UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 7, 2001
CTI DIVERSIFIED HOLDINGS, INC.
(FOMERLY UNIQUE BAGEL CO., INC.)
(Exact name of registrant as specified in its charter)
Delaware 000-30095 33-0921967
(State of (Commission (I.R.S. Employer
organization) File Number) Identification No.)
1116-925 W. Georgia Street, Vancouver, B.C. V6C 3L2
(Address of principal executive offices)
Registrant's telephone number, including area code (604) 646-6638
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Pursuant to a Share Purchase Agreement (the "Agreement")
effective February 16, 2001, the Company, a Delaware corporation,
acquired approximately 97% of the total issued and outstanding
shares of CobraTech Industries, Inc., a British Columbia
corporation ("CobraTech").
The Agreement was approved by the unanimous consent of the Board
of Directors and a majority of the shareholders of CobraTech on
February 16, 2001.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 2, 2000, the Registrant approved the Agreement
between itself and CobraTech Industries, Inc. Under the terms of
the Agreement, the Company purchased approximately 97% of the
total issued and outstanding shares of CobraTech in exchange for
5,757,776 shares of common stock issued to the selling
shareholders of CobraTech.
ITEM 5. OTHER INFORMATION
On January, 10, 2001, the Company changed its name to CTI
Diversified Holdings, Inc.
On January 11, 2001, the Company abandoned its business plan of
overseeing the business of New York Bagel Company, which
developed, produced, and marketed a line of bagels and other
bread products, and adopted the business plan of CobraTech
Industries, Inc., which is engaged in providing leading North
American IT, ISP, ASP products and services for introduction and
distribution into the Asian e-security, e-business and e-
financial markets as well as providing consulting services for IT
security, pursuant to the closing of the Share Purchase
Agreement.
On February 7, 2001, Rene Palsenbarg cancelled 26,355,000 shares
of the Company's stock to be returned to the authorized but
unissued shares of the Company.
ITEM 6. RESIGNATIONS OF REGISTRANTS' DIRECTORS
On November 30, 2000, the Board of Directors appointed Rene
Palsenbarg as a member of the board of directors and as an
officer of the Company, effective immediately.
On December 1, 2000, the Company accepted the resignations of
Dennis Greenfield and Lorelie Capul as members of the board of
the directors and as officers of the Company, effective
immediately. The remaining board member did not immediately fill
the vacancies created by the resignations of Dennis Greenfield
and Lorelie Capul. Rene Palsenbarg was elected as President,
Secretary, and Treasurer.
On January 11, 2001, the sole director of the Company appointed
Stephen Koltai and Robert Kubbernus to fill the vacancies on the
board of directors created on December 1, 2000.
On February 7, 2001, Rene Palsenbarg resigned as the sole officer
of the Company, effective immediately and Stephen Koltai was
appointed as the sole officer of the Company.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
a) Financial Statements of Unique Bagel Co., Inc. for the
year ended December 31, 1999 and the period ended
September 30, 2000 are hereby incorporated by reference
to the financial statements included in the Form
10-SB/A filed on August 30, 2000 and the Form 10-QSB
filed on November 13, 2000, respectively.
b) The audited consolidated financial statements of
CobraTech Industries, Inc. for the fiscal period ending
October 15, 2000 were prepared by the Company in
accordance with GAAP applied on a basis consistent with
prior years, are correct and accurate in every
particular and present fairly the financial condition
and position of the Company as at October 15, 2000 and
the results of its operations for the period from
January 1, 2000 to October 15, 2000
c) Prior to the merger with CobraTech Industries, Inc.,
CTI Diversified Holdings (fka Unique Bagel Co., Inc.)
had no operations and had minimal assets and no
revenue during 1999. The pro-forma financial
statements, which serve to restate the results of 1999
as if the two companies had combined operations during
1999, therefore, will not differ in any material way
from the financial statements of CobraTech Industries,
Inc. The Company will not, therefore, include separate
pro-forma financial statements.
The Audited consolidated financial statements of CobraTech
Industries, Inc.
INDEPENDENT AUDITOR'S REPORT
To The Stockholders and Board of Directors
Cobratech Industries Inc.
(Formerly Cobra Energy Ltd.)
I have audited the accompanying consolidated balance sheets of
Cobmtech Industries Inc. (A Development Stage Company) as at
October 15, 2000 and December 31, 1999 and the related
consolidated statements of operations, changes in stockholders'
equity and cash flows for the periods then ended. These financial
statements are the responsibility of the company's management My
responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards in the United States of America. Those
standards require that I plan and perform an audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimate s made by
management, as well as evaluating the overall financial statement
presentation. I believe that my audit provides a reasonable basis
for my opinion.
The accompanying financial statements have been prepared assuming
that Cobratech Industries Inc. (A Development Stage Company) will
continue as a going concern. The Company is in the development
stage and does not have the necessary working capital for its
planned activity which raises substantial doubt about its ability
to continue as a going concern. Management's plans in regards to
this matter are discussed in note 2. The financial statements do
not include any adjustments that might result from the outcome of
this uncertainty.
In my opinion, these consolidated financial statements present
fairly, in all material respects, the consolidated financial
position of Cobratech Industries Inc. (A Development Stage
Company) as at October 15, 2000 and December 31, 1999 and the
consolidated results of its operations and its cash flows for the
288 days ended October 15, 2000, for the year ended December 31,
1999, and for the period from inception on November 18, 1997 to
October 15, 2000 in conformity with generally accepted accounting
principles in the United States of America.
November 15, 2000
Surrey BC CHARTERED ACCOUNTANT
- 1 -
COBRATECH INDUSTRIES INC.
(Formerly Cobra Energy Ltd.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
OCTOBER 15,2000
October 15 December 31
2000 1999
ASSETS
CURRENT ASSETS
Cash $ 134,638 $ 138,599
Accounts receivable 430 -
Directors' Loans (Note 7) 52,463 -
Prepaid expenses and deposits 129,649 7,712
Loan receivable 19,044 -
----------- ----------
336,224 146,311
CAPITAL ASSETS (Note 4) 196,538 7,076
----------- ----------
TOTAL ASSETS $ 532,762 $ 153,387
=========== ==========
LIABILITIES
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 94,921 $ 3,239
DIRECTORS' LOANS (Note 7) - 109,172
----------- ----------
94,921 112,411
=========== ==========
STOCKHOLDERS' EQUITY
CAPITAL STOCK
Authorized:
200,000,000 Common shares without par
value
Issued and fully paid:
October 15, 2000-11,413,700 common shares
December 31, 1999-4,425,000 common shares 1,814,307 687,412
Less: Subscriptions receivable
at December 31, 1999 - (549,225)
----------- ----------
1,814,307 138,187
Deficit accumulated during the development
stage (1,376,466) (97,211)
----------- ----------
437,841 40,976
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 532,762 153,387
=========== ==========
APPROVED BY THE DIRECTORS
(The accompanying notes form an integral part of the these financial
statements)
-2
COBRATECH INDUSTRIES INC.
(Formerly Cobra Energy Ltd.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE 288 DAYS ENDED OCTOBER 15,2000
with comparative figures for the year ended December 31, 1999
288 Days Ended Year Ended Cumulative
October 15, December 31, Amounts from
2000 1999 Inception on
November 17,
1997 to October
15,2000
EXPENSES
Advertising and promotion $ 140,347 $ 666 $ 141,013
Amortization 7,538 334 7,872
Consulting 248,559 40,371 288,930
Courier and delivery 3,042 26 3,068
Insurance 1,463 - 1,463
Legal and accounting 42,117 21,460 63,577
Licenses, dues and 5,134 289 5,423
subscriptions
Moving 4,490 - 4,490
Office 71,520 1,597 73,117
Rent 116,073 8,916 124,989
Telephone 17,658 365 18,023
Travel 231,219 13,125 244,344
Vehicle 3,306 - 3,306
Wages and employee benefits 394,704 9,686 404.39
----------- ----------- ------------
LOSS BEFORE OTHER EXPENSE
(INCOME) (1,287,170) (96,835) (1,384,005)
----------- ----------- ------------
OTHER EXPENSE (INCOME)
Interest income (8,989) - (8,989)
Interest expense 1,074 376 1,450
----------- ----------- ------------
(7,915) 376 (7,539)
----------- ----------- ------------
LOSS FOR THE PERIOD $(1,279,255) $ (97,211) $(1,376,466)
=========== =========== ============
Basic and diluted loss per share $ (0.55) $ -
=========== ===========
Weighted average
number of shares outstanding 2,343,027 3,570,488
=========== ===========
(The accompanying notes form an integral part of the these financial statements)
-3
COBRATECH INDUSTRIES INC.
(Formerly Cobra Energy Ltd.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE 288 DAYS ENDED OCTOBER 15,2000
with comparative figures for the year ended December 31, 1999
298 Days Ended Year Ended Cumulative
October 15, December 31, Amounts from
2000 1999 Inception on
November 17,
1997 to October
15,2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) for the period $ (1,279,255) $ (97,211) $ (1,376,466)
NON CASH ITEMS
Amortization 7,538 334 7,872
-------------- ------------- -------------
(1,271,717) (96,877) (1,368,594)
CHANGES IN NON-CASH WORKING CAPITAL
Accounts receivable 548,795 - 548,795
Prepaid expenses (121,937) (7,712) (129,649)
Loan receivable (19,044) - (19,044)
Accounts payable and accrued liabilities 91,681 3,239 94,920
-------------- ------------- -------------
Net cash used in operating activities (772,222) (101,350) 495,022
-------------- ------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Directors' loans (161,635) 109,172 (52,463)
Subscribed capital stock 1,126,895 138,187 1,265,082
Net cash provided by financing activities 965,260 247,359 1,212,619
CASH FLOWS FROM INVESTING ACTIVITIES
Leaseholds (75,679) - (75,679)
Office furniture and equipment (121,320) (7,410) (128,730)
Net cash used in investing activities (196,999) (7,410) (204,409)
-------------- ------------- -------------
(DECREASE) INCREASE IN CASH (3,961) 138,599 134,638
CASH POSITION, beginning of period 138,599 - -
-------------- ------------- -------------
CASH POSITION, end of period $ 134,638 $ 138,599 $ 134,638
============== ============= =============
Supplemental disclosure with respect to cash
flows:
Cash paid for income taxes $ - $ - $ -
Cash paid for interest $ 1,074 $ 376 $ 1,450
============== ============= =============
Supplemental disclosure of non-cash operating,
investing, and financing activities:
Common shares issued for services $ - $ - $ -
============== ============= =============
(The accompanying notes form an integral part of the these financial statements)
-4
COBRATECH INDUSTRIES INC.
(Formerly Cobra Energy Ltd.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS'EQUITY
FROM NOVEMBER 17,1997 (DATE OF INCEPTION) TO OCTOBER 15,2000
Deficit
Accumulated
During the
Common stock Development
Shares Amount Stage Total
Net loss, from November 17,
1997(date of inception) to
December 31, 1999 $ (97,211) $ (97,211)
Stock subscribed for not issued
as of December 31, 1999,
stock offering for cash 3,250,000 687,412 - 687,412
Less: share subscriptions receivable
as at December 31, 1999 1,175,000 (549,225) - (549,225)
------------ ------------ ------------ -----------
Balance, December 31, 1999 4,425,000 138,187 (97,211) 40,976
Net loss, from January 1, 2000
to October 15, 2000 (1,279,255) (1,279,255)
Stock subscribed for not issued
from January 1 to October 15,
2000, stock offering for cash 6,988,700 1,676,120 - 1,676,120
------------ ------------ ------------ -----------
Balance, October 15, 2000 11,413,700 $ 1,814,307 $(1,376,466) $ 437,841
============ ============ ============ ===========
(The accompanying notes form an integral part of these financial statements)
-5
COBRATECH INDUSTRIES INC.
(Formerly Cobra Energy Ltd.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 288 DAYS ENDED OCTOBER 15,2000
1. ORGANIZATION OF THE COMPANY
Cobratech Industries Inc ("the Company") was incorporated on
November 17, 1997 under the laws of British Columbia, Canada. On
this date the company entered the development stage in accordance
with Statement of Financial Accounting Standards No. 7. The
Company's primary purpose is the marketing and export of the Jaws
computer security technology to Asia. The Company has established
offices in Vancouver, Canada, Hong Kong, and Tokyo, Japan.
2. GOING CONCERN
The Company's financial statements are prepared using the
generally accepted accounting principles applicable to a going
concern which contemplates the realization of assets and
liquidation of liabilities in the normal course of business.
However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the
Company to continue as a going concern Management plans are to
raise capital through additional share subscriptions and in the
longer term, revenues from operations. The Company's ability to
continue as a going concern is dependent upon raising additional
capital, and, ultimately, upon achieving profitable operations.
October 15, 2000 December 31,
1999
Deficit accumulated during
the development stage $ (1,376,466) $ (97,211)
============== ==============
3. SIGNIFICANT ACCOUNTING POLICIES
The company follows accounting principles generally accepted in
the United States and Canada in preparing it financial
statements. The significant accounting policies used are as
follows:
a) Fair value of financial statements
The Company's estimate of the fair value of cash, receivables,
payables and accruals approximate the carrying value.
b) Income taxes
The company has operated at a loss since inception. The Company
feels that any tax benefit from these operating losses is
uncertain and would be reduced to zero under the valuation
allowance rules.
c) Basic loss per share
Earnings per share are provided in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings per share". Due
to the Company's simple capital structure, with only common stock
outstanding, only basic loss per share is presented. Basic loss
per share is computed by dividing losses available to common
shareholders by the weighted average number of common shares
outstanding during the periods.
(The accompanying notes form an integral part of the these
financial statements)
-6
COBRATECH INDUSTRIES INC.
(Formerly Cobra Energy Ltd.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 288 DAYS ENDED OCTOBER 15,2000
d) Estimates and assumptions
The peparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and
liabilities at the dates of the financial statements and revenues
and expenses during the reporting periods. Actual results could
differ from these estimates.
e) Cash equivalents
All highly liquid investments purchased with an original maturity
of three months or less are considered cash equivalents.
f) Capital assets
Capital assets are recorded at cost with depreciation and
amortization provided as follows:
Rate Method
Office furniture and
equipment 20 % Diminishing balance
Leasehold improvements 1/5 Straight-line
The above rates have been utilized to reflect the anticipated
life expectancy,
In the year of acquisition only one-half the normal rate is
applied.
g) Comprehensive income
The company has adopted Statement of Financial Accounting
Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income".
This statement establishes rules for the reporting of
comprehensive income and its components. The adoption of SFAS 130
had no impact on total stockholders' equity as of October 15,
2000.
h) Accounting for derivative instruments and hedging activities
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards No. 133 ("SFAS
133"), "Accounting for Derivative Instruments and Hedging
Activities" which establishes accounting and reporting standards
for derivative instruments and for hedging activities. SFAS 133
is effective for all fiscal quarters of fiscal years beginning
after June 15, 1999. In June 1999, the FASB issued SFAS 137 to
defer the effective date of SFAS 133 to fiscal quarters of fiscal
years beginning after June 15, 2000. The Company does not
anticipate that the adoption of the statement will have a
significant impact on its financial statements.
i) Stock-based compensation
Statement of Financial Accounting Standards No. 123, "Accounting
for Stock-Based Compensation" encourages, but does not require,
companies to record compensation cost for stock-based
compensation plans at fair value. The Company has chosen to
account for stock-based compensation using Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees".
Accordingly compensation cost for stock options is measured as
the excess, if any, of the quoted market price of the Company's
stock at the date of the grant over the amount an employee is
required to pay for the stock.
(The accompanying notes form an integral part of the these
financial statements)
-7
COBRATECH INDUSTRIES INC.
(Formerly Cobra Energy Ltd.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 288 DAYS ENDED OCTOBER 15,2000
4. CAPITAL ASSETS
October 15, December
2000 31, 1999
Accumulated Net Book Net Book
Cost Amortization Value Value
Office furniture
and equipment $ 128,730 $ 1,946 $ 126,784 $ 7,076
128,730
Leasehold
improvements 75,679 5,925 69,754 -
--------- --------- ---------- ----------
$ 204,409 $ 7,871 $ 196,528 $ 7,076
========= ========= ========== ==========
5. CAPITAL STOCK
The Company's authorized capital stock consists of 200,000,000
shares of common stock, without par value. All shares of common
stock have equal voting rights and, when validly issued and
outstanding, are entitled to one vote per share in all matters to
be voted upon by shareholders. The shares of common stock have no
preemptive, subscription, conversion or redemption rights and may
be issued only as fully paid and nonassessable shares. Holders of
the common stock are entitled to share pro-rata in dividends and
distributions with respect to the common stock, as may be
declared by the Board of Directors out of funds legally
available.
6. CONSOLIDATED FINANCIAL STATEMENTS
These consolidated financial statements include the accounts of
Cobratech Industries Inc. and its wholly owned subsidiaries,
Cobratech Industries Limited and Cobratech Industries Japan
Limited.
7. DIRECTORS' LOANS
Directors' loans do not bear interest and have no specific terms
of repayment.
8. LEASE OBLIGATIONS
The company has entered into operating leases for the rental of
its premises. The Company is responsible for maintenance and
insurance on its principal facilities. The total obligations
under these leases are as follows:
Year
2001 $ 61,248
2002 66,815
2003 77,952
2004 51,968
9. RELATED PARTY TRANSACTIONS
During the period ended October 15, 2000, the company paid
salaries amounting to $I 10,000 (December 3 1, 1999 -$10,000) to
a director of the company.
(The accompanying notes form an integral part of the these
financial statements)
-8
COBRATECH INDUSTRIES INC.
(Formerly Cobra Energy Ltd.)
(A Development Stage Company)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 288 DAYS ENDED OCTOBER 15,2000
10. UNCERTAINTY DUE TO THE YEAR 2000 ISSUE
The Year 2000 Issue arises because many computerized
systems use two digits rather than four to identify a
year. Date-sensitive systems may recognize the year 2000
as 1900 or some other date, resulting in errors when
information using year 2000 dates is processed. In
addition, similar problems may arise in some systems which
use certain dates in 1999 to represent something other
than a date.
The effects of the Year 2000 Issue may be experienced
before, on, or after January 1, 2000, and, if not
addressed, the impact on operations and financial
reporting may range from minor errors to significant
systems failure, which could affect an entity's ability to
conduct normal business operations. It is not possible to
be certain that all aspects of the Year 2000 Issue
affecting the entity, including those related to the
efforts of customers, suppliers, or other third parties,
will be fully resolved.
(The accompanying notes form an integral part of the these
financial statements)
-9
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
CTI Diversified Holdings, Inc.
By: /s/ Stephen Koltai
Stephen Koltai, President
Date: March 9, 2001