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: November 26, 2003
---------------------------------
(Date of earliest event reported)
NAPOLI ENTERPRISES, INC.
------------------------
(A Colorado Corporation)
(Exact name of registrant as specified in its chapter)
Colorado 7389 912015608
-------- ---- ---------
(State or other (Primary Standard (IRS Employer
jurisdiction of Classification Code Identification No.)
incorporation) Number)
35, Vlaicu Pircalab str.
Chisinau, Republic of Moldova
-----------------------------
(Address of principal executive offices)
(386) 409-0200
--------------
(Registrant's telephone number,
including area code)
Suite 566 - 1027 Davie Street
Vancouver, BC Canada V6E 4L2
----------------------------
(Former name or address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure
Napoli Enterprises, Inc., is hereby releasing condensed pro forma financials for
the seven months up to September 30, 2003 as well as the unaudited financials
for its subsidiary Lion Gri for the nine months up to September 30, 2003.
/s/ Greg Sonic
- ---------------
Greg Sonic
CEO, CFO, President & Secretary
Chairman & Director
November 24, 2003
CONSOLIDATED PRO FORMA FINANCIAL STATEMENTS
NAPOLI ENTERPRISES, INC.
SEPTEMBER 30, 2003
NAPOLI ENTERPRISES, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Pages
-----
Unaudited Pro Forma Condensed Combined Financial Information F-1
Unaudited Pro Forma Condensed Combined Balance Sheet
September 30, 2003 F-2
Unaudited Pro Forma Condensed Combined Statement of Operations
For the seven months ending September 30, 2003 F-3
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ending February 28, 2003 F-4
Notes to the Condensed Combined Financial Statements F-5
F-i
Napoli Enterprises, Inc.
Unaudited Pro Forma Condensed Combined Financial Information
------------------------------------------------------------
The following unaudited pro forma condensed combined financial information has
been prepared to demonstrate the acquisition of all issued and outstanding
shares of Lion-Gri S.R.L. (LG) on October 29, 2003 by Napoli Enterprises,
Inc.(NPLE). The pro forma condensed combined financial information is based on
the following:
1. The unaudited historical financial statements as of September 30, 2003
and for the seven months then ended;
2. The audited historical consolidated financial statements for the year
ended February 28, 2003;
3. The LG audited historical financial statements as of December 31, 2002
and for the nine months ended September 30, 2003;
4. Pro forma adjustments as described in the accompanying notes.
The pro forma condensed combined balance sheet as of September 30, 2003 and the
pro forma condensed combined statements of operations for the year ended
February 28, 2003 and the seven months ending September 30, 2002 gives effect to
the acquisition of LG as if it occurred by purchase as of March 1, 2002.
Related pro forma adjustments are described in the accompanying notes. The
unaudited pro forma condensed combined financial information is based upon
available information, which has been used solely for the purposes of developing
such unaudited pro forma financial information. The unaudited pro forma
condensed combined financial information does not purport to represent what the
results of operations or financial condition would have been had the acquisition
of LG occurred as of the pro forma dates specified above, or to project the
results of operations or financial condition for any future period or date.
The unaudited pro forma condensed combined financial information should be read
in conjunction with the historical financial statements and notes.
F-1
Napoli Enterprises, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
September 30, 2003
----------------------------------------------------
Pro Forma Pro Forma
NPLE LG Adjustments Combined
---------------- ---------------- ---------------- ----------------
ASSETS
Current Assets:
Cash $ 41 $ 190,545 $ $ 190,586
Accounts Receivable -- 829,958 829,958
Inventories -- 5,787,352 5,787,352
Other current assets -- 2,167,283 2,167,283
---------------- ---------------- ----------------
41 8,975,138 8,975,179
Fixed assets -- 5,896,231 5,896,231
Other assets 2,849,313 303,567 (2,849,313) 303,567
---------------- ---------------- ----------------
Total assets $ 2,849,354 $ 15,174,936 $ (2,849,313) $ 15,174,977
================ ================ ================ ================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Current liabilities $ 40,925 $ 9,137,192 $ $ 9,178,117
Long-term debt -- 860,097 860,097
Minority interest -- 89,907 89,907
---------------- ---------------- ----------------
Total liabilities 40,925 10,087,196 10,128,121
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock/Members Equity 42,000 -- 42,000
Additional paid-in capital 8,055,887 -- (7,919,896) 135,991
Accumulated deficit (5,289,458) 5,087,740 5,070,583 4,868,865
---------------- ---------------- ----------------
Total stockholders' equity 2,808,429 5,087,740 5,046,856
---------------- ---------------- ---------------- ----------------
Total liabilities and stockholders' equity $ 2,849,354 $ 15,174,936 $ (2,849,313) $ 15,174,977
================ ================ ================ ================
F-2
Napoli Enterprises, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the seven months ending September 30, 2003
--------------------------------------------------------------
Pro Forma Pro Forma
NPLE LG Adjustments Combined
---------------- ---------------- ---------------- ----------------
Sales $ -- $ 6,480,350 $ $ 6,480,350
Cost of sales -- 4,885,625 4,885,625
---------------- ---------------- ----------------
Gross profit -- 1,594,725 1,594,725
Operating expenses 194,480 1,102,572 1,297,052
Income (loss) from operations (194,480) 492,153 297,673
Other expenses 948 66,103 67,051
Net Income (loss) $ (195,428) 426,050 230,622
================ ================ ================ ================
Income (loss) per share $ nil $ na $ $ nil
================ ================ ================ ================
Weighted average number of
shares outstanding 42,000,000 42,000,000
================ ================ ================ ================
F-3
Napoli Enterprises, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the year ending February 28, 2003
--------------------------------------------------------------
Pro Forma Pro Forma
NPLE LG Adjustments Combined
---------------- ---------------- ---------------- ----------------
Sales $ -- $ 10,522,978 $ $ 10,522,978
Cost of sales -- 7,648,678 7,648,678
---------------- ---------------- ----------------
Gross profit -- 2,874,300 2,874,300
Operating expenses 47,882 1,790,743 1,838,625
Income (loss) from operations (47,882) 1,083,557 1,035,675
Other expenses 241,081 186,039 427,120
Net Income (loss) $ (288,963) 897,518 608,555
================ ================ ================ ================
Income (loss) per share $ nil $ Na $ $ .01
================ ================ ================ ================
Weighted average number of
shares outstanding 42,000,000 42,000,000
================ ================ ================ ================
F-4
Napoli Enterprises, Inc.
Notes to the Condensed Combined Financial Statements
----------------------------------------------------
Note 1 - Basis of Presentation
- ------------------------------
Napoli Enterprises, Inc. (the Company) entered into an agreement with Lion-Gri
S.R.L. (LG), whereby the Company acquired 100% of LG. As consideration for LG,
the Company issued 34,474,451 shares of common stock. The transaction was
completed October 29, 2003.
For purposes of theses pro-forma financial statements, the acquisition of LG has
been recorded as a reverse acquisition, which is a capital transaction and not a
business combination. Accordingly, no adjustments have been made for the fair
value of the assets acquired and the capital structure of the combined company
has been adjusted to reflect the capital structure of the acquired company.
Note 2 - Pro Forma Adjustments
- ------------------------------
The following adjustments were made in preparation of these statements:
(a) Adjustment to reflect acquisition as if it had occurred on March 1, 2002.
F-5
CONSOLIDATED FINANCIAL STATEMENTS
LION-GRI S.R.L. AND SUBSIDIARY
THE PERIOD ENDED SEPTEMBER 30, 2003
F-6
LION-GRI S.R.L. AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Pages
-----
Consolidated Balance Sheet F-8
Consolidated Statements of Operations and Comprehensive Income F-9
Consolidated Statements of Cash
Flows F-10
F-7
LION-GRI SRL
(A LIMITED LIABILITY COMPANY)
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2003
(UNITED STATES DOLLARS)
(UNAUDITED)
September 30, December 31,
2003 2002
---------------- ----------------
ASSETS
------
CURRENT ASSETS
Cash and bank balances 190,545 97,708
Trade receivables 829,958 954,062
Inventories 5,787,352 4,141,639
Advances to suppliers 2,016,379 987,453
Other current assets 150,904 45,886
---------------- ----------------
TOTAL CURRENT ASSETS 8,975,138 6,226,748
NOTE RECEIVABLE - RELATED PARTY 139,707 185,582
EQUITY INVESTMENTS 98,251 93,730
FIXED ASSETS, NET 5,896,231 3,457,027
OTHER ASSETS 65,609 58,727
---------------- ----------------
TOTAL ASSETS 15,174,936 10,021,814
================ ================
LIABILITIES AND MEMBERS' EQUITY
-------------------------------
CURRENT LIABILITIES
Current portion of long-term debt 472,479 391,293
Short-term bank loans 936,782 449,487
Related party loans 886,253 2,536,423
Other short-term loans 938,080 41,920
Short-term advances from customers 1,405,611 244,668
Trade accounts payables 4,272,989 3,274,980
Related party payables 27,098 194,295
Accrued liabilities 197,900 67,076
---------------- ----------------
TOTAL CURRENT LIABILITIES 9,137,192 7,200,142
LONG-TERM LIABILITIES
Long-term debt 860,097 139,631
---------------- ----------------
TOTAL LIABILITIES 9,997,289 7,339,773
MINORITY INTEREST 89,907 94,269
MEMBERS' EQUITY 5,087,740 2,587,772
---------------- ----------------
TOTAL LIABILITIES AND MEMBERS' EQUITY 15,174,936 10,021,814
================ ================
F-8
LION-GRI SRL
(A LIMITED LIABILITY COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME
(UNITED STATES DOLLARS)
(UNAUDITED)
Period Ended September 30
2003 2002
---------------- ----------------
SALES 8,331,879 7,786,716
COST OF SALES 6,281,518 5,505,827
---------------- ----------------
GROSS PROFIT 2,050,361 2,280,889
SELLING AND MARKETING EXPENSES 764,533 754,275
GENERAL AND ADMINISTRATIVE EXPENSES 333,413 286,706
OTHER OPERATIONAL EXPENSES 319,646 143,207
---------------- ----------------
INCOME FROM OPERATIONS 632,769 1,096,701
MINORITY INTEREST (7,174) 556
OTHER INCOME (LOSS)
Net gain on sale of fixed assets (17,132) (3,840)
Interest expense (75,032) (32,390)
---------------- ----------------
INCOME BEFORE TAX PROVISION 547,779 1,059,915
PROVISION FOR INCOME TAXES - -
---------------- ----------------
NET INCOME 547,779 1,059,915
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation 196,124 (35,631)
---------------- ----------------
comprehensive INCOME (LOSS) 743,903 1,024,284
================ ================
F-9
LION-GRI SRL
(A LIMITED LIABILITY COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNITED STATES DOLLARS)
(UNAUDITED)
Period, Ended
September 30
2003 2002
---------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 547,779 1,059,915
Adjustments to reconcile net income to net cash provided by
operating activities:
- Depreciation and amortization 188,784 206,388
- (Gain) loss on disposition of fixed assets, net (17,132) 3,841
- Minority interest expense 7,174 (556)
Changes in operating assets and liabilities:
- Increase in trade receivables 151,030 114,750
- Increase in inventories (1,399,181) (1,418,747)
- (Increase) decrease in advances to suppliers (932,368) (1,104,920)
- (Increase) decrease in other current and noncurrent assets (97,136) (264,958)
- Increase (decrease) in advances from customers 1,083,247 2,284,035
- Increase in accounts payable and accrued liabilities 777,460 448,179
Net cash provided by operating activities 309,657 1,327,927
CASH FLOWS FROM INVESTING ACTIVITIES
- Capital expenditures (2,113,962) (935,495)
- Purchase of intangibles (4,387) (5,470)
- Purchase of note receivable-related parties (103,202) (139,803)
- Payments received on other note receivables 153,024 -
- Purchase of long-term investments (885) (156,936)
Cash used by investing activities (2,069,412) (1,237,704)
CASH FLOWS FROM FINANCING ACTIVITIES
- Capital contributions 1,463,766 -
- Proceeds from long-term debt 867,833 80,493
- Proceeds from short-term loans 1,607,729 797,444
- Proceeds from loans 1,745,261 -
- Payments on loans (2,600,478) (26,315)
- Principal payments on long-term debt (19,085) (199,126)
- Principal payments on short-term loans (1,221,435) (727,831)
Cash provided by financing activities 1,843,591 (75,335)
Effect of exchange rate changes on cash 9,001 (33,164)
NET INCREASE (DECREASE) IN CASH 92,837 (18,276)
Cash and cash equivalents, at beginning of period 97,708 36,682
Cash and cash equivalents, at end of period 190,545 18,406
Supplementary disclosures of cash flow information:
- Interest paid 190,917 77,280
- Taxes paid 89,880 76,584
F-10