short
period to maturity for these instruments.
(K) Concentrations
Supplies used in providing services are to be purchased from one
supplier, the licensor (see Note 2).
(L) New Accounting Pronouncements
The Financial Accounting Standards Board has recently issued one new
accounting pronouncement. Statement No. 133 as amended by Statement
No. 137 and 138, "Accounting for Derivative Instruments and Hedging
Activities" established accounting and reporting standards for
derivative instruments and related contracts and hedging activities.
This statement is effective for all fiscal quarters and fiscal years
beginning after June 15, 2000. The adoption of this pronouncement did
not have a material effect on the Company's financial position or
results of operations.
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
Note 2 License
On August 1, 2000, the Company entered into a License Agreement (the "License
Agreement") with a third party to license a patent pending cleaning process and
related products (the "Licensed Products") for large scale water and fluid
treatment, filtering and storage facilities. The Company also assumed from a
founder certain manufacturers representative agreements and the rights to the
License Agreement as discussed above with that third party. The License
Agreement allows the Company to market, sell, and distribute the Licensed
Products under the Floran trade name in stipulated geographic locations outside
the United States and Germany including China, India, Pakistan, Korea,
Indonesia, Philippines, Cambodia, Vietnam, Thailand, Burma, Laos, Malaysia,
Bangladesh, U.A.E., Israel, Saudi Arabia, Kuwait, Qatar, Taiwan, and Japan. The
manufacturers representative agreements cover the States of Florida and Georgia.
The consideration for the license was $1,500,000, a 15% common stock ownership
of the Company (9,000,000 shares), as stipulated in the Agreement (see Notes 4
and 6), future royalties and minimum product purchase requirements in years 4
and thereafter, as stipulated, to maintain the exclusive license. As of December
31, 2000, $50,000 was paid, $950,000 was due on February 23, 2001, and $500,000
is due on July 23, 2001 (see Note 4). As of the date of the accompanying audit
report, the Company was in default on the February 23, 2001 payment (see Note
10). The common stock aggregating 19,000,000 shares was issued as of December
31, 2000. The common shares were valued at $47,500 based on a contemporaneous
issuance to a founder as expense reimbursement (see Note 6). Included in the
19,000,000 was 10,000,000 shares issued to the founder for the manufacturers
representative agreements and the rights to the License Agreement.
As the Company has not placed the license into service as of December 31, 2000,
no amortization has been recognized.
The Company has reviewed the potential impairment of the license and rights
pursuant to SFAS 121. Realization of this intangible license and rights asset is
dependent upon the Company's ability to implement its business plan and generate
significant revenues. The accompanying financial statements do not include any
adjustments that might result from the outcome of this uncertainty. (See Note
10).
Note 3 Due to Investors
In December 2000, the Company raised $86,000 from three investors based on a
private placement offering at $1.00 per share. The investors subsequently agreed
to rescind the subscription agreements and subscribe to a new private placement
offering which occurred in 2001 at $0.50 per share after the recapitalization
(see Note 1). Accordingly, the $86,000 is reflected as a liability at December
31, 2000.
Note 4 Payable Under License Agreement
The payable represents the non-interest bearing amounts due under a stipulated
schedule in the License Agreement (see Note 2) as follows:
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
February 23, 2001 $ 950,000
July 23, 2001 500,000
-------------
-------------
$ 1,450,000
=============
The February 23, 2001 amount was in default as of the date of the accompanying
audit report (see Note 10). The licensor has agreed to extend the February 23,
2001 payment date until April 30, 2001.
Note 5 Commitments
(A) Consulting Agreements
On August 1, 2000, the Company executed a consulting agreement
whereby the consultant will provide stipulated services. The
consultant was granted 200,000 common shares of the Company's stock,
which vest over the service period from August 1, 2000 through July
31, 2002. The consultant earned 41,667 shares from August 1, 2000 to
December 31, 2000 valued at $104 based on the fair market value at the
pro-rata completion dates of the services provided. Such fair market
value averaged $0.0025 per a share for that period. Since the shares
were not physically issued as of December 31, 2000, the common stock
is reflected as common stock issuable in the accompanying financial
statements. In addition, the consultant will be paid 3% of all net
profits of the Company generated as a direct result of the new
business brought to the Company through the consultant's efforts. (See
Note 6)
Subsequent to year-end, on January 2, 2001, the Company executed a
consulting agreement whereby the consultant will provide CFO services.
The consultant was issued 500,000 common shares with 200,000 shares
previously issued effective at inception and vesting immediately at
that time and 300,000 issued in January 2001 and vesting over 12
months and an initial payment of $12,000 for services rendered. The
200,000 shares were valued at $500 based on a common stock issuance
for expense reimbursement to a founder and recognized as a consulting
expense over the service period in 2000. The 300,000 shares will be
reported as consulting expense in year 2001 based on the value
computed as they vest.
Note 6 Stockholders' Deficiency
(A) Stock Issuances
The Company issued 11,000,000 common shares to its founders effective
at inception in exchange for organizational services valued at $27,500
based on a contemporaneous common stock issuance to a founder for
expense reimbursement (see below). The Board of Directors has
authorized 2,000,000 of the founder shares held by one founder to be
granted to employees, as determined, for future services. Compensation
expense will be recognized in the future periods as determined on the
grant dates.
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
The Company issued 20,000,000 common shares to a founder as
reimbursement for $50,100 of organizational and general and
administration expenses paid on behalf of the Company. The $50,100 has
been charged to operations as of December 31, 2000.
The Company issued 19,000,000 common shares to acquire license rights
and manufacturers representative rights from a third party and a
founder, respectively, in August 2000. The shares were valued at
$47,500 based on the contemporaneous common stock issuance to a
founder for expense reimbursement (see above and Note 2).
From August 1, 2000 to December 31, 2000, the Company committed to
issue pro-rata 41,667 shares valued at $0.0025 per share based on the
average fair market value during the service period to a consultant
pursuant to a consulting agreement (see Note 5).
Note 7 Income Taxes
There was no income tax expense for the period ended December 31, 2000 due to
the Company's net losses.
The Company's tax expense (benefit) differs from the "expected" tax expense
(benefit) for the period ended December 31, 2000, (computed by applying the
Federal Corporate tax rate of 34% to loss before taxes), as follows:
Computed "expected" tax expense (benefit) $ (51,470)
Effect of net operating losses 51,470
--------------
$ -
==============
The effects of temporary differences that gave rise to significant portions of
deferred tax assets and liabilities at December 31, 2000 are as follows:
Deferred tax assets:
Other net operating loss carryforward $ 42,085
Stock based compensation 9,385
--------------
Total gross deferred tax assets 51,470
Less valuation allowance (51,470)
--------------
Net deferred tax assets $ -
==============
The Company has stock based expenses and other net operating loss carryforwards
of approximately $151,383 available to offset futureb taxable income through
2020.
Note 8 Segment Information
The Company did not begin sales until 2001 therefore segment information is not
presented.
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
Note 9 Related Parties
The Company paid a principal stockholder $38,000 in consulting fees in 2000 and
assumed license rights and manufacturers representative agreements from that
same stockholder for 10,000,000 shares of the Company's common stock (see Note
2). That same principal stockholder entered into a consulting agreement with the
Company in January 2001 (see Note 11).
Note 10 Going Concern
As reflected in the accompanying financial statements, the Company is a
development stage company with no revenues and losses of $151,383 through
December 31, 2000. In addition, the Company is in default on a payment due under
the licensing agreement (see Note 4). The ability of the Company to realize its
intangible license asset and continue as a going concern is dependent on the
Company's ability to further implement its business plan and generate revenues.
The financial statements do not include any adjustments that might be necessary
if the Company is unable to continue as a going concern.
In January 2001, the Company was acquired by a public shell company and plans a
private placement offering of common stock at $0.50 per share. The Company has
also generated sales during 2001 (unaudited).
Note 11 Subsequent Events
- -------------------------
(A) Consulting Expense
In January 2001, under a stock purchase agreement ("the Stock Purchase
Agreement"), a principal stockholder (the "Principal Stockholder") was
to pay $500,000 to acquire 9,750,000 free trading common shares of an
inactive SEC reporting corporation (see Note 1(A)). As of the date of
the accompanying audit report 9,550,000 shares were acquired for a
total $475,000 or $0.0497 per share and the principal stockholder paid
$200,000 and owed one of the two sellers $275,000 which was
collateralized by 250,000 of the purchased shares and other personal
assets of the seller. The difference of 200,000 shares were not
purchased since $25,000 of the purchase price was not paid to a second
seller.
Under two consulting agreements with three-year terms effective
January 9, 2001, the consultants were made a party to the Stock
Purchase Agreement as the sole compensation pursuant to those
consulting agreements. The Consultants received 2,950,000 fully vested
shares each, however, they did not pay for such shares, and there is
no obligation on the consultants to repay the principal stockholder.
Accordingly, the receipt of the shares by the consultants is, in
substance, a payment under the consulting agreements and the Company
will recognized an approximate $293,000 related consulting expense
over the service period based on the pro-rata portion of the aggregate
purchase price value or $0.0497 per share.
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
In addition 650,000 of the total purchased shares were granted to a
third consultant for services rendered and an expense of $32,330 was
recognized in January 2001 based on the pro-rata portion of the
purchase price or $0.0497 per share.
(B) Common Stock Issuance
The Company has issued 172,000 common shares for the $86,000
investment reflected as a liability at December 31, 2000. In addition,
82,000 common shares were issued for $41,000 in January and February
2001.
(C) Stock Options
On February 15, 2001, Floran International, Inc., the Company's post
recapitalization legal parent, authorized the issuance of an aggregate
300,000 common stock options to three directors at an exercise price
of $0.10 per share vesting pro-rata over a 12-month period.
(D) Consulting Agreements
Under a one-year agreement executed on December 15, 2000 and effective
January 1, 2001, the Company will pay a principal stockholder as a
consultant, $12,000 per month plus approved out-of-pocket expenses.
The consultant will provide management related services as stipulated
in the agreement.
On February 1, 2001, the Company entered into a consulting agreement
(the "Agreement") to receive services relating to business
development. As consideration, the Company granted the consultant
1,100,000 fully vested common stock options exercisable at $0.10 per
share. The Company will recognize an expense, as measured on the grant
date, over the one-year term of the agreement in accordance with SFAS
123. In addition, the consultant will be paid fees of $100,000 and 10%
of all business and funding received from introductions made, payable
over the one-year term.
In February 2001, the Company's Board of Directors authorized the
issuance of 1,500,000 common shares for two consulting and management
agreements that were in negotiation at the date of the accompanying
audit report.
(E) Employment Agreements
The Company executed a one-year employment agreement effective January
1, 2001 (the "effective date"), for an employee to provide services
for an annual salary of $36,400, a common stock issuance of 10,000
shares, 40,000 stock options exercisable at $1.00 per a share for 36
months from the effective date, and a discretionary bonus.
H2O International, Inc.
(A Development Stage Company)
Notes to Financial Statements
December 31, 2000
On January 1, 2001, the Company entered into a one-year employment
agreement whereby the employee will receive $36,000 per year with
potential increments to $60,000 based on capitalization of the
Company. The employee will also receive 1,500,000 shares of the
Company's common stock vesting pro-rata over the service period and
certain stipulated bonuses tied to the net profits of the Company.
Severance pay, if payable, will be two months salary.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Floran International, Inc.
------------------------------------
(Registrant)
Date: March 30, 2001 By /s/ Fred Jarosz
---------------------
Name: Fred Jarosz
Title: President
Index to Exhibits
Sequentially
Exhibit No. Description of Document Numbered Page No.
None
