UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10/A
AMENDMENT NO. 3
----------------------
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 0-49824
----------------------
INAMCO INTERNATIONAL CORP.
(Exact name of registrant as specified in its charter)
DELAWARE 72-1359595
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
801 Montrose Ave., South Plainfield, NJ 07080
(Address of principal executive offices) (Zip Code)
(908) 754-4880
(Registrant's telephone number,
including area code)
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.00001 par value NASDAQ
- ----------------------------------------- ----------------------------------------------------
Title of each class to be so registered Name of each exchange on which each class is to be
registered
Securities to be registered pursuant to Section 12(b) of the Act: None
---------------
INAMCO INTERNATIONAL CORP.
INDEX
No. Page
- --- ----
Item 1. Business 3
- ---------------------------------------------------------------------------------------------------------
Item 2. Selected Financial Information 12
- ---------------------------------------------------------------------------------------------------------
Item 3. Management's Discussion And Analysis Of Financial Condition And Results Of
Operations 13
- ---------------------------------------------------------------------------------------------------------
Item 4. Properties 19
- ---------------------------------------------------------------------------------------------------------
Item 5. Security Ownership of Certain Beneficial Owners and Management 19
- ---------------------------------------------------------------------------------------------------------
Item 6. Directors and Executive Officers 20
- ---------------------------------------------------------------------------------------------------------
Item 7. Executive Compensation 22
- ---------------------------------------------------------------------------------------------------------
Item 8. Certain Relationships and Related Transactions 23
- ---------------------------------------------------------------------------------------------------------
Item 9. Legal Proceedings 24
- ---------------------------------------------------------------------------------------------------------
Item 10. Market Price of and Dividends on the Registrant's Common Equity and Related
Stockholder Matters 24
- ---------------------------------------------------------------------------------------------------------
Item 11. Recent Sales of Unregistered Securities 25
- ---------------------------------------------------------------------------------------------------------
Item 12. Description of Registrant's Securities to be Registered 28
- ---------------------------------------------------------------------------------------------------------
Item 13. Indemnification of Directors and Officers 28
- ---------------------------------------------------------------------------------------------------------
Item 14. Financial Statements and Supplementary Data 29
- ---------------------------------------------------------------------------------------------------------
Item 15. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosures 42
- ---------------------------------------------------------------------------------------------------------
Item 16. Financial Statements and Exhibits 42
- ---------------------------------------------------------------------------------------------------------
INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS
This Form 10 includes statements that could be construed as
"forward-looking" in nature. For such statements, we claim the protection of the
Private Securities Litigation Reform Act of 1995. Readers of the Form 10 are
cautioned, not to place undue reliance on these statements, which speak only as
of the date on which they are made. These statements involve a number of risks
and uncertainties, which include statements about the Company's strategy and
goals, and other statements that are not historical facts. Some of the
statements are preceded by the words "intends," "will," "plans," "expects,"
"anticipates," "estimates," "aims," and "believes" or similar words. The Company
undertakes no obligation to update publicly or revise any of these statements.
Actual events or results may differ materially from the Company's expectations.
Important factors that could cause actual results to differ materially from
those stated or implied by any statement include, but are not limited to, the
following: the ability to complete, if at all, within a reasonable time period;
future quarterly or annual financial results; the timing, success and cost of
research and development, and out-licensing endeavors.
2
ITEM 1. BUSINESS.
GENERAL DEVELOPMENT OF BUSINESS.
Inamco International Corp. ("Inamco", the "Company", or "Registrant") was
incorporated in Delaware on January 17, 1993 originally as Omni Assets, Inc.
("Omni). Omni, at the time of its inception, was established to operate as a
financial consulting firm, whose clients were to be other companies in need of
assistance in raising capital, and/or required advice on mergers and
acquisitions, or the hiring of management. Since the Company's inception in
1993, it has never been an operating concern and/or generated any revenues.
The Company is a developmental stage corporation as defined in Financial
Accounting Standards Board Statement No.7, and is a non-operating public shell,
meaning it has not commenced full-scale operations and has insignificant assets
and liabilities. Since its inception, the Company has not had any revenues or
earnings, and the future success of the Company is dependent on creating a
viable business and/or finding a suitable merger candidate.
In September of 1999, negotiations between Mr. Varges George, the president
and sole shareholder of Inamco Services Corp., a management company that owns
and operates two separate and wholly owned subsidiary companies: Medicos
Laboratories, Inc. and Advanced Diagnostics, Inc. (descriptions of which are
located elsewhere in this Form-10), and the directors and majority shareholders
of Omni began. Initially, the reasons behind the acquisition of Omni, revolved
around the possible merger of Mr. George's pharmaceutical company, Medicos
Laboratories, Inc., and Omni (as further described in this Form 10 report). All
immediate collaborations between the parties focused upon an entity, to be owned
by Mr. George, successfully merging with Omni. There was also a mutual
understanding between the parties that Royal Capital Corp. ("Royal"), a
consulting company to be retained, would act as a consultant and familiarize
itself with the merger between the two companies.
On October 26, 1999, Inamco International Corp., a Delaware Corporation,
being incorporated on the 18th day of October, 1999, merged with Omni in a
transaction solely for stock. Pursuant to the merger agreement, 1000 shares of
Inamco were exchanged for 22,712,500 shares of Omni. Once the merger was
completed, Inamco terminated its corporate existence and, in February of 2000,
the name of Omni Assets, Inc., was changed to Inamco International Corp. At the
completion of the merger, the Company's common stock had a par value of $.00001,
giving the value of those shares, issued as part of the merger, a worth of $227.
In October of 1999, a formal agreement was entered into with Royal. This
agreement paid Royal for consultation services connected with the merger of the
two companies. In consideration for those services, Inamco agreed to pay
1,355,365 shares of its restricted common stock to Royal and/or it designees.
In January of 2000, preliminary steps were taken to measure the feasibility
of a merger and/or acquisition of Medicos Laboratories, Inc. ("Medicos") by
Inamco. Medicos, at the time, was a company dedicated to the research,
development and formulating
3
manufacture of quality generic pharmaceuticals. Generic pharmaceuticals, as a
whole, have the same chemical and therapeutic properties as their brand-named
counterparts. Although typically less expensive, they are required to meet the
same governmental standards as the brand-named drug, and most must receive
approval from the appropriate regulatory authority prior to manufacture and
sale. A manufacturer cannot produce or market a generic pharmaceutical until all
relevant patents (and any additional government-mandated market exclusivity
periods) covering the original brand-name product have expired. It was later
deemed that Medicos was too much in its infancy stage to be a realistic merger
candidate. Although it was researching formulations on certain generic
pharmaceuticals, it did not have all of its laboratory equipment, proper FDA and
Good Manufacturing Procedures certification(s), and/or any revenue producing
contractual agreements. It was recommended that any arrangements to merge the
two companies be halted, until such time, if any, that Medicos could become an
operating pharmaceutical company. At this time it appears that a merger with
Medicos is unlikely.
In February of 2000, the Company entered into a collaborative agreement
with Royal, so that Royal could provide certain services to Inamco on a
non-exclusive and best efforts basis. Royal contracted to familiarize itself
with the business operations, prospects and management of Inamco, and make
certain recommendations in order to enhance the marketing of any future
products. In consideration of the foregoing, Inamco immediately agreed to tender
a total of 1,000,000 shares of its common stock to Royal and/or its designees.
In March of 2000, Inamco began to compensate Royal, as per their
contractual obligations. In the month of March, Inamco issued a total of
1,170,000 restricted common shares to Royal and/or their assigns.
In May of 2000, Inamco continued their compensation to Royal with an
additional issuance of 1,000,000 shares of restricted common stock to Royal
and/or their assigns.
In November of 2000, Inamco finalized the compensation to Royal with a
final issuance of 185,365 shares of restricted common stock to Royal and/or
their assigns.
As of November 2000, the Company had paid out a total of 2,355,365
restricted common shares to Royal Capital, and/or their assigns, as per the
parties' agreements (a list of Royal's assigns is located elsewhere in this
Form-10). The Company claims no knowledge, as to why Royal decided to issue a
certain number of its restricted common shares to certain designees. Inamco
acted within the purview of its contractual obligations, and Royal was paid
within the three different time frames as stated above. At the time in which the
agreements were signed between the parties, the value for the services to be
rendered by Royal, to the Company, equaled approximately $750,000 dollars, and
Royal agreed to accept restricted shares of common stock rather than cash.
The Company then began to initiate certain internal business procedures by
retaining the services of a lawyer and the consulting services of an investment
banker. The Company agreed to issue 25,000 and 68,245 shares of restricted
common stock, respectably, to each. For legal services rendered, shares were
issued in May of 2000, and in November of 2000,
4
shares were issued for consultation services (descriptions of which can be found
in other sections of this Form-10).
Since the Company's inception, the ability to achieve and identify certain
goals or objectives has been dependent upon many factors, some of which are out
of the Company's control. The ability of the Company to merge with an operating
pharmaceutical company will depend upon many factors, including the
identification of a proper merger candidate, the size of any future
collaborations, the success rate of future marketing strategies, and general and
industry-specific economic conditions which may affect any and all future
business expenditures. As a consequence, the likelihood of the Company to
produce any revenues in the future is dependent solely on a merger and/or
acquisition, the success of which may never be achieved.
At present, the Company has never had any subsidiaries, and is currently
not the subject of, or engaged in, any bankruptcy, receivership or similar
proceedings. There has been no material reclassification, merger, consolidation,
or any acquisition or disposition of any material amount of assets to or from
the Company, and the Company has undergone no structural changes since the
merger of Inamco and Omni. The Company's common stock presently trades on the
over-the-counter pink sheets under the symbol IICO.PK and as of July 30, 2003,
the Company had 27,600,000 shares outstanding with a last trade bid price of
$0.01.
PLAN OF OPERATION.
FINANCIAL INFORMATION ABOUT SEGMENTS. The information required by this
section calls for a report on each segment, as defined by generally accepted
accounting principals, revenues from external customers, a measure of profit or
loss and total assets, as described by Regulation S-K (Subpart 229.101). The
Company must report this information for each of the last three fiscal years or
for as long as it has been in business, whichever period is shorter. The
information provided for in this section does conform with generally accepted
accounting principals and is included in, and can be crossed referenced to our
audited financial statements.
NARRATIVE DESCRIPTION OF BUSINESS. At present, the Company has yet to
commence any operations, and does not own any intellectual properties
whatsoever. All future business is hypothetical and predicated on the successful
merger with an established pharmaceutical manufacturer, which cannot be relied
upon and/or guaranteed.
If a successful merger is to be consummated with an existing pharmaceutical
manufacturer, the proper candidate will need to be an established pharmaceutical
company that presently manufactures and distributes certain generic
over-the-counter ("OTC") and prescription drugs. Current management of the
Company has determined, that any candidate to be acquired or merged with, may
need to have the ability to manufacture generic drugs whose equivalents are
Actifed(R), Allerest(R), Anacin(R), Co-Tylenol(R), Exlax(R), Sudafed(R), and/or
NightQuil(R). The candidate should also be in the position to produce other OTC
drugs and/or generic prescription medications.
5
If a merger and/or acquisition should be consummated, Inamco believes that
it may be in a position to sell its future products acquired in a the merger to
distributors (both domestic and international), hospitals, and large buying
groups. However, the Company is not currently in a position to sell its future
products to such groups. The Food and Drug Administration ("FDA") oversees the
manufacture of both brand-name and generic pharmaceuticals, and the production
of these drugs is usually subject to:
(1) An approved New Drug Application ("NDA") which allows the
medication to state both its safety and effectiveness;
(2) Marketed under an NDA for safety only;
(3) Marketed without an NDA; or
(4) Marketed pursuant to over-the-counter monograph regulations.
For generic pharmaceuticals being manufactured for both safety and
effectiveness, prior to marketing, these drugs must undergo and pass an
Abbreviated New Drug Application ("ANDA"). The Company realizes that in order to
get approval from the FDA via an ANDA, all drug product applications will need
to include: data relating to product formulation, raw material suppliers,
stability information, manufacturing techniques, packaging, labeling, and
quality control information. Those drugs subject to an ANDA under the Drug Price
Competition and Patent Term Restoration Act of 1984 (the "Waxman-Hatch Act")
must also contain bio-equivalency data. Generics can also be marketed by
adhering to FDA enforcement policies, or be subject to an over-the-counter drug
review monograph process. At present, Inamco has not prepared or submitted any
ANDA applications; it is contemplated however that certain applications may be
submitted based on certain drugs that Inamco may manufacture if a merger is
consummated.
If a successful merger and/or acquisition is consummated, the Company will
be immediately subject to the following FDA enforcement policies and
over-the-counter drug review monograph processes with respect to those certain
generic drugs wished to be manufactured and marketed:
o Comply with Standard Operating Procedures and Good Manufacturing
Practices which include:
o The development of a drug formulation that matches the Brand
product that is to be reproduced (i.e. assay, content uniformity,
dissolution profiles, and stability)
o The manufacture of a pilot batch that will equal 1/10 the size of
the actual production batch
o Test and validate both the manufacture process and the drug
potency of the pilot batch
o Generate stability data covering a 3 month time frame in which a
portion of the pilot batch will be subjected to a constant
temperature of 40 degrees centigrade and 75% relative humidity
o Generate stability data covering a long-term time frame (12
months) in which a portion of the pilot batch will be subjected
to a constant temperature of 25 degrees centigrade and a 60%
relative humidity
6
o Upon successful stability studies for the 3 month time frame, the
product is ready for mass production and marketing o The
manufacture of 3 production sized batches in which the
manufacture process as well as drug potency will be tested and
validated
o Prepare and submit final documentation to State Formulary
committees, to obtain an approval from each State so that the
product may be reimbursed through insurance companies and
Medicaid.
After a merger and/or acquisition is consummated, and if the candidate
company should not have any business relationships with manufacturers of raw
chemicals, or if any relationship is deemed "not being in the best interest" of
Inamco; the Company will then identify other sourcing chemical companies where
raw materials can be purchased in bulk for the manufacture of its generic
pharmaceuticals. All raw chemicals needed are readily available; however, it
will be the Company's intention to always be conscious of pricing, for certain
chemical companies will give discounts when buying in bulk and placing continual
orders. It will be Inamco's expectation to benefit from the fact that the
pharmaceutical industry is non-cyclical and the need for quality generic drugs
is always present. At present, Inamco has not identified any sourcing chemical
companies where raw materials could be purchased. If any company to be acquired
should not have a business relationship(s) with a sourcing chemical company,
Inamco will begin the identification process once a merger is consummated, a
course of action that should not take more than one month.
A proper merger candidate will also have its good manufacturing procedures
("GMP") certification issued by the FDA. This certification will allow Inamco to
produce certain generic pharmaceuticals to sell to future clientele. Coinciding
with expected revenues generated, Inamco will submit several different ANDA
applications to the FDA, so that it may manufacture certain prescription
medication and add considerable profit potential to its entire pharmaceutical
operation. At present, Inamco has no clientele or business operations and will
rely on a merger in order to generate future business, as well as a client list
of wholesalers and distributors.
It will be Inamco's future intention not to have a single customer or group
of customers comprising more than 20% of its revenue stream. The Company will
continue to add to its client base by tendering offers through certain buying
groups, municipalities, government agencies, hospital and retail distributors.
This will ensure enough of a customer base, so that the loss of any one client
will not significantly affect the Company's revenue stream.
Since the Company has yet to begin any operations, it has no backlogged
orders or government contracts subject to renegotiation or termination. At
present the Company has no competition as well. It is contemplated, however that
if a merger and acquisition is successful, the Company will have competition
with other manufacturers of generic pharmaceuticals. These competitors will
probably have substantially greater capital resources than Inamco, as well as
seasoned sales and marketing teams in place. It is the Company's belief that its
primary competition will come from other manufacturers of generic
pharmaceuticals, brand name pharmaceutical companies that also produce generic
drugs, the
7
original manufacturer of the brand named drug in which the generic is derived,
and brand named pharmaceutical companies that can produce new drugs for the same
malady as the Company's proposed manufactured generic drug.
Inamco has not spent any monies on company-sponsored research and
development activities, and there are no plans to do so in the foreseeable
future. Once a merger and/or acquisition is consummated, the Company intends to
be in compliance with all federal, state and local provisions with respect to
the manufacture of generic pharmaceuticals. The FDA will oversee and enforce
compliance for good manufacturing practices, and it is the Company's additional
intention to locate a manufacturing facility located in a properly zoned
manufacturing area.
RISKS INHERENT IN A DEVELOPMENT STAGE COMPANY. The Company was incorporated
in Delaware on January 17, 1983 originally as Omni Assets, Inc. On October 26,
1999, Inamco International Corp., a Delaware Corporation being incorporated on
the 18th day of October 1999, merged with Omni in a transaction solely for
stock. In February of 2000, the name of Omni was changed to Inamco International
Corp. Since the Company's inception, it has been engaged almost exclusively in
organizational activities and has just recently begun the search for a
pharmaceutical merger candidate, so that it may enter into the generic
pharmaceutical manufacturing arena. Accordingly, as a transitional development
stage company, the Company has had no operating history upon which an evaluation
of the Company's prospects can be determined. Consequently, the likelihood of
success of the Company must be considered in view of all of the risks, expenses
and delays inherent in the establishment of a new business, including, but not
being limited to, expenses and delays of an ongoing business that has commenced,
slower than anticipated manufacturing and marketing activities, the uncertainty
of market assimilation of the Company's product and other unforeseen factors.
RISKS RELATING TO A MERGER. It must noted that the Company has not
identified a suitable merger candidate to date, and no assurance can be made
that a candidate will ever be found. Accordingly, the likelihood that the
Company may merge with an ongoing pharmaceutical company must be considered in
view of all of the risks, expenses and delays inherent to a merger, including,
but not being limited to, expenses, agreements and delays of merging one
business with another, due diligence compilation, shareholder approval,
regulatory approval, legal and accounting reviews, and any other unforeseen
factors that are to effect the Company's ability to merge with a pharmaceutical
concern.
NO OPERATING HISTORY; LOSSES. The Company has had no business
operations and no prior operating history. The Company anticipates that it will
continue to incur losses and generate negative cash flow once a merger and
acquisition has been consummated. At this time, the Company has no revenues; and
there is no assurance that the Company will ever have revenues or be profitable
or achieve positive cash flow from operations. Since October of 1999, the
Company has incurred a total loss of $37,243 up and until March 31, 2003.
DEPENDENCE UPON KEY PERSONNEL. The success of the Company depends, in
part, upon the successful performance of its president and secretary, Mr.
8
Varges George. Mr. George at present is the sole executive and director of the
Company. He has complete and exclusive control as to all aspects of the
Company's direction and operation. The Company had entered into a one year
comprehensive employment contract with Mr. George dated October 27, 1999. The
contract engaged Mr. George to provide exclusive services to the Company for a
total of one year, and then to render his services from time to time, as per the
discretion of the Company's director (Mr. George being that director). Although
Mr. George owns another company, as described in other sections of this Form 10,
he has never broken the exclusivity clause between the time frames of October
27, 1999 and October 26, 2000, for the reason that he remained within the
confines of his employment agreement, while qualifying and quantifying possible
business acquisition and/or merger. Mr. George's compensation was a one-time
payment of one million shares of Inamco International, Corp. common stock (a
copy of the Agreement is attached hereto). If a merger and/or acquisition is
consummated, the Company intends to elect a board of directors, who will employ
additional qualified executives, employees and consultants having significant
experience in delivering the business expertise needed. In the interim, if Mr.
George should fail to perform any of the duties undertaken by him, for any
reason whatsoever, the ability of the Company to find a merger candidate, so
that manufacturing, marketing and distribution of generic pharmaceutical may
begin, could be adversely affected. The Company may seek in the future to secure
and maintain key man insurance on Mr. George; there is no assurance, however,
that such insurance will in fact be obtained. Moreover, the Company believes
there are available qualified managerial and other personnel in sufficient
numbers to properly staff the facilities and offices of the Company, but there
can be no assurance that the Company will be able to attract sufficient
qualified personnel.
REGULATION. The Company, as well as all participants in the generic over
the counter pharmaceutical industry, must comply with the rules and regulations
of the Food and Drug Administration. ("FDA"). The manufacture of generic drugs
is governed by FDA regulations and protocols. Such regulations and protocols are
subject to change. Therefore, the Company's approach to certification, if a
merger should occur, may require modifications to adjust for future regulatory
change. Furthermore, the Company's future activities (although less intense than
more established pharmaceutical manufacturers who are principally engaged in the
manufacture of controlled drug products) are subject to extensive regulation not
only by the FDA, but comparable state regulatory and foreign health authorities.
COMPETITION. If a merger should occur between the Company and a
pharmaceutical concern, it is the Company's belief that there are manufacturing
entities that currently offer products and services similar to those to be
proposed by the Company. These entities may have greater financial and personnel
resources than the Company. Manufacture and use of generic over the counter
("OTC") drugs throughout the United States is on the increase. The generic OTC
manufacturing industry, in general, is dominated by a small number of companies,
which are well known to the public.
THERE IS A POTENTIAL CONFLICT OF INTEREST OF THE COMPANY'S PRESIDENT IF THE
COMPANY ACQUIRES AN INDEPENDENT PHARMACEUTICAL COMPANY OR BEGINS NEGOTIATIONS
WITH MEDICOS LABORATORIES, INC. Mr. Varges George is currently the president;
and sole shareholder of Inamco Services Corp. which is totally independent from,
and should not be confused with Inamco International Corp. This management
company owns and operates two separate wholly owned subsidiary companies,
9
one of which is a generic pharmaceutical manufacturer, Medicos Laboratories,
Inc. ("Medicos"). Medicos operates primarily as a laboratory engaged in the
development and manufacture of non-prescription and prescription generic drugs.
Among the products being produced are: clinical chemical reagents, tablets,
chewable tablets, capsules, liquids and powders. It should be noted that if
Inamco International Corp. should acquire and/or merge with another
pharmaceutical company other than Medicos Laboratories Inc., there would be a
conflict of interest resulting form Mr. George's 100% ownership in Medicos and
his majority ownership in Inamco International Corp. The control of both of
these competing companies would present a conflict of interest for Mr. George.
If this should occur, it will be the legal responsibility of Mr. George to
properly relinquish one of his executive roles, as well as any equity ownership,
within one of the competing companies.
POTENTIAL CONFLICT OF INTEREST REGARDING THE TIME SPENT BETWEEN COMPANIES.
As described elsewhere in this Form 10, the Company's president, Mr. Varges
George is currently the sole shareholder of Medicos Laboratories, Inc., a
company that manufactures generic pharmaceuticals; Mr. George was also party to
an exclusive employment contract between he and Inamco from October, 1999 to
October, 2000. Any potential conflicts of interest regarding Mr. George's time
spent, with respect to both companies, is resolved by the fact that Mr. George
has never been an officer or employee of Medicos and does not see to the
day-to-day operation of that company.
INAMCO'S COMMITMENT TO ISSUE AND REGISTER FOR RESALE A LARGE NUMBER OF
SHARES PURSUANT TO CONTRACTUAL OBLIGATIONS. In October of 1999, a formal
agreement was entered into with Royal Capital, a consultation firm. This
agreement paid Royal for consultation services connected with certain merger
activities had between Omni and Inamco (as described elsewhere in this Form 10).
In consideration for those services, Inamco agreed to pay a total of 2,355,365
shares of restricted common stock to Royal and/or its designees. As of June 2,
2003, Inamco had 27,600,000 shares issued and outstanding, inclusive of those
restricted shares forwarded to Royal and/or their designees. Therefore, should
Royal and/or their designees sell all or a large number of their common shares,
once all restrictions are lifted, it could reduce the per-share value of
Inamco's common shares currently traded on the NASDAQ pink sheets and currently
held by existing investors.
10
EFFECTS ON THE FLUCTUATION OF COSTS AND AVAILABILITY OF RAW MATERIALS. If a
merger is to occur, the Company intends to purchase premium grade raw materials
for use in its generic drug manufacturing enterprise. Such unprocessed natural
products will be obtained from third party sources and manufacturing
sub-contractors. The price and availability of these raw materials are subject
to numerous factors not within the Company's control including: weather
conditions, policies of foreign countries and/or trade restrictions as well as
the status of the worldwide demand for generic drug ingredients. In the event
the Company cannot timely acquire its raw materials from third party entities,
the Company's ability to ship its products and service to its targeted markets
on a timely basis, if at all, would be negatively affected.
RELIANCE ON OUTSIDE SUPPLIERS. After a merger, the Company intends to
purchase its raw materials and supplies from independent sources. It will remain
dependent upon such outside sources for all of its unprocessed natural products.
There can be no assurance that these sources will be able to provide adequately
for the future needs to the Company. In the event that any of the Company's
future suppliers should suffer quality control problems, lack of raw materials
or financial difficulties, the Company would be required to find alternative
sources for its product lines. The Company believes that the likelihood that it
could identify a broad base of alternative sources is high based on the large
number of easily accessible and affordable producers of compounds for generic
drugs in the manufacturing marketplace. The time lost in seeking and acquiring
additional and newer sources, however could adversely affect the Company's
future revenues and profitability.
PRODUCT LIABILITY. The testing, marketing and sale of generic
pharmaceuticals entail an inherent risk of allegations of product liability, and
there can be no assurance that product liability claims will not be asserted
against the Company. Inamco may incur product liability due to product failure
or improper use of products by the user. The Company intends to obtain product
liability insurance that should be adequate for future operations. There can be
no assurance, however, that the amount of insurance, once obtained, will be
sufficient to fully insure against claims that may be made against the Company.
At present, the Company has not prepared or submitted any applications to the
Food and Drug Administration with respect to testing, marketing, or the sale of
generic pharmaceuticals; it is contemplated however that certain applications
may be submitted based on certain drugs that the Company may manufacture once a
merger is consummated. Once applications are submitted, the Company cannot state
when approvals will be had, if ever.
THE GENERIC DRUG ENFORCEMENT ACT OF 1992. Which was amended to the FDC
Act, gives the FDA six ways to penalize any entity that engages in wrongdoing
with respect to the development and/or manufacture of a generic drug, or the
purposefully faulty submission of an ANDA, which include, but are not limited
to:
1) Permanently or temporarily prohibit alleged wrongdoers from
submitting or assisting in the submission of an ANDA;
2) Temporarily deny approval of, or suspend applications to market
particular generic drugs;
3) Suspend the distribution of all drugs approved or developed
pursuant to an invalid ANDA;
4) Withdraw approval of an ANDA;
11
5) Seek civil penalties; and/or
6) Significantly delay the approval of any pending ANDA from the
same party.
At present, the Company has never been the subject of any enforcement action by
the FDA (and/or otherwise), and it is the intention of the Company to acquire a
pharmaceutical entity that itself has had no previous problems with the FDA.
There can be no assurances, however, that restrictions and/or fines will not be
imposed on Inamco in the future.
AVAILABLE INFORMATION. Inamco has filed a Form-10 registration statement(s)
under the Securities Act of 1933 since its acquisition of Omni Assets, Inc., on
October 26, 1999. However, any statements, including this amended "Form-10", may
be viewed by contacting the Securities and Exchange Commission, Public Reference
Room, located at 450 Fifth Street, N.W., Washington, D.C. 20549. 1-800-SEC-0330.
REPORTS TO SECURITY HOLDERS. To date, Inamco has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and has been subject to such filing requirements
for the past 90 days. This Form 10 report contains financial information
examined by a certified public accountant, and is made available to securities
holders and the general public as mandated by the SEC and stock exchange rules
and regulations.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS. Inamco is not
a foreign private issuer filing any registration statements under the Securities
Act of 1933.
ITEM 2. SELECTED FINANCIAL INFORMATION.
The following Selected Financial Data has been derived from the Company's
audited financial statements and the information should be read in conjunction
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Item 13. Financial Statements and Supplementary Data" included
elsewhere in this Form 10. Other information contained in this Form 10 speaks of
possible material adverse effects regarding the Company's financial condition
and results of operation. Readers of this Form 10 should refer to the matters
described under the heading "Risk Factors".
12
Years Ended December 31,
--------------------------------------------------------------------------
Inception
January 17, 1993
to
2002 2001 2000 2002
---------------- ---------------- --------------- -------------------
STATEMENT OF OPERATIONS DATA:
Net Sales $ -- $ -- $ -- $ --
Cost of Goods Sold -- -- -- --
----------------- ---------------- --------------- -------------------
Gross profit -- -- -- --
Cost and Expenses
Bank Charges and Miscellaneous $ 1,226 $ 525 $ 1,215 $ 2,967
Professional and Consulting Fees 8,000 -- 11,157 32,657
---------------- ---------------- --------------- -------------------
9,226 525 12,372 35,624
----------------- ---------------- --------------- -------------------
Net income (loss) (9,226) (525) (12,372) (35,624)
================= ================ =============== ===================
Weighted average shares outstanding:
Basic 27,600,000 27,600,000 25,871,020 9,323,472
================ ================ =============== ===================
Loss Per Share* $ 0.00 $ 0.00 $ 0.00 $ 0.00
================ ================ =============== ===================
Years Ended December 31,
--------------------------------------------------------------------------
Inception
January 17, 1993
to
2002 2001 2000 2002
---------------- ---------------- --------------- -------------------
BALANCE SHEET:
ASSETS
Current Assets
Cash $ 927 $ 38 $ 343 $ --
----------------- ---------------- --------------- -------------------
Total Current Assets 927 38 343 --
Other Assets 213 213 213 --
----------------- ---------------- --------------- -------------------
Total Assets $ 1,140 $ 251 $ 556 $ --
----------------- ---------------- --------------- -------------------
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
LIABILITIES
Accounts Payable and Accrued
Expenses $ 5,615 $ 1,668 $ 1,148 $ --
----------------- ---------------- --------------- -------------------
Total Current Liabilities 5,615 1,668 1,148 --
Due to Officers/Shareholders 8,069 1,900 2,200 --
----------------- ---------------- --------------- -------------------
Total Liabilities $ 13,684 $ 3,568 $ 3,348 $ --
----------------- ---------------- --------------- -------------------
STOCKHOLDERS' DEFICIENCY
Common Stock, $.00001 par value
Authorized: 50,000,000 shares
Issued and Outstanding:
27,600,000 shares 276 276 276 --
Additional paid-in capital 22,804 22,804 22,804 --
Deficit Accumulated in the
Development Stage (35,624) (3,317) (2,792) --
----------------- ---------------- --------------- -------------------
Total Shareholders' (12,544) (3,317) (2,792) --
Deficiency
----------------- ---------------- --------------- -------------------
$ 1,140 $ 251 $ 556 --
================ ================ =============== ===================
ITEM 3. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
You should read the following discussion and analysis in conjunction with
the Company's "Financial Statements and Supplementary Data" included elsewhere
in this Form 10.
At present, the Company has yet to commence any operations, and does not
own any intellectual properties whatsoever. The Company is in the development
stage as defined in Financial Accounting Standards Board Statement No.7, and is
a non-operating public shell, meaning it has not commenced full-scale operations
and has insignificant assets and liabilities. Since its inception, the Company
has not had any revenues or earnings, and all future business is hypothetical
and predicated on the successful merger with an established pharmaceutical
manufacturer.
13
CRITICAL ACCOUNTING POLICIES AND MANAGEMENT ESTIMATES
It cannot be assured that the Company will have any accounting policies
and/or management estimates, based off of actual business operations, in the
foreseeable future. The initiation of these practices will only begin once a
successful merger with an established pharmaceutical manufacturer has been had.
However, the Securities and Exchange Commission defines critical accounting
policies as those that are, in management's view, most important to the
portrayal of the company's financial condition and results of operations and
most demanding of their judgment. Our discussion and analysis of our financial
condition and results of operations are based upon our consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the US. The preparation of these financial statements
requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses. We base our estimates upon
historical experience and on various other assumptions that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions. If the Company should merge
with an existing pharmaceutical company, our accounting policies will include:
REVENUE RECOGNITION. Our revenue recognition policies will be in accordance
with the Securities and Exchange Commission Staff Accounting Bulletin (SAB) 101,
Revenue Recognition in Financial Statements. SAB 101 provides guidance related
to revenue recognition based on the interpretations and practices developed by
the Securities and Exchange Commission. Some of our future pharmaceutical
manufacturing agreements may contain multiple elements, including "downstream
milestones" and royalty obligations.
If revenues are to occur from "milestones", cash flow is recognized when
earned, as evidenced by written acknowledgment from our collaborator, provided
that (i) the milestone
14
event is substantive and its achievability was not reasonably assured at the
inception of the agreement, and (ii) our performance obligations after the
milestone achievement will continue to be funded by our collaborator at a
comparable level to, or before the milestone achievement. If both of these
criteria are not met, the milestone payment can be recognized over the remaining
minimum period of our performance obligations under the agreement. If upfront
fees are to be negotiated in any future contracts, they can be recognized over a
period of time relative to the services to be provided.
GOODWILL AND INTANGIBLES. Purchase accounting requires accounting estimates
and judgments to allocate the purchase price of any future acquisition to the
fair market value of the assets and liabilities purchased. Any future acquired
technology can be amortized over its useful life. The estimated useful life can
be determined based on an analysis, as of any acquisition date, of conditions
in, and the economic outlook for, the pharmaceutical industries and the patent
life of that specific technology. As with any intangible asset, we will evaluate
the value of the technology and, if necessary, we will have a future write-down
of the carrying value of the technology. If it should be determined that any
technology has become impaired, that may accelerate the amortization of any
technology if it should be deemed that its life has been shortened.
INCOME TAXES. At present, the Company has yet to commence any operations,
and does not own any intellectual properties whatsoever. Since its inception,
the Company has not had any revenues or earnings however, it is contemplated
that once business operations begin, we could record a valuation allowance, in
order to reduce our deferred tax assets. More consideration on future taxable
income and feasible tax planning strategies in assessing the need for a
valuation allowance will be had once a successful merger is completed.
The above is not intended to be a comprehensive list of all or any of our
present or future accounting policies. In many cases, the accounting treatment
of a particular transaction is specifically dictated by generally accepted
accounting principles, with no need for management's judgment in their
application. There are also areas in which management's judgment in selecting
any available alternative would not produce a materially different result. See
our audited consolidated financial statements and notes thereto in this Report
on Form 10 which contain accounting policies and other disclosures required by
generally accepted accounting principles.
THREE MONTHS ENDED MARCH 31, 2003 COMPARED TO THE THREE MONTHS ENDED 2002
REVENUES
None. For the three months ended March 31, 2003 and the year ended December
31, 2002, the Company has had no revenue.
RESEARCH AND DEVELOPMENT
15
None. For the three months ended March 31, 2003 and the year ended December
31, 2002, the Company has performed no research and development whatsoever.
GENERAL AND ADMINISTRATIVE
General and administrative expenses are minimal,
and for the quarter ended March 31, 2003 have totaled $1,575 and $0 for the same
quarter ended March 31, 2002. General and administrative expenses consist
primarily of supporting administration of a public company and some professional
fees. We expect that our general and administrative expenses will increase
substantially once a merger and/or acquisition is consummated, in order to
support our growth and requirements as a public company.
NON-CASH STOCK-BASED COMPENSATION CHARGES
None. For the three months ended March 31, 2003, the Company has not had
any non-cash stock based deferred compensation.
OTHER INCOME, NET
None. For the three months ended March 31, 2003 and the year ended December
31, 2002, the Company has had no other income.
RESEARCH AND DEVELOPMENT
None. For the three months ended March 31, 2003 and the year ended December
31, 2002, the Company has performed no research and development whatsoever.
NON-CASH STOCK-BASED COMPENSATION CHARGES NONE.
For the three months ended March 31, 2003 and the year ended December 31,
2002, the Company has not had any non-cash stock based deferred compensation.
OTHER INCOME, NET
None. For the three months ended March 31, 2003 and 2002, the Company has
had no other income.
YEAR ENDED DECEMBER 31, 2002 COMPARED TO THE YEAR ENDED DECEMBER 31, 2001
REVENUES. We recorded no revenues for this time frame, and you should read
the following in conjunction with the Company's "Financial Statements and
Supplementary Data" included elsewhere in this Form 10.
16
RESEARCH AND DEVELOPMENT EXPENSES. There has been no Research and
development expenses, and the following should be read with the Company's
"Financial Statements and Supplementary Data" included elsewhere in this Form
10.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased $8,701 to $9,226 for the year ended December 31, 2002 from $525 for
the year ended December 31, 2001. The increase was a result of general and
administrative expenses for Inamco, which consisted primarily of professional
fees and other general corporate expenses. We expect that our general and
administrative expenses will increase to support our growth and requirements as
a public company.
AMORTIZATION OF DEFERRED COMPENSATION. There has been no Amortization of
Deferred Compensation for the Company, and the following should be read with the
"Financial Statements and Supplementary Data" included elsewhere in this Form
10. Interest Income. Interest income was nominal for the year ended December 31,
2002 and the year ended December 31, 2001. This was due to a nominal cash
balance that did not exceed $950, at any given time, within the Company's
primary corporate account. Interest Expense. Interest expense was nominal for
the year ended December 31, 2002 and the year ended December 31, 2001. This was
due to a nominal cash balance that did not exceed $950, at any given time,
within the Company's primary corporate account. Gain on Investment. We recorded
no Gains on Investment for this time frame, for the Company does not own any
long-term or short-term liquid financial instruments, and you should read the
following in conjunction with the Company's "Financial Statements and
Supplementary Data" included elsewhere in this Form 10.
OTHER INCOME. We reported no Other Income for this time frame, and you
should read the following in conjunction with the Company's "Financial
Statements and Supplementary Data" included elsewhere in this Form 10.
NON-CASH PREFERRED STOCK CHARGE. We recorded no non-cash preferred stock
charge for this time frame, and you should read the following in conjunction
with the Company's "Financial Statements and Supplementary Data" included
elsewhere in this Form 10.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity refers to our ability to generate adequate amounts of cash to
meet our needs. We have been generating the cash necessary to fund our
operations from continual loans from the president and chief operating officer,
Mr. Varges George. We have incurred a loss in each year since inception, and we
expect to incur substantial losses for at least the next several years. We
expect that losses may fluctuate, and that such fluctuations may be substantial.
As of March 31, 2003, we had an accumulated deficit of $37,243. Our accumulated
deficit is the result of expenses incurred in connection with our general and
17
administrative costs, as well as the cost to support the growth and requirements
as a public company.
Potential immediate sources of liquidity are the continual loans from Mr.
George. Another potential source of liquidity is the sale of restricted shares
of our common stock.
Net cash provided by loans from Mr. George was approximately $800 during
the three months ended March 31, 2003, and approximately $9,226 during the year
ended December 31, 2002, with a total of approximately $8,868 still owing to Mr.
George, from the Company, that is incurring 7% interest on an annual basis while
the debt is outstanding.
As of March 31, 2003, we had $182 in cash and cash equivalents compared to
$927 in cash and cash equivalents as of December 31, 2002. The decrease of $745
is primarily attributable to operating expenses incurred by the Company.
Net cash used in operating activities was approximately $1,545 for the
three months ended March 31, 2003, and approximately $9,226 during the year
ended December 31, 2002. The primary use of cash for both the quarter ending
March 31, 2003 and the year ended December 31, 2002 was to fund general and
administrative costs, as well as the cost to support the growth and requirements
as a public company. Our net loss in the period, adjusted for non-cash expenses,
amortization, and changes in operating assets and liabilities. Net cash used in
operating activities was approximately $NIL for the quarter ending March 31,
2002, and $525 during the year ended December 31, 2001.
While we believe that our current capital resources and anticipated cash
flows from any merger and/or acquisition activity will not be sufficient to meet
any future capital requirements, we understand that additional financing will be
needed. The estimated length of time current cash and available borrowings will
sustain our operations is based on estimates and assumptions we have made. These
estimates and assumptions are subject to change at any time, however, the
Company estimates, based on Mr. George continuing to fund certain operational
costs, that the current liquidity and capital resources available to the
Company, should sustain current limited operation for another 2 years. We cannot
assure you that adequate funding will be available to us or, if available, that
such funding will be available on acceptable terms. Any shortfall in funding
could result in the curtailment of any merger activities, as well as the Company
having to cease all operations.
INCOME TAXES As of March 31, 2003, we had approximately $1,545 of net
operating losses for federal income tax purposes. These amounts reflect
different treatment of expenses for tax reporting than is used for financial
reporting. United States tax law contains provisions that may limit our ability
to use net operating losses in any year, or if there has been a significant
ownership change. Any future significant ownership change may limit the use of
our net operating losses.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
18
Risk. The Company is not exposed to any market risk due to the fact that it
does not own any risk sensitive instruments; all cash is used solely for the
purpose of maintaining a minimum balance within a corporate bank account and the
fluctuations that interest rates play on that cash is immaterial.
ITEM 4. PROPERTIES.
The Company presently does not have any assets or liabilities, including
any property or long-term lease agreements. It is the understanding of the
Company's president, that if Inamco is able to consummate a merger and/or
acquisition of a pharmaceutical company, that future company may have facilities
suitable enough for the research and development, manufacture, and warehousing
of generic pharmaceuticals. If any acquisition candidate should not own any such
facility, it will be necessary for the Company to purchase, or enter into a
lease agreement, in order to procure a manufacturing facility.
ITEM 5. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
As of May 9th, 2002, the Company had a total number of shares outstanding
equal to Twenty Seven Million Six Hundred Thousand (27,600,000). The following
table provides information pertaining to owners of more than five percent of any
class of the Company's voting stock.
- -------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Name and Address Amount and Nature Percentage of
Title of Class of Beneficial Owner of Beneficial Owner Ownership
- -------------------------------------------------------------------------------------------------------------
Common A Inamco Services Corp.* 12,947,487 46.91%
801 Montrose Ave.
South Plainfield, NJ 07080
Common A Advanced Diagnostics Inc.* 8,326,403 30.17%
801 Montrose Ave.
South Plainfield, NJ 07080
* It should be noted that Mr. Varges George is the sole shareholder and owner of
Inamco Services Corp., and Advanced Diagnostics Inc., as described above.
Accordingly, Mr.
19
George has direct control and ownership of 21,273,890 shares of common stock,
which represents approximately 77.07% of the Company's outstanding common shares
(this does not take into consideration shares owned personally by Mr. George, as
explained below).
Security ownership of management.
As of May 9th, 2002, the Company had a total number of shares
outstanding equal to Twenty Seven Million Six Hundred Thousand (27,600,000). The
following table provides information pertaining to shares beneficially owned by
all directors and nominees.
- -------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4)
Name and Position Amount and Nature Percentage of
Title of Class of Beneficial Owner of Beneficial Owner Ownership
- -------------------------------------------------------------------------------------------------------------
Common A Varges George* 1,000,000 3.62%
President/Secretary
* Taking into consideration that Mr. Varges George is the sole shareholder of
Inamco Services Corp., and Advanced Diagnostics Inc., it should be noted, that
with the addition of Mr. George's personal shares received as employment
compensation, and described in other sections of this Form 10, he has direct
control of a total of 22,273,890 shares of common stock, which represents
approximately 80.70% of the Company's outstanding common shares.
ITEM 6. DIRECTORS AND EXECUTIVE OFFICERS.
Identification of directors.
At present, Inamco has only one director, Mr. Varges George.
IDENTIFICATION OF EXECUTIVE OFFICERS.
At present, Mr. Varges George, age 45, is the sole executive to the
Company. He serves in the capacity of both president and secretary. He has been
the sole executive of the Company since the acquisition of Omni Assets, Inc. by
the Company on October 26, 1999. At present, Mr. George has no arrangements or
understandings between he and any other parties with respect to the Company
except those that are stated herein.
IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES.
At present, the Company has no employees or understanding with any
persons acting as production managers, sales managers, or research scientists
who are in any way associated with Inamco.
FAMILY RELATIONSHIPS.
20
There are no relationships between family members of the sole executive and
the Company.
BUSINESS EXPERIENCE.
For the past 10 years, Mr. Varges George has been the president; and sole
shareholder of Inamco Services Corp., a management company that owns and
operates two separate and distinct companies: Medicos Laboratories, Inc. and
Advanced Diagnostics, Inc., descriptions of which are as follows:
MEDICOS LABORATORIES, Inc. operates primarily as a laboratory engaged in
the development and manufacture of non-prescription and prescription generic
drugs. As stated earlier in the Form 10, generic pharmaceuticals, as a whole,
have the same chemical and therapeutic properties as their brand-named
counterparts. Although typically less expensive, they are required to meet the
same governmental standards as the brand-named drug, and most must receive
approval from the appropriate regulatory authority prior to manufacture and
sale. A manufacturer cannot produce or market a generic pharmaceutical until all
relevant patents (and any additional government-mandated market exclusivity
periods) covering the original brand-name product have expired. Medicos, being
an U.S. Food and Drug Administration ("FDA") approved manufacturer, has the
ability to produces both over-the-counter ("OTC") and certain prescription
medications in the forms of tablets and capsules. Medicos, in September of 2002,
received FDA approval to manufacture and sell Phenazopyridine tablets, it's sole
product, and is now researching and developing other niche drug products in
which to produce and distribute. An acquisition has not occurred, for the fact
that Medicos needs to complete certain other business activities, including but
not being limited to, final construction of warehousing areas, and the
completion and consummation of certain other manufacturing and distributing
agreements. The Company anticipates that an acquisition of Medicos could be
consummated by the end of the third quarter of 2003, however there are certain
risks, as explained in other sections of this Form 10, associated to merging the
Company and Medicos, which could curtail and/or suspend any acquisition
contemplated. Readers of this Form 10 report are not to assume that an
acquisition of Medicos is a likely event.
ADVANCED DIAGNOSTICS, INC. is dedicated to the research, development and
manufacturing, and marketing of diagnostic test kits. The company sells its
products through wholesalers, private label distributors, drug chain stores,
health maintenance organizations ("HMO's"), hospital buying groups, and local,
state and federal government agencies. This company produces such products as:
pregnancy tests, allergy indicators, Strep A Testing, ovulation and fertility
testing, tumor markers, drugs of abuse diagnostic kits, and infectious diseases
tests.
Mr. George received the degree of Master of Business Administration from
the Siddharth Institute of Industry and Administration of Bombay, India in 1979.
Mr. George, an accountant by training, has comprehensive knowledge of
import-export markets and of financial operations, which has enabled him to work
in fast-paced, highly diversified environments. While working as the Finance
Manager for Sayco & Al Ordoba in 1981, Mr. George orchestrated international
transactions involving millions of dollars with such
21
multi-national conglomerates as IBM, Xerox, Amoco Oil and Minnesota Mining and
Manufacturing. Mr. George was Finance and Administration Manager for Al Orooba
Technical Trading Co. of the United Arab Emirates in 1982, Chief Accountant for
Step International Marketing Co. of Bombay, India in 1979, and Accountant for
St. George Automobiles and Thankappan and Madhu, both of Kerala, India in 1977.
DIRECTORSHIPS.
At present, the Company has no directors or understanding with any
persons acting as directors who are in any way associated with Inamco.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
The sole executive of Inamco, Mr. Varges George, nor any other entity, with
which he may be involved, has ever filed any petitions under the Federal
bankruptcy laws or any state insolvency laws. He has never been convicted of a
crime, nor named in any criminal proceeding, nor the subject of any order,
judgment, or decree, that would permanently or temporarily enjoin him from:
acting as a futures commission merchant, introducing broker, or any other
sanctioned NASD licensed person. He has never been barred permanently or
temporarily from engaging in any type of business practice, or engaging in any
activity in connection with the purchase or sale of any security or commodity.
PROMOTERS AND CONTROL PERSONS.
The Company has had no need to employ and/or invoke the services of a
promoter.
ITEM 7. EXECUTIVE COMPENSATION.
Summary of Cash and Certain Other Compensation
The following table sets forth certain information concerning the
compensation paid by the Company for services rendered to the Company in all
capacities for the fiscal years ended December 31, 2002, 2001, 2000 and 1999 by
the Company's Chief Executive Officer:
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------- -------------
CLASS "A"
ALL OTHER COMMON STOCK
ANNUAL RECEIVED BY 3 VALUE OF
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSATION PRINCIPAL COMPENSATION
- ---------------------------- ------- ---------- -------------- --------------- --------------
Varges George 2002 $ -- $ -- -- $ 10,000
President and Secretary 2001 -- -- -- 50,000
2000 -- -- -- 1,100,000
1999 -- -- 1,000,000 sh. 2,350,000
22
In accordance with the rules of the SEC, the compensation described in the above
table, and that was paid to Mr. George, was done so entirely in stock and does
not include any medical payments, group life insurance or any other benefit that
could be received by the sole Executive Officer of the Company. Furthermore,
there has been no compensation awarded to, earned by, or paid to any other
person, acting as an employee, since the Company's acquisition of Omni Assets,
Inc., on October 26, 1999.
ITEM 8. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
TRANSACTIONS WITH MANAGEMENT AND OTHERS.
The Company has not been involved with or privy to any transactions with
any persons and/or business entities since the Company's acquisition of Omni
Assets, Inc., on October 26, 1999. The acquisition of Omni (Omni being defined
as a "non-operating public shell"), in essence, was by a privately owned
operating company, and for reasons of filing this Form 10, that transaction was
deemed as a capital purchase by a privately-held business. Since that purchase,
Inamco has been dormant with the exception of the limited amount of activity as
described in Item. 1 "BUSINESS" - "General development of business" above.
CERTAIN BUSINESS RELATIONSHIPS.
The Company's sole executive, Mr. Varges George, is currently the president
and sole shareholder of Inamco Services Corp. This management company owns and
operates two separate and distinct companies: Medicos Laboratories, Inc. and
Advanced Diagnostics, Inc., descriptions of both company's stated herein, under
Item 6. "DIRECTORS AND EXECUTIVE OFFICERS" - "Business Experience" of Mr. Varges
George.
Although the Company's sole executive officer and director is also the
owner of record, of Inamco Services Corp., Medicos Laboratories, and Advanced
Diagnostics, neither he nor any other entity has made payment, nor contributed
to the Company's gross revenues or assets in any way whatsoever since the
acquisition of Omni Assets, Inc. on October 26, 1999. As explained in previous
sections of this Form 10 report, net cash provided by loans from Mr. George was
approximately $9,226 during the year ended December 31, 2002, and a total of
$8,068 is owing to Mr. George, from the Company, that is incurring 7% interest
on an annual basis while the debt is outstanding. Net cash proceeds from loans
by Mr. George were $525 during the year ended December 31, 2001.
The Company's sole executive, Mr. George, is not a member of, or of counsel
to, a law firm, nor is he a partner to an investment banking firm, where such a
company would need a retainer in order to perform certain services to Inamco.
23
INDEBTEDNESS OF MANAGEMENT.
The sole executive of Inamco, Mr. Varges George, has not been indebted to
the Company in any way whatsoever.
TRANSACTIONS WITH PROMOTERS.
The Company has had no need to employ and/or invoke the services of a
promoter.
ITEM 9. LEGAL PROCEEDINGS
None either historically or presently.
ITEM 10. MARKET PRICE OF AND DIVIDENS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION.
Our common stock has traded on the Nasdaq pink-sheets under the symbol
"IICO". The following table sets forth, for the period indicated, the high and
low bid quotations for the common stock as reported by Nasdaq.
HIGH LOW
----- -----
- --------------------------------------------------------------------------------------
Quarter ended March 31, 2003
Second Quarter $ .01 $ .01
- --------------------------------------------------------------------------------------
First Quarter $ .01 $ .01
- --------------------------------------------------------------------------------------
Year ended December 31, 2002
- --------------------------------------------------------------------------------------
First Quarter $ .05 $ .01
- --------------------------------------------------------------------------------------
Second Quarter $ .01 $ .01
- --------------------------------------------------------------------------------------
Third Quarter $ .01 $ .01
- --------------------------------------------------------------------------------------
Fourth Quarter $ .01 $ .01
Year ended December 31, 2001
- --------------------------------------------------------------------------------------
First Quarter $ 1.15 $ .22
- --------------------------------------------------------------------------------------
Second Quarter $ .28 $ .05
- --------------------------------------------------------------------------------------
Third Quarter $ .08 $ .05
- --------------------------------------------------------------------------------------
Fourth Quarter $ .05 $ .05
- --------------------------------------------------------------------------------------
As of April 26, 2002 there were 94 registered stockholders of record of the
Company's common stock.
24
DIVIDENDS
The Company has never declared or paid any cash dividends on its capital
stock and does not anticipate paying any cash dividends in the foreseeable
future.
Securities authorized for issuance under equity compensation plans.
The Company has never declared or authorized the issuance of any common
stock for the purposes of a compensation plan, and does not anticipate on doing
so in the foreseeable future.
ITEM 11. RECENT SALES OF UNREGISTERED SECURITIES.
SECURITIES SOLD.
Since the merger of Omni Assets, Inc. on October 26, 1999, there has been
no sale of registered or unregistered securities, by the Company, for cash, to
any person(s) and/or entity. The following issuance of restricted shares of
common stock is the direct result of the Company entering into certain
contractual obligations, payment of which was made pursuant to "compensation"
obligations had between the parties; it should be noted, in instances where
securities are issued for consideration other than cash, the Securities and
Exchange Commission considers those instances sales.
ON OCTOBER 27, 1999, the president and majority shareholder, Mr. Varges
George, owned approximately Eighty percent (80.70%) of the Company after the
merger of Omni was consummated. It was his sole decision, to divide his
ownership in the Company via the following manner:
i) An employment contract was entered into between the Company and
himself, whereby his compensation would be One Million shares of
restricted common stock (copy of employment contract attached
hereto in other sections of this Form 10);
ii) Mr. George opted to have a total of 12,947,487 shares issued to
Inamco Services Corp., rather than to himself personally. As
explained in other sections of this Form 10, Mr. George is the
sole owner and director of Inamco Services, Corp.; and
iii) Mr. George opted to have a total of 8,326,403 shares issued to
Advanced Diagnostics, Inc., rather than to himself personally. As
explained in other sections of this Form 10, Mr. George is the
sole owner and director of Advanced Diagnostics, Inc.
On May 23, 2000, a total of 25,000 shares of restricted common stock were
issued to H. Neil Broder for legal services rendered. At that time, the value
for the services rendered equaled approximately $30,000 dollars and the party
agreed to accept restricted shares of common stock rather than cash; and
25
ON NOVEMBER 10, 2000, a total of 68,245 shares of restricted common stock
were issued to Calvin Moore as compensation regarding consultation on certain
Company submissions to the Securities and Exchange Commission and to the
Company's registered transfer agent. At that time, the value for the services
rendered equaled approximately $50,000 dollars and the party agreed to accept
restricted shares of common stock rather than cash.
As explained in other sections of this Form 10 report, for services
rendered, the consultation firm Royal Capital, received compensation in the form
of restricted common shares of stock. This firm obtained their shares for
rendering general corporate advisory services to the Company in connection with
the Company's efforts to expand its business operations, mergers, joint ventures
and acquisitions. They also assisted in providing guidance in selecting
appropriate resources for legal documents and the establishment of escrow
accounts. Any relationship with Royal Capital or its principals have been
terminated.
As of November 2000, the Company had paid out a total of 2,355,365
restricted common shares to Royal Capital, and/or their designees, as per the
parties' agreement(s). The Company claims no knowledge, as to why Royal decided
to issue a certain number of its restricted common shares to certain designees.
The Company only acted within the purview of its contractual obligation with
Royal. Royal was paid within three different time frames, the month of March
2000, the month of May 2000, and the month of November 2000. However, at the
time in which agreement(s) were signed between the parties, the value for the
services to be rendered by Royal to the Company equaled approximately $750,000
dollars and Royal agreed to accept restricted shares of common stock rather than
cash. A list of Royal's designees is as follows:
ON MARCH 24, 2000, a total of 10,000 shares of restricted common stock were
issued to Peter Bonafide via the request of Royal Capital;
ON MARCH 29, 2000, a total of 10,000 shares of restricted common stock were
issued to Brian Amery via the request of Royal Capital;
ON MARCH 29, 2000, a total of 75,000 shares of restricted common stock were
issued to Henry Book via the request of Royal Capital;
ON MARCH 29, 2000, a total of 15,000 shares of restricted common stock were
issued to Bruce Deichl via the request of Royal Capital;
ON MARCH 29, 2000, a total of 25,000 shares of restricted common stock were
issued to Rick Deichl via the request of Royal Capital;
ON MARCH 29, 2000, a total of 600,000 shares of restricted common stock
were issued to Leslie Gonda & Susan Gonda Family Trust via the request of Royal
Capital;
ON MARCH 29, 2000, a total of 150,000 shares of restricted common stock
were issued to Carl Henn via the request of Royal Capital;
26
ON MARCH 29, 2000, a total of 75,000 shares of restricted common stock were
issued to Robert Klein via the request of Royal Capital;
ON MARCH 29, 2000, a total of 25,000 shares of restricted common stock were
issued to Frank Milnar via the request of Royal Capital;
ON MARCH 29, 2000, a total of 10,000 shares of restricted common stock were
issued to Larry Ross via the request of Royal Capital;
ON MARCH 29, 2000, a total of 25,000 shares of restricted common stock were
issued to William Scanlan via the request of Royal Capital;
ON MARCH 29, 2000, a total of 125,000 shares of restricted common stock
were issued to Anthony Schweiger via the request of Royal Capital;
ON MARCH 29, 2000, a total of 25,000 shares of restricted common stock were
issued to Byrom Zuckerman via the request of Royal Capital;
ON MAY 17, 2000, a total of 500,000 shares of restricted common stock were
issued to Bruce Deichl via the request of Royal Capital;
ON MAY 17, 2000, a total of 500,000 shares of restricted common stock were
issued to Jerry Swon via the request of Royal Capital;
ON NOVEMBER 10, 2000, a total of 25,000 shares of restricted common stock
were issued to John Goldstein via the request of Royal Capital; and
ON NOVEMBER 10, 2000, a total of 160,365 shares of restricted common stock
were issued to Royal Capital.
EXEMPTION FROM REGISTRATION CLAIMED.
These shares of our common stock were issued to these shareholders in
reliance on an exemption from registration under Section 4(2) of the Securities
Act of 1933. The shares of our common stock qualified for exemption under
Section 4(2) of the Securities Act of 1933 since the issuance of those shares
did not involve a "public offering" as defined in Section 4(2) of the Act, due
to the insubstantial number of persons involved in the deal, the amount of
shares issued, manner of the issuance and the actual number of shares issued. We
did not undertake an offering in which a high number of shares were issued to a
high number of investors. In addition, these shareholders had the necessary
investment intent as required by Section 4(2) since they agreed to and received
a share certificate bearing a legend stating that such shares are restricted
pursuant to Rule 144 of the 1933 Securities Act. These restrictions ensure that
these shares would not be immediately redistributed into the market and
therefore not be part of a "public offering." Based on an analysis of the above
factors, we have met the
27
requirements to qualify for exemption under Section 4(2) of the Securities Act
of 1933 for this transaction.
TERMS OF CONVERSION OR EXERCISE.
All restricted shares of common stock that the Company has issued over the
past three years for services rendered, are restricted and exempt from
registration and have not been registered under the Securities Act of 1933, as
amended. The shares may not be offered, sold, or otherwise transferred in the
absence of an effective registration statement or an exemption from the
registration requirements of said act, as to which a prior opinion of counsel
may be required by the issuer or the transfer agent.
USE OF PROCEEDS.
Since the merger of Omni Assets, Inc. by the Company on October 26, 1999,
there has been no sale of registered or unregistered stock for cash by the
Company to any person(s) or entity.
ITEM 12. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
Our authorized capital stock consists of 50,000,000 shares of Common Stock,
par value $0.00001 per share (the "Common Stock"). As of the date of this
Form-10, there were issued and outstanding 27,600,000 shares of Common Stock
The holders of Common Stock are entitled to one vote for each share on all
matters submitted to a vote of stockholders, they do not have cumulative voting
rights. Accordingly, the holders of a majority of the stock entitled to vote in
any election of directors may elect all of the directors standing for election.
Subject to the preferences that may be applicable to any then outstanding
Preferred Stock, the holders of Common Stock will be entitled to receive such
dividends, if any, as may be declared by the Board from time to time out of
legally available funds. Upon the liquidation, dissolution, or winding up of the
Company, the holders of Common Stock will be entitled to share ratably in all
assets of the Company that are legally available for distribution, after payment
of all debts and other liabilities and subject to the prior rights of holders of
any preferred stock then outstanding. The holders of Common Stock have no
preemptive, subscription, redemption, or conversion rights.
TRANSFER AGENT AND REGISTRAR. The transfer agent and registrar for the Common
Stock is the InterWest Stock Transfer & Trust Company, Salt Lake City, Utah.
ITEM 13. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-laws provide that directors and officers shall be, and at the
discretion of the Board of Directors, non-officer employees may be, indemnified
by the Company to the
28
fullest extent authorized by Delaware law, as it now exists or may in the future
be amended, against all expenses and liabilities reasonably incurred in
connection with service for or on behalf of the company and further permits the
advancing of expenses incurred in defending claims. This provision does not
alter a director's liability under the Federal securities laws. In addition,
this provision does not affect the availability of equitable remedies, such as
an injunction or rescission, for breach of fiduciary duty.
ITEM 14. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The following Financial Statements and Supplementary Data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" included elsewhere in this Form 10.
INAMCO INTERNATIONAL, CORP.
INDEX TO FINANCIAL STATEMENTS
PAGE
-----
Consolidated Balance Sheet - Unaudited dated March 31, 2003 30
-----------------------------------------------------------------------------------
Consolidated Statements of Operation - Unaudited dated March 31, 2003 31
-----------------------------------------------------------------------------------
Consolidated Cash Flow Statements - Unaudited dated March 31, 2003 31
-----------------------------------------------------------------------------------
Notes to Consolidated Unaudited Financial Statements 32
-----------------------------------------------------------------------------------
Report of Kahn Boyd Levychin, Independent Auditors 34
-----------------------------------------------------------------------------------
Audited Balance Sheets 35
-----------------------------------------------------------------------------------
Audited Statements of Operations 36
-----------------------------------------------------------------------------------
Audited Statements of Cash Flows 37
-----------------------------------------------------------------------------------
Audited Statements of Stockholders' Deficiency 38
-----------------------------------------------------------------------------------
Notes to Audited Financial Statements 39
-----------------------------------------------------------------------------------
Supplementary Data 41
29
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INAMCO INTERNATIONAL, CORP.
CONDENSED BALANCE SHEETS
MARCH 31, DECEMBER 31,
2003 2002
------------------ -------------------
(UNAUDITED) (NOTE)
- --------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------
Current assets:
Cash $ 182 $ 927
================== ==================
Total Current Assets 182 927
- -------------------------------------------------------------------------------------------------
Other Assets $ 213 $ 213
================== ==================
- -------------------------------------------------------------------------------------------------
Total Assets $ 395 $ 1,140
- -------------------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS'
DEFICIENCY
- -------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable and accrued expenses $ 5,690 $ 5,615
------------------ ------------------
- -------------------------------------------------------------------------------------------------
Total Current liabilities 5,690 5,615
Due to Officers/Shareholders 8,868 8,069
------------------ ------------------
Total Liabilities 14,558 13,684
- -------------------------------------------------------------------------------------------------
Stockholders' Deficiency:
Common stock, $0.00001 par value;
30
MARCH 31, DECEMBER 31,
2003 2002
------------------ -------------------
(UNAUDITED) (NOTE)
- --------------------------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------------------------
Authorized: 50,000,000 shares
Issued and Outstanding: 27,600,000 shares 276 276
Additional paid-in capital 22,804 22,804
Deficit Accumulated in the Development Stage (37,243) (35,624)
------------------ ---------------
Total Stockholders' Deficiency (14,163) (12,544)
================== ===============
Total liabilities and stockholders' equity $ 395 $ 1,140
================= ================
Note: The balance sheet at December 31, 2002 has been derived from the
audited financial statements at that date but does not include
all of the information and footnotes required by accounting
principles generally accepted in the Unites States for complete
financial statements.
See accompanying notes to condensed financial statements.
INAMCO INTERNATIONAL, CORP.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended
March 31,
--------------------------------------
2003 2003
------------------ ------------------
- ---------------------------------------------------------------------------------------------------
Revenues
- ---------------------------------------------------------------------------------------------------
Total revenues $ -- $ --
- ---------------------------------------------------------------------------------------------------
Cost and Expenses
- ---------------------------------------------------------------------------------------------------
Bank Charges and Miscellaneous 45 --
Professional and Consulting Fees 1,575 --
----------------- -----------------
Total operating expenses --
- ---------------------------------------------------------------------------------------------------
Net Loss $ (1,620) $ --
- ---------------------------------------------------------------------------------------------------
----------------- -----------------
Net (loss) per share $ (0.00) $ (0.00)
- ----------------------------------------------------------------------------------------------------
Weighted Average Number of Shares Outstanding 27,600,000 27,600,000
================== ==================
CONDENSED CASH FLOW STATEMENTS (UNAUDITED)
THREE MONTHS ENDED MARCH 31,
-------------------------------------
2002 2003
---------------- ------------------
- ---------------------------------------------------------------------------------------------------
Cash Flows from Operating Activities
Net income (loss) $ (1,620) $ --
Adjustments to reconcile net loss to net cash used
in operating activities: --
Change in accrued expenses 75 --
----------------- ---------------
- ---------------------------------------------------------------------------------------------------
Net cash used for operating activities (1,545) --
Cash Flows from Investing Activities
- ---------------------------------------------------------------------------------------------------
31
THREE MONTHS ENDED MARCH 31,
-------------------------------------
2002 2003
---------------- ------------------
- ---------------------------------------------------------------------------------------------------
Change in other assets -- --
Net cash used for investing activities -- --
- ---------------------------------------------------------------------------------------------------
Cash Flows from Financing Activities
Loans from officer/shareholder, net of repayments 800 --
Restricted common stock issued in payment of
expenses -- --
- ---------------------------------------------------------------------------------------------------
----------------- ------------------
Net cash provided by financing activities 800 --
- ---------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH (745) --
Cash at beginning of period 927 38
----------------- ------------------
Cash at end of period $ 182 $ 38
- ---------------------------------------------------------------------------------------------------
NOTES TO CONDENSED UNAUDITED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments necessary for a fair statement of (a) results of
operations for the three month periods ended March 31, 2003 and 2002 (b) the
financial position at March 31, 2003, and (c) the statements of cash flows for
the three month period ended March 31, 2003 and 2002 have been made. The results
of operations for the three months ended March 31, 2003 are not necessarily
indicative of the results to be expected for the full year.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for financial statements. For further
information, refer to the audited financial statements and notes thereto for the
year ended December 31, 2002 included in the Company's Form 10-KSB filed with
the Securities and Exchange Commission on April 15, 2003.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect amounts reported in the condensed financial
statements and related footnotes. Changes in the estimates may affect amounts
reported in future periods.
The Company's financial statements have been presented on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company has no significant assets, no
revenues and has had losses since inception. The Company can only become a
viable going concern if it obtains additional capital and acquires a viable
operating company.
2. NET LOSS PER SHARE
In accordance with SFAS No. 128, Earnings Per Share basic and diluted net loss
per share are computed by dividing the net loss for the period by the weighted
average number of common shares outstanding during the period.
32
3. COMPREHENSIVE
Loss Comprehensive loss for all periods presented is the same as net loss.
4. DEFERRED STOCK COMPENSATION
For the three months ended March 31, 2003 and 2002, in connection with advisory
and consultation to second party firms, the Company recorded no deferred stock
compensation. 5. Non-cash Preferred Stock Charge For the three months ended
March 31, 2003 and 2002, the Company recorded no sale of any forms of Preferred
Stock.
6. CAPITAL PURCHASE OF COMMON STOCK BY A PRIVATELY HELD BUSINESS
On October 26, 1999, the Company, which was previously known as Omni
Assets, Inc.(a "non-operating" public shell), sold 22,273,890 of its common
shares of stock to Inamco International Corp. (a privately held corporation).
The acquisition was deemed to be a capital purchase, by privately held
corporations, of the majority amount of common shares owned by Omni Assets, Inc.
In January 2000, Omni then purchased the name of "Inamco International Corp.",
and in February 2000, the Company changed it name from "Omni Assets, Inc." to
"Inamco International Corp.". The listing symbol was changed from "OMNA" to
"IICO" . The Company currently has a total number of shares outstanding equal to
Twenty Seven Million Six Hundred Thousand (27,600,000).
33
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
BOARD OF DIRECTORS AND STOCKHOLDERS
INAMCO INTERNATIONAL CORP.
We have audited the accompanying balance sheets of INAMCO INTERNATIONAL CORP. (A
Development Stage Company) as of December 31, 2002, 2001 and 2000, and the
related statements of operations, stockholders' equity, and cash flows for the
years then ended and from the inception date of January 17, 1993 to December 31,
2002. 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 audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits 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 estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of INAMCO INTERNATIONAL CORP., as
of December 31, 2002, 2001 and 2000, and the results of its operations and its
cash flows for the years then ended and from the inception date of January 17,
1993 to December 31, 2002 in conformity with accounting principles generally
accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company had a loss from operations and has a working
capital deficiency, raising substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in Note A. The financial statements do not include any adjustments relating to
the recoverability and classification of asset carrying amounts or the amounts
and classifications of liabilities that might result should the Company be
unable to continue as a going concern.
KAHN BOYD LEVYCHIN, LLP
New York, New York
March 31, 2003
34
INAMCO INTERNATIONAL CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
December 31, 2001, 2002 and 2000
December 31,
------------
2002 2001 2000
----- ----- ----
ASSETS
Current Assets
Cash $ 927 $ 38 $ 343
-------- -------- --------
Total Current Assets 927 38 343
Other Assets 213 213 213
-------- -------- --------
Total Assets $ 1,140 $ 251 $ 556
======== ======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses $ 5,615 $ 1,668 $ 1,148
-------- -------- --------
Total Current Liabilities 5,615 1,668 1,148
Due to Officer/Shareholder 8,069 1,900 2,200
-------- -------- --------
Total Liabilities 13,684 3,568 3,348
STOCKHOLDERS' DEFICIENCY
Common Stock, $.00001 par value
Authorized: 50,000,000 shares
Issued and Outstanding: 27,600,000 276 276 276
Additional paid-in capital 22,804 22,804 22,804
Deficit Accumulated in the Development Stage (35,624) (26,397) (25,872)
-------- -------- --------
Total Shareholders' Deficiency (12,544) (3,317) (2,792)
-------- -------- --------
$ 1,140 $ 251 $ 556
======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
35
INAMCO INTERNATIONAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Years Ended December 31, 2002, 2001 and 2000
Inception
January 17, 1993 to Year Ended December 31,
-----------------------
December 31,2002 2002 2001 2000
---------------- ---- ---- ----
Net Sales $ - $ - $ - $ -
Cost of Goods Sold - - - -
---------------- ------------ ------------ ------------
Gross Profit - - - -
Costs and Expenses
Bank Charges and Miscellaneous 2,967 1,226 525 1,215
Professional and Consulting Fees 32,657 8,000 - 11,157
---------------- ------------ ------------ ------------
35,624 9,226 525 12,372
---------------- ------------ ------------ ------------
Net Loss $ (35,624) $ (9,226) $ (525) $ (12,372)
================ ============ ============ ============
Weighted Avereage Number of
Shares Outstanding 9,323,472 27,600,000 27,600,000 25,871,020
---------------- ------------ ------------ ------------
Loss Per Share (A) $ (0.00) $ (0.00) $ (0.00) $ (0.00)
================ ============ ============ ============
(A) Loss per share less that $.01
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
36
INAMCO INTERNATIONAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
December 31, 2001 and 2000
Inception
January 17, 1993 to Year Ended December 31,
-----------------------
December 31,2002 2002 2001 2000
------------------ ---- ---- ----
Cash flows from operating activities:
Net loss $ (35,624) $ (9,226) $ (525) $(12,372)
Adjustments to reconcile net loss
to net cash used in operating activities
Change in accrued expenses 5,615 3,947 520 1,148
------------------ -------- -------- --------
Net cash used for operating activities (30,009) (5,279) (5) (11,224)
------------------ -------- -------- --------
Cash flows from investing activities:
Change in other assets (213) - - (213)
------------------ -------- -------- --------
Net cash used for investing activities (213) - - (213)
------------------ -------- -------- --------
Cash flows from financing activities:
Loans from officer/shareholder, net of
repayments 8,068 6,168 (300) 2,200
Restricted common stock issued in payment
of expenses 22,868 - - 9,367
Issuance of restricted common stock in
Connection with merger agreement 213 - - 213
------------------ -------- -------- --------
Net cash provided by financing activities 31,149 6,168 (300) 11,780
------------------ -------- -------- --------
NET INCREASE (DECREASE) IN CASH 927 889 (305) 343
Cash at beginning of period - 38 343 -
------------------ -------- -------- --------
Cash at end of period $ 927 $ 927 $ 38 $ 343
================== ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
37
INAMCO INTERNATIONAL CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
Inception January 17, 1993 to December 31, 2002
Deficit
Accumulated
Additional in the
Common Stock $.00001 Par Value Paid-In Development
Shares Amount Capital Stage Total
---------- ---------- --------- ---------- ----------
Issuance of restricted common stock
for services 437,500 $ 4 $ 1,996 $ - $ 2,000
Net Loss for the year ended
December 31, 1993 - - - (2,000) (2,000)
---------- ---------- --------- ---------- ----------
Balance at December 31, 1993 437,500 4 1,996 (2,000) -
Issuance of restricted common stock
for services 1,850,000 19 11,481 11,500 -
Net Loss for the year ended
December 31, 1997 - - - (11,500) (11,500)
---------- ---------- --------- ---------- ----------
Balance at December 31, 1997 2,287,500 23 13,477 (13,500) -
Net Loss for the year ended
December 31, 1998 - - - - -
---------- ---------- --------- ---------- ----------
Balance at December 31, 1998 2,287,500 23 13,477 (13,500) -
Net Loss for the year ended
December 31, 1999 - - - - -
---------- ---------- --------- ---------- ----------
Balance at December 31, 1999 2,287,500 23 13,477 (13,500) -
Net Loss for the year ended
December 31, 2000 - - - (12,372) (12,372)
Issuance of restricted common stock
for services 2,600,000 26 9,327 - 9,353
Issuance of restricted common
stock in connection with agreement 22,712,500 227 - - 227
---------- ---------- --------- ---------- ----------
Balance at December 31, 2000 27,600,000 276 22,804 (25,872) (2,792)
Net Loss for the year ended
December 31, 2001 - - - (525) (525)
---------- ---------- --------- ---------- ----------
Balance at December 31, 2001 27,600,000 276 22,804 (26,397) (3,317)
Net Loss for the year ended
December 31, 2002 - - - (9,227) (9,227)
---------- ---------- --------- ---------- ----------
Balance at December 31, 2002 27,600,000 $ 276 $ 22,804 $ (35,624) $ (12,544)
========== ========== ========= ========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
38
INAMCO INTERNATIONAL CORP.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
Years Ended December 31, 2002, 2001 and 2000
NOTE A - ORGANIZATION AND BASIS OF PREPARATION
Inamco International Corp. (the "Company") was incorporated in Delaware on
January 17, 1983 originally as Omni Assets, Inc. ("Omni"). On October 26, 1999,
Inamco International Corp. ("Inamco"), a Delaware corporation, merged with Omni
in a transaction solely for stock. Pursuant to the merger agreement, 1,000
shares of the original Inamco were exchanged for 22,712,500 shares of Omni,
Inamco terminated its corporate existence and, in February 2000, the name of
Omni was changed to Inamco International Corp.
The Company's financial statements have been presented on a going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. The Company has no significant assets, no
revenues and has had losses since inception. The Company can only become a
viable going concern if it obtains additional capital and acquires a viable
operating company.
NOTE B - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying financial statements follows.
1. BASIS OF ACCOUNTING
Financial statements are prepared on the accrual basis of accounting.
2. USE OF ESTIMATES
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities at the date
of the financial statements and revenues and expenses during the reporting
period. Actual results could differ from those estimates.
3. CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents.
4. INCOME TAXES
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards No.109, Accounting for Income Taxes. This
statement requires, among other things, an asset and liability approach for
financial accounting and reporting of deferred income taxes. In addition, the
deferred tax liabilities and assets are required to be adjusted for the effect
of any future changes in the tax law or rates. Deferred income taxes arise from
temporary differences resulting in the basis of assets and liabilities for
financial reporting
39
and income tax purposes. A valuation allowance is provided if the Company is
uncertain as to the realization of deferred tax assets.
5. LOSS PER SHARE
Statement of Financial Accounting Standards No. 128 (SFAS No. 128), Earnings per
Share, specifies the computation, presentation and disclosure requirements for
earnings per share for entities with publicly held common stock or potential
common stock.
Net loss per common share - basic and diluted is determined by dividing the net
loss by the weighted average number of shares of common stock outstanding.
6. STOCK-BASED EMPLOYEE COMPENSATION
Stock-based employee compensation is accounted for under the intrinsic value
based method as prescribed by Accounting Principles Board (APB) Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations as
clarified by Financial Interpretation No. 44 (FIN 44), Accounting for Certain
Transactions Involving Stock Compensation. These notes to the financial
statements do not include the pro forma disclosures required by Statement of
Financial Accounting Standards No. 123 (SFAS No. 123), Accounting for
Stock-Based Compensation, because the stock awarded was fully vested at the time
of issuance and the fair value was equal to the intrinsic value.
NOTE C - DEVELOPMENT STAGE COMPANY
The Company is in the development stage as defined in Financial Accounting
Standards Board Statement No. 7. It has not commenced full scale operations and
has insignificant assets and liabilities. Since inception, the Company did not
have any revenues or earnings. The future success of the Company is dependent on
obtaining a viable business opportunity and /or merger candidate. The Company is
seeking a merger candidate who manufactures and distributes certain generic
over-the-counter drugs. Management is seeking additional investment capital to
support its entrance into a new business opportunity or merger.
NOTE D - RELATED PARTY TRANSACTIONS
1. DUE TO OFFICER/SHAREHOLDER
Since the merger in 1999, Varges George, President and majority shareholder,
loaned the Company $8,068 ($2,800 in 2000 and $6,168 in 2002) for payment of
operating expenses. The Company has paid back $900 ($600 in 2000 and $300 in
2001) leaving a balance of $8,068 at December 31, 2002.
NOTE E - INCOME TAXES
Temporary differences and carryforwards give rise to deferred tax assets and
liabilities. The principal components of the deferred tax assets relate to net
operating loss carryforwards. At December 31, 2002, the Federal net operating
loss carryforwards were approximately $36,000. The net operating loss
carryforwards expire at various dates through 2022, and because of the
uncertainty in the Company's ability to utilize the net operating loss
carryforwards, a full valuation allowance was provided at December 31, 2002,
2001 and 2000. Corporate income tax returns have not been filed since 1999. Item
40
Supplementary Data
Years Ended December 31,
2002 2001
---------------- ----------------
STATEMENT OF OPERATIONS DATA:
Net Sales $ -- $ --
Cost of Goods Sold -- --
----------------- ----------------
Gross profit -- --
Cost and Expenses
Bank Charges and Miscellaneous $ 1,226 $ 525
Professional and Consulting Fees 8,000 --
---------------- ----------------
9,226 525
----------------- ----------------
Net income (loss) (9,226) (525)
================= ================
Weighted average shares outstanding:
Basic 27,600,000 27,600,000
================ ================
Loss Per Share* $ 0.00 $ 0.00
================ ================
41
ITEM 15. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
During the acquisition of Omni Assets by the Company, Sobel & Co., LLC
acted as the Omni Asset's certified public accounts. They provided, to the
Company, at that time, audited balance sheets, related statements of operations,
stockholders' deficiency and cash flow statements for the year ended December
31, 1999. Since that time, the Company has had no assets, liabilities, operating
activities, or revenue and has no need to employ the services of an accountant.
Prior reports from the auditors did contain an opinion as it relates to a
"Development Stage" company and its ability to operate being dependent upon
obtaining a viable and successful business opportunity. The disclaimer of the
opinion was not qualified or modified as to uncertainty, audit scope or
accounting principles except for a modification that describes substantial doubt
surrounding the Company's ability to continue as a going concern.
The audited financial statements that accompany this Form 10, as amended, were
performed by the Company's new auditors, Kahn Boyd Levychin & Company, after
Sobel & Co. resigned in October of 2002, pursuant to Regulation S-K. A letter
that addresses Sobel & Co. resignation is attached hereto.
ITEM 16. FINANCIAL STATEMENTS AND EXHIBITS.
Financial Statement Schedules have been omitted because the information
has been included in the notes to the Financial Statements included in this
Form-10, as amended.
EXHIBITS:
EXHIBIT NO. DESCRIPTION
- ----------- ----------------------------------------------------------------------------------------
1 Agreement and Plan of Merger by and between Omni Assets, Inc. and Inamco International,
Corp. - dated October 26, 1999*
2 Employment Agreement of Company's President - dated October 27, 1999*
3 Consultation Agreement between Royal Capital Corp. and the Company - dated February 8, 2000*
* Previously filed.
42
SIGNATURES
Pursuant to the requirements of Section 12 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.
Inamco International Corp.
A Delaware Corporation
/s/ VARGES GEORGE
- -------------------------------
Varges George
President
43