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EXHIBIT 99
WANT & ENDER, CPA, P.C.
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CERTIFIED PUBLIC ACCOUNTANTS 37 East 28th Street, 8th Floor
New York, NY 10016
MARTIN ENDER, CPA Telephone (212) 684-2414
STANLEY Z. WANT, CPA, CFP Fax: (212) 684-5433
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors:
REDOX TECHNOLOGY CORPORATION
We have audited the accompanying balance sheet of REDOX TECHNOLOGY CORPORATION
at December 31, 1997 and the related statements of income and retained earnings,
stockholders' equity 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 have conducted our audit in accordance with generally accepted auditing
standards. These 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 also includes examining on a test basis, evidence
supporting the amounts and diclosures 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.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has not yet begun
operations, and as such, has sustained recurring losses. In our opinion, the
financial statements referred to above present fairly, in all material respects,
the financial position of REDOX TECHNOLOGY CORPORATION at December 31, 1997, and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/ Martin Ender
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Martin Ender
Want & Ender CPA, P.C.
Certified Public Accountants
New York, NY
March 11, 1998
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ReDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
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BALANCE SHEET
as of
December 31, 1997
ASSETS
CURRENT ASSETS:
Cash on Hand $ 242.26
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TOTAL CURRENT ASSETS $ 242.26
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FIXED ASSETS: (See Note 3)
Office Equipment $ 8,394.76
Accumulated Depreciation: Office Equipment (6,718.00)
Furniture & Fixtures 20,302.74
Accumulated Depreciation: Furn. & Fixt. (14,400.00)
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TOTAL FIXED ASSETS $ 7,579.50
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OTHER ASSETS:
License Agreement (See Note 12) $ 20,000.00
Patent (See Notes 4 and 9) 1,500.00
Security Deposits 1,159.10
Goodwill (See Note 5) 50,000.00
Organization Costs 250.00
(Net of accumulated amortization $500)
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TOTAL OTHER ASSETS $ 72,909.10
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TOTAL ASSETS $ 80,730.86
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ReDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
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BALANCE SHEET
as of
December 31, 1997
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 1,698.60
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STOCKHOLDERS' EQUITY:
Common Stock, par value $.00005 per share
100,000,000 authorized. 45,700,000 issued and
outstanding.(See Notes 6 and 11) $ 2,285.00
Convertible Preferred Stock, par value $.001
10,000,000 shares authorized. 6,000,000 shares
issued and outstanding. 6,000.00
Additional Paid-in Capital (See Notes 6 and 11) 478,346.71
Accumulated Deficit - December 31, 1997 (407,599.45)
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Total Stockholders' Equity $ 79,032.26
TOTAL LIABILITIES AND EQUITY $ 80,730.86
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ReDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
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STATEMENT OF INCOME AND RETAINED EARNING
for the year ending
December 31, 1997
INCOME:
Revenues $ 108.67
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TOTAL REVENUES $ 108.67
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EXPENSES:
Auto Expense $ 1,283.39
Dues and Subscriptions 5,375.70
Office Expenses 8,282.65
Professional Fees 20,818.41
Rent 16,316.97
Telephone Expenses 5,221.99
Local Travel 6,831.25
Miscellaneous Tax 227.05
Public Relations 3,069.62
Interest 1.21
Travel and Entertainment 920.87
Depreciation 5,280.00
Amortization 0.00
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TOTAL EXPENSES $ 73,629.11
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NET INCOME/(LOSS) FOR THE PERIOD $ (73,520.44)
ACCUMULATED DEFICIT - JANUARY 1, 1997 $ (334,079.01)
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ACCUMULATED DEFICIT - DECEMBER 31, 1997 $ (407,599.45)
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ReDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
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STATEMENT OF STOCKHOLDERS' EQUITY
as of
December 31, 1997
COMMON STOCK - $.00005 par value
Authorized - 100,000,000 shares
Issued - 45,400,000 shares $ 2,270.00
Addtional Paid-in Capital 388,875.13
Accumulated Deficit (334,079.01)
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STOCKHOLDERS' EQUITY - JANUARY 1, 1997 $ 57,066.12
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COMMON STOCK: Issued - 300,000 15.00
PREFERRED STOCK: Issued - 6,000,000 $ 6,000.00
Addtional Paid-in Capital (See Note 6) 89,471.58
Net profit/(loss) for the period
January 1, 1997 to December 31, 1997 (73,520.44)
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STOCKHOLDERS' EQUITY - DECEMBER 31, 1997 $ 79,032.26
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ReDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
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STATEMENT OF CASH FLOW
for year ended
December 31, 1997
Current Year
12-31-97
Cash Flows from Operating Activities
NET INCOME $ (73,520.44)
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Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization $ 5,280.00
Increase/(Decrease) in Accounts Paybles 1,133.60
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Total Adjustments $ 6,413.60
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NET CASH PROVIDED (Used) BY OPERATING ACTIVITIES $ (67,106.84)
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Cash Flows from Investing Activities
Cash Payments for the Purchase of Property $ (2,302.74)
(Increase)/Decrease in Other Assets (20,000.00)
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NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES $ (22,302.74)
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Cash Flows from Financing Activities
Proceeds from Issuance of Common Stock $ 15.00
Proceeds from Additional Paid-in Capital 89,471.58
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NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES $ 89,486.58
Net Increase/(Decrease) in Cash $ 77.00
Cash at Beginning of Period 165.26
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CASH AT END OF PERIOD $ 242.26
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ReDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
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NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE 1. NATURE OF BUSINESS
REDOX TECHNOLOGY CORPORATION, was incorporated on April 25, 1988, under the laws
of the State of Delaware. The original name of the corporation was DCUSA
CORPORATION. DCUSA Management referred to the company as a "blind pool" or
"blank check" company. Its primary business was to obtain an acquisition and/or
merger transaction whereby its stockholders would benefit. On June 1, 1993, the
name of the corporation was changed to REDOX TECHNOLOGY CORPORATION. During
1993, the Company acquired a pending patent and all rights thereto which REDOX
Management intends to develop for commercial purposes.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
INCOME TAXES:
The Company is currently operating at a loss. It has therefore not
provided for income taxes.
ORGANIZATION COSTS:
The Company has capitalized the costs of organization and registration
of its securities. Amortization is computed on a straight-line basis
over sixty months commencing April 25, 1988. The Company is no longer
amortizing its organizational costs. These costs will be written off at
such time that it may be determined that the company has been
unsuccessful in its efforts to attract a suitable partner.
NOTE 3. FIXED ASSETS
In January 1994, the Company received furniture and office equipment from Mr.
Richard Szymanski as part of a Sale Contract and Bulk Transfer Agreement between
Mr. Szymanski and the Company. The assets have been recorded in the books at
their fair market value of $25,000.
NOTE 4. PATENT ACQUISITION
On April 9, 1993 the Company acquired all interest in a U.S. Patent Pending
application titled "EMERGENCY RESERVE BATTERY". It involves high density energy
technology to enhance battery cells. The rights to the patent pending were
acquired in exchange for fifteen million (15,000,000) shares of par value .0001
per share, with actual value of the intellectual property so acquired to be
determined by an independent agency. For purpose of financial statements, the
value is shown as $1,500. Management decided to record the property on the books
at the aggregate par value $1,500. The value of this property is computed at
$5,200,000. This value has been determined by Battelle Memorial Institute which
is an independent valuation agency.
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ReDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
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NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE 4. PATENT ACQUISITION (continued)
On August 18, 1997, REDOX executed an exclusive agreement with Clark University,
an option to elect a royalty bearing, limited terms, license to the Patent
Rights in the novel Aluminum-Sulfur Battery developed by Stuart Licht at Clark
University.
Such exclusivity to apply to the electronics industry and for space
applications. The company paid $20,000.00 for the exclusive use of these patents
for the electronics industry and space application.
NOTE 5. GOODWILL
This represents amounts paid for the acquisition of DCUSA Corporation by Richard
Szymanski. This is reflected on the books as Additional Paid-In Capital.
NOTE 6. COMMON STOCK
On April 9, 1993, the number of outstanding shares of the Company's Common Stock
was increased by fifteen million (15,000,000) shares. These fifteen million
(15,000,000) shares were issued to Richard A. Szymanski in exchange for
assignment of all rights to the pending patent application (See Note 4 above).
On July 1, 1996, the Board of Directors approved and issued a stock option to
purchase 1,000,000 shares to C. D. Douglas, said option to be exercised by July
1, 1998. Said option was exercised by Mr. Douglas.
NOTE 7. ADDITIONAL PAID-IN CAPITAL
The cost of furniture and equipment acquired during the year was $0 (See Note
3). The fair market value has been determined at $25,000. The corporation has
decided to record the asset in the books at the fair market value. The
difference between the acquisition cost and the fair market value has therefore
been transferred to additional paid-in capital.
As of March 31, 1994, the corporation was utilizing capital borrowed from its
principal shareholder, Richard A. Szymanski. The principal and interest due on
the note as of December 31, 1993 was $88,358, and the principal and interest due
as of March 31, 1994 was $120,539, there having been an additional $32,181
accrued during the first quarter 1994. As per an agreement with Mr. Szymanski,
the entire balance due to him was converted to Additional Paid-In Capital. For
all of 1994, that amount was $186,023, there has been $153,842 directly posted
to Additional Paid-In Capital during the second, third, and fourth quarters of
1994, in addition to the $32,181 transferred thereto from the first quarter of
1994. During 1995 an additional $33,212 has been contributed to Additional
Paid-In Capital by Richard A. Szymanski. During 1996 an additional amount of
$80,636 was contributed to Additional Paid-In Capital by Richard Szymanski. For
the year ending December 31, 1997 an additional amount of $89,457 has been
contributed by Richard Szymanski.
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ReDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
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NOTE 8. CHANGE OF FISCAL YEAR
On June 16, 1993, the Board of Directors approved the change of fiscal year of
the corporation from beginning on June 1 and ending on May 31, to beginning on
January 1 and ending December 31.
NOTE 9. ALTERATIONS TO PREVIOUS FINANCIAL STATEMENTS FOR THE SAME PERIOD.
The original audited balance sheet as of March 31, 1994, recognized the patent
at its fair market value of $5,200,000 (See Note 4), with the corresponding
value assigned to Additional Paid-In Capital. Management decided to revise the
March 31, 1994 financial statement to recognize the patent's value at $1,500,
with corresponding value assigned to Additional Paid-In Capital.
NOTE 10. GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. Because the Company has not yet
commenced operations, it is entirely dependent upon the continued contributions
of capital and other resources provided by its principals until such time as
sufficient capital can be raised from other sources (e.g. from the sale of the
Company's authorized but unissued Common stock) to commence production for sale
of its products. Therefore, the assumption that the Company is a going concern,
is entirely determined upon the uncertain ability of the Company to raise
capital in such an amount as would be necessary to commence operations and
produce sufficient cash flow therefrom to survive.
NOTE 11. ADJUSTMENTS TO STOCKHOLDERS' EQUITY ENTRIES
The sum of Fifteen Dollars ($15.00) has been transferred from Additional Paid-In
Capital to Common Stock at Par Value. This has been done to reflect the par
value of all of the Company's Common Stock outstanding.
The sum of Six Thousand Dollars ($6,000) has been transferred from Additional
Paid-In Capital to Preferred Stock. This has been done to reflect the par value
of all of the Company's Preferred Stock outstanding.
NOTE 12. LICENSE AGREEMENT
The Company executed a license agreement with Clark University for the exclusive
use of their patented technology in certain industries. The Company paid Twenty
Thousand Dollars ($20,000) for the use of this technology and will pay a royalty
to Clark University on products sold as a result of using the technology.
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