SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K-A
(AMENDMENT NO. 2)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 22, 2000
MAXX INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Utah 000-26971 87-0284871
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
c/o Solomon Broadcasting International, Inc.
130 El Camino Drive, Beverly Hills 90212
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number: (516) 827-5500
Area Investment and Development Company
(Former name or former address, if changed since last report.)
This form 8-K-A (Amendment No. 2) amends the Registrant's Current Report on
Form 8-K-A dated October 10, 2000 and filed October 11, 2000.
Item 2. Acquisition or Disposition of Assets.
Item 2 is incorporated herein by reference to the Registrant's Current
Report on Form 8-K dated February 22, 2000 and filed on February 23, 2000.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
Audited financial statements of Maxx International, Inc. for the years
ended December 31, 1999.
(b) Pro Forma Financial Information.
Pro forma balance sheet of the Registrant (formally known as Area
Investment and Development Company) as of December 31, 1999, pro forma statement
of operations for the year ended December 31, 1999 and pro forma statement of
operations for the three months ended March 31, 2000 giving effect to the pro
forma adjustments related to the acquisition of assets from Maxx International,
Inc. (a Nevada corporation) and the acquisition of Pure Vision Internet, Inc.
(c) Exhibits.
Exhibit No. Document
----------- --------
(2.1) Asset Acquisition Agreement dated February 3, 2000
between Area Investment and Development Company
and Maxx International, Inc. (a Nevada
Corporation) (incorporated by reference to the
Registrant's Current Report on Form 8-K dated
February 22, 2000 and filed on February 23, 2000
with the Securities and Exchange Commission)
1
(2.2) Assignment to Area Investment and Development
Company of rights, title and interest of Maxx
International, Inc. (a Nevada corporation) from
Max Entertainment LLC ("Max") and Doyle Capital
Management Limited ("DCML") to the June 21, 1999
Agreement by and between Max, DCML and Libreria
Editrice Rogate
(23) Consent of Jim Clouse, CPA
2
MAXX INTERNATIONAL, INC.
INDEPENDENT AUDITOR'S REPORT
FOR THE PERIOD JULY 12, 1999 (INCEPTION)
THROUGH DECEMBER 31, 1999
MAXX INTERNATIONAL, INC.
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT ......................................... 3
FINANCIAL STATEMENTS
BALANCE SHEET ............................................... 4
STATEMENT OF OPERATIONS AND RETAINED EARNINGS (DEFICIT) ..... 5
STATEMENT OF CASH FLOWS ..................................... 6
NOTES TO FINANCIAL STATEMENTS ............................... 7-9
2
Jim Clouse, CPA
4665 Bowling Green Road
Franklin, KY 42134
(270) 586 - 0224
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Maxx International, Inc.
Hicksville, NY 11801
I have audited the accompanying balance sheet of Maxx International, Inc. as of
December 31, 1999 and the related statements of operations, retained earnings
(deficit), and cash flows for the year then ended. 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.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the overall financial statement presentation. I believe that my audit
provides a reasonable basis for my opinion.
The accompanying financial statements have been presented assuming the Company
will continue as a going concern. As discussed in Note 3 to the financial
statements, the Company's continuing as a going concern is dependent upon
whether it can internally generate a revenue stream from its' existing assets or
obtain substantial cash infusion into the Company to sustain it until a revenue
stream is generated. The financial statements presented herein do not include
any adjustments that might result from the outcome of this uncertainty.
In my opinion, the financial statements referred to in the first paragraph
present fairly, in all material respects, the financial position of Maxx
International, Inc. as of December 31, 1999 and the results of its operations
and cash flows for the year then ended in conformity with generally accepted
accounting principles.
Jim Clouse, CPA
September 12, 2000
3
MAXX INTERNATIONAL, INC.
BALANCE SHEET
DECEMBER 31, 1999
1999
-----------
ASSETS:
Current Assets:
Cash & cash equivalents $ 106,905
Production & marketing costs 316,914
-----------
Total Current Assets 423,819
-----------
Other Assets:
Book rights, permits & licenses, net 513,094
Organization costs, net 22,500
-----------
Total Other Assets 535,594
-----------
TOTAL ASSETS $ 959,413
===========
LIABILITIES & STOCKHOLDERS' DEFICIT:
Current Liabilities:
Accrued payables $ 31,250
Loans payable 1,889,768
-----------
Total Current Liabilities 1,921,018
-----------
Stockholders' deficit:
Common stock (50,000,000 shares of $.01 par
value stock authorized, no shares issued,
3,500,000 shares subscribed) 35,000
Less: Stock subscriptions receivable (35,000)
Deficit accumulated during the development stage (961,605)
-----------
Total Stockholders' Deficit (961,605)
-----------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 959,413
===========
The accompanying notes are an integral part of these financial statements.
4
MAXX INTERNATIONAL, INC.
STATEMENT OF OPERATIONS AND RETAINED EARNINGS (DEFICIT)
FOR THE PERIOD JULY 12, 1999 (INCEPTION) THROUGH DECEMBER 31, 1999
1999
---------
Total income $ --
Expenses:
Consulting services 129,433
Professional services 113,931
Travel & entertainment 522,470
Public relations 30,000
Commissions 25,395
Rent 8,638
Telephone 1,489
Dues & subscriptions 546
Office expense 10,556
Bank charges 7,242
Contributions 65,000
Accrued expenses 31,250
Amortization 15,656
---------
Net income (loss) before income taxes (961,605)
Income tax expense --
---------
Net income(loss) after income taxes (961,605)
---------
Retained earnings, beginning of year --
---------
Retained earnings (deficit accumulated during
the development stage), end of year $(961,605)
=========
The accompanying notes are an integral part of these financial statements.
5
MAXX INTERNATIONAL, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD JULY 12, 1999 (INCEPTION) THROUGH
DECEMBER 31, 1999
1999
-----------
Cash Flows from Operating Activities:
Net loss from operations $ (961,605)
Adjustments to reconcile net loss to
net cash used by operations:
Increase in accrued payables 31,250
Amortization expense 15,656
-----------
Net Cash used by Operating Activities (914,699)
-----------
Cash Flows from Investing Activities: --
Production & marketing costs 316,914
Book rights, permits & licenses 526,250
Organization costs 25,000
-----------
Net Cash from Investing Activities 868,164
-----------
Cash Flows from Financing Activities:
Proceeds from borrowing 1,889,768
-----------
Net Cash from Financing Activities 1,889,768
-----------
Net cash increase for period 106,905
Cash and cash equivalents, beginning of year --
-----------
Cash and equivalents, end of year $ 106,905
===========
The accompanying notes are an integral part of these financial statements.
6
MAXX INTERNATIONAL, INC.
NOTES TO THE FINANCIAL STATEMENTS
For The Period July 12, 1999 (Inception) through December 31, 1999
Note 1: Nature of Organization
Maxx International, Inc. (the Company) was organized July 12, 1999 for the
purpose of purchasing and marketing the exclusive worldwide licensing rights to
the seven private prayer books of His Holiness Pope John Paul II. The Company is
a development stage company.
The Company's operating results took place entirely during the last six months
of 1999 and consisted exclusively of costs related to its' acquisition of those
rights and development of marketing strategies. The Company received no revenue
during 1999.
Note 2: Significant Accounting Policies
Revenues and Expenses. The Company's primary source of revenue will be derived
from the sale of various media assets or licensing fees from those assets. All
revenues will be recognized in the period earned and expenses recorded when
incurred in accordance with the accrual basis of accounting.
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 assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash & Cash Equivalents. Cash and cash equivalents consist of cash held in an
escrow account. Throughout the year, The Company's cash balances were deposited
into and all disbursements made from this one escrow account. Management
believes the Company is not exposed to any significant credit risk on cash and
cash equivalents.
Production & Marketing Costs. All costs for the production and marketing of a
CD-ROM featuring international artists reading various prayers contained within
the Pope's Prayer Books and performance of a concert in the Vatican are
capitalized in this account.
Book Rights, Permits & Licenses. The Company purchased the exclusive worldwide
licensing rights to the seven private prayer books written by His Holiness Pope
John Paul II. Book rights, permits and licenses consist of the original purchase
price, royalties and other related costs associated with securing these rights.
The rights are being amortized over a 20-year life using the straight-line
method.
7
Note 2, continued:
Organization Costs. Organization costs of the corporation have been recorded as
an asset and will be amortized over 60 months on a straight-line basis.
Loans Payable. As of December 31, 1999 the Company had not issued any stock in
the corporation. Accordingly, investment monies infused into the Company at that
date are recorded as Loans Payable.
Note 3: Concentration of Risk/Going Concern
The Company's major assets include the book rights, permits and licensing rights
from the Pope's Prayer Books, production and marketing costs for those rights,
and, subsequent to year end, credit card and calling card rights secured by
sublicense from the Museum of the Treasures of St. Peters in the Vatican, and
the purchase of a subsidiary, Pure Vision Internet, Inc. as described in Note 6.
All these assets are in the developmental stage.
The Company's continuing as a going concern is dependent upon whether it can
internally generate a revenue stream from these assets or obtain substantial
cash infusion to sustain it until a revenue stream is generated.
Management is actively seeking significant funding. However, if the Company is
unsuccessful attracting significant cash infusion, the amount of revenue the
Company will generate may be inadequate to mitigate the adverse impacting of the
Company's operations.
Note 4: Capital Stock
The Company has authorized 50,000,000 shares of $.01 par value stock. As of
December 31, 1999 there were no shares issued and 3,500,000 shares subscribed.
Note 5: Net Operating Loss Carryforward
The Company has elected to carryforward operating losses. The net operating loss
carryforward at December 31, 1999 was $961,605.
Note 6: Subsequent Events
On February 19, 2000, the Company sold 100% of its' assets to the Area
Investment and Development Company in exchange for 3,500,000 shares of
restricted $.01 par value common stock. No liabilities or other encumbrances
were acquired in the asset acquisition. On April 17, 2000 the Area Investment
and Development Company changed its legal name to Maxx International, Inc.
8
Note 6, continued:
On March 27, 2000, the Area Investment and Development Company purchased 100% of
the shares of Pure Vision Internet, Inc. of San Clemente, California in exchange
for approximately 14% of its' common stock and various options exercisable at
various times. Pure Vision Internet, Inc. provides web hosting, web development,
and audio and video encoding.
Maxx International, Inc. has acquired the rights to imprint reproductions of the
works of art located in the Museum of the Treasures of St. Peters in the Vatican
on financial credit and debit cards and telephone calling cards. The sublicense
agreement remains in effect until February 7, 2006.
9
AREA INVESTMENT AND DEVELOPMENT COMPANY
PRO FORMA BALANCE SHEET
DECEMBER 31, 1999
ASSETS
Current Assets:
Cash $ 127,394
Accounts Receivable 2,166
Compact Disc and Video Production Costs 316,914
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Total Current Assets 446,474
COMPUTER EQUIPMENT AND LEASEHOLD
IMPROVEMENTS , Net of Accumulated
Depreciation and Amortization 6,678
BOOK RIGHTS,Net of Accumulated Amortization 513,094
ORGANIZATION COSTS, Net of
Accumulated Amortization 22,966
GOODWILL, Net of Accumulated Amortization 37,222
----------
TOTAL ASSETS $1,026,434
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Expenses $ 41,407
Income Taxes Payable 800
Note Payable, Current 5,286
Loan Payable, Former Stockholder 57,015
Loans Payable 1,889,768
----------
Total Current Liabilities 1,994,276
----------
Stockholders' Equity:
Common Stock, $0.01 Par Value, 50,000,000 Authorized,
9,048,171 Shares Issued and Outstanding 90,482
Additional Paid-in Capital 116,700
Accumulated Deficit -1,175,024
----------
Total Stockholders' Equity -967,842
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,026,434
==========
AREA INVESTMENT AND DEVELOPMENT COMPANY
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
INCOME
Net Sales $ 130,937
Interest Income 489
----------
GROSS INCOME 131,426
----------
EXPENSES
General and Administrative 1,209,268
----------
Total Expenses 1,209,268
----------
LOSS FROM OPERATIONS -1,077,842
----------
NET LOSS -$1,077,842
==========
BASIC LOSS PER SHARE -$0.14
==========
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 7,634,474
==========
AREA INVESTMENT AND DEVELOPMENT COMPANY
PRO FORMA STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2000
INCOME
Net Sales $ 56,821
Interest Income 280
----------
GROSS INCOME 57,101
----------
EXPENSES
General and Administrative 1,047,899
----------
Total Expenses 1,047,899
----------
LOSS FROM OPERATIONS -990,798
----------
NET LOSS -$990,798
==========
SIGNATURES
Pursuant to the requirement 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, this 12th day of October, 2000.
MAXX INTERNATIONAL, INC.
By: /s/ Adley Samson
---------------------------
Adley Samson, C.F.O.