1
As Filed with the Securities & Exchange Commission on December 1, 1999
Registration No. 333-17719
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
AMENDMENT NO. 13
TO
FORM S-1
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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COUNTRYLAND WELLNESS RESORTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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Delaware 1000 84-0687501
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL IRS ID NO.
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER)
2205 PURPLE MAJESTY COURT
LAS VEGAS, NEVADA 89117-2747
(702) 240-4408
(ADDRESS INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
--------------------
FERNANDO JUAN
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
2205 PURPLE MAJESTY COURT
LAS VEGAS, NEVADA 89117-2747
(702) 240-4408
(NAME, ADDRESS INCLUDING ZIP CODE AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------------
COPIES TO:
DONALD E. STUDER, ESQ.
ATTORNEY AT LAW
3611 CAPLES ROAD
WEST MONROE, LOUISIANA 719292
(318) 397-7297
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date hereof.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box. [ ]
If this Form is filled to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
--------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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PROSPECTUS
Issued November __, 1999
10,000,000 Shares
[COUNTRYLAND LOGO]
COMMON STOCK
----------------
COUNTRYLAND WELLNESS RESORTS, INC. IS OFFERING 10,000,000 SHARES OF COMMON
STOCK. THIS IS OUR INITIAL PUBLIC OFFERING AND NO PUBLIC MARKET CURRENTLY
EXISTS FOR OUR SHARES. WE ANTICIPATE THAT THE INITIAL PUBLIC OFFERING PRICE
WILL BE BETWEEN $18 AND $23 PER SHARE.
----------------
WE HAVE APPLIED TO LIST OUR COMMON STOCK ON THE NEW YORK STOCK EXCHANGE MARKET
UNDER THE SYMBOL "CWR."
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PRICE $_______ A SHARE
----------------
UNDERWRITING
PRICE TO DISCOUNTS AND
PUBLIC COMMISSIONS
-------- -------------
Per Share ....................... $ $
Total ........................... $ $
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a criminal offense.
Countryland will grant underwriters the right to purchase up to an additional
1,200,000 shares to cover over-allotments.
----------------
UNDERWRITERS TO BE ANNOUNCED LATER.
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[GATEFOLD ARTWORK]
[Narrative description of graphic material omitted in electronically filed
document
The following text is at the top of the page and spans the front cover
foldout:
COUNTRYLAND GLOBAL INTERNET CONTENT LIFE EXTENSION PROGRAM
Web Users Receive Wellness Reports Faster and More Reliably,
Even in Times of Peak Demand
The following text appears on the left hand side of the inside front
cover foldout above the first graphic:
Internet Life Extension Services by using genes technology.
The left hand side of the inside front cover contains a graphic that
consists of a map of the United States with a Web user on the far right and a
Web site on the far left with routers, network access points, an exchange point
and a local internet service provider and arrows depicting the flow of
information in the center of how to live to be a 100 years old.
Below this graphic the following text appears:
Without Life Extension Program life is shorter.
- Delivery of rich content (such as graphics, advertisements and streaming
media) may be delayed or lost at numerous points across the Internet
- Content often is not delivered via optimal route
- Web site may not be designed to handle periods of peak demand
The following text appears on the right hand side of the inside front
cover above a second graphic:
Internet Life Extension Program
The right hand side of the front cover contains a graphic that consists of
a map of the United States with a Web user on the far right and a Web site on
the far left with routers, network access points, an exchange point, a local
internet service provider and an Countryland server in the center. Arrows depict
the flow of information between the Web user and the local internet service
provider and between the local internet service provider and the Company's Web
site.
Below this graphic the following text appears:
Wellness Service
- Speeds delivery of rich content by intelligently routing it from nearby
countryland server
- Improves reliability of delivery and comes with countryland's
proof-of-performance guarantee
- Always serves up-to-date content
- Handles periods of peak demand
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TABLE OF CONTENTS
PAGE
----
PROSPECTUS SUMMARY................................... 3
RISK FACTORS......................................... 7
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS.... 8
USE OF PROCEEDS...................................... 9
DIVIDEND POLICY...................................... 9
CAPITALIZATION....................................... 10
DILUTION............................................. 11
SELECTED FINANCIAL DATA.............................. 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS................ 13
BUSINESS............................................. 15
MANAGEMENT........................................... 16
RELATED PARTY TRANSACTIONS...........................
PRINCIPAL STOCKHOLDERS............................... 20
CERTAIN TRANSACTIONS................................. 21
DESCRIPTION OF CAPITAL STOCK......................... 22
SHARES ELIGIBLE FOR FUTURE SALE...................... 24
UNDERWRITERS......................................... 26
LEGAL MATTERS........................................ 28
EXPERTS.............................................. 28
WHERE YOU CAN FIND MORE INFORMATION.................. 28
INDEX TO FINANCIAL STATEMENTS........................ F-1
UNTIL , 1999 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT BUY, SELL OR TRADE THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
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PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information about "CWR" and the common stock being sold in this offering and our
financial statements and accompanying notes appearing elsewhere in this
prospectus.
COUNTRYLAND WELLNESS RESORTS, INC.
Summary of significant Nature of the Business--
Countryland Wellness Resorts, Inc., is a Delaware Corporation. The company is
engaged in the discovery and development of precious metals mining properties
located in Quincy, Plumas County, California which consists of 750 acres of land
where 39 unpatented mining claims are located. All assessment work has been done
at the mines and all the reports have been filed with the Bureau of Land
Management, Sacramento, California and the County of Plumas in accordance with
mining rules and regulations. The company has a permit to operate on small
scale, the mines from the United States Forestry Department, Quincy, California.
The company is intent on going in a big mining venture to recover the gold and
silver in the proven reserves as soon as the price of gold increases in value.
The results will be increased gross revenues and liquidity. Small scale
operation is limited to 2,000 tons per day only, the company expect to start
mining as soon as gold price is $400 per troy ounce or better.
The Company is in the process of getting its Life Extension Center, a Longevity
Members Association for the purpose of helping people live longer by using
preventive Medicine with gene testing for discovery of dominant illness in the
different subjects and to repair the genes by genetic engineering followed with
a program of exercise and nutrition. The member signs for a period of ten years
and receives one week per year of care at the center. The cost for this program
is $3,000.00 per year per member, all payable in advance making it an effective
way to minimize the cost of medical treatment which is out of control. This will
have a material impact in the short and long term liquidity for the Company.
A. BASIC STRATEGY -- Wellness Resorts and Life Extension Program at the
Ballys and Paris Hotel and Casino Las Vegas, Nevada is a wholly owned
subsidiary of Countryland Wellness Resorts, Inc., a publicly traded company
(CWR) which operates A Life Extension (Longevity) Program where the members
are trained in how to live a longer life and a healthy life free of disease.
B. OVERVIEW OF THE WELLNESS RESORTS OR LIFE EXTENSION MEMBERS IN THE UNITED
STATES. The Life Extension Program in the United States is very limited.
People like to live longer, and there is a market for the first company to
start this project. That company will benefit from the need for the program
because of the large cost of medical treatment that amount to about 1.3
trillion and continues to increase with no end in sight.
C. CHARACTERISTIC OF THE LIFE EXTENSION PROGRAM. The Life Extension Program
that we have consists of Preventive Medicine by using the latest approved
techniques in the field of Gene Testing Technology and by testing the genes of
all our members with a PCR gene testing machine to detect gene abnormalities.
The abnormal genes can be repaired by using our genetic engineering and prevent
the illness caused by such defective gene. By the use of proper supplements
needed by the human body we can produce a disease free human specimen that is
free of the diseases caused by said defective gene and with the proper
nutrition to accompany these supplements the body can be built strong to combat
all the pollutants and interference of this era. With the use of proper
exercises according to body type we can be built to live to 120 years and any
death before that should be considered a premature death.
The company is also engaged in the electrical contracting business through
their subsidiary Network Electric Company, a major contractor for electrical
projects in the State of Nevada.
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RECENT DEVELOPMENTS
The company is entering into a contract with two major hotels in Las Vegas,
Nevada to acquire the use of 2,000 hotel's rooms or 1,000 in each hotel.
Contracts are been prepared and the company expects to start signing members to
the wellness program or Life Extension Program in the near future. The 2,000
rooms will be able to accommodate on an annual basis 104,000 prospective
members. The company will receive revenues of $3.12 Billion based on a ten
years pre-paid fees paid in advance to the Company. The net profit to the
company will be $2.44 Billion for the entire ten years or $244,000,000 every
year.
The company expect to sign 25,000 members on the year 2000, 25,000 members on
the year 2001, 25,000 members on the year 2002 and 25,000 members on the year
2003.
The company expects to acquire additional rooms from other hotels in the Las
Vegas area and sign additional members to the program.
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THE OFFERING
Common stock offered.......................... 10,000,000 shares
Common stock to be outstanding after this
offering.................................... 100,737,573 shares
Use of proceeds............................... For working capital and general
corporate purposes. For more detailed
information, see "Use of Proceeds" on
page 18.
Proposed (Countryland logo) symbol............ CWR
SUMMARY FINANCIAL DATA
PERIOD FROM INCEPTION
(OCTOBER 1, 1999) THROUGH
DECEMBER 31, 1999
--------------------------
(IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Revenue............................................. $ 3,631
Total operating expenses............................ 1,153
Operating net....................................... 2,690
Net................................................. 2,690
Net attributable to common stockholders............. 0
Basic and diluted net per share..................... $ .03
Weighted average common shares outstanding.......... 90,777
Pro forma basic and diluted net per share........... $ .03
Pro forma weighted average common shares
outstanding...................................... 90,777
Weighted average shares used in computing the pro forma basic and diluted
net loss per share have been calculated assuming the conversion of all shares
of convertible preferred stock outstanding as of September 30, 1999 into common
stock as if the shares had converted immediately upon issuance. Accordingly,
accrued dividends and accretion to redemption value are not included in the
calculation of pro forma basic and diluted loss per share. The pro forma as
adjusted column in the balance sheet data below gives effect to the conversion
of all shares of convertible preferred stock outstanding as of September 30,
1999 into common stock upon the closing of this offering and the sale of the
8,000,000 shares of common stock in this offering at an assumed initial public
offering price of $22.00, after deducting the estimated underwriting discounts
and commissions and estimated offering expenses payable by us.
AS OF SEPTEMBER 30, 1999
------------------------
PRO FORMA
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents...................... $ 932 $ 0
Working capital................................ 862 0
Total assets................................... 2,600,652 400,000
Long-term liabilities.......................... 0 0
Convertible preferred stock.................... 0 0
Total stockholders' equity (deficit)........... $2,594,393 $400,000
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Except as set forth in our financial statements or as otherwise indicated,
all information in this prospectus:
- Assumes no exercise of the underwriters' over-allotment option; and
- Reflects a $400,000,000 removal of cash equivalent represented by four
bank guarantees from Bank BNI, Indonesia.
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell shares of common stock
and seeking offers to buy shares of common stock only in jurisdictions where
offers and sales are permitted.
Our principal executive offices are located at 2205 Purple Majesty Court
Las Vegas, NV 89117 and our telephone number is (702) 240-4408 our E-Mail
address is CWCTRUST@Earthlink.Net our information on the Web site is
incorporated by reference into this prospectus.
Countryland, the CWR logo and CWRI are our trademarks. This prospectus also
contains trademarks and trade names of other companies.
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RISK FACTORS
The securities offered hereby are speculative, and prospective investors should
be aware that purchase of these securities involves a high degree of risk.
Accordingly, the securities should be purchased only by persons who can afford
to lose their entire investment. The following special risks, should be
considered:
1. Limited History of Business Operations. The Company has limited operating
history, having commenced operations in 10-22-74. There can be no assurance
that the Company will continue to be profitable in the future. Because of its
limited operating history, the Company's use of proceeds from this offering
could vary from the estimates given under the caption "Use of Proceeds." See
"Use of Proceeds."
2. Sufficiency of Funds. The business of casinos, hotel and life extension can
require significant amounts of capital. Management believes that the proceeds
of this offering will be sufficient to satisfy its anticipated cash
requirements for at least the 12 months following the completion of this
offering however, there can be no assurance that any or all of the Warrants
will be exercised and in such event the Company may need further financing for
purchase of equipment and for working capital purposes and to continue growth
of its operations, of which there can be no assurance, and there is no
assurance that the Company will be able to obtain additional financing on
satisfactory terms. No arrangements have been made at this time to raise
capital other than through this offering and the Company has not engaged in
discussions with any institutional or private lenders for such financing. See
"Use of Proceeds" and "Business." Any such financing may involve the issuance
of additional shares of Common Stock without the prior notification or approval
of shareholders, including the purchasers in this offering.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve
substantial risks and uncertainties. You can identify these statements by
forward-looking words such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "should," "will" and "would" or similar words. You
should read statements that contain these words carefully because they discuss
our future expectations, contain projections of our future results of operations
or of our financial position or state other "forward-looking" information. We
believe that it is important to communicate our future expectations to our
investors. However, there may be events in the future that we are not able to
accurately predict or control. The factors listed above in the section captioned
"Risk Factors," as well as any cautionary language in this prospectus, provide
examples of risks, uncertainties and events that may cause our actual result to
differ materially from the expectations we describe in our forward-looking
statements. Before you invest in our common stock, you should be aware that the
occurrence of the events described in these risk factors and elsewhere in this
prospectus could have a material adverse effect on our business, results of
operations and financial position.
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USE OF PROCEEDS
We estimate that the net proceeds from our sale of the 10,000,000 shares
of common stock will be approximately $160 million, assuming an initial public
offering price of $18.00 per share and after deducting estimated underwriting
discounts and commissions and estimated offering expenses payable by us. If the
over-allotment option is exercised in full, we estimate that the net proceeds
will be approximately $162 million.
The principal purposes of this offering are to establish a public market
for our common stock, to increase our visibility in the marketplace, to
facilitate future access to public capital markets, to provide liquidity to
existing stockholders and to obtain additional working capital.
We expect to use the net proceeds for anticipated working capital and
general corporate purposes. Although we may use a portion of the net proceeds
to acquire businesses, products or technologies that are complementary to our
business, we have no specific acquisitions planned. Pending such uses, we plan
to invest the net proceeds in investment grade, interest-bearing securities.
DIVIDEND POLICY
We have never paid or declared any cash dividends on our common stock or
other securities and do not anticipate paying cash dividends in the foreseeable
future. We currently intend to retain all future earnings, if any, for use in
the operation of our business.
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CAPITALIZATION
The following table sets forth our capitalization as of September 30,
1999. The pro forma as adjusted information reflects the issuance and sale of
the 10,000,000 shares of common stock offered by us in this offering at an
assumed initial public offering price of $18.00 per share.
This table should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and our
financial statements and accompanying notes and other financial data included
elsewhere in this prospectus.
AS OF SEPTEMBER 30, 1999
-----------------------------
ACTUAL PRO FORMA
---------- ----------
(IN THOUSANDS)
Long-term liabilities............................... $ 0 $ 0
---------- ----------
Stockholders' equity (deficit):
Common stock, $0.003 par value; 200,000,000 shares
authorized, 90,777,573 shares issued and
outstanding, actual; 90,777,573 shares issued and
outstanding, on a pro forma basis, 100,777,573
shares issued and outstanding, on a pro forma as
adjusted basis.................................... 272 302
Additional paid-in capital.......................... 385 0
Note receivable from officers for stock............. 0 0
Deferred compensation............................... 0 0
Accumulated deficit................................. 0 0
---------- ----------
Total stockholders' equity.................... 2,594,393 2,594,393
---------- ----------
Total capitalization.......................... $1,633,986 $1,813,986
========== ==========
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DILUTION
Countryland's net tangible book value as of September 30, 1999, was
approximately $40 million, or $28.82 per share of common stock. Pro forma net
tangible book value per share represents our tangible net worth (tangible assets
less total liabilities) divided by the 90,000,000 shares of common stock
outstanding. After giving effect to the issuance and sale of the shares of
common stock offered by Countryland in this offering at an assumed initial
public offering price of $18.00 per share, Countryland net tangible book value
at September 30, 1999 would have been $100 million, or $25.94 per share. The
initial public offering price per share will significantly exceed the net
tangible book value per share. Accordingly, new investors who purchase common
stock in this offering will suffer an immediate dilution of their investment of
$2.92 per share. The following table illustrates this per share dilution:
Assumed initial public offering price per share ............. $18.00
Pro forma net tangible book value per share before this
offering ................................................ $28.82
Decrease in pro forma net tangible book value per share
attributable to new investors ........................... 2.92
------
Pro forma net tangible book value per share after this
offering .................................................. 25.94
------
Dilution per share to new investors ......................... $ 2.92
======
The following table summarizes on a pro forma basis as of September 30, 1999,
the difference between the number of shares of common stock purchased from
Countryland, the total consideration paid to Countryland, and the average price
per share paid by existing stockholders and by new investors. The calculation
below is based on an assumed initial public offering price of $_____ per share,
before deduction of estimated underwriting discounts and commissions and
estimated offering expenses payable by us:
SHARES PURCHASED TOTAL CONSIDERATION
-------------------- --------------------------
NUMBER PERCENT AMOUNT PER SHARE
---------- ------- -------------- ---------
Existing stockholders ..... 90,777,573 90.8 $1,633,986,000 1
New investors ............. 10,000,000 9.2 180,000,000 9
----------- ----- -------------- --
Total ............... 100,777,593 100.0% $1,813,986,000 10
=========== ===== ============== ==
Net tangible book value per share after this offering would be $25.94 and
total dilution per share to new investors would be $2.92. If the underwriters'
over-allotment option is exercised in full, the number of shares held by new
investors will increase to 100,777,573 shares, or 9.2% of the total number of
shares of common stock outstanding after this offering.
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SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction with
Countryland's financial statements and related notes and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
other financial data included elsewhere in this prospectus. The statement of
operations data for the period from inception January 1, 1999 to September 30,
1999 are derived from audited financial statements included elsewhere in this
prospectus. The statement of operations data for the nine months ended
September 30, 1999 and the balance sheet data as of September 30, 1999 are
derived from unaudited financial statements included elsewhere in this
prospectus. Operating results for the nine months ended September 30, 1999 are
not necessarily indicative of the results that may be expected for any other
period or the entire year ending December 31, 1999.
PERIOD FROM INCEPTION
(January 1, 1999) TO
September 30, 1999
-----------------------
(IN THOUSANDS)(EXCEPT*)
STATEMENT OF OPERATIONS DATA:
Revenue...................................................... $ 3,631
-------
Operating expenses:
Cost of service............................................ 48
Engineering and development................................ 50
Sales, general and administrative.......................... 1,047
Equity related compensation................................ (170)
-------
Total operating expenses............................. 1,153
-------
Operating loss............................................... 0
Interest income (expense), net............................... 178
-------
Net loss..................................................... 0
Dividends and accretion to preferred stock redemption
value...................................................... --
-------
Net loss attributable to common stockholders................. $ 0
=======
Basic and diluted net per share.............................. $ 25.94*
Weighted average common shares outstanding................... 28.82*
Pro forma basic and diluted net per share (unaudited)........ $ 0.03
Pro forma weighted average common shares outstanding
(unaudited)................................................ 90,777
AS OF SEPTEMBER 30, 1999
-----------------------------
ACTUAL
-----------
(IN THOUSANDS)
BALANCE SHEET DATA:
Cash and cash equivalents.................................... $ 932
Working capital.............................................. 862
Total assets................................................. 2,200,000
Long-term liabilities........................................ 0
Convertible preferred stock.................................. 0
Total stockholders' equity................................... $2,194,000
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read together with our financial
statements and accompanying notes appearing elsewhere in this prospectus. This
prospectus contains forward-looking statements that involve risks and
uncertainties. Actual results may differ from those indicated in
forward-looking statements.
OVERVIEW
Nature of the Business: Countryland Wellness Internet Network Trust, a Nevada
trust was originally incorporated in Colorado on October 29, 1974, as Minerals
Mining Corporation. The name was first changed to Grand American International
Corporation, then Continental Wellness Casinos Corp., and then, on December 22,
1997, to Continental Wellness Casinos Trust, a real estate investment trust. On
December 16, 1998 the present name was adopted. The Company had been engaged in
the discovery and development of precious metals with mining properties located
at Quincy, Plumas County, California. The Company has 750 acres of land where 39
unpatented mining claims are located. All assessment work has been done at the
mines and all reports have been filed with the Bureau of Land Management,
Sacramento, California and the County of Plumas in accordance with the mining
rules and regulations. The Company has permits to operate the mines from the
United States Forestry Department, Quincy, California. The Company presently
does not intent to re-open mining operations to recover the gold and silver in
the proven reserves, and will not do so until the price of gold increases
significantly.
The Company is in the process of getting its live longer center, a longevity
members association, with the purpose of making people live longer by using
preventive medicine with genes testing for discovery of predominant illness in
the different subjects and repair defective genes by genetic engineering
followed with a program of exercise and nutrition. The hotel's guests sign a
long term rental agreement for a room or suite at the Company's resort hotel
and casino for a week or two per year for a period of ten years, payable in
advance, and also receive one week of care at the center. The rental cost is
$3,000.00 per week per year per guest.
The Company acquired Network Electric Company for a Pay Out Order to
be paid from funds due to the Company.
The Company entered into a Joint Venture Agreement with Striker Gold Mines, Ltd.
to invest six bank guarantees from Bank BNI Indonesia to be used in an
Investment Program that will regenerate 9% per day and the Company will receive
50% of the profit. The program is ready to start in about 30 days.
The Company entered into an agreement with Las Vegas Entertainment Network,
Inc., a publicly traded Company listed on the small caps of the NASDAQ Stock
Exchange were the Company has given the right to LVEN to use one of the
guarantee issued by Bank BNI Indonesia and loan a Gold Certificate (Restricted)
for 10,600 troy ounces of gold and the Company received 3,000,000 (Restricted)
shares of Common Stock from LVEN.
Engineering and development expenses consist primarily of salaries and
related personnel costs and costs related to the design, development, testing,
deployment and enhancement of our service and our network. We have to date
expensed our engineering and development costs as they were incurred. We
believe that research and development is critical to our strategic product
development objectives and intent to enhance our technology to meet the
changing requirements of the market demand. As a result, we expect our
engineering and development expenses to increase in the future.
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Sales, general and administrative expenses consist primarily of salaries
and related costs of sales and marketing, operations and finance personnel and
recruiting expenses, professional fees and legal accounting services. We expect
that sales, general and administrative expenses will increase in the future as
we hire additional personnel, expand our operations domestically, initiate
additional marketing programs, establish sales offices in new locations and
incur additional costs related to the growth of our business and our operations
as a public company.
RESULTS OF OPERATIONS
PERIOD FROM INCEPTION (JANUARY 8, 1999) THROUGH DECEMBER 31, 1999 AND THE
NINE-MONTH PERIOD ENDING SEPTEMBER 30, 1999
Liquidity and Capital Resources
The expansion and diversification of the Registrant's business has occurred
selectively for the past two years through the development of the Registrant's
mines for the production of gold and silver and other precious metals. The
Registrant is organizing its longevity center, a wellness resort for life
extension. The strategic and aggressive growth program enables the Registrant to
provide future earnings for the Company. The Registrant is confident that the
program of long term room rentals in a resort hotel and casino in conjunction
with a longevity center, will increase sales and produce a positive cash flow.
RECENT ACCOUNTING PRONOUNCEMENT
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivatives
and Hedging Activities," which establishes accounting and reporting standards
for derivatives instruments, including derivative instruments embedded in other
contracts, and for hedging activities. We will adopt SFAS No. 133 as required by
SFAS No. 137, "Deferral of the Effective Date of the FASB Statement No. 133," in
fiscal year 2001. We do not expect the adoption of SFAS No. 133 to have an
impact on our financial condition or results of operations.
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BUSINESS
OVERVIEW
A. Basic Strategy -- Wellness-Resort and Casino, Las Vegas, Nevada is a wholly
owned subsidiary of Countryland Wellness Resorts, Inc., which will operate the
Life Extension Club where the members are trained in how to live a longer life
and a healthy life free of any diseases.
B. Overview of the Wellness Resort or Life Extension Club in the United
States. The Life Extension Program in the United States are very limited and
people like to live longer and the market is there for the first company that
starts this project to benefit from the need of the program.
C. Characteristic of the Life Extension -- The Life Extension Program that
we are engaged in consists of Preventive Medicine by using the latest medical
approved techniques in the field of Genes Technology and by testing the genes
of all our members with the PCR machine the detection of illness producing
genes can be repaired and many of the illnesses associated with that gene can
be prevented. By the use of proper supplements needed by the human body we can
produce a better human specimen that is free of any type of disease and with
the proper nutrition.
D. Recommendation -- The Wellness Resort will establish a membership program
where the members sign a contract for 10 years which is refundable by their
group insurance plan.
The Life Extension Program and Membership Club
A. Source of Revenue:
1. The signing of members from our list of available members that desire to
join the Life Extension Club at the rate of $3,000 per year and payable 10 years
in advance.
2. The members will be acquired through direct marketing by sending brochures
to a selected group of citizens. No membership has been sold to date.
3. The signing of members from recommendations by other members will produce
many leads because everybody desires to visit Las Vegas, Nevada, the
entertainment capital of the world and receive a one week vacation free.
B. Costs -- The total cost for the Life Extension Club is $3,000 for one unit
which consists of staying in the Wellness Resort Hotel and Casino for one week
and receiving all the training of how to live longer and healthier but they
must sign for ten (10) years and pay $30,000 for the 10 years.
C. Net Revenue -- Considering that the average Hotel and Casino that we will
be using for our program has a combined total of 2,000 rooms, 2,000 club
members per week with a total of 312,000 week units at $3,000 per week unit
will bring a net revenue of $312,000,000.00 per year. However, the members are
paying 10 years in advance for a grand total of $3.12 billion of total revenue.
D. Products -- We will offer a great amount of products and other services to
our members which will produce additional revenues to our company.
E. The members will be refunded for the cost of the program by reporting the
medical test they will receive from the company as follows: Gene Testing for 20
genes at the rate of $1,500 per gene give a total of $30,000. Blood Testing
cost $3,000. Allergy Testing cost $4,000. Imaging Testing cost of $2,000, and
X-Rays testing cost of $1,000. The total cost of all testing is about $40,000
and the Medical Insurance Group Policies from most Insurance Companies cover up
to 80% of the cost of testing. The Insurance Company payments for the test will
cover the $30,000 cost of the Life Extension Program.
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MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of Countryland, and their ages and
positions as of September 30, 1999 are as follows:
The members of the Board of Trustees of the Company serve until the next
annual meeting of stockholders, or until their successors have been elected. The
officers serve at the pleasure of the Board of Directors. Information as to the
directors and executive officers of the Company is as follows:
NAME AGE TITLE
Fred Cruz 77 President and Chief Executive
Officer, Chairman and Trustee
Fernando Juan 58 Chief Financial Officer, Vice
President, Secretary and Trustee
Identified herein are all directors and executive officers of the Company.
The information set forth as to each Director and Executive Officer has been
furnished by such person.
Fred Cruz, 75, is and has been since October, 1987, a director, chairman of
the board, and president of the company. Cruz holds two doctorate degrees,
Doctor of Podiatric Medicine and Doctor of Medicine. Cruz has operated many
medical clinics in the State of California and at present is retired from his
profession. He has engaged in many business ventures and has been working with
precious metals for the last 30 years. Cruz no longer has a license to practice
medicine or podiatry as he is retired.
RICK ERIKSEN, 40, Experience: April, 1996 to February, 1988, National Sales
Manager, Partners Across America, Altamonte Springs, Florida; April, 1995
to March, 1996 - was a Licensed Real Estate Agent, Marriot Vacation Club
International (MVCI) Newport Beach, California and Pacific Monarch Resorts,
Laguna Hills California; November, 1980 to April, 1995 Commercial Investment
Real Estate Agent Marcus & Millichap, Inc. of Newport Beach, California; July,
1994 to April, 1985 - Century 21, Irvine/Santa Ana, California; February, 1985
to October, 1990 Commodity Futures Broker for Clayton-Balfour Brokerage, Irvine,
California; Credentials: California Real Estate License #01102626 issued
February 11, 1991 and Expires on March 14, 1999.
DONALD STUDER, Attorney at Law, in practice since January 9, 1969. Experience
in contract law, corporate law, labor law and business administration.
President and Director of Grand American International Corporation since 1984
to present. Attorney and SubTrustee of Grand American Bank Trust since 1984 to
present. Negotiated the acquisition of a full service bank in the United Arab
Emirates. Engaged in the general practice of law, with emphasis on business,
real-estate and labor law. Conducted a real estate brokerage for 3 years.
Negotiated over 300 collective bargaining agreements. Represented clients in
more than 100, each NLRB proceedings, Superior Court and Federal Court actions.
Worked with Brundage, Williams & Zeilman Law Firm as a Staff Attorney,
specializing in labor law. Opened own law office while still employed with Ryan
Aeronautical Company. Handled over 300 cases including criminal, divorce,
personal injury, probate, bankruptcy and contract matters. Phi-Kappa Phi, Sigma
Pi Sigma, Sigma Tau Sigma, Phi Beta Phi, State Bar of California, San Diego
County Bar Association, California real-estate broker, listed in Who's Who in
American Law (1st edition). Received a BS degree in Physics, with honors, from
the University of Florida in April 1963, and a JD degree Magna Cum Laude, from
the University of San Diego in 1968.
MADRIGALE, ROBERT B., Baccarat / Mini Baccarat Floor Supervisor Mirage Hotel/
Resort & Casino, Las Vegas, Nevada from January 1990 to Present, Baccarat Floor
Supervisor Trump Plaza Hotel and Casino Atlantic City, New Jersey from January
1987 to January 1990, Dealer Trump Plaza Hotel and Casino, Atlantic City from
1983 to 1987, Dealer, Tropicana Hotel and Casino, Atlantic City, New Jersey
from March 1982 to November 1983, Licensed by the Nevada Gaming Board, Special
skills good leadership skills, Excellent rapport with customers and fellow
workers. Completed all Management classes offered at the Mirage Hotel and
Casino, Las Vegas, Nevada.
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STEIN, GARY, A well organized individual who possesses excellent people skills,
that have established is leadership and respect among my peers and clients.
Professional Gambling Industry Experience, November 1989 to present Mirage
Resorts Hotel and Casino as Floor Casino Supervisor Baccarat, Blackjack,
Roulette and Pai-Gow Poker, 1990 to present Community College of Southern
Nevada, Adjunct Professor; Casino Management, July 1987 to November 1989 MGM
Bally's, Casino Floor Supervisor, October 1985 to July 1987 Dealer, February
1984 to October 1985 Barbary Coast Hotel and Casino, Dealer, Education
Community College of Southern Nevada A.A.S. in Casino Management, graduated with
Honors, University of Central Florida Majored in Finance, Long Island
University Majored Marketing and Sullivan County Community College, A.A.S. in
Business Administration. Licensed by the Nevada Gaming Board.
KLACSMANN, KARL L., Education: Clark County Community College Las Vegas, Nevada
A.A.S. degree in Hotel Management 1975, University of Nevada Las Vegas, B.A.
degree Hotel Administration with majored on Casino Operations, Casino
Management, Hotel and Casino Marketing, Mathematics of Casino Gamings,
Surveillance and Protection of Table Games. Work Experience: 1989 to present
Mirage Hotel and Casino Las Vegas, Nevada, Casino Gaming Department, 1982 to
1989 Sands Hotel Las Vegas, Nevada, Casino Executive, 1981 to 1982 Claridge
Hotel, Atlantic City, New Jersey, Casino Executive, 1980 to 1981 Sand Hotel,
Atlantic City, New Jersey, Casino Executive, 1973 to 1979 Dunes Hotel and
Casino Las Vegas, Nevada Supervisory Manager of the Casino, 1972 to 1973
Stardust Hotel and Casino Las Vegas, Nevada Dealer, 1970 to 1972 Hacienda Hotel
and Casino Las Vegas, Nevada Dealer, 1970 Completion of Nevada Gaming School,
1969 to 1970 Four Seasons Restaurant, New York City, Assistant to the Director
of the hotel.
JOHN MAVROS, Mavros has a broad background on three continents involving the
operations and sales of hotels and suite properties. Has held key management
positions over a period of several years with the Westin Plaza Hotel in Los
Angeles, opened the Westin Philippine Plaza in Manila, was general manager of
the Grande Bretagne Hotel in Athens, Greece, served as Vice President and
General Manager of the Registry Hotel Corporation in Irvine and Universal
City, California, served as Senior Vice President of California Hotels
Corporation. Mavros is also a member of the University of Arizona Presidents
Club, and holds a Certified Hotel Administrator designation from the
Educational Institute of the American Hotel-Motel Association.
LEWIS AKMAKJIAN, 75, Graduate in business and financing with major in
securities transactions and operations. Has been stockbroker since 1958 and
worked as follows in the Securities Business: 1966, Toluca Pacific Securities
Corporation, Manager, 1990 to 1995. H.J. Mayer and Company, Broker-Manager,
1975 to 1988. C.L. McKinne, broker and manager, 1972 to 1975. G.L. Bisbak as
manager, 1958 to 1972. Foreman and company as Securities Broker Manager, 1955
to 1958. J. Logan and Company as stockbroker manager. Specialist securities
analyst, broker/dealer, underwriting, selling and purchase of stocks and bonds.
License-CRD 2204 with approval granted in California National Association of
Securities Dealers and New York Stock Exchange.
Each executive officer serves at the discretion of the board of directors
and holds office until his successor is elected and qualified or until his
earlier resignation or removal. There are no family relationships among any of
the directors or executive officers of Akamai. Each of the directors serve on
the board of directors pursuant to the terms of an agreement that will
terminate upon the closing of this offering.
ELECTION OF DIRECTORS
Following this offering, the board of directors will be divided into three
classes, each of whose members will serve for a staggered three-year term.
Messrs. Cruz and Juan will serve in the class whose term expires in 2003,
Messrs. Leighton and Scott will serve in the class whose term expires in 2004
and Messrs. Studer, Stein and Eriksen will serve in the class whose term
expires in 2002. Upon the expiration of the term of a class of directors,
directors in such class will be elected for three-year terms at the annual
meeting of stockholders in the year in which such term expires.
COMPENSATION OF DIRECTORS
We reimburse directors for reasonable out-of-pocket expenses incurred in
attending meetings of the board of directors. We may, in our discretion, grant
stock options and other equity awards to our non-employee directors from time
to time pursuant to our 1998 stock incentive plan. We have not yet determined
the amount and timing of such grants or awards.
BOARD COMMITTEES
The board of directors has established a compensation committee and an
audit committee. The compensation committee, which consists of Messrs. Studer,
Stein, Akmakjian and Mavros, reviews executive salaries, administers our bonus,
incentive compensation and stock plans, and approves the salaries and other
benefits of our executive officers. In addition, the compensation committee
consults with our management regarding our pension and other benefit plans and
compensation policies and practices.
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The audit committee, which consists of Messrs. Juan, Klacsmann and Studer
reviews the professional services provided by our independent accountants, the
independence of such accountants from our management, our annual financial
statements and our system of internal accounting controls. The audit committee
also reviews such other matters with respect to out accounting, auditing and
financial reporting practices and procedures at it may find appropriate or may
be brought to its attention.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by us, for services
rendered for the period from August 20, 1998, the date of our inception, to
December 31, 1999, to the person who acted in the capacity of chief executive
officer during that period. None of our other executive officers who held
office as of December 31, 1998 met the definition of "highly compensated"
within the meaning of the Securities and Exchange Commission's executive
compensation disclosure rules. In the table below, columns required by the
regulations of the Securities and Exchange Commission have been omitted where
no information was required to be disclosed under those columns.
SUMMARY COMPENSATION TABLE
EXECUTIVE COMPENSATION
The following table sets forth all cash compensation paid or accrued including
bonuses paid or accrued, to the following persons during 1998, for services
rendered in all capacities to the Company.
Number of Individual Capacities in which Cash
or Number in Group served during 1998
None None None
The Company pays no compensation to Directors for services as Directors.
BENEFIT PLANS
The following Benefit Plans are in the process of being adopted and
implemented by the Company.
Stock Incentive Plan. Our stock incentive plan will provide for the grant
of restricted stock and other stock-based awards and stock options. A maximum of
28,755,600 shares of common stock will be authorized to be issued pursuant to
the stock incentive plan. Our officers, employees, directors, consultants and
advisors will be eligible to receive awards under the stock incentive plan.
The compensation committee of our board of directors will administer the
stock incentive plan. The compensation committee with the assistance of
management selects the recipients of awards and determines:
- The number of shares of common stock covered by options and the dates
upon which such options become exercisable;
- The exercise price of options;
- The duration of options; and
- The number of shares of common stock subject to any restricted stock or
other stock-based awards and the terms and conditions of such awards,
including the conditions for repurchase, issue price and repurchase
price.
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In the event of a merger or other acquisition event, our board of
directors is authorized to provide for outstanding awards to be assumed or
substituted for by the acquiror. If the acquiror does not assume or substitute
for outstanding awards, our board of directors may provide that all unexercised
options will become exercisable in full prior to the completion of such event
and that these options will terminate upon the completion of the event if not
previously exercised. In addition, immediately prior to the consummation of an
acquisition event, the vesting schedule of each outstanding option and
stock-based award will be accelerated.
Employee Stock Purchase Plan. Our employee stock purchase plan will
provides for the issuance of up to 600,000 shares of our common stock to
participating employees.
The employee stock purchase plan, which shall be intended to qualify under
Section 423 of the Internal Revenue Code, containing consecutive, overlapping,
twenty-four month offering periods. Each offering period includes four six-month
purchase periods. The offering periods generally start on the first trading day
on or after June 1 and December 1 of each year. However, the first such offering
period will commence on the first trading day after the effective date of this
offering and end on the last trading day on or before November 30, 2001.
All of our employees, including directors who are employees, and all
employees of any participating subsidiaries:
- Whose customary employment is for more than five months in a calendar
year; and
- Who have been employed by us for at least seven calendar days prior to
enrolling
will be eligible to participate in the employee stock purchase plan. Employees
who would immediately after the grant own five percent or more of the total
combined voting power or value of our stock or any subsidiary will not be
eligible to participate.
To participate in the employee stock purchase plan, an employee must
authorize us to deduct from one to ten percent of his or her base pay during
the offering period. Amounts deducted and accumulated by the participant are
used to purchase shares of common stock at the end of each purchase period. The
price of stock purchased under the employee stock purchase plan is 85% of
the lower of the fair market value of the common stock (i) at the beginning of
the offering period, or (ii) at the end of the purchase period; provided,
however, that under certain circumstances, the purchase price may be adjusted
to a price not less than 85% of the lower of the fair market value on the
common stock on (i) the date our stockholders approve an increase in shares
reserved for issuance under the employee stock purchase plan or (ii) at
the end of the purchase period. In the event the fair market value at the end
of a purchase period is less than the fair market value at the beginning of the
offering period, the participants will be withdrawn from the current offering
period following exercise and automatically re-enrolled in a new offering
period. The new offering period will use the lower fair market value as of the
first date of the new offering period to determine the purchase price for
future purchase periods. Participants may end their participation at any time
during an offering period, and they will be paid their payroll deductions to
date. Participation ends automatically upon termination of employment.
401(k) Plan. Our employee savings and retirement plan will be qualified
under Section 401 of the Internal Revenue Code. Our employees may elect to
reduce their current compensation by up to the statutorily prescribed annual
limit and
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PRINCIPAL STOCKHOLDERS
The following table sets forth information regarding beneficial ownership
of our common stock as of September 30, 1999, and as adjusted to reflect the
sale of the shares of common stock in this offering, by:
- Each person who owns beneficially more than 5% of the outstanding
shares of our common stock;
- Each of our directors;
- The executive officer named in the Summary Compensation Table under
"Management -- Executive Compensation" on page 41; and
- All of our directors and executive officers as a group.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission, and includes voting and investment power
with respect to shares. Unless otherwise indicated below, to our knowledge, all
persons named in the table have sole voting and investment power with respect
to their shares of common stock, except to the extent authority is shared by
spouses under applicable law. Unless otherwise indicated, the address of each
person owning more than 5% of the outstanding shares of common stock is c/o
Country and Wellness Resorts, Inc, 2205 Purple Majesty Court, Las Vegas, NV
88117.
NUMBER OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIALLY OWNED
Grand American Bank Trust owns approximately 60% of the Company's Class "A"
common stock as of December 31, 1998.
Name and address of Beneficial Number and Percent Percent Before
Owner: After Offer of Shares Offering
Grand American Bank Trust 54,050,000(1) 60% 54%
2205 Purple Majesty Court
Las Vegas, NV 89117
Kari L. Cruz 7,900,000 10% 8%
2205 Purple Majesty Court
Las Vegas, NV 89117
V. G. Kelly & D. Kelly Trust 3,130,933(2) 3.5% 3.2%
936 West 21st Street
Santa Ana, CA 92706
Joseph Witzman 3,266,960(3) 3.6% 3.3%
5946 Soledad Mountain Road
La Jolla, CA 92037
Forbes Family Trust 2,000,000(2) 2.2% 2%
All Officers and Directors as a group
58,512 Class "A" or .00064%
- -----------
(1) Purchase for cash equivalent.
(2) Purchase by surrendering debt of the company.
(3) Purchase with cash and part given as gift.
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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 shares 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 Directors
had exercised the authority granted.
The Company issued to Joseph Witzman 3,266,960 Class "B" common shares of
no par value in exchange the cancellation of some of the Company debt and said
Class "B" Common Shares were restricted shares that bear a legend 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" common
shares of $.003 par value in exchange of the cancellation of the balance of the
Company debt and said Class "A" common shares were restricted shares that bear a
legend and are subject to the provisions of Securities and Exchange Commission
Rule 144.
The holders of Class "A" Equity Units have promised to abide by the restrictions
invoked by the Securities and Exchange Commission Rule 144.
DESCRIPTION OF CAPITAL STOCK
After this offering, the authorized capital stock of Countryland will
consist of 200,000,000 shares of common stock, $0.003 par value per share, and
none shares of preferred stock, $0.01 par value per share. As of September 30,
1999, there were outstanding:
- 90,777,573 shares of common stock held by 580 stockholders of record;
and
- options and warrants to purchase an aggregate of none shares of common
stock.
Upon completion of this offering and the conversion of all outstanding
shares of preferred stock into common stock, there will be 100,777,573 shares
of common stock outstanding.
COMMON STOCK
Holders of our common stock are entitled to one vote for each share held
on matters submitted to a vote of stockholders. Holders of our common stock do
not have cumulative voting rights. Accordingly, holders of a majority of the
shares of common stock entitled to vote in any election of directors may elect
all of the directors standing for election. Holders of common stock are
entitled to receive their proportionate share of dividends declared by the
Board of Directors, subject to any preferential dividend rights of outstanding
preferred stock. Upon the liquidation, dissolution or winding up of Akamai, the
holders of common stock are entitled to receive ratably the net assets of
Akamai available after the payment of all debts and other liabilities and
subject to the preferential rights of any outstanding preferred stock. The
common stock has no preemptive, subscription, redemption or conversion rights.
All outstanding shares of common stock are fully paid and nonassessable. The
rights, preferences and privileges of the common stock are subject to the
rights of the holders of shares of any series of preferred stock which Akamai
may designate and issue in the future.
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PREFERRED STOCK
Our Board of Directors will be authorized to issue shares of preferred
stock in one or more series without stockholder approval. The Board will have
discretion to determine the rights, preferences, privileges and restrictions,
including voting rights, dividend rights, conversion rights, redemption
privileges and liquidation preferences of each series of preferred stock.
The purpose of authorizing the Board of Directors to issue preferred stock
and determine its rights and preferences is to eliminate delays associated with
a stockholder vote on specific issuances. The Board's ability to issue
preferred stock will provide desirable flexibility in connection with possible
acquisitions and other corporate purposes and could make it more difficult for
a third party to acquire, or could discourage a third party from acquiring, a
majority of our outstanding voting stock. The issuance of preferred stock with
voting and conversion rights may adversely affect the voting power of the
holders of common stock. We have no present plans to issue any shares of
preferred stock.
DELAWARE LAW AND OUR CHARTER AND BY-LAW PROVISIONS; ANTI-TAKEOVER EFFECTS
Countryland is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for three years after the date of the transaction in which the
person became an interested stockholder, unless the business combination is
approved in a prescribed manner. A "business combination" includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. An "interested stockholder" is a person who, together
with affiliates and associates, owns, or within three years did own, 15% or
more of the corporation's voting stock.
Countryland's certificate of incorporation and by-laws to be effective on
the closing of this offering provide:
- That the Board of Directors be divided into three classes, as nearly
equal in size as possible, with no class having more than one director
more than any other class, with staggered three-year terms;
- That directors may be removed only for cause by the vote of the holders
of at least 66% of the shares of our capital stock entitled to vote; and
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- That any vacancy on the Board of Directors, however occurring, including
a vacancy resulting from an enlargement of the Board, may only be filled
by a vote of a majority of the directors then in office.
The classification of the Board of Directors and the limitations on the
removal of directors and filling of vacancies could make it more difficult for
a third party to acquire, or discourage a third party from acquiring,
Countryland.
The certificate of incorporation and by-laws to be effective on the
closing of this offering also provide that, after the closing of this offering:
- Any action required or permitted to be taken by the stockholders at an
annual meeting or special meeting of stockholders may only be taken if
it is properly brought before such meeting and may not be taken by
written action in lieu of a meeting; and
- Special meetings of the stockholders may only be called by the Chairman
of the Board of Directors, the President, or by the Board of Directors.
Our by-laws will also provide that, in order for any matter to be
considered "properly brought" before a meeting, a stockholder must
comply with requirements regarding advance notice to us.
These provisions could delay until the next stockholders' meeting
stockholder actions which are favored by the holders of a majority of our
outstanding voting securities. These provisions may also discourage another
person or entity from making a tender offer for our common stock, because such
person or entity, even if it acquired a majority of our outstanding voting
securities, would be able to take action as a stockholder only at a duly called
stockholders meeting, and not by written consent.
Delaware law provides that the vote of a majority of the shares entitled
to vote on any matter is required to amend a corporation's certificate of
incorporation or by-laws, unless a corporation's certificate of incorporation
or by-laws, as the case may be, requires a greater percentage. Our certificate
of incorporation requires the vote of the holders of at least 75% of the shares
of our capital stock entitled to vote to amend or repeal any of the foregoing
provisions of our certificate of incorporation. Generally, our by-laws may be
amended or repealed by a majority vote of the Board of Directors or the holders
of a majority of the shares of our capital stock issued and outstanding and
entitled to vote. Changes to our by-laws regarding special meetings of
stockholders, written actions of stockholders in lieu of a meeting, and the
election, removal and classification of members of the Board of Directors
require the vote of the holders of at least 75% of the shares of our capital
stock entitled to vote. The stockholder vote would be in addition to any
separate class vote that might in the future be required pursuant to the terms
of any series preferred stock that might be then outstanding.
LIMITATION OF LIABILITY AND INDEMNIFICATION
Our certificate of incorporation provides that our directors and officers
shall be indemnified by us except to the extent prohibited by Delaware law.
This indemnification covers all expenses and liabilities reasonably incurred in
connection with their services for or on behalf of us. In addition, our
certificate of incorporation provides that our directors will not be personally
liable for monetary damages to us or to our stockholders for breaches of their
fiduciary duty as directors, unless they violated their duty of loyalty to us
or our stockholders, acted in bad faith, knowingly or intentionally violated
the law, authorized illegal dividends or redemptions or derived an improper
personal benefit from their action as directors.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is American
Securities Transfer and Trust, Inc.
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, we will have 100,777,573 shares of
common stock outstanding, assuming no exercise of outstanding options. Of these
shares, the shares to be sold in this offering will be freely tradable without
restriction or further registration under the Securities Act, except that any
shares purchased by our affiliates, as that term is defined in Rule 144 under
the Securities Act, may generally only be sold in compliance with the
limitations of Rule 144 described below. The remaining 99,222,427 shares of
common stock are "restricted securities" under Rule 144. Generally, restricted
securities that have been owned for at least two years may be sold immediately
after the completion of this offering and restricted securities that have been
owned for at least one year may be sold 90 days after the completion of this
offering.
SALES OF RESTRICTED SHARES
In general, under Rule 144, stockholders, including our affiliates, who
have beneficially owned shares for at least one year are entitled to sell,
within any three-month period, a number of these shares that does not exceed
the greater of one percent of the then outstanding shares of common stock and
the average weekly trading volume in the common stock in the over-the-counter
market during the four calendar weeks preceding the date on which notice of
such sale is filed, provided requirements concerning availability of public
information, manner of sale and notice of sale are satisfied. In addition, our
affiliates must comply with the restrictions and requirements of Rule 144,
other than the one-year holding period requirement, in order to sell shares of
common stock which are not restricted securities.
Under Rule 144(k), a stockholder who is not an affiliate and has not been
an affiliate for at least three months prior to the sale and who has
beneficially owned shares for at least two years may sell these shares without
compliance with the foregoing requirements. In meeting the holding periods
described above, a stockholder can include the holding periods of a prior owner
who was not an affiliate. The holding periods described above do not begin until
the stockholder pays the full purchase price or other consideration. Rule 701
provides that currently outstanding shares of common stock acquired under our
employee compensation plans may be sold beginning 90 days after the date of
this prospectus by stockholder other than affiliates subject only to the manner
of sale provisions of Rule 144 and by affiliates under Rule 144 without
compliance with its one-year holding period requirement.
LOCK-UP AGREEMENTS
Countryland and our executive officers, directors and other
securityholders will enter into lock-up agreements with the underwriters.
Without the prior written consent of the underwriters, none of us will, during
the period ending 180 days after the date of this prospectus, (1) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
common stock or any securities convertible into or exchangeable for common
stock, or (2) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the common stock, regardless of whether any such transactions described in
clause (1) or (2) of this paragraph is to be settled by delivery of such common
stock or such other securities, in cash or otherwise. In addition, for a period
of 180 days from the date of this prospectus, except as required by law, we have
agreed not to consent to any offer for sale, sale or other disposition, or any
transaction which is designed or
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could be expected, to result in, the disposition by any person, directly or
indirectly, of any shares of common stock without the prior written consent of
the underwriters except that we may, without consent, grant options and sell
shares pursuant to our stock plans.
The underwriters may enter into similar lock-up agreements for up to 180
days with those individuals and entities who purchase approximately 89% of the
shares under our directed share program.
REGISTRATION RIGHTS
After this offering, the holders of approximately 100,777,573 shares of
common stock will be entitled to rights with respect to the registration of
these shares under the Securities Act. If we propose to register any of our
securities under the Securities Act, either for our own account or for the
account of other security holders exercising registration rights, these holders
are entitled to notice of such registration and are entitled to include shares
of common stock. Additionally, they are entitled to demand registration rights
pursuant to which they may require us on up to five occasions to file a
registration statement under the Securities Act at our expense. We are required
to use our best efforts to effect any such registration. These registration
rights are subject to the right of the underwriters of an offering to limit the
number of shares included in such registration and our right not to effect a
requested registration within 180 days following an offering of our securities
pursuant to a registration statement in connection with an underwritten public
offering, including this offering. Further, holders may require us to file
registration statements on Form S-3 at our expense. These registration rights
are subject to our right not to effect, no more than once during any 12-month
period, a requested registration if the registration would interfere with an
unforeseen securities or business transaction.
25
28
UNDERWRITERS
Under the terms and subject to the conditions contained in an underwriting
agreement to be entered into, underwriters to be named later, acting as
representatives, will severally agree to purchase, and we will agree to sell to
them, the respective number of shares of common stock set forth opposite the
names of the underwriters below:
NUMBER OF
NAME SHARES
- ---- ---------
To be announced later..................................... 10,000,000
----------
Total.................................................. 10,000,000
==========
The underwriters will be offering the shares subject to their acceptance
of the shares from us and subject to prior sale. The underwriting agreement will
provide that the obligations of the several underwriters to pay for and accept
delivery of the shares of common stock offered in this offering are subject to
customary closing conditions. The underwriters will be obligated to take and pay
for all of the shares of common stock offered in this offering, other than those
covered by the over-allotment option described below, if any such shares are
taken.
The underwriters will initially propose to offer part of the shares of
common stock directly to the public at the initial public offering price set
forth on the cover page of this prospectus and part to dealers at a price that
represents a concession not in excess of $18.00 per share under the initial
public offering price. Any underwriters may allow, and the dealers may reallow,
a concession not in excess of $22.00 per share to other underwriters or to other
dealers. After the initial offering of the shares of common stock, the offering
price and other selling terms may from time to time be varied by the
representatives of the underwriters.
We will grant to the underwriters an option, exercisable for 30 days
from the date of this prospectus, to purchase up to an aggregate of 1,200,000
additional shares of common stock at the initial public offering price set forth
on the cover page hereof, less underwriting discounts and commissions. The
underwriters may exercise such option solely for the purpose of covering
over-allotments, if any, made in connection with this offering of common stock.
To the extent this over-allotment option is exercised, each underwriter will
become obligated, subject to other conditions, to purchase approximately the
same percentage of additional shares of common stock as the number set forth
next to such underwriter's name in the preceding table bears to the total number
of shares of common stock set forth next to the names of all underwriters in the
preceding table.
We have filed an application for our common stock to be quoted on the
N.Y.S.E. Market under the symbol "CWR".
26
29
Countryland, our directors and executive officers and substantially all
other stockholders are expected to agree that, without the prior written consent
of Morgan Stanley & Co. Incorporated on behalf of the underwriters, during the
period ending 180 days after the date of this prospectus, he, she or it will
not, directly or indirectly:
- Offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend or otherwise transfer or dispose of,
directly or indirectly, any shares of common stock or any securities
convertible into or exercisable or exchangeable for common stock; or
- Enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of common
stock,
whether any such transaction described above is to be settled by delivery of
common stock or such other securities, in cash or otherwise.
In order to facilitate the offering of the common stock, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the common stock. Specifically, the underwriters may over-allot in
connection with the offering, creating a short position in the common stock for
their own account. In addition, to cover over-allotments or to stabilize the
price of the common stock, the underwriters may bid for, and purchase, shares of
common stock in the open market. Finally, the underwriting syndicate may reclaim
selling concessions allowed to an underwriter or a dealer for distributing the
common stock in the offering if the syndicate repurchases previously distributed
shares of common stock in transactions to cover syndicate short positions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the common stock above independent market
levels. The underwriters are not required to engage in these activities and may
end any of these activities at any time.
We and the underwriters will agree to indemnify each other against
liabilities in connection with this offering, including liabilities under the
Securities Act.
PRICING OF THE OFFERING
Prior to this offering, there has been no public market for the shares of
common stock. Consequently, the public offering price for the shares of common
stock will be determined by negotiations between Countryland and the
representatives of the underwriters. Among the factors to be considered in
determining the public offering price will be:
- Our record of operations, our current financial position and future
prospects;
- The experience of our management;
- Sales, earnings and other financial and operating information in recent
periods; and
- The price-earnings ratios, price-sales ratios, market prices of
securities and financial and operating information of companies engaged
in activities similar to ours.
The estimated public offering price range set forth on the cover page of
this preliminary prospectus is subject to change as a result of market
conditions and other factors.
27
30
LEGAL MATTERS
The validity of the shares of common stock we are offering will be passed
upon for us by Donald E. Studer, Esq., West Monroe, Louisiana. Legal matters in
connection with this offering will be passed upon for the underwriters by Donald
E. Studer, Esq., West Monroe, Louisiana.
EXPERTS
The financial statements as of December 31, 1998 and for the period from
inception (August 20, 1998) to December 31, 1998 included in this prospectus
have been so included in reliance on the report of Brown, Fink, Boyce & Co.
(NEC) 9-30-99 independent accountants, given on the authority of said firm as
experts in auditing and accounting. Luis R. Hidalgo, CPA. (CWR) 12-31-98.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-1 under the Securities Act with respect to the common stock
we propose to sell in this offering. This prospectus, which constitutes part of
the registration statement, does not contain all of the information set forth
in the registration statement. For further information about us and the common
stock we propose to sell in this offering, we refer you to the registration
statement and the exhibits and schedules filed as a part of the registration
statement. Statements contained in this prospectus as to the contents of any
contract or other document filed as an exhibit to the registration statement are
not necessarily complete. If a contract or document has been filed as an
exhibit to the registration statement, we refer you to the copy of the contract
or document that we have filed. You may inspect the registration statement,
including exhibits, without charge at the principal office of the Securities
and Exchange Commission in Washington, D.C. You may inspect and copy the same
at the public reference facilities maintained by the Securities and Exchange
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Room 1024, Washington,
D.C. 20549, and at the Commission's regional offices located at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7
World Trade Center, Suite 1300, New York, New York 10048. You can also obtain
copies of this material at prescribed rates by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, the Securities and Exchange Commission maintains a website at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Securities and Exchange Commission.
28
31
COUNTRYLAND WELLNESS RESORTS, INC.
INDEX TO FINANCIAL STATEMENTS
PAGE
----
Financial statements:
Report of Independent Accountants........................ F-2
Balance Sheets........................................... F-3
Statements of Operations.................................
Statement of Income...................................... F-5
Statements of Common Issued Stock and
Stockholders' Equity Changes.......................... F-6
Statements of Cash Flows................................. F-7
Notes to Financial Statements............................ F-9
F-1
32
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Countryland Wellness Resorts, Inc.
In our opinion, the accompanying balance sheet and the related statements
of operations, cash flows and convertible preferred stock and stockholders'
deficit present fairly in all material respects, the financial position of
Countryland as of December 31, 1998 and the results of its operations and its
cash flows for the period from inception (January 1, 1998) to December 31, 1998,
in conformity with generally accepted accounting principles. 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 of these statements in accordance with
generally accepted auditing standards which 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,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.
/s/ LUIS R. HIDALGO
- ---------------------------
Luis R. Hidalgo
April 23, 1999
F-2
33
COUNTRYLAND WELLNESS RESORTS, INC.
BALANCE SHEET
September 30, 1999 and 1998
ASSETS
September 30, September 30,
1999 1998
------------- -------------
Current assets
Cash $ 932,482 $ 862,726
Marketable securities (Note 1) 404,750,000 1,100,161,949
Gold in storage (Note 9) 0 27,317,000
Receivables
Current - contracts 2,464,477 3,207,883
Retention - contracts 271,872 567,789
Interest, related (Note 2) 63,964 61,836
Other 1,525 7,394
Total receivables 2,801,838 1,132,186,530
Costs and estimated earnings in
excess of billings (Note 3) 656,700 207,769
Notes receivable related (Note 4) 747,114 81,635
Note receivable (Note 5) 32,305 530,000
Total current assets 5,170,439 5,688,981
Property and equipment (Note 1)
Transportation equipment 353,795 353,795
Operating equipment 277,821 245,389
Office equipment and furnishings 84,867 84,867
Leasehold improvements 32,876 36,696
749,359 720,747
Mining properties (Note 10) 2,191,187,000 2,208,731,000
Less: Accumulated depreciation (480,479) (397,863)
Net property and equipment 2,191,450,880 2,209,053,884
Other assets
Federal income tax deposit 384,627 371,138
Note receivable, related (Note 4) 65,724 64,724
Deposit 96,914 0
Total other assets 547,265 435,862
Total assets 2,600,652,904 3,346,929,395
The accompanying notes and auditors' report should be read in connection with
these financial statements.
F-3
34
COUNTRYLAND WELLNESS RESORTS, INC.
BALANCE SHEET
SEPTEMBER 30, 1999 AND 1998
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, September 30,
1999 1998
------------- -------------
Current liabilities
Bank line of credit (Note 6) $ 600,000 $
Trade accounts payable 576,089 833,253
Stockholder distributions payable 263,000 3,999,900
Accrued expenses 163,990 72,889
Billings in excess of costs and 68,600
estimated earnings (Note 3) 620,565 537,990
Total current liabilities 2,292,244 5,444,032
Stockholders' equity
Common stock, par value $
200,000,000 shares authorized,
90,777,573 shares issued and
outstanding 272,332 272,332
Paid-in capital 385,418 385,418
Retained earnings 3,308,922 618,277
Total stockholders' equity 2,594,393,988 3,340,209,336
Total liabilities and
stockholders' equity 2,600,652,904 3,346,929,395
The accountants' review report and accompanying notes should be read in
connection with these financial statements.
F-4
35
COUNTRYLAND WELLNESS RESORTS, INC.
STATEMENT OF INCOME
FOR THE YEAR ENDED SEPTEMBER 30, 1999 AND 1998
September 30, 1999 September 30, 1998
--------------------------- ---------------------------
Contract income $11,282,206 100.00% $15,039,822 100.00%
Direct costs
Labor and labor costs 3,202,457 28.38% 3,582,898 23.82%
Materials 3,901,431 34.58% 6,131,363 40.77%
Subcontracts 398,654 3.53% 295,237 1.96%
Other 148,019 1.32% 76,841 0.51%
Total direct costs 7,650,561 67.81% 10,086,339 67.06%
Gross profit from contracting 3,631,645 32.19% 4,953,483 32.94%
General and administrative expense 1,047,125 9.28% 2,203,997 14.65%
Income from operations 2,584,520 22.91% 2,749,486 18.29%
Other income (expense)
Interest income 29,190 0.26% 146,977 0.97%
Discounts 19,039 0.17% 24,921 0.16%
Miscellaneous income 50,524 0.45% 128,884 0.86%
Interest expense 178,216 1.57% (40,480) -0.27%
Unrealized stock loss (170,844) -1.51% (676) -
Total other income (expense) 106,125 0.94% 259,626 1.72%
Net income 2,690,645 23.85% 3,009,112 20.01%
The accompanying notes and auditors' report should be read in connection with
these financial statements.
F-5
36
COUNTRYLAND WELLNESS RESORTS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE TEN MONTHS ENDED JULY 31, 1999
COMMON COMMON PAID RETAINED TOTAL
STOCK STOCK IN EARNINGS STOCKHOLDERS
SHARES VALUE CAPITAL EQUITY
Balance, September 30, 1999 90,777,573 272,332 385,418 3,308,922 2,594,393,988
Net income -- -- -- 2,690,645 2,690,645
Balance July 31, 1999 90,250,877 271,000 385,418 2,618,277 3,017,358,000
The accountants' review report and accompanying notes should be read in
connection with these financial statements.
F-6
37
COUNTRYLAND WELLNESS RESORTS, INC.
STATEMENT OF CASH FLOWS
FOR THE TEN MONTHS ENDED JULY 31, 1999
Cash flows from operating activities $
Cash received from customers 12,158,297
Cash paid to suppliers and employees (8,756,231)
Interest received 20,208
Cash provided by operating activities 3,422,274
Cash flows from investing activities
Purchases of equipment and improvements (28,612)
Advances on notes receivable (666,479)
Repayment of notes receivable 530,000
Proceeds from sale of marketable securities 212,473
Cash provided by investing activities 47,382
Cash flows from financing activities
Advance on line of credit 600,000
Distributions to stockholders (3,399,900)
Cash provided by financing activities (3,399,900)
Net increase in cash 69,756
Cash at September 30, 1998 862,726
Cash at July 31, 1999 $ 932,482
The accountants' review report and accompanying notes should be read in
connection with these financial statements.
F-7
38
COUNTRYLAND WELLNESS RESORTS, INC.
STATEMENT OF CASH FLOWS (CONT'D)
FOR THE TEN MONTHS ENDED JULY 31, 1999
Reconciliation of net income to net cash provided by operating activities
Net income $2,690,645
Adjustments
Depreciation 82,616
Gain on sale of marketable securities (50,524)
Decrease (increase) in assets
Receivables 1,043,064
Costs and estimated earnings in excess
of billings (448,931)
Deposits (142,708)
Increase (decrease) in liabilities
Accounts payable (257,164)
Accrued bonuses 263,000
Accrued interest, related 163,990
Other accrued expenses (4,289)
Billings in excess of costs and estimated
earnings 82,575
Net cash provided by operating activities $3,422,274
The accountants' review report and accompanying notes should be read in
connection with these financial statements.
F-8
39
COUNTRYLAND WELLNESS RESORTS, INC.
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1999
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Company Activities
Countryland Wellness Resorts, Inc. (the Company) is an electrical
contracting firm operating primarily in the Northern Nevada area. The
firm does new construction, retrofit and repair work on commercial and
governmental projects. The work performed under cost-plus-fee and
fixed-price contracts with various contracts being modified by
incentive and penalty provisions. Company is engaged in starting a
Life Extension (Wellness) Program and the mining of gold and silver.
Financial Statement Classification
In accordance with normal practice in the construction industry, the
Company includes in current assets and liabilities amounts realized
and payable over a period in excess of one year. Consistent with this
practice, asset and liability accounts relating to construction
contracts are classified as current. The lives of contracts entered
into by the Company generally range from six to eighteen months.
Property and Equipment
Property and equipment are recorded at cost. Expenditures for renewals
and betterments which extend the life or improve existing properties
are capitalized. Maintenance and repairs are charged against income.
Depreciation of property and equipment is provided principally on the
straight-line method. For income tax purposes, the ACRS and MACRS
methods of cost recovery are used. The estimated useful lives for
financial statement purposes are as follows:
Lives (years)
-------------
Transportation equipment................... 5
Operating equipment........................ 4-7
Office equipment and furnishings........... 5-7
Leasehold improvements..................... 39
Depreciation expense for the period ended July 31, 1999 was $82,616.
Revenue and Cost Recognition
Revenues from contracts are recognized on the percentage-of-completion
method based on the proportion of costs incurred on the contract to
total estimated contract costs. Material estimated losses prior to
completion are recognized in their entirety when apparent.
Costs and estimated earnings in excess of amounts billed are
classified as current assets. Billings in excess of costs and
estimated earnings are classified as current liabilities.
See accountants' review report.
F-9
40
COUNTRYLAND WELLNESS RESORTS, INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 1999
NOTE 1
The Company placed six (6) of its bank guarantees issued by BNI Bank
with Striker Gold Mines, Ltd. in a joint venture that will produce 9%
per day to the Company. For 3,000,000 shares of common stock
(restricted) the Company assigned to Las Vegas Entertainment Network,
Inc., a public company trading on the small caps of the NASDAQ Stock
Exchange. At the time of the transaction these shares of common stock
had a value of $4,750,000. The Company has another transaction with U.S.
Guarantee Corporation, a Nevada corporation where USGC has committed to
the Company a loan of $400,000,000 by using the four (4) bank guarantees
from Bank BNI, Indonesia however the Company has not received any funds
from USGC.
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Tax Method and Distributions
The Company's stockholders have elected Subchapter S Corporation status.
Under these provisions, the Company pays no Federal income tax. The
Company's income is taxed to the stockholders in their individual tax
returns.
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months
or less to be cash equivalents.
NOTE 2: INTEREST RECEIVABLE, RELATED
This represents accrued interest on a note from a related party.
Management intends to collect this amount during the current period.
NOTE 3: COSTS AND ESTIMATED EARNINGS ON CONTRACTS IN PROGRESS
Costs incurred on contracts in progress $4,420,487
Estimated earnings 2,629,588
Contract revenue earned to date 7,050,075
Less billings to date 7,013,940
Net under billings $ 36,135
See accountants' review report.
F-10
41
COUNTRYLAND WELLNESS RESORTS, INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 1999
NOTE 4: NOTES RECEIVABLE, RELATED
Notes receivable, related at July 31, 1999 consist of the following:
Amounts Due
Interest Within After
Rate one year one year
Unsecured note due from a major
stockholder of a related company.
The entire balance was repaid in
August 1999. 7.00% $200,000 $ --
Note secured by real estate, due
from a key employee of the Company.
Principal and interest payments of
$882 are due monthly. 7.00% 5,497 65,724
Unsecured note due from a key
employee of the Company. The entire
balance is due December 31, 1999. -- 23,000 --
Unsecured note due from a company
owned by the major stockholders of
the Company. The entire balance is
due December 31, 1999. 7.00% 518,617 --
$747,114 $65,724
See accountants' review report.
F-11
42
COUNTRYLAND WELLNESS RESORTS, INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 1999
NOTE 5: LINE OF CREDIT
The Company has a line of credit agreement with a bank subject to a
$1,000,000 limit. The credit line is secured by the accounts
receivable, inventory and equipment of the Company and bears interest
at prime, (8.0% at July 31, 1999) payable monthly. The agreement
expires April 30, 2000. There was a balance of $600,000 owing on the
line at July 31, 1999.
NOTE 6: ACCRUED INTEREST, RELATED
This represents interest payable to the majority stockholder of the
Company. The amount will be paid on or before December 31, 1999:
NOTE 7: CONTRACT BACKLOG
The following schedule is a reconciliation of construction contract
backlog representing signed contracts as of July 31, 1999:
Balance, September 30, 1998 $ 5,219,287
Contract adjustments 697,511
New contracts during the year 9,580,125
15,496,923
Less: Contracts revenue earned 11,282,206
Balance, July 31, 1999 $ 4,214,717
NOTE 8: CONCENTRATIONS OF CREDIT RISK
The Company maintains its cash balances in a financial
institution. The balances in the financial institutions are
insured by the Federal Deposit Insurance Corporation up to
$100,000. At July 31, 1999, the Company's uninsured cash balances
total $1,226,534.
See accountant's review report.
F-12
43
COUNTRYLAND WELLNESS RESORTS, INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 1999
NOTE 9:
With respect to gold in storage at the NDS Bonded Warehouse at
Dominguez Hills, California, the Company has determined that the
warehouse went out of business about three or four years ago and said
gold deposit has been declared a casualty loss. In the opinion of the
Company Counsel the gold has been lost or stolen, and in any event is
missing. The loss to the Company is $27,317,000 which the Company has
no insurance to cover. The matter is currently under investigation.
NOTE 10: PROVEN GOLD AND SILVER RESERVE ON MINING PROPERTIES
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, make these estimates generally less precise than other
estimates in connection with financial disclosure. Proven reserves are
estimated quantities of gold and silver which geological and
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 troy ounces of silver. The values of these reserves
based on average market prices as of September 30 1999 and September
30, 1998 are as follows:
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------
(Dollars in Thousands)
Gold 7,000,000 troy ounces
@$297.90/troy ounce $2,085,300,000
@$296.40/troy ounce $2,074,800,000
Silver 19,000,000 troy ounces
@$5.573/troy ounce $ 105,887,000
@$5.200/troy ounce $ 98,800,000
F-13
44
COUNTRYLAND WELLNESS RESORTS, INC.
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 1999
NOTE 11:
The Company acquired Network Electric Company on September 19, 1999,
a Nevada corporation engaged on the business of electrical contractor
for the sum of $20,000,000 payable by a Pay Out Order No. 0000887531
to be paid out from proceeds of the loan for $400,000,000 from U.S.
Guarantee Corporation or, in the even such funds are not forthcoming,
from proceeds of the trading program with Striker Gold Mines, Ltd.
NOTE 12: CHANGE OF NAME AND OTHER MATTERS
The Board of Directors adopted on September 15, 1999 the following
resolutions:
a. The name of the Company was changed to Countryland Wellness
Resorts, Inc.
b. The China International Packaging Leasing Co., Ltd. merger was
cancelled.
c. The Company has acquired Network Electric Company as a wholly owned
subsidiary.
d. The Company has entered into a Joint Venture Agreement with Striker
Gold Mines, Ltd.
e. The Company has entered into a Loan Agreement with U.S. Guarantee
Corporation.
F-14
45
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 and 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/ Louis R. Hidalgo
Certified Public Accountant
April 23, 1999
Luis R. Hidalgo, Jr., CPA
2823 Lockwood Ave., Fremont, CA 94539
510-659-9435
46
Stickel & Associates P.O. Box 91, Tustin, Ca. 92681 (714) 751-4742
May 14, 1985
Minerals, Mining and Energy Corp.
7750 El Camino Real, Suite K
Rancho La Costa, Ca. 92008
Attention: Stewart Douglas, President
Subject: Review of Literature and Inspection of Gold Claims in Plumas County,
California, Blackhawk, Alan, MMC and Dean Lode Claims Consisting of 750 Acres.
References:
1) Geology of the Pulga and Bucks Lake Quadrangles, Butte and
Plumas Counties California, USGS Prof. Paper 731, date 1973.
2) Examination and Sampling of the Blackhawk and Sections 13 Claims,
Plumas County, California, by Mm. H. Bird, dated June 1, 1976.
3) Bucks Lake Quadrangle, Map, USGS, 1:62,500, date 1950.
Gentlemen:
This letter presents our present geological engineering evaluation of the
subject gold and silver claims that are located in Plumas County, California.
We visited and inspected the property on April 19, and 20, 1985. The property
consists of approximately 750 acres of lode claims with a reported overlying of
a few placer claims. The properties lie about 5 and 11 miles directly west of
Quincy on the Bucks Lake Road.
The claims are named Blackhawk, Alan, MMC, and Dean. The Blackhawk, Alan and
MMC claims lie in Sections 21, 22, and 27 of T24N, R8E. The Dean claims lie in
the northwest corner of Section 13, T24N, R8E.
GEOLOGY
These claims lie along the southwest and northwest borders of a northwest
trending zone or band of highly fractured peridotite altered to serpentine.
Broad fault zones bound the peridotite bodies or bands and there are no
indications of heat alterations. There has been no production from hard rock
mining, however, significant placer hydraulicking and sluicing has occurred. The
placer deposits occur in two periods of erosion, the Present and the Tertiary.
Although, concentrations of gold have only been found in the Blackhawk and Dean
claims, it does occur scattered throughout the peridotite.
PRESENCE OF GOLD AND SILVER
Reference 2 indicates that there is a conservative 10,000,000 tons of hard rock
ore reserves. Rock chip and channel samples were obtained from 10 to 50 foot
sections of road cuts and outcrops on these claims and it is reported
"consistently assayed high in gold (AU)". The highest gold value was 2.80
oz/ton, however, the overall average was .7 oz/ton. Silver (AG) ranged from a
trace to 2.62 oz/ton. These values varied greatly, depending upon the freshness
of the outcrop. Assays also indicated the presence of platinoid metals.
Total amount of gold and silver in these claims is 7,000,000 oz. of gold and
19,000,000 oz. of silver. These figures were compiled from data presented in
Reference 2.
47
It is reported that during the summer of 1983, approximately $30,000 worth of
placer gold was dredged from one of the creeks flowing through the Blackhawk
claims. This gold was dredged from an area of the creek about 100 yards long.
Stickel & Associates warrant that our services are performed, within the limits
prescribed by our clients, with the usual thoroughness and competence of the
geological engineering profession. No other warranty or representation, either
expressed or implied, is included or intended in our proposals or reports or
contracts.
We appreciate the opportunity of presenting this report. If you have any
questions, please contact this office.
Very truly yours,
STICKEL & ASSOCIATES
(S) J. F. STICKEL
J. F. Stickel, rg 2999
JFS/hr
April 25, 1986
It is our opinion that the described and proven "indicated" ore reserves are
based on data as described above.
STICKEL & ASSOCIATES
(S) J. F. STICKEL
J. F. Stickel, RG 2999
STICKEL & ASSOCIATES P.O. Box 91, Tustin, Ca. 92618
(714) 751-4742
May 14, 1985
Mineral Mining and Energy Corp.
7750 El Camino Real, Suite K
Ranch La Costa, Ca. 92008
Attention; Stewart Douglas, President
LETTER OF CONSENT
We, Stickel & Associates
Consultants in Applied Geology, Geophysics and Engineering, hereby give
the consent to Mineral, Mining and Energy Corporation to use our Geologist and
Mining Report dated May 14, 1985 on the mining properties known as Blackhawk,
Alan, MMC and Eean Lode Claims Consisting of 750 acres.
STICKEL & ASSOCIATES
48
EXHIBITS
Incorporated herein by reference is the Exhibit submitted in paper
format with Form SE to Form 424B1 Dated December 1, 1999 by Registrant.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SE
FORM FOR SUBMISSION OF PAPER FORMAT EXHIBITS
BY ELECTRONIC FILERS
COUNTRYLAND WELLNESS RESORTS, INC. 0000887531
(Exact name of Registrant as specified in (Registered CIK Number)
charter)
424B1 Dated December 1, 1999 0-20217 (Should have read 333-17719)
(Electronic report, schedule, or (SEC File Number, if available)
registration statement of which
the documents are a part (give
period of report)
- -------------------------------------------------------------------------------
Name of Person Filing the Document
(if other than the Registrant)
49
SIGNATURES
Filings Made by the Registrant:
The Registrant has duly caused this form to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of West Monroe, State
of Louisiana, December 1, 1999.
COUNTRYLAND WELLNESS RESORTS, INC.
(Registrant)
By: /s/ DONALD E. STUDER, DIRECTOR