PROSPECTUS
10,000,000 Class "A" Equity Units
5,000,000 Class "B" Equity Units
Countryland Wellness Internet Network Trust
Equity Units: Class "A" and Class "B"
All of the shares of Equity Units (the "Equity Units") offered hereby
(the "Offering") are being offered by Countryland Wellness Internet Network
Trust (the "Company"). The Equity Units will be traded on the NASDAQ SMALL
CAPS BOARD Market under the symbol CWIN (approval pending), the proposed
sale price for the Equity Units on the Stock Market will be 11.00 per share
in accordance with offering.
Of the 15,000,000 shares of Class "A" offered hereby, 5,000,000 shares
(the "Direct Shares") will be sold directly by the Company. No underwriting
discount or commission will be paid on the Direct Shares. The 10,000,000
(the "Public Shares") will be offered by the several underwriters.
See "Risk Factors" for a discussion of certain information that should be
considered in connection with an investment in the Equity Units.
NEITHER THE NEVADA STATE GAMING CONTROL BOARD NOR THE
GAMING COMMISSION NOR ANY OTHER GAMING AUTHORITY HAS PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR THE
INVESTMENT MERITS OF THE SECURITIES OFFERED HEREBY. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL. THESE SECURITIES
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Price Underwriting Discount Proceeds to Company(2)
Per Public Share "A" $11.00 $1.10(1) $9.90
Per Public Share "B" $11.00 $11.00
Total(3) $11,000,000 $154,000,000
(1) The Company has agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Act of 1933,
as amended. See "Underwriting". The shares are being offered on a straight
best efforts, no premium basis by the Company. No person has agreed to
purchase or take down any of the shares. The Company reserves the right to
reduce the exercise price of the Class "B" Equity Units at any time. The
Company may extend the Class "B" exercise period until one year from the
date of this prospectus, and may vary the terms of the Class "B" in any
extention period.
(2) Before deducting expenses payable by the Company for legal, accounting
and other expenses estimated to be $16,500,000.
(3) The Company has granted the Underwriters a 30-day option to purchase
in the aggregate up to 1,260,000 additional shares of Equity Units solely
to cover over-allotments, if any. See "Underwriting". If the Underwriters
exercise such option in full, the total Price, Underwriting Discount
and Proceeds to Company will be $13,860,000, $1,386,000, and $12,474,000
respectively.
The Public Shares are offered by the several Underwriters, subject to prior
sale, when, as and if delivered to and accepted by the Underwriters, and
subject to approval of certain legal matters by counsel. It is expected
that delivery of the Public Shares subject to this offering will be made
on or about June 30, 1999 at the offices of Countryland Wellness Internet
Network Trust, 2205 Purple Majesty Court, Las Vegas, Nevada 89117-2747.
The date of this Prospectus is May 31, 1999.
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-
ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE EQUITY UNIT AT A LEVEL ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS AND SELLING
GROUP MEMBERS MAY ENGAGE IN PASSIVE MARKETING TRANSACTIONS
IN THE EQUITY UNIT ON NASDAQ IN ACCORDANCE WITH RULE 10-B 6A
UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE "UNDERWRITING".
PROSPECTUS SUMMARY
The following summary is qualified detailed information and financial data,
included notes thereto appearing elsewhere in this Prospectus. The
information in this Prospectus gives effect to the Company sale of
securities but does not give effect to the exercise of any Class "B". Each
prospective investor is urged to read this Prospectus in its entirety.
THE COMPANY
The Company in engaged in the mining development industry. The Company
will operate the casino Hotel and Casino upon receiving full approval from
Nevada Gaming Control and the Casino will produce great revenues for the
Company, if the Company is successful with this offering.
The executive offices of the Company are located at 2205 Purple Majesty
Court, Las Vegas, Nevada 89117-2747
Telephone ( 702) 240-4408
THE OFFERING
Securities Offered:
10,000, 000 Class "A" Stock are offered upon exercise of 5,000,000 Class
"B" Stock Purchase Options. The "Class B" will be distributed pro-rata to
all shareholders of record as of the date of this Prospectus, on the basis
of one "B" for each four shares held as of such date. See "Description of
Securities" and "Plan of Distribution."
Equity Units Outstanding Before Offering.... 90,250,877
Common Stock Outstanding After Offering... 105,250,877
Use of Proceeds
The net proceeds of this offering, estimated to be $ 150,000,000 if all the
"Class B" are exercised, will be used to retire working capital
indebtedness, pay marketing costs, and for working capital purposes. See
"Use of Proceeds".
Risk Factors
Investments in the securities offered hereby involves a high degree of risk
and immediate substantial dilution. See "Use of Proceeds".
NASDAQ Small Caps Symbol CWIN (applied for).
1. The company has never operated a Hotel and Casino Property, or a wellness
membership organization.
2. Control by Insiders. At the completion of this offering, directors and
officers of the Company and other principal stockholders and their families
will own 60% of the Company's outstanding Equity Units, or approximately
54,050,000 shares of the outstanding voting stock,which will likely give
them a controlling interest in the Company and the ability to elect the
entire Board of Trustees. See "Principal Stockholders."
3. Investment by Current Stockholders. The Company's current stockholders
purchased their 90,250,877 shares of Equity Unit for aggregate
consideration of cash and services or $0.25 to $7.00 per Unit. These
stockholders do not intend to contribute additional amounts of cash or
other property to the Company in the future.
4. Limited Public Market. The market for the Company's Equity Units has been
limited and sporadic, and there can be no assurance that a trading market
will develop following this offering, or if such a trading market
develops, that it will be sustained. No person has agreed to make a
market in the Equity Unit and market making activities could be
discontinued at any time.
5. Dilution. Purchasers of the Shares offered by this Prospectus will
experience immediate and substantial dilution in that the net tangible
value of the Equity Unit outstanding after the offering will be sub-
stantially less than the per share public offering price of the Shares
offered hereby. See "Dilutions".
6. Shares Eligible for Future Sale. Upon sale of the 15,000,000 Shares
offered hereby, the Company will have outstanding 100,250,877 Class "A"
Equity Units, including 72,661,029 shares which are "Restricted Securities"
as defined under Rule 144 promulgated under the Securities Act of 1933.
Such shares will be subject to resale restrictions and will be ineligible
for sale in the public market until June 2001, after which sales may be
made pursuant to Rule 144 under the Securities Act. Sales of substantial
amounts of the Equity Unit of the Company in the public market could
adversely affect prevailing market prices.
See "Description of Securities Shares Eligible for Future Sale."
7. Foreign Operations. The Company does not conduct any foreign
operations or business outside of the United States.
8. Current Registration Statement and Blue Sky Qualification Required of
Warrants. In order for a holder of a Class "B" to exercise it there must
be a current registration statement on file with the Securities and
Exchange Commission and various state security regulatory authorities to
continue registration of the Shares underlying the Class "B". The Company
has undertaken to keep (and intends to keep) the registration statement
filed in connection with this offering effective with respect to the
Class "B" with the Securities and Exchange Commission and state securities
authorities for so long as the Class "B" remain exercisable. However,
maintenance of an effective registration statement will subject the
Company to substantial continuing expenses for legal and accounting fees
and there can be no assurance the Company will be able to maintain a
current registration statement until July 31, 1999 when the Class "B"
expire. Moreover, Blue Sky Qualification of the Class "B" and the
underlying Class "A" shall be undertaken only in those states in which the
Company's shareholders reside as of the date of this prospectus. The
Company intends to register the Shares underlying the Class "B" in all
states in which Class "B" holders reside, unless the cost of such
registration, in relation to the number Class "B" potentially exercisable,
is clearly disproportionate. In addition, due to the Company's limited
history or operations, it is possible that one or more states where Class
"B" holders reside will not permit registration of the underlying Shares
until a favorable history of operations can be demonstrated or other
criteria complied with. The value of the Class "B" may be affected
adversely by the Company's inability to maintain an effective registration
statement with respect to the underlying Shares or by the non-
qualification of the underlying Shares in the state of such holders or a
partial purchasers residence. Holders of Class "B" may contact the Company
in order to ascertain the states in which the Shares underlying the Class
"B" will be qualified for sale.
9. Arbitrary Offering Price. The exercise price and other terms of the
Class "B" have been determined arbitrarily by the Company and do not bear
any relationship to the assets, results of operations, or book value of the
Company, or any other established criteria of value. Purchasers of the
Shares underlying the Class "B" will be exposed to a substantial risk of a
decline in the market price of the Equity Unit after this offering, if a
market develops. See "Plan of Distribution". The Company, is applying for
listing on NASDAQ Small Caps Market.
While many NASDAQ stocks are covered by the definition of Penny Stock,
transactions in NASDAQ stock are exempt from all but the sale market maker
provision for (1) issuers who have $2,000,000 in tangible assets
($5,000,000 if the issuer has not been in continuous operation for three
years), (ii) transactions in which the customer is an institutional
accredited investor and (iii) transactions that are not recommended by
the broker/dealer,. In addition, transactions in NASDAQ security
directly with the NASDAQ market maker for such securities, are subject
only to the sole market disclosure, and the disclosure with regard to
commissions to be paid to the broker/dealer and the registered
representatives.
Finally, all NASDAQ securities are exempt if NASDAQ raises its requirements
for continued listings so that any issuer with less than $2,000,000 in net
tangible assets or stockholder's equity would be subject to delisting.
These criteria are more stringent than the recent increase in NASDAQ'S
maintenance requirements. For as long as Company's securities are subject
to the rules of Penny Stocks, the market liquidity for the Company's
securities will be severely affected by limiting the ability of
broker/dealers to sell the Company's securities and the ability of
purchasers in this offering to sell their securities in the secondary
market.
10. Risks Low priced Stocks. The Equity Unit is not eligible for quotation
on the Automated Quotation System of the National Association of Securities
Dealers, Inc. ("NASD").
In the absence of a security being quoted on NASDAQ, or the Company having
$2,000,000 in net tangible assets, trading in the Common dividing the
net tangible book value of the Company (total tangible assets less total
liabilities) by the number of outstanding shares of Common Stock. At
December 31, 1998 the Company's Equity Unit had a net tangible book value
of $2,394,036,000 or $26,527 share. After giving effect to the receipt
of the net proceeds from the sale of all Shares offered hereby, at a
public offering price of $11.00 per Share, the pro forma net tangible
book value of the Company at December 31, 1998 would have been
$ 2,394,186,000 or $23,882 per share, representing an immediate increase
in net tangible book value of $150,000,000 share to the present
stockholders, and immediate dilution of $2,645 to public investors. The
following illustrates diluting to public investors on a per share
basis, assuming all Class "B" are exercised. To the extent less than all
are exercised, net proceeds to the Company will be less and dilution to
investors in this offering will be proportionately greater. The shares will
be free trading shares and not subject to Rule 144.
The procedure after the Dilution factor will be that the net asset value of
the shares will be reduced from $26,527 to $23,882 per Equity Unit. Public
offering price share....$11.00. Net tangible book value per share before
offering....$2,645. Decrease per share attributable to public
investors....$2,645. Pro forma net tangible book value per share after
offering....$23,882. Dilution per share to public investors....$2,645.
11. There is a risk factor because of the lack of experience in running a
hotel or a wellness center. However, the Company has a great number of
highly experienced hotel and casino operators to accomplish all phases of
these operations.
The following table sets forth with respect to the present stockholders
and public Investors a comparison of the number of shares of Equity Unit
owned by the present stock Holders, the number of shares of Equity Unit to
be purchased from the Company by the purchasers of the 15,000,000 Shares
offered hereby and the respective aggregate consideration paid to the
Company and the average price per share.
The present stockholders will not be considered underwriters for this
offering in accordance with Act of 1933.
Current
Stock- 10,000,000 Class "A" 100% $110,000,000 100% $11.00
holders
5,000,000 Class "B" 100% $55,000,000 100% $11.00
Public 10,000,000 Class "A" 100% $110,000,000 100% $11.00
Investors
5,000,000 Class "B" 100% $55,000,000 100% $11.00
Public Investors will be purchasing the shares and present stockholders
will be purchasing the Class "B".
MARKET PRICE OF EQUITY UNIT
The Equity Unit has traded on the "pink sheets" maintained by the National
Association of Securities Dealers (NASD) under The National Quotation
Bureau, Inc. since April 25, 1976. The following table gives the high and
low bid prices since January 2, 1992, as reported by the market makers of
the Company's stock.
These prices are without retail mark up of markdowns and commissions,
and may not reflect actual transactions. The Company does not believe that
trading of its Equity Unit currently is reflective of an established
trading market.
Public Investors will be purchasing the Class "A" Equity Units with no
option to purchase the Class "B" Equity Units per understanding.
MARKET PRICE OF COMMON STOCK
The Common Stock has traded on the "pink sheets" maintained by the
National Quotation Bureau and on the NASD's Electronic Bulletin Board since
April 25, 1976. The following table gives the high and low bid prices
since December 31, 1998 reported by the market makers of the Equity Units.
These prices are without retail mark up of markdowns and commissions, and
may not reflect actual transactions. The Company does not believe that
trading of its Equity Units currently is reflective of an established
trading market. The stock is no longer traded on the "pink sheet."
1999 LOW HIGH 1998 LOW HIGH
1st Qtr No Trading 1st Qtr. No Trading
2nd Qtr. No Trading
3rd Qtr. No Trading
4th Qtr. No Trading
1997 LOW HIGH
1st Qtr. No Trading
2nd Qtr. 6 3/8 7
3rd Qtr. 6 1/2 7
4th Qtr. 6 5/8 7
1996 LOW HIGH
1st Qtr. No Trading
2nd Qtr. No Trading
3rd Qtr. No Trading
4th Qtr. No Trading
1995 LOW HIGH
1st Qtr. No Trading
2nd Qtr. No Trading
3rd Qtr. No Trading
4th Qtr. No Trading
1994 LOW HIGH
1st Qtr. No Trading
2nd Qtr. No Trading
3rd Qtr. No Trading
4th Qtr. No Trading
1993 LOW HIGH
1st Qtr. No Trading
2nd Qtr. No Trading
3rd Qtr. No Trading
4th Qtr. No Trading
1992 LOW HIGH
1st Qtr. No Trading
2nd Qtr. No Trading
3rd Qtr. No Trading
4th Qtr. No Trading
Company trading is pending approval. As of December 31, 1998 there
were approximately 576 holders of Company Equity Units. No trading or
volume is available because the shares of the Equity Units are waiting
for approval. The Equity Units do not currently trade. No trading or
volume is available because the shares have not been trading since 1992.
The transfer agent for the common stock and the warrant agent is American
Securities Transfer, Inc., P.O. Box 1596, Denver, Colorado 80201.
USE OF PROCEEDS
If all 15,000,000 Class "B" are exercised, of which there can be no
assurance, the net proceeds to the Company will be approximately
$148,500,000 after deducting offering expenses of approximately
$16,500,000. The Company intends to utilize the net proceeds during the
12-month period following the offering as follows. If less than all of
the Class "B" are exercised, the proceeds of this offering will be spent
first to purchase equipment, and for consolidation of assembly operations
and then pro rata for the other purposes set forth herein.
Pending use of all the proceeds, the Company will make temporary
investments of the proceeds, including but not limited to interest bearing
savings accounts, certificates of deposit, money market and other
liquid assets.
The foregoing list of expenditures is an estimate and will vary due to
changing circumstances such as variations in additional contracts which may
be acquired. Any change in the application of proceeds will occur solely in
the discretion of the Company's Board of Trustees.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Summary of significant Nature of the Business
Countryland Wellness Internet Network Trust, a Nevada Trust was organized
on February 9, 1998. The company is engaged in the discovery and
development of precious metals mining properties located in Quincy, Plumas
County, California.
No material changes from period to period.
No seasonal aspects that will affect the financial condition or results of
operations.
BUSINESS
The Basic Plan
A. Basic Strategy - Wellness-Resort and Casino, Las Vegas, Nevada is a
Wholly owned subsidiary of Countryland Wellness Internet Network Trust,
a publicly traded Trust (CWIN) which operates a life Extension Club where
the members are trained in how to live a longer life.
PRINCIPAL STOCKHOLDERS
Grand American Bank Trust owns 60% of the Company's Class "A" Equity Unit
as of December 31, 1998.
Name and Address Number Percent Before Percent After
Beneficial Owner of Shares Offering Offering
Grand American Bank Trust 53,050,000 (1) 60% 54%
Estate Trust Organization Class "A"
Las Vegas, Nevada
Kari L. Cruz 7,900,000 10% 8%
2205 Purple Majesty Court Class "A"
Las Vegas, Nevada 89117
V.G. Kelly & D. Kelly Trust 3,130,933 (2) 3.5% 3.2%
936 West 21 st. Street Class "A"
Santa Ana, CA 92706
Joseph Witzman 3,266,960 (3) 3.6% 3.3%
5946 Soledad Mountain Road Class "A"
La Jolla, CA 92037
All the Officers and Trustees own less than 60,000 Equity Units.
(1) Purchase for cash equivalent
(2) Purchase by surrendering debt of the company.
(3) Purchase with cash and part given as gift.
CERTAIN TRANSACTIONS
The Company is authorized to issue 50,000,000 shares of no par value Class
"B" shares. The Company gave authority to its Board of Directors to issue
such Class "B" stock in one or more series, and to fix the number of share"
in each series, and all designations, relative rights, preferences and
limitations of the stock issued in each series. As of April 13, 1994,
the Board of Trustees had exercised the authority granted.
The Company issued to Joseph Witzman 3,266,960 Class "B" Equity Unit of no
par value in exchange for the cancellation of some of the Company debt and
said Class "B" Equity Unit were restricted shares that bear a ledgend and
are subject to the provisions of Securities and Exchange Commission Rule
144. The holder of said securities has promised to abide by the
restrictions of Securities and Exchange Commission Rule 144.
The Company also issued to Joseph Witzman 3,266,960 Class "A" Equity
Unit shares of $.003 par value in exchange for the cancellation of the
balance of the Company debt and said Class "A" Equity Unit were restricted
shares that bear a ledgend and are subject to the provisions of
Securities and Exchange Commission Rule 144.
COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
FINANCIAL DATA
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
Countryland Wellness Internet Network Trust
Las Vegas, Nevada
I have audited the accompanying balance sheets of Countryland Wellness
Internet Network Trust as of December 31, 1998 and 1997, and the related
statement of income and retained earnings for the year that ended
December 31, 1998. These financial statements are the responsibility of
the Company's management. My responsibility is to express an opinion on
these financial statements based on my audit.
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 misstatements. 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. I believe that my audit
provides a reasonable basis for my opinion.
In my opinion, except as stated in the following paragraphs, the balance
sheet and income statement referred to above present fairly, in all
material respects, the financial position of Countryland Wellness Internet
Network Trust as of December 31, 1998 and the statement of income for the
year then ended in conformity with generally accepted accounting principles.
I was unable to prepare the statement of cash flows for the year ended
December 31, 1998 because management did not provide me with the details
of cash receipts and disbursements.
I was unable to apply the appropriate audit procedures to the following
accounts because management did not provide me the backups or supporting
documents from China International Packaging and Leasing Co., Ltd.:
accounts receivable, rental receivable past due, fixed assets, deferred
taxes, other liabilities, reserve funds, enterprise expansion fund,
operating expenses, and general and administrative expenses.
/S/ LUIS R. HIDALGO, JR.
Certified Public Accountant
April 23, 1999
COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
BALANCE SHEETS
DECEMBER 31, 1998 AND DECEMBER 31, 1997
1998 1997
(Dollars in Thousands)
ASSETS
Cash (Note 9) $4,449
Gold in storage $27,317
Cash equivalents (Note 10) $1,122,301
Accounts receivable - net $20,326
Deferred charges and other assets (Note 2)
Deferred mining exploration costs and
Deferred operating expenses $4,813 $4,813
Property and equipment - net $17
Proven Reserves (Note 4 and 12)
Gold - net of estimated mining costs $1,171,000 $2,032,880
Silver $91,200 $112,955
Deferred Taxes $43
Unamortized exchange loss $504
---------- ----------
Total Assets $2,414,653 $2,177,465
---------- ----------
LIABILITIES AND STOCKHOLDERS EQUITY
Loans payable $23,761
Accrued expenses $9,955
Other payables $748
Common Stock, Class "A" $0.003 par value
Authorized shares - 500,000,000
Issued and outstanding - 90,028,877 in
1998 and 1997 $271 $271
Common Stock, Class "B" no par value, with
a stated value of $1.00 per share.
Authorized shares - 50,000,000 in
1998 and 1997 $5,266 $5,266
Capital in excess of par $2,394,036 $2,171,928
Retained Earnings ($19,384)
----------- ----------
Total Liabilities & Stockholder's Equity $2,414,653 $2,177,465
----------- ----------
See accompanying notes to Financial Statements.
COUNTRYLAND WELLNESS INTERNET NETWORK TRUST
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1998
1998
(Dollars in thousands)
Operating revenues $0
Operating expenses $1,711
General and administrative expenses $2,772
------
Operating loss ($4,483)
Loss on exchange ($5,016)
--------
Net loss ($9,499)
Retained earnings, beginning ($9,885)
--------
Retained earnings, ending ($19,384)
See accompanying notes to financial statements.
COUNTRYLAND WELLNESS INTERNET NETW0RK TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Description of Business: The Company is engaged in the mining development
in the United States and equipment leasing business in China. Since
October 22, 1974, the Company has owned and operated thirty-nine (39) mines
and one (1) mill site at Quincy, Plumas County, California, and is
engaged in the exploration of said mines for the production of precious
metals like gold and silver. The company also applied for a license in
Las Vegas, Nevada to conduct Life Extension programs and to operate
hotels and casinos.
Development Costs: The Company will not capitalize property taxes on its
mining properties until the mines are ready for operation and development.
2. DEFERRED CHARGES AND OTHER ASSETS
(In Thousand Dollars)
This consists of:
Deferred Mining Exploration Costs $3,253
Deferred mining exploration costs were incurred
in prior years with the amounts being estimated
based on the prevailing costs of mining exploration
at that time due to absence of supporting documentation.
On April 13, 1996, the Company issued shares of stocks
valued at $3,252,669 to pay for its obligations arising thereto.
Deferred Operating Expenses
Related to additional sale of Common "A" shares $1,479
Prior years expenses 81
------
Total Operating Expenses $1,560
------
Total Deferred Charges and Other Assets $4,813
3. RELATED PARTY TRANSACTIONS
Grand American Bank Trust owns approximately 60% of the Company's Class "A"
common stock as of December 31, 1998.
4. PROVEN GOLD AND SILVER RESERVE
The process of estimating mineral reserves is very complex, requiring
significant subjective decision in the evaluation of available geological,
engineering, and economic data for each reserve. The data for a given
reserve may change substantially over time as a result of additional
development activity, production under varying economic conditions, etc.
Consequently, material revision to the existing reserve estimates may occur
in the future. Although, every reasonable effort was made to ensure that
the reserve estimates reported represent the most accurate assessment
possible, the significance of the subjective decision required, the
variances in the available data for various reserves, makes these estimates
generally less precise than other estimates in connection with financial
disclosure. Proven reserves are estimated quantities of gold and silver
which geological engineering data demonstrate, with reasonable certainty,
to be recoverable in future years from known reserves under existing
economic and operating conditions.
Stickel and Associates, independent consultants in applied geology,
geophysics and engineering, has estimated 7,000,000 troy ounces of gold and
19,000,000 ounces of silver. The values of these reserves based on average
market prices as of December 31, 1998 and December 31, 1997 are as follows:
12-31-98 12-31-97
(Dollars in Thousands)
Gold 7,000,000 troy ounces
@ $293/troy ounce $1,171,000
@290.34/troy ounce $2,032,380
Net of estimated mining cost
Silver 19,000,000 troy ounces
@ $4.80/troy ounce $91,200
@ $5.94/troy ounce $112,955
---------- ----------
$1,262,200 $2,145,335
The above figures were also shown in the balance sheet at December 31, 1998
and 1997. The 1997 figures are stated at gross amounts because management
was unable to furnish me the estimated costs of mining.
5. STOCKHOLDER'S EQUITY
The Company is authorized to issue 50,000,000 shares of no par value Class
"B" shares. The Company gave authority to its Board of Directors to issue
such Class "B" in one or more series, and to fix the number of shares in
each series, and all designations relative rights, and preferences and
limitations of the stock issued in each series, As of April 13, 1994, the
Board of Directors has exercised the authority granted.
6. CONTINGENCIES
The Company is not involved in any legal proceeding which is considered to
be ordinary routine litigation incident to its business.
7. CHANGE OF NAME
The name of the Company was changed from Continental Wellness Casinos Trust
to Countryland Wellness Internet Network Trust. The Company adopted a
revised trust indenture discontinuing its real estate investment trust
status. On February 6, 1999, the Company formally merged with China
International Packaging and Leasing Co., Ltd., an equipment leasing company
in Beijing, China.
8. HOTEL ACQUISITION
The Company is in the process of concluding the purchase of the El Rancho
Hotel and Casino in Las Vegas, Nevada, an 1,008-room hotel and casino.
(See exhibits attached herewith.)
9. CASH
(Dollars in Thousands)
Cash consists of:
Cash on hand $ 2
Cash in bank 4,447
------
Total $4,449
10. CASH EQUIVALENTS
This consists of:
Negotiable Warehouse Receipt No. 929 from Grand American Bank Trust dated
December 9, 1998 with a value of $22,300,816; and eleven (11) Bank
Guarantees No. BG1735/KB/98, BG1730/KB/98, BG1734/KB/98, BG1736/KB/98,
BG1777/KB/98, BG1732/KB/98, BG1738/KB/98, BG1737/KB/98, BG1739/KB/98,
BG1775/KB/98, AND BG1779/KB/98 each for US $100,000,000, issued by PT Bank
Negara Indonesia (Persero) Tbk. Head Office, Treasury Division, Jakarta,
Indonesia.
11. Continental Wellness Casinos Trust a Real Estate Investment Trust (USA)
and China International Packaging and Leasing Co., Ltd. (Beijing, China)
had merged on December 16, 1998 and became the Countryland Wellness
Internet Network Trust. The financial statements presented in this report
are a consolidation of the two companies.
12. The Statement of Income and Retained Earnings for the year ended
December 31, 1998 were from the operations of China International
Packaging and Leasing Co., Ltd.
LETTER OF CONSENT
To the Board of Directors and Stockholders
Countryland Wellness Internet Network Trust
Las Vegas, Nevada
I herewith consent to the use of my Independent Auditor's Report and Balance
Sheets of Countryland Wellness Internet Network Trust as of December 31, 1998
and December 31, 1997 anf the related statement of income for the year 1998,
in the Company's submissions to the Securities and Exchange Commission, in
connection with the Company's filings with the Commission.
/S/ Luis R. Hidalgo
Certified Public Accountant
April 23, 1999
Luis R. Hidalgo, Jr., CPA
2383 Lockwood Ave., Fremont, CA 94539
510-659-9435
EXHIBITS
Exhibits are filed on paper