UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K - Amendment No. 1
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES ACT OF 1934
Date of Report (Date of earliest event reported): July 8, 2002
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CYOP SYSTEMS INTERNATIONAL INCORPORATED
(Formerly Triple 8 Development Corporation)
(Exact name of registrant as specified in its charter)
Nevada
(State of Incorporation)
000-32355
(Commission File Number)
98-0222927
(I.R.S. Employer Identification Number)
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Suite 406
1040 Hamilton Street
Vancouver, British Columbia
V6B 2R9
(Address of principal executive offices, including zip code)
(604) 688-8864
(Registrant's telephone Number, including area code)
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INFORMATION TO BE INCLUDED IN THE REPORT
Item 2. Acquisition or Disposition of Assets.
By resolution dated December 14, 2001, the Registrant's board of directors (Vendors) disposed of the crediplay system developed by Moshpit Entertainment Inc, a wholly owned subsidiary of CYOP Systems Inc. a wholly owned subsidiary of the Registrant, to a (purchaser) director of the Registrant for three million dollars ($3,000,000.00US) by way of renunciation of a one million two hundred thousand ($1,200,000.00US) shareholder loan, and by way of a one million eight hundred thousand ($1,800,000.00US) promissory note, maturing December 14, 2010, between the Registrant and the director (Purchaser). This agreement concluded with the December 31, 2001 year-end financial statements and the subsequent audit of the accounts contained therein, specifically the shareholder loan account. The audited financial statements of the registrant were filed on Form 10K, March 31, 2002. An exploitation agreement in the form of an exclusive Marketing, Development and Distribution Agreement was also executed December 14, 2001 whereby the Purchaser (Director of the Registrant) granted back to the Registrant an appointment as the sole and exclusive agent and representative of the crediplay system, to develop, enhance, modify, market, distribute and maintain the crediplay system for a period of fifteen years with automatic renewal of five year terms with 90 day prior to expiry written renewal notices. The terms of the exploitation agreement provide for the Registrant to retain 80% of the gross earnings in year one, 83% in year two, 85% in year three and 90% in year four and every year thereafter.
The crediplay system is a suite of applications that support the efficient and secure exchange of information between Internet-based electronic game tournament operators and their players/members and credit and payment management facilities.
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Item 7 - Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
Not Applicable
(b) Pro Forma Financial Information
The Registrant's unaudited pro forma consolidated financial statements follow the signature page of this Form 8K amendment report which include:
Introduction to Unaudited Pro Forma Consolidated Financial Statements
Unaudited Pro Forma Consolidated Balance Sheet as at December 31, 2000
Unaudited Pro Forma Consolidated Balance Sheet as at December 31, 2001
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: July 8, 2002
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CYOP SYSTEMS INTERNATIONAL INCORPORATED
(formerly Triple 8 Development Corporation)
Per: /s/Mitch White
Mitch White, President and Director
EXHIBIT INDEX
0.1 Software Acquisition Agreement between CYOP Systems Inc. (Vendors) a wholly owned subsidiary of CYOP Systems International Inc. and Mitch White (Purchaser) dated as of December 14, 2001.
1.2 Marketing, Development & Distribution Agreement between CYOP Systems International Inc., (Marketer) and Mitch White (Vendor) dated December 14, 2001.
INTRODUCTION TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
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The unaudited pro forma consolidated statements of operations for the year ended December 31, 2000 and December 31, 2001 give effect to the sale of the crediplay system as if it had occurred on January 1, 2000 and January 1, 2001.
The Registrant believes the accounting used for the pro forma adjustments provides a reasonable basis on which to present the unaudited pro forma consolidated financial statements.
The unaudited pro forma consolidated statement of operations and unaudited pro forma consolidated balance sheet are unaudited and were derived by adjusting the historical consolidated financial statements of CYOP Systems International Inc., which include the results of business. The unaudited pro forma consolidated financial statements are provided for informational purposes only and should not be construed to be indicative of CYOP Systems International Inc.'s consolidated financial position or results of operations for any future date or period.
The unaudited pro forma consolidated financial statements and accompanying notes should be read in conjunction with CYOP Systems International Inc.'s historical consolidated financial statements and notes thereto included in CYOP Systems International Inc.'s Annual Report on Form 10-K as of and for the year ended December 31, 2001.
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CYOP SYSTEMS INTERNATIONAL INCORPORATED | |||||
Unaudited Pro Forma Consolidated Balance Sheet as of | |||||
December 31, 2000 | |||||
(Expressed in U.S. Dollars) | |||||
2000 | Pro Forma | Pro Forma | |||
Historical | Adjustments | Combined | |||
ASSETS | |||||
Current | |||||
Cash and cash equivalents | $ | 29,480 | $ 29,480 | ||
Accounts receivable | 16,808 | 90,000 | 106,808 | ||
Prepaid expenses and deposit | 50,992 | 50,992 | |||
Total current assets | 97,280 | 187,280 | |||
Note receivable related party | - | 1,565,452 | 1,565,452 | ||
Fixed assets | 236,246 | 236,246 | |||
Software development costs | 100 | 100 | |||
Total assets | $ | 333,626 | $ 1,989,078 | ||
LIABILITIES | |||||
Current | |||||
Bank overdraft | $ | - - | - | ||
Demand loans | 452,676 | 452,676 | |||
Demand loans related party | 725,129 | (1,200,000) | (474,871) | ||
Accounts payable and accrued liabilities | 205,373 | 205,373 | |||
Payroll deductions payable | 227,689 | 227,689 | |||
Short-term loan | - | - | |||
Investor deposit | - | - | |||
Total current liabilities | 1,610,867 | 410,867 | |||
Deferred revenue | - | (2,016,632) | 2,016,632 | ||
Total Liabilities | 1,610,867 | 2,427,499 | |||
STOCKHOLDERS' (DEFICIENCY) | |||||
Share capital | |||||
Authorized: | |||||
100,000,000 | shares of common stock with a par value | ||||
of $0.0001 per share | |||||
Issued, allotted and outstanding: | |||||
28,382,975 | 2,838 | 2,838 | |||
Additional paid-in capital | 149,237 | 149,237 | |||
Accumulated other comprehensive income | 14,801 | 14,801 | |||
Deficit accumulated | (1,444,117) | 838,820 | (605,297) | ||
Total stockholders' (deficiency) | (1,277,241) | (438,421) | |||
Total liabilities and stockholders' (deficiency) | $ | 333,626 | $ | 1,989,078 | |
CYOP SYSTEMS INTERNATIONAL INCORPORATED | ||||
Unaudited Pro Forma Consolidated Statements of Operations | ||||
Year ended December 31, 2000 | ||||
(Expressed in U.S. Dollars) | ||||
2000 | Pro Forma | Pro Forma | ||
Historical | Adjustments | Combined | ||
Revenue | ||||
Sales related party | $ | - | $ - | |
Sales | - | |||
Accrued interest | 90,000 | 90,000 | ||
- | 90,000 | |||
Cost of sales | - | - | ||
Gross profit | - | 90,000 | ||
Advertising and promotion expenses | (85,143) | (85,143) | ||
Software development costs | (748,820) | 748,820 | - | |
Loan interest expenses | (50,813) | (50,813) | ||
Write off of demand loan | - | - | ||
General and administrative expenses | ||||
Accounting and audit | (64,398) | (64,398) | ||
Automobile | (33,604) | (33,604) | ||
Depreciation of fixed assets | (7,380) | (7,380) | ||
Foreign exchange loss | (12,934) | (12,934) | ||
Legal and other professional fees | (119,720) | (119,720) | ||
Office and miscellaneous | (63,640) | (63,640) | ||
Rent | (28,468) | (28,468) | ||
Salaries and benefits | (147,217) | (147,217) | ||
Stock-based compensation | - | - | ||
Telephone and bandwidth | (15,515) | (15,515) | ||
Operating loss | (1,377,652) | (538,832) | ||
Write off of Leasehold improvements | - | - | ||
Loss on disposal of fixed assets | - | - | ||
Net loss for the year | $ | (1,377,652) | $ (538,832) | |
Loss per share | ||||
Basic and diluted | $ | (0.07) | $ (0.03) | |
Weighted average number of | ||||
common shares outstanding | ||||
Basic and diluted | 20,682,124 | 20,682,124 | ||
CYOP SYSTEMS INTERNATIONAL INCORPORATED | |||||
Unaudited Pro Forma Consolidated Balance Sheet as of | |||||
December 31, 2001 | |||||
(Expressed in U.S. Dollars) | |||||
2001 | Pro Forma | Pro Forma | |||
Historical | Adjustments | Combined | |||
ASSETS | |||||
Current | |||||
Cash and cash equivalents | $ | 1,852 | $ 1,852 | ||
Accounts receivable | 178,910 | 86,295 | 265,205 | ||
Demand loan, interest at 12% per annum and unsecured | 14,472 | 14,472 | |||
Due from director, non interest bearing and unsecured | 105,738 | 105,738 | |||
Prepaid expenses and deposit | 49,191 | 49,191 | |||
Total current assets | 350,163 | 436,458 | |||
Note receivable related party | 1,565,452 | 1,565,452 | |||
Fixed assets | 222,646 | 222,646 | |||
Software development costs | - | - | |||
Total assets | $ | 2,138,261 | $ 2,224,556 | ||
LIABILITIES | |||||
Current | |||||
Bank overdraft | $ | 18,604 | $ 18,604 | ||
Demand loans | 452,676 | 452,676 | |||
Demand loans related party | 50,000 | 50,000 | |||
Accounts payable and accrued liabilities | 586,139 | 586,139 | |||
Payroll deductions payable | 362,115 | 362,115 | |||
Short-term loan | 228,421 | 228,421 | |||
Investor deposit | 10,000 | 10,000 | |||
Total current liabilities | 1,707,955 | 1,707,955 | |||
Deferred revenue | 2,270,394 | 2,270,394 | |||
Total Liabilities | 3,978,349 | 3,978,349 | |||
STOCKHOLDERS' (DEFICIENCY) | |||||
Share capital | |||||
Authorized: | |||||
100,000,000 | shares of common stock with a par value | ||||
of $0.0001 per share | |||||
Issued, allotted and outstanding: | |||||
28,439,975 | 2,844 | 2,844 | |||
Additional paid-in capital | 219,127 | 219,127 | |||
Accumulated other comprehensive income | 133,194 | 133,194 | |||
Deficit accumulated | (2,195,253) | 86,295 | (2,108,958) | ||
Total stockholders' (deficiency) | (1,840,088) | (1,753,793) | |||
Total liabilities and stockholders' (deficiency) | $ | 2,138,261 | $ 2,224,556 | ||
CYOP SYSTEMS INTERNATIONAL INCORPORATED | ||||
Unaudited Pro Forma Consolidated Statement of Operations | ||||
Year ended December 31, 2001 | ||||
(Expressed in U.S. Dollars) | ||||
2001 | Pro Forma | Pro Forma | ||
Historical | Adjustments | Combined | ||
Revenue | ||||
Sales related party | $ | 509,225 | $ 509,225 | |
Sales | 3,705 | (3,705) | - | |
Accrued interest | 90,000 | 90,000 | ||
512,930 | 599,225 | |||
Cost of sales | 300,647 | 300,647 | ||
Gross profit | 212,283 | 298,578 | ||
Advertising and promotion expenses | (101,217) | (101,217) | ||
Software development costs | - | - | ||
Loan interest expenses | (177,288) | (177,288) | ||
Write off of demand loan | (46,500) | (46,500) | ||
General and administrative expenses | ||||
Accounting and audit | (38,221) | (38,221) | ||
Automobile | (64,192) | (64,192) | ||
Depreciation of fixed assets | (5,058) | (5,058) | ||
Foreign exchange loss | (64,032) | (64,032) | ||
Legal and other professional fees | (149,017) | (149,017) | ||
Office and miscellaneous | (70,641) | (70,641) | ||
Rent | (52,807) | (52,807) | ||
Salaries and benefits | (131,605) | (131,605) | ||
Stock-based compensation | (5,796) | (5,796) | ||
Telephone and bandwidth | (25,227) | (25,227) | ||
Operating loss | (719,318) | (633,023) | ||
Write off of Leasehold improvements | (31,434) | (31,434) | ||
Loss on disposal of fixed assets | (384) | (384) | ||
Net loss for the year | $ | (751,136) | $ | (664,841) |
Loss per share | ||||
Basic and diluted | $ | (0.03) | (0.02) | |
Weighted average number of | ||||
common shares outstanding | ||||
Basic and diluted | 28,433,430 | 28,433,430 | ||
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