UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8 - K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): DECEMBER 20, 2000
stereoscape.com, inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW JERSEY 95-4598912
(STATE OR JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
3440 ROUTE 9 SO., FREEHOLD, NEW JERSEY 07728
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (732) 462-7767
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
a. On December 12, 2000 ("the closing date"), stereoscape.com, inc.,
("stereoscape" or "the Company") acquired Marx Toys, Inc.("Marx Toys"), a
Florida Corporation located at 1800 NE 114th Street, North Miami, Florida 33181.
Prior to the closing, all of the outstanding common shares of Marx
Toys, Inc. were held by JAY HOROWITZ ("Horowitz") of North Miami, Florida, the
sole shareholder, and at closing were converted into 15,000,000 shares of
stereoscape common stock.
Upon the transfer of the stereoscape shares to Horowitz, Marx Toys
became a wholly owned subsidiary of stereoscape.
There was no material relationship between Horowitz and
stereoscape or any of its affiliates, any director or officer of stereoscape, or
any associate of any such director or officer.
Consideration for the acquisition was solely in the form of a
stock for stock exchange.
Item 7(a). FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
Following are the audited financial statement of Marx Toys, Inc. for
the period August 16, 1999 (date of inception) through December 31, 1999 and for
the year ended December 31, 2000:
MARX TOYS, INC.
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1999
MARX TOYS, INC.
Financial Statements
C O N T E N T S PAGE
--------------- ----
Independent Auditors' Report 1
Balance Sheet as of December 31, 1999 2
Statement of Income and Accumulated
Deficit
from the Inception, August 16, 1999,
Through December 31, 1999 3
Notes to the Financial Statements 4-6
Supplemental Information:
Independent Auditors' Report on
Supplemental Information 7
Schedule of Operating Expenses 8
(Auditors' Letterhead)
(Bloom,Gettis, Habib, Silver & Terrone, P. A.)
(Certified Public Accountants)
(2601 South Bayshore Drive)
(Miami, Florida 33133)
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Marx Toys, Inc.:
We have audited the accompanying balance sheet of the Marx Toys, Inc., as of
December 31, 1999, and the related statement of income and accumulated deficit
from the date of inception, August 16, 1999, through December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe 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 Marx Toys, Inc., as of December
31, 1999, and the results of its operations from the date of inception, August
16, 1999, through December 31, 1999, in conformity with generally accepted
accounting principles.
Bloom, Gettis, Habib, Silver & Terrone, P. A.
Certified Public Accountants
2601 South Bayshore Drive
Miami, Florida 33133
February 15, 2001
MARX TOYS, INC.
Balance Sheet
December 31, 1999
ASSETS
CURRENT ASSETS:
Cash (Note A) $ -
Accounts receivable 5,201
Inventories 64,509
Due from affiliated company 30,820
Prepaid expenses (Note F) 8,100
----------
TOTAL CURRENT ASSETS 108,630
OTHER ASSETS 462
----------
TOTAL ASSETS $ 109,092
==========
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 10,989
Royalty payable 4,886
Payroll taxes payable 3,644
----------
TOTAL CURRENT LIABILITIES 19,519
DEFERRED INCOME 100,221
--------
TOTAL LIABILITIES 119,740
STOCKHOLDERS' DEFICIENCY:
Common stock, $.01 Par value, 10,000 shares
authorized, issued and outstanding 100
Accumulated Deficit (10,748)
----------
TOTAL STOCKHOLDER'S DEFICIENCY (10,648)
----------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY $ 109,092
==========
The accompanying notes are an integral part of these statements.
Page 2
MARX TOYS, INC.
Statement of Income and Retained Accumulated Deficit
From Inception, August 16, 1999,
Through December 31, 1999
SALES REVENUE, NET $ 112,109
-----------
COST OF GOODS SOLD
Purchases 136,668
Royalty expense 4,886
Less: Ending inventory (64,509)
-----------
TOTAL COST OF GOODS SOLD 77,045
----------
GROSS PROFIT 35,064
OPERATING EXPENSES 45,812
-----------
NET (LOSS) (10,748)
Retained Earnings - Inception -
-----------
Accumulated Deficit - December 31, 1999 $ (10,748)
===========
The accompanying notes are an integral part of these statements.
Page 3
MARX TOYS, INC.
Notes to the Financial Statements
For the Period Ended December 31, 1999
NOTE A - NATURE OF BUSINESS
The Company is engaged in the manufacture and sale of collectible toys, which
consist of action figures and play sets. Production labor is provided by two
independent manufacturing facilities, located in Mexico and Ohio. The latter
facility also provides the Company with its fulfillment services.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
Accounting Method:
The Company utilizes the accrual method of accounting in accordance with
generally accepted accounting principles which requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent liabilities at the date of the
financial statements and the reported amounts of operations during the reporting
period. Actual results may differ from those estimates.
Cash:
As more fully described in Note C, the Company did not own a cash account during
1999. Instead, a related party provided certain services to the Company,
including receiving payments and making expenditures on behalf of it.
Accordingly, the accompanying financial statements do not include a statement of
cash flows. Paragraph 32 of Financial Accounting Standards Number 95 "Statement
of Cash Flows" requires an enterprise to disclose all non-cash investing or
financing transactions. The Company has no material investing or financing
transactions during 1999, other than the amounts reflected in the accompanying
statement of income and described in Note C.
Accounts Receivable:
The Company periodically reviews the current status of receivables and
historical collection experience in order to provide for an allowance for
losses. At the balance sheet date management has determined that no provision is
necessary.
Inventory:
Inventory, which consists of finished toys, is stated at the lower of cost,
determined on a first-in, first-out (FIFO) basis, or market
Organization Costs:
Organization costs are recorded at cost less accumulated amortization using the
straight-line method over 60 months.
Fixed Assets
Fixed assets are stated at cost, which at the December 31, 1999 there were none.
Repairs and maintenance, including replacement of minor items of physical
properties, are charged to current operations while major additions are
capitalized.
Small Business Corporation:
The financial statements do not include a provision for income taxes due the
Company's election, and the stockholder's consent, to be taxes as a small
business corporation. Accordingly, substantially all income is taxed to the
shareholder, and the Company is not liable for Federal Income taxes.
See Independent Auditors' Report
Page 4
MARX TOYS, INC.
Notes to the Financial Statements
(continued)
For the Period Ended December 31, 1999
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
(continued)
Leases
The Company accounts for leases in accordance with the provisions of Statement
of Financial Accounting Standards No. 13 (SFAS No. 13). In accordance with SFAS
No. 13, the Company charges payments under its operating type leases to current
operations while leases which are in essence financing arrangements are
capitalized and treated as installment purchases. Refer to Notes E and H for
further information.
NOTE C - RELATED PARTY TRANSACTIONS
Due From Related Parties:
During 1999, the Company commenced operations, prior to obtaining cash accounts
with any bank. To facilitate consummation of sales and operating transactions,
an entity related to the Company, through common ownership, allowed management
to utilize an existing banking relationship owned by the related entity. Under
this arrangement, the related party owed the Company a net amount of $30,820, as
of December 31, 1999. This amount is unsecured and non-interest bearing. Th
Company secured its own banking relationship during June 2000.
Shared Office Expenses:
The Company entered into an office sharing agreement with the related company
described above. The agreement requires the Company to compensate the related
party for conducting certain business affairs of the Company, including
occupancy costs. Shared office expenses for 1999 was $33,822, and has been paid
to the related party, in computing the amount owing at December 31, 1999,
described above.
Line of Credit:
The Company has available a $100,000 line of credit with a financial
institution. The line of credit is personally guaranteed and secured by personal
assets of the sole shareholder. At the balance sheet date, no amounts were
outstanding under the agreement.
NOTE D - INVENTORY
Inventory, at December 31, 1999, consisted of approximately seven thousand nine
hundred (7,900) packages of gold and silver knights at a unit cost of seven
dollars and fifty cents ($7.50) each.
NOTE E - DEFERRED REVENUE
Deferred revenue represents credits issued to a major customer (see Note F) to
be utilized against future orders.
See Independent Auditors' Report
Page 5
MARX TOYS, INC.
Notes to the Financial Statements
(continued)
For the Period Ended December 31, 1999
NOTE F - CONCENTRATIONS
The Company had sales to a single customer representing 58% of revenues during
1999. The Company is actively soliciting additional outlets for its products,
including the internet. Management expects to reduce its reliance upon this
single customer in future periods, as sales increase.
Substantially all of the toys sold in 1999 were manufactured under production
contracts with a fabrication plant located in Mexico. Management believes
identical production, under similar terms, could be readily obtained, in the
event this facility becomes unavailable.
NOTE G - SUBSEQUENT EVENTS
Related Party Transaction:
In August, 2000 the Company purchased, from American Plastic Equipment, Inc. all
molds currently owned by American of Marx Toy origin, and all intellectual
property rights associated with or related to the products made from the molds.
The purchase price was $100,000.
Sale of the Company:
In December 2000, the Company was acquired by stereoscape.com, inc., a publicly
held, Nevada corporation, in a stock-for-stock exchange with the Company's
shareholder, effective October 1, 2000.
Change in Management:
Effective with the sale to stereoscape.com, inc. the management of Marx Toys,
Inc.(its sole shareholder, Jay Horowitz) is by agreement, "available for
consulting as reasonably needed" for an initial term of two years.
See Independent Auditors Report
Page 6
SUPPLEMENTAL INFORMATION
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION
Marx Toys, Inc.:
Our audit and report thereon was made for the purpose of forming an opinion on
the financial statements taken as a whole of Marx Toys, Inc. for the period from
date of inception, August 16, 1999, to December 31, 1999, which are presented in
the preceding section of this report. The supplemental information presented
hereinafter is presented for purposes of additional analysis and is not a
required part of the basic financial statements. Such information has not been
subjected to the auditing procedures applied to the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statement taken as a whole.
Bloom, Gettis, Habib, Silver & Terrone, P. A.
Certified Public Accountants
2601 South Bayshore Drive
Miami, Florida 33133
February 15, 2001
Page 7
MARX TOYS, INC.
Schedule of Operating Expenses
For the Period From Date of Inception,
August 16, 1999, To December 31, 1999
Amortization $ 38
Collection charges 706
Office expenses 16,665
Payroll - officer 7,000
Payroll - other 9,100
Payroll taxes 1,722
Professional fees 2,645
Travel and entertainment expenses 1,000
---------
$ 38,876
=========
See Independent Auditors' Report on Schedules
Page 8
MARX TOYS, INC.
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 2000
MARX TOYS, INC.
Financial Statements
C O N T E N T S PAGE
--------------- ----
Independent Auditors' Report 1
Balance Sheet as of December 31, 2000 2
Statement of Operations and Accumulated Deficit
for the Year Ended December 31, 2000 3
Statement of Cash Flows for the
Year Ended December 31, 2000 4
Notes to the Financial Statements 5-7
Supplemental Information:
Independent Auditors' Report on
Supplemental Information 8
Schedule of Selling, General and
Administrative Expenses 9
(Auditors' Letterhead)
(Bloom,Gettis, Habib, Silver & Terrone, P. A.)
(Certified Public Accountants)
(2601 South Bayshore Drive)
(Miami, Florisa 33133)
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Marx Toys, Inc.
North Miami, Florida
We have audited the accompanying Balance Sheet of Marx Toys, Inc., as of
December 31,2000, the related Statements of Operations and Accumulated Deficit
and Cash Flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe 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 the Marx Toys, Inc., as of
December 31, 2000, and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note I to the
financial statements, the Company has suffered recurring losses from operations
and has a net capital deficiency that raises substantial doubt about its ability
to continue as a going concern. Management's plan, in regard to these matters,
are also described in Note I. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Bloom, Gettis, Habib, Silver & Terrone, P. A.
Certified Public Accountants
2601 South Bayshore Drive
Miami, Florida 33133
March 20, 2001
MARX TOYS, INC.
Balance Sheet
December 31, 2000
ASSETS
CURRENT ASSETS:
Cash $ 13,204
Accounts receivable 14,435
Inventory 100,630
Prepaid expenses 29,714
----------
TOTAL CURRENT ASSETS 157,983
FIXED ASSETS, net of accumulated depreciation
in the amount of $15,749 87,192
OTHER ASSETS 4,945
----------
TOTAL ASSETS $ 250,120
==========
LIABILITIES AND STOCKHOLDER'S DEFICIENCY
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 30,511
Payroll taxes payable 41,353
Note Payable - Bank 79,632
Due to Parent Company 65,601
Due to Related Parties 56,890
Customer Deposits 100,221
----------
TOTAL CURRENT LIABILITIES 373,938
----------
STOCKHOLDERS' DEFICIENCY:
Common stock - $.01 Par value - 10,000 Shares
Authorized, Issued and Outstanding 100
Additional Paid-in Capital 100,000
Accumulated deficit (223,918)
----------
TOTAL STOCKHOLDER'S DEFICIENCY (123,818)
----------
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIENCY $ 250,120
==========
The Accompanying notes are an integral part of the financial statements.
Page 2
MARX TOYS, INC.
Statement of Operations and Accumulated Deficit
From the Year Ended December 31, 2000
SALES $ 267,846
-----------
COST OF GOODS SOLD
Beginning Inventory 64,509
Purchases 195,084
Royalty expense 3,464
-----------
Total available 263,057
Ending Inventory 100,630
-----------
TOTAL COST OF GOODS SOLD 162,427
-----------
GROSS PROFIT 105,419
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 318,589
-----------
NET (LOSS) (213,170)
ACCUMULATED DEFICIT - January 1, 2000 (10,748)
-----------
ACCUMULATED DEFICIT - December 31, 2000 $ (223,918)
===========
The accompanying notes are an integral part of the financial statements.
Page 3
MARX TOYS, INC.
Statement of Cash Flows
For the Year Ended December 31, 2000
Cash flows from operating activities:
Net Loss $(213,170)
Adjustments to Reconcile Net Loss to
Net Cash used in operating Activities:
Depreciation and Amortization 16,266
Changes in Assets and Liabilities:
Accounts receivable (9,234)
Inventory (36,121)
Prepaid expenses (21,614)
Accounts payable and accrued expenses 14,636
Payroll taxes payable 37,709
---------
Net cash (used in) operating activities (211,528)
---------
Cash flows from investing activities:
Purchase of property and equipment ( 7,941)
----------
Cash flows from financing activities:
Proceeds from notes payable 79,362
Proceeds from related parties 153,311
---------
Net cash provided by financing and other activities 232,673
---------
Net increase in cash 13,204
Cash - January 1, 2000 -
---------
Cash - December 31, 2000 $ 13,204
=========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:
Cash Paid During the Year for Interest $ 6,510
=========
MATERIAL NON-CASH TRANSACTIONS:
The asset purchases discussed in Note B were paid for by the Company's
former stockholder as a contribution to capital in the amount of $100,000.
The accompanying notes are an integral part of the financial statements.
Page 4
MARX TOYS, INC.
Notes to the Financial Statements
For the Period Ended December 31, 2000
NOTE A - REPORTING AND SIGNIFICANT ACCOUNTING POLICIES:
Business and Organization:
Marx Toys, Inc. (the Company) is organized under the laws of the State of
Florida and is engaged in the wholesale trade of collectible toys through the
internet and to retail stores. Production is provided, under contract with
independent manufacturing facilities, located in Ohio and Mexico. The latter
facility also provides the Company with its fulfillment services. Accounting
policies of the Company are on the accrual method of accounting in accordance
with generally accepted accounting principles, and are summarized as follows:
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual results may
differ from those estimates.
Accounts Receivable:
The Company's management periodically reviews the status and collectibility
of accounts receivable and provides an allowance for losses on receivables based
on a review of the current status of existing receivables and historical
collection experience. At the balance sheet date, management has determined that
no provision is necessary.
Inventory:
Inventory, which consists of finished toys, is stated at the lower of cost
(determined on a first-in, first-out method) or market.
Property and Equipment:
Property and equipment are recorded at cost. Major renewals and betterments
are capitalized, while maintenance, repairs and minor renewals are charged to
expense as incurred.
Advertising Costs:
Advertising costs are expensed as incurred.
Income Taxes:
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due, if any, plus deferred
tax benefits (net of valuation allowance) from operating losses that are
available to offset future taxable income.
NOTE B - RELATED PARTY TRANSACTIONS
Due to Related Parties:
Prior to May, 2000, the Company did not have bank accounts, but rather
utilized the accounts of American Plastics Equipment, Inc. (American), a related
entity through common ownership. The Company's cash was commingled with the cash
of American and that of stockholder, Jay Horowitz and a family member
(Horowitz). At the Balance Sheet date, $33,110 is due from American and $90,000
is owed to Horowitz.
The Company is disputing the liability to Horowitz. At the Balance Sheet date,
management is not able to estimate the outcome of this dispute.
See Independent Auditors' Report
Page 5
MARX TOYS, INC.
Notes to the Financial Statements
(continued)
For the Period Ended December 31, 2000
NOTE B - RELATED PARTY TRANSACTIONS
Shared Office Expenses:
During 2000, the Company had an office sharing agreement with American,
requiring the Company to reimburse American for its share of business expenses ,
including occupancy costs. The agreement requires the Company to compensate the
related party for conducting certain business affairs of the Company, including
occupancy costs. Allocated expenses for 2000 were $20,000, and have been
included in computing the amount due at December 31, 2000, described above.
Asset Purchase:
In August, 2000, the Company purchased from American all molds currently
owned by American of Marx Toy origin, and all intellectual property rights
associated with or related to the products made from the molds. The purchase
price was $100,000.
Sale of Company:
In December, 2000, the Company was acquired by stereoscape.com, inc., a
publicly held Nevada corporation, in a stock-for-stock exchange with the
Company's shareholder, effective October 1, 2000. At December 31, 2000, the
Company was indebted to stereoscape.com, inc. for funds advanced in the amount
of $65,601. These unsecured advances bear no interest.
Change in Management:
Effective with the sale to stereoscape.com, inc., the management of Marx
Toys, Inc. (its sole shareholder, Jay Horowitz) is by agreement, "available for
consulting as reasonably needed" for an initial term of two years.
NOTE C - PROPERTY AND EQUIPMENT:
Major categories of property and equipment, at December 31, 200, consist of the
following:
Office Equipment and Furnishings $ 7,941
Production Molds 95,000
--------
102,941
Less: Accumulated depreciation 15,749
--------
$ 87,192
========
For the year ended December 31, 2000, depreciation expense totaled $15,749.
NOTE D - NOTE PAYABLE - BANK
At the Balance Sheet date, the Company had a $100,000 revolving line of credit
with a financial institution with interest paid monthly at a rate of 10.5%. This
credit facility is personally guaranteed by and secured by the personal assets
of the Company's former shareholder, Jay Horowitz. The outstanding balance on
this line of credit, at December 31, 2000, was $79,362, and interest expense
totaled $6,510 for the year then ended.
NOTE E - CUSTOMER DEPOSITS:
Customer deposits represent credits issued to a major customer, to be utilized
against future orders.
See Independent Auditors' Report
Page 6
MARX TOYS, INC.
Notes to the Financial Statements
(continued)
For the Period Ended December 31, 2000
NOTE F - INCOME TAXES:
As more fully described in Note B, the Company was acquired effective October 1,
2000. The financial statements do not include a provision for income taxes for
the period prior to the acquisition due to the Company's election, and the
shareholder's consent, to be taxed as a small business corporation. Accordingly,
substantially all income for the nine month period ended September 30, 2000 is
taxed to the shareholder and the Company is not liable for federal or state
income taxes. Effective with the acquisition, the election to be taxed as a
small business corporation is rescinded.
Deferred taxes are recognized for temporary differences between the basis of
assets and liabilities for financial statement and income tax purposes. The
differences relate primarily to tax loss carry forwards that may be used to
offset future taxable income. If not used, the losses expire in 2015.
The circumstances described in Note I call into question whether the Company
will ever be able to avail itself of these tax benefits in the foreseeable
future. Accordingly, management has established a valuation allowance of 100% of
the tax benefit associated with these losses in the accompanying financial
statements.
NOTE G - CONCENTRATION OF RISKS:
Substantially all of the toys sold in 2000 were manufactured under production
contracts with fabrication facility located in Ohio. Management believes
identical production, under similar terms, could be readily obtained, in the
event this facility becomes unavailable.
NOTE H - COMMITMENTS:
Lease commitments:
The Company leases its office under an operating lease which expires in 2002.
Future minimum lease payments under this lease are as follows:
Year Ending December 31, AMOUNT
------------------------ ------
2001 $12,000
2002 12,000
-------
$24,000
=======
NOTE I - GOING CONCERN:
As shown on the accompanying financial statements, the Company incurred a net
loss of $213,170 during the year ended December 31, 2000, and as of that date,
the Company's current liabilities exceeded its current assets by $215,955. Those
factors, as well as the ability and continued willingness of the parent company
or other related parties to contribute operating capital, create an uncertainty
about the Company's ability to continue as a going concern. Management of the
Company is developing a plan to increase its assets and reduce its liabilities
through aggressive sales and a more vigorous production schedule necessary to
satisfy those sales. The financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
See Independent Auditors' Report
Page 7
SUPPLEMENTAL INFORMATION
INDEPENDENT AUDITORS' REPORT ON SUPPLEMENTAL INFORMATION
To the Board of Directors
Marx Toys, Inc.
North Miami, Florida
Our audit of Marx Toys, Inc. was made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental information
presented herein is presented for the purposes of additional analysis and is not
a required part of the basic financial statements. Such information has not been
subjected to the auditing procedures applied to the basic financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
Bloom, Gettis, Habib, Silver & Terrone, P. A.
Certified Public Accountants
2601 South Bayshore Drive
Miami, Florida 33133
March 20, 2001
Page 8
Marx Toys, Inc.
Schedule of Selling, General and Administrative Expenses
For the Year Ended December 31, 2000
Amortization and depreciation $ 16,266
Office expenses 10,818
Payroll 120,854
Payroll taxes 11,250
Professional fees 10,818
Travel and entertainment expenses 9,283
Advertising 23,259
Showroom expenses 9,396
Freight out and delivery 17,337
Interest expense 6,510
Rent and occupancy costs 5,344
Repairs and maintenance 3,708
Commissions 6,215
Automobile expenses 1,288
Allocated office overhead 20,000
Telephone 7,921
Web site and domain hosting 5,174
Exhibits 28,177
Printing and reproduction 5,045
---------
$ 318,589
=========
See Independent Auditors' Report on Supplemental Information
Page 9
Item 7(b). PRO FORMA FINANCIAL INFORMATION
The following pro forma financial information presents the effects of
the acquisition of Marx Toys, Inc. by the registrant as if the
acquisition had been completed as of December 31, 1999. The unaudited pro forma
financial information has been compiled by management. The pro forma
consolidated income statement is based upon the projected information for the
fiscal year ended December 31, 2000.
The pro forma financial information is not necessarily indicative of
the realists of operations and financial position which will be attained in the
future. The pro forma information should be read in conjunction with the
historical consolidated financial statements of stereoscape.com, inc. as
reported on Forms 10KSB and 10QSB for the year and the three months ended
December 31, 2000 and March 31, 2001 respectively.
STEREOSCAPE.COM, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000
COMPANY MARX
BEFORE TOYS, PRO FORMA
ACQUISITION INC. CONSOLIDATED
----------------------------------------------
ASSETS
Current Assets:
Cash $ 197,034 $ 13,204 $ 210,238
Accounts Receivable 1,037 14,435 15,472
Notes and loans Receivable 135,875 - 135,875
Inventories 176,518 100,630 277,148
Investments 9,133 - 9,133
Prepaid Expenses and
Other Current Assets 73,601 (35,887) 37,714
---------------------------------------------
Total Current Assets 593,198 92,382 685,580
Property and equipment 17,734 505,748 523,482
Other Assets 3,173 - 3,173
Intangible assets - 4,945 4,945
---------------------------------------------
TOTAL ASSETS $ 614,105 $ 603,075 $ 1,217,180
=============================================
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities:
Notes Payable $ 9,500 - $ 9,500
Accounts Payable and
Accrued Expenses 288,272 71,864 360,136
Note payable - bank - 79,362 79,362
Due to related parties - 56,890 56,890
Customer deposits 36,850 100,221 137,071
---------------------------------------------
TOTAL LIABILITIES 334,622 308,337 642,959
---------------------------------------------
STOCKHOLDERS' EQUITY
Common Stock 61,197 16,500 77,697
Additional Paid-in Capital 1,464,143 491,408 1,955,551
(Accumulated Deficit) (1,245,857) (213,170) (1,459,027)
---------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 279,483 294,738 574,221
---------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 614,105 $ 603,075 $ 1,217,180
=============================================
Item 7(b). PRO FORMA FINANCIAL INFORMATION (CONTINUED)
STEREOSCAPE.COM, INC. AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2000
COMPANY
BEFORE
PRO FORMA MARX TOYS, PRO FORMA
ADJUSTMENTS INC. CONSOLIDATED
-----------------------------------------------
Net Sales $ 2,192,278 $ 267,846 $ 2,460,124
Cost of Sales 1,797,556 162,427 1,959,983
----------------------------------------------
Gross Profit 394,722 105,419 500,141
Selling, General and
Administrative Expense 867,740 312,079 1,179,819
Interest Expense - Net 22,188 6,510 28,698
----------------------------------------------
Net (Loss) ($ 495,206) ($ 213,170) ($ 708,379)
===============================================
NET (Loss) Per Share ($ 0.006) ($ 0.003) ($ 0.009)
===============================================
Weighted Average Shares
Used in Computation 76,196,848 76,196,848 76,196,848
===============================================
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf the
undersigned thereunto duly authorized
STEREOSCAPE.COM, INC.
--------------------
(Registrant)
Date: March 29, 2001 By:/s/ Mario A. Bassani
---------------------
Mario A. Bassani
Chief Executive Officer
March 29, 2001 By:/s/ Gary B. Hyman
---------------------------
Gary B. Hyman
Chief Financial Officer