SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): November 15, 2004
THE MONEY TREE LENDING GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 65-0709376
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NO.) (IRS EMPLOYEE
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
3400 Tamiami Trail
Suite 203
Port Charlotte, Florida 33952
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(941) 764-6767
(ISSUER TELEPHONE NUMBER)
3380 Tamiami Trail
Suite B-2
Port Charlotte, Fl 33952
(FORMER ADDRESS)
============================================================================
FORWARD LOOKING STATEMENTS
This Form 8-K and other reports filed by Registrant from time to time with
the Securities and Exchange Commission (collectively the "Filings") contain or
may contain forward looking statements and information that are based upon
beliefs of, and information currently available to, Registrant's management as
well as estimates and assumptions made by Registrant's management. When used in
the filings the words "anticipate", "believe", "estimate", "expect", "future",
"intend", "plan" or the negative of these terms and similar expressions as they
relate to Registrant or Registrant's management identify forward looking
statements. Such statements reflect the current view of Registrant with respect
to future events and are subject to risks, uncertainties, assumptions and other
factors relating to Registrant's industry, Registrant's operations and results
of operations and any businesses that may be acquired by Registrant. Should one
or more of these risks or uncertainties materialize, or should the underlying
assumptions prove incorrect, actual results may differ significantly from those
anticipated, believed, estimated, expected, intended or planned.
Although Registrant believes that the expectations reflected in the forward
looking statements are reasonable, Registrant cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, Registrant
does not intend to update any of the forward-looking statements to conform these
statements to actual results.
INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On November 15, 2004 (the "Effective Date"), pursuant to a Stock Purchase
Agreement and Share Exchange (the "Agreement") between The Money Tree Lending
Group, Inc. (TMTLG), a Delaware corporation, and The Money Tree Lending Group
Inc. (MONEY TREE), a Florida Corporation, and all of the shareholders of MONEY
TREE, TMTLG acquired all of the shares of MONEY TREE from the MONEY TREE
shareholders in consideration for the issuance of a total of 25,100,000 shares
of common stock, and 5,000,000 shares of preferred stock of TMTLG to the MONEY
TREE shareholders. Pursuant to the Agreement, MONEY TREE became our wholly owned
subsidiary. The acquisition was approved by the unanimous consent of our Board
of Directors on November 15, 2004.
ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
Pursuant to the Stock Purchase Agreement, between TMTLG and MONEY TREE, TMTLG
acquired one hundred percent (100%) of the issued and outstanding shares of
common stock of MONEY TREE in exchange for a total of 25,100,000 shares of our
common stock and 5,000,000 shares of our preferred stock which are restricted in
accordance with Rule 144 of the 1933 Securities Act. Pursuant to the Agreement,
MONEY TREE became our wholly owned subsidiary.
Our primary products are mortgage loans secured by real estate and annuities.
The products can be offered across the United States, but at this time, our main
focus is on the Florida market. Demand for home loan financing has grown
substantially in recent years. We believe that the total United States market
for our industry exceeds $560 billion annually in alternative mortgage lending.
Of this market, we believe that our target market, consumers who obtain home
loan financing from the Internet, comprises more than $240 billion. We believe
that the principal factor driving growth in our industry is the dream of home
ownership.
We acquire mortgage loans and other financial products from third-party sources
on a project-by-project basis. This approach gives us substantial flexibility in
terms of production volume and delivery time, significantly reduces our fixed
production overhead, and largely eliminates the risk to us of cost overruns in
production.
Similarly, we reduce our fixed processing costs by duplicating the functions for
our products. Our management team has extensive experience in the origination,
processing, closing, funding and delivery of mortgage loans in the secondary
market and other financial service products. Philip Sampiere, our President and
Chief Executive Officer, has extensive knowledge of our industry and has
successfully founded and developed other profitable businesses. Other members of
our management team have broad expertise in software and technology, sales and
marketing, finance, real estate and mortgage law. They have all contributed to
our record of aggressive growth in our core business and of acquiring and
integrating companies in related businesses.
We plan to develop strategic alliances and joint ventures with businesses
outside of the financial industry to broaden our distribution channels, such as
leading media companies that can distribute our products for use on popular and
newly developing media formats, including revenue sharing with cable and
satellite television operators and Internet service providers. We expect these
initiatives to widen the scope of our distribution network, enabling us to reach
new customers while supplying our partners and licensees with content.
To finance future acquisitions, we expect to use a combination of cash flow
generated by our operating activities and, in some instances, our common stock.
MONEY TREE has agreed to distribute the 100,000 shares of TMTLG common stock,
acquired pursuant to the Stock Purchase Agreement between MONEY TREE and Scott
Raleigh, in the following manner:
Philip A. Sampiere, Jr.- 50,000 common shares
Lisa Warram - 50,000 common shares
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
On November 15, 2004, pursuant to the Agreement, we issued 25,100,000 shares of
our common stock and 5,000,000 shares of our preferred stock to the MONEY TREE
in exchange for all of the issued and outstanding shares of the MONEY TREE.
These shares were issued in reliance on an exemption from registration under
Section 4(2) of the Securities Act of 1933.
These shares of our common stock qualified for exemption under Section 4(2) of
the Securities Act of 1933 since the issuance of shares by us did not involve a
public offering. The offering was not a "public offering" as defined in Section
4(2) due to the insubstantial number of persons involved in the deal, the size
of the offering, and the manner of the offering. We did not undertake an
offering in which we sold a high number of shares to a high number of investors.
In addition, the MONEY TREE shareholders had the necessary investment intent as
required by Section 4(2) since they agreed to and received share certificates
bearing a legend stating that such shares are restricted pursuant to Rule 144 of
the 1933 Securities Act. This restriction ensures 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
requirements to qualify for exemption under Section 4(2) of the Securities Act
of 1933 for this transaction.
Item 5.01 CHANGES IN CONTROL OF REGISTRANT
On November 15, 2004 (the "Effective Date"), pursuant to a Stock Purchase
Agreement between TMTLG and MONEY TREE, and all of the shareholders of MONEY
TREE, TMTLG acquired all of the shares of MONEY TREE from the MONEY TREE
shareholders in consideration for the issuance of a total of 25,100,000 shares
of common stock, and 5,000,000 shares of preferred stock of TMTLG to the MONEY
TREE shareholders. Pursuant to the Agreement, MONEY TREE became our wholly owned
subsidiary. The acquisition was approved by the unanimous consent of our Board
of Directors on November 15, 2004.
The 25,100,000 common shares and the 5,000,000 preferred shares were issued to
the MONEY TREE shareholders in the following manner:
Philip A. Sampiere, Jr.- 12,550,000 common shares
2,500,000 preferred shares
Lisa Warram- 12,550,000 common shares
2,500,000 preferred shares
ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS.
Phillip Sampiere was appointed as the Company's Chief Executive Officer, Chief
Financial Officer, President, and Secretary as of November 5, 2004. He resigned
as Vice President, Secretary and Treasurer on November 15, 2004. Mr. Sampiere is
a 1988 graduate from Port Charlotte High School. He began his career with The
Money Tree Lending Group, Inc. as the President and State qualifying principle
broker since 1996, overseeing the production of all day to day operations,
advertising, sales and media throughout the state. He is now overseeing policy,
management and strategy in all areas of the Company. He will be restructuring
operations to insure national expansion and has been very influential in forming
alliances with a wide-range of partners in order to secure the Company's
position in the future
Lisa Warram was appointed the Company's Vice President, Secretary, and Treasurer
on November 15, 2004. Lisa is a 1983 graduate from Charlotte High School. Her
vast knowledge and experience of the real estate settlement process makes her an
asset to the Company. Mrs. Warram is Vice President and co-founder of the
Company and is in charge of closing and secondary shipping operations. Mrs.
Warram has developed outstanding relationships and partnerships amongst
individuals and companies in the real estate industry.
ITEM 9.01 FINANCIAL STATEMENT AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Financial Statements of MONEY TREE are included after the signature page.
(b) Pro Forma Financial Information.
None.
(c) Exhibits.
Stock Purchase Agreement and Share Exchange dated November 15, 2004, by and
among THE MONEY TREE LENDING GROUP, INC., and The MONEY TREE LENDING GROUP,
INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE MONEY TREE LENDING GROUP, Inc.
By: /s/ Philip A. Sampiere, Jr.
--------------------------------
Philip A. Sampiere, Jr.
PRESIDENT
Dated: November 23, 2004
The Money Tree Lending Group, Inc.
Financial Statements
For the Quarter and Two Quarters Ended June 30, 2004
McClusky, Gaines, Gill, Daughtrey & Horner
Certified Public Accountants
PO Box 510308
Punta Gorda, FL 33951
July 28, 2004
To the Board of Directors
The Money Tree Lending Group, Inc.
Port Charlotte, Florida
We have compiled the accompanying statement of assets, liabilities and
equity-income tax basis of The Money Tree Lending Group, Inc. (a Corporation) as
of June 30, 2004, and the related statement of revenues, expenses and retained
earnings-income tax basis for the quarter and two quarters then ended, in
accordance with Statements on Standards for Accounting and Review Services
issued by the American Institute of Certified Public Accountants. The financial
statements have been prepared on the accounting basis used by the Company for
income tax purposes, which is a comprehensive basis of accounting other than
generally accepted accounting principles.
A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements and, accordingly, do not express
an opinion or any other form of assurance on them.
Management has elected to omit substantially all of the disclosures and the
statement of cash flows ordinarily included in financial statements. If the
omitted disclosures and statement of cash flows were included in the financial
statements, they might influence the user's conclusions about the Company's
assets, liabilities, revenues, expenses, retained earnings and cash flows.
Accordingly, these financial statements are not designed for those who are not
informed about such matters.
/s/ McClusky, Gaines, Gill, Daughtrey & Horner
McClusky, Gaines, Gill, Daughtrey & Horner
The Money Tree Lending Group, Inc.
Statement of Assets, Liabilities
and Equity-Income Tax Basis
As of June 30, 2004
ASSETS
CURRENT ASSETS
Cash $ 331,558.98
Accounts Receivable-Employees 1,601.78
Prepaid Rent 1,177.00
---------------------
Total Current Assets
334,337.76
---------------------
PROPERTY AND EQUIPMENT
Furniture and Fixtures 16,681.07
Office Equipment 24,052.12
Less: Accumulated Depreciation (40,151.60)
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Net Property and Equipment 581.59
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OTHER ASSETS
Organizational Expense 464.90
Accumulated Amortization (464.90)
Rent Deposit 2,677.98
Utility Deposit 565.00
Copier Key Deposit, Fort Myers 50.00
Equipment Lease Deposit 265.92
Advance to Shareholders 42,492.10
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Total Other Assets 46,051.00
---------------------
TOTAL ASSETS $ 380,970.35
=====================
See Accountants' Report
The Money Tree Lending Group, Inc.
Statement of Assets, Liabilities
and Equity-Income Tax Basis
As of June 30, 2004
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 2,547.40
Escrow Funds Held 105.00
Federal Income Tax Payable 627.00
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Total Current Liabilities 3,279.40
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LONG-TERM LIABILITIES
Long-Term Notes Payable 320,356.72
Stockholders Loan 3,084.04
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Total Long-Term Liabilities 323,440.76
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Total Liabilities 326,720.16
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STOCKHOLDERS' EQUITY
Common Stock $.0001 Par Value,
100,000,000 Shares Authorized,
25,000,000 Shares Issued and Outstanding 2,500.00
Preferred Stock $.0001 Par Value,
10,000,000 Shares Authorized,
5,000,000 Shares Issued and Outstanding 500.00
Paid in Capital 47,690.00
Retained Earnings (Deficit) 3,560.19
---------------------
Total Stockholders' Equity 54,250.19
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 380,970.35
---------------------
See Accountants' Report
The Money Tree Lending Group, Inc.
Statement of Revenues, Expenses
and Retained Earnings-Income Tax Basis
For the Quarter and Two Quarters Ended June 30, 2004
Current Quarter % Year to Date %
------------------- --------- ------------------- ----------
REVENUES
Sales $ 100,155.31 99.88 $ 182,432.55 100.18
Interest Income 218.78 0.22 218.78 0.12
(0.30)
Returns and Allowances (100.00) (0.10) (539.92)
------------------- --------- ------------------- ----------
Total Revenues 100,274.09 100.00 182,111.41 100.00
------------------- --------- ------------------- ----------
OPERATING EXPENSES
Officers Salaries 12,580.08 12.55 24,826.00 13.63
Office Salaries 15,689.05 15.65 28,691.53 15.75
Payroll Taxes 3,365.36 3.36 5,797.14 3.18
Advertising 16,225.23 16.18 28,085.03 15.42
Accounting 4,050.00 4.04 5,915.00 3.25
Automobile Expense 10,800.00 10.77 21,032.45 11.55
Bank Service Charges 230.74 0.23 798.12 0.44
Commissions 12,528.28 12.49 15,174.94 8.33
Credit Reports 2,061.00 2.06 3,472.83 1.91
Data Services-Flood Cert 54.00 0.05 54.00 0.03
Data Services-Document 1,980.00 1.97 4,788.20 2.63
Dues and Subscriptions 71.10 0.07 71.10 0.04
Depreciation 231.25 0.23 462.50 0.25
Entertainment 84.52 0.08 84.52 0.05
Equipment Rental 191.46 0.19 191.46 0.11
Equipment Lease 1,572.66 1.57 3,944.04 2.17
Insurance 2,784.51 2.78 5,399.28 2.96
Interest Exp - Annuities 216.66 0.22 216.66 0.12
Internet & Software Fees 929.85 0.93 2,244.40 1.23
Licenses and Fees 0.00 0.00 445.00 0.24
Meals 0.00 0.00 182.23 0.10
Miscellaneous 17.01 0.02 167.01 0.09
Office Supplies 2,431.64 2.42 4,075.70 2.24
Payroll Services 340.87 0.34 780.26 0.43
Postage 1,527,02 1.52 3,775.24 2.07
Rent 3,852.00 3.84 7,597.00 4.17
Repairs and Maintenance 837.57 0.84 877.57 0.48
Supplies 0.00 0.00 23.88 0.01
Taxes-Other 600.00 0.60 1,158.75 0.64
Title Fees 0.00 0.00 700.00 0.38
Trash Removal 35.00 0.03 35.00 0.02
Telephone 2,399.35 2.39 4,581.36 2.52
Utilities 552.17 0.55 916.04 0.50
------------------- --------- ------------------- ----------
Total Operating Expenses 98,238.38 97.97 176,564.24 96.95
------------------- --------- ------------------- ----------
REVENUES OVER (UNDER) EXPENSES BEFORE TAXES 2,035.71 2.03 5,547.17 3.05
Provision for Income Tax 304.00 0.30 627.00 0.34
------------------- --------- ------------------- ----------
REVENUES OVER (UNDER) EXPENSES $ 1,731.71 1.73 4,920.17 2.70
=================== ========= ==========
RETAINED EARNINGS-BEGINNING (1,359.98)
RETAINED EARNINGS (DEFICIT)-ENDING $ 3,560.19
===================
See Accountants' Report
THE MONEY TREE LENDING GROUP, INC.
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY - INCOME TAX BASIS
December 31, 2002
McClusky, Gaines, Gill, Daughtrey & Horner
Certified Public Accountants
Roger J. McClusky, CPA 222 Nesbit Street o Punta Gorda, FL 33950
Jeff Gaines, Jr., CPA (Retired) Mailing: P.O. Box 510308 o Punta Gorda, FL 33951-0308
Steven Roy Gill, CPA 941-639-2146 o Fax: 941- 639-0558 o 1-800-282-01 56 (FL)
Daniel R. Daughtrey, CPA
Michael J. Horner, CPA, 1777 Tamiami Trail, o Port Charlotte, FL 33948
JD Samuel C. Summers, CPA 941-625-8789
Donna J. Schiller, CPA 2960 S. McCall Road, Suite 210 o Englewood, FL 34224
Daniel A. Lane, CPA, JD, MT 941- 473-1655
Independent Auditors' Report
Board of Directors
The Money Tree Lending Group, Inc. 3380
Tamiami Trail, Suite B-2
Port Charlotte, FL 33952
We have audited the accompanying statement of assets, liabilities and
equity-income tax basis of The Money Tree Lending Group, Inc., a Florida
corporation, as of December 31, 2002. This financial statement is the
responsibility of the Corporation's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the statement of
assets, liabilities and equity-income tax basis is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of assets, liabilities and
equity-income tax basis. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of assets, liabilities and equity-income tax
basis, presentation. We believe that our audit of the statement of assets,
liabilities and equity-income tax basis, provides a reasonable basis for our
opinion.
As described in Note 1, this financial statement was prepared on the basis of
accounting the Corporation uses for income tax purposes, which is a
comprehensive basis of accounting other than the generally accepted accounting
principles.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the assets, liabilities and equity of The Money Tree
Lending Group, Inc. as of December 31, 2002, on the basis of accounting
described in Note 1.
/s/ McClusky, Gaines, Gill, Daughtrey & Horner
McClusky, Gaines, Gill, Daughtrey & Horner
CERTIFIED PUBLIC ACCOUNTANTS
February 27, 2003
THE MONEY TREE LENDING GROUP, INC.
STATEMENT OF ASSETS, LIABILITIES AND EQUITY-INCOME TAX BASIS
December 31, 2002
ASSETS
CURRENT ASSETS
Cash in banks $ 15,970
Investments, at cost 17
Employee advances 15,774
Prepaid rent 1,177
-----------------
TOTAL CURRENT ASSETS 32,938
-----------------
PROPERTY AND EQUIPMENT
Furniture, fixtures and equipment less
accumulated depreciation of $37,883 2,850
-----------------
OTHER ASSETS
Advances to shareholders 11,759
Deposits 3,059
-----------------
TOTAL OTHER ASSETS 14,818
-----------------
TOTAL ASSETS $ 50,606
=================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,611
Funds held in Trust 105
-----------------
TOTAL CURRENT LIABILITIES 2,716
LONG-TERM LIABILITIES
Notes payable -0-
-----------------
TOTAL LIABILITIES 2,716
-----------------
STOCKHOLDERS' EQUITY
Common stock, $1 par value; 7,500 shares
authorized; 200 shares issued and outstanding 200
Additional paid in capital 47,690
Retained earnings -0-
-----------------
TOTAL STOCKHOLDERS' EQUITY 47,890
-----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 50,606
=================
The Accompanying Notes are an Integral Part of this Financial Statement.
3
THE MONEY TREE LENDING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of The Money Tree Lending Group,
Inc. (the Company) is presented to assist in understanding the Company's
financial statements. The financial statements and notes are representations of
the Company's management, who is responsible for their integrity and
objectivity.
Business Activities - The Company was incorporated in the State of Florida on
- -------------------
November 16, 1996. It is located in Charlotte County, Florida and is engaged in
obtaining loans secured by real estate. During 1998, the Company opened an
office in Lee County, Florida. At the end of 2001, the Lee County office was
closed and those operations were moved to Charlotte County.
Basis of Reporting - This financial statement is prepared on the accounting
- ------------------
basis used for the Corporation's federal income tax return, the accrual basis
federal income tax method of accounting. Accordingly, the accompanying financial
statement is not intended to present financial position in conformity with
generally accepted accounting principles.
Property and Equipment -Property and equipment are stated at cost. Expenditures
- ----------------------
for maintenance and repairs are charged to income as incurred. Additions and
betterments are capitalized. Depreciation is provided under the straight-line
method based upon estimated useful lives of the assets with such lives ranging
from three to seven years.
Use of Estimates - The preparation of financial statements in conformity with
- ----------------
the income tax basis of accounting requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
S Corporation Income Tax Status - The Company, with consent of its shareholders,
- -------------------------------
has elected under the Internal Revenue Code to be an S Corporation. In lieu of
corporation income taxes, the shareholders of an S Corporation are taxed on
their proportionate share of the Company's taxable income. Therefore, no
provision or liability for federal income taxes has been included in these
financial statements.
NOTE 2 - LIQUID ASSETS
As of December 31, 2002 the Company's liquid assets are in excess of 20% of
adjusted total equity.
4
THE MONEY TREE LENDING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2002
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment at December 31, 2002 are comprised of the following:
Furniture and Fixtures $ 16,681
Equipment 24,052
----------
40,733
Less: Accumulated Depreciation 37,883
----------
$ 2,850
==========
NOTE 4 - RELATED PARTY TRANSACTIONS
As of December 31, 2002, the Company's two shareholders had received advances
of$5,879 each. No interest has been charged on these advances.
NOTE 5 - LEASES
During the year ended December 31, 2002, the Company entered into an operating
lease for certain office equipment. The future minimum lease payments are as
follows:
YEAR AMOUNT
---- ------
2003 $ 4,980
2004 4,980
2005 4,980
2006 4,980
2007 2,075
Thereafter -0-
-------
$21,995
=======
5
THE MONEY TREE LENDING GROUP, INC.
SCHEDULE OF OTHER ASSETS
December 31, 2002
OTHER ASSETS
Advances to shareholders $ 11,759
Rent deposit 2,444
Utility deposit 615
--------------
TOTAL OTHER ASSETS $ 14,818
==============
SUPPLEMENTARY INFORMATION
See Accountants' Report and Notes to Financial Statements
6
THE MONEY TREE LENDING GROUP, INC.
STATEMENT OF ASSETS, LIABILITIES AND
EQUITY - INCOME TAX BASIS
December 31, 2003
McClusky, Gaines, Gill, Daughtrey & Horner
Certified Public Accountants
Roger J. McClusky, CPA 222 Nesbit Street o Punta Gorda, FL 33950
Jeff Gaines, Jr., CPA (Retired) Mailing: P.O. Box 510308 o Punta Gorda, FL 33951-0308
Steven Roy Gill, CPA 941-639-2146 o Fax: 941- 639-0558 o 1-800-282-01 56 (FL)
Daniel R. Daughtrey, CPA
Michael J. Horner, CPA, 1777 Tamiami Trail, o Port Charlotte, FL 33948
JD Samuel C. Summers, CPA 941-625-8789
Donna J. Schiller, CPA 2960 S. McCall Road, Suite 210 o Englewood, FL 34224
Daniel A. Lane, CPA, JD, MT 941- 473-1655
Independent Auditors' Report
Board of Directors
The Money Tree Lending Group, Inc. 3380
Tamiami Trail, Suite B-2
Port Charlotte, FL 33952
We have audited the accompanying statement of assets, liabilities and
equity-income tax basis of The Money Tree Lending Group, Inc., a Florida
corporation, as of December 31, 2003. This financial statement is the
responsibility of the Corporation's management. Our responsibility is to
express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the statement of
assets, liabilities and equity-income tax basis is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of assets, liabilities and
equity-income tax basis. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall statement of assets, liabilities and equity-income tax
basis, presentation. We believe that our audit of the statement of assets,
liabilities and equity-income tax basis, provides a reasonable basis for our
opinion.
As described in Note 1, this financial statement was prepared on the basis of
accounting the Corporation uses for income tax purposes, which is a
comprehensive basis of accounting other than the generally accepted accounting
principles.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the assets, liabilities and equity of The Money Tree
Lending Group, Inc. as of December 31, 2003, on the basis of accounting
described in Note 1.
/s/ McClusky, Gaines, Gill, Daughtrey & Horner
McClusky, Gaines, Gill, Daughtrey & Horner
CERTIFIED PUBLIC ACCOUNTANTS
February 7, 2004
THE MONEY TREE LENDING GROUP, INC.
STATEMENT OF ASSETS, LIABILITIES AND EQUITY-INCOME TAX BASIS
December 31, 2003
ASSETS
CURRENT ASSETS
Cash in banks $ 10,386
Investments, at cost 17
Employee advances 16,035
Prepaid rent 1,177
------------
TOTAL CURRENT ASSETS 27,615
------------
PROPERTY AND EQUIPMENT
Furniture, fixtures and equipment less
accumulated depreciation of $39,689 1,044
------------
OTHER ASSETS
Advances to shareholders 20,328
Deposits 3,059
------------
TOTAL OTHER ASSETS 23,387
------------
TOTAL ASSETS $ 52,046
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,611
Funds held in Trust 105
------------
TOTAL CURRENT LIABILITIES 2,716
------------
LONG-TERM LIABILITIES
Notes payable -0-
------------
TOTAL LIABILITIES 2,716
------------
STOCKHOLDERS' EQUITY
Common stock, S.0001 par value; 100,000,000 shares
authorized; 25,000,000 shares issued and outstanding 2,500
Preferred stock, $.0001 par value,
10,000,000 shares authorized,
5,000,000 shares issued and outstanding 500
Additional paid in capital 47,690
Retained earnings (deficit) (1,360)
------------
TOTAL STOCKHOLDERS' EQUITY 49,330
------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 52,046
============
The Accompanying Notes are an Integral Part of this Financial Statement.
3
THE MONEY TREE LENDING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of The Money Tree Lending Group,
Inc. (the Company) is presented to assist in understanding the Company's
financial statements. The financial statements and notes are representations of
the Company's management, who is responsible for their integrity and
objectivity.
Business Activities - The Company was incorporated in the State of Florida on
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November 16, 1996. It is located in Charlotte County, Florida and is engaged in
obtaining loans secured by real estate.
Basis of Reporting - This financial statement is prepared on the accounting
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basis used for the Corporation's federal income tax return, the accrual basis
federal income tax method of accounting. Accordingly, the accompanying financial
statement is not intended to present financial position in conformity with
generally accepted accounting principles.
Property and Equipment - Property and equipment are stated at cost. Expenditures
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for maintenance and repairs are charged to income as incurred. Additions and
betterments are capitalized. Depreciation is provided under the straight-line
method based upon estimated useful lives of the assets with such lives ranging
from three to seven years.
Use of Estimates - The preparation of financial statements in conformity
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with the income tax basis of accounting requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
Cash Equivalents - The Company considers all short-term investments with an
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original maturity of three months or less to be cash equivalents.
Income Taxes - The Company had previously elected under the Internal Revenue
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Code to be taxed as an S Corporation. On October 30, 2003, the Company issued a
second class of stock, and consequently terminated their S Corporation election.
The Company filed an S Corporation return for the period January 1, 2003 to
October 29, 2003, and a C Corporation return for the period October 30, 2003 to
December 31, 2003. There was no income tax liability for 2003 because the C
Corporation operated at a loss. The net operating loss of $1,360, which begins
to expire in 2023, is available to offset future income.
NOTE 2 - LIQUID ASSETS
As of December 31, 2003 the Company's liquid assets are in excess of 20% of
adjusted total equity.
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THE MONEY TREE LENDING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2003
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment at December 31, 2003 are comprised of the following:
Furniture and Fixtures $ 16,681
Equipment 24,052
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40,733
Less: Accumulated Depreciation 39,689
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$ 1,044
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NOTE 4 - RELATED PARTY TRANSACTIONS
As of December 31, 2003, the Company's two shareholders had received advances of
$10,164 each. No interest has been charged on these advances.
NOTE 5 - LEASES
During the year ended December 31, 2002, the Company entered into an operating
lease for certain office equipment. The future minimum lease payments are as
follows:
YEAR AMOUNT
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2004 $ 4,980
2005 4,980
2006 4,980
2007 2,075
Thereafter -0-
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$17,015
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NOTE 6 - RECAPITALIZATION
On October 30, 2003, the Company was recapitalized. At that date, the Company
issued 5,000,000 shares of preferred stock and 25,000,000 shares of its new
common stock. Philip A. Sampiere, Jr. and Lisa Warram each received 2,500,000
shares of preferred at $.0001 per share and 12,500,000 shares of common at
$.0001 per share for at total cost of $3,000.
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THE MONEY TREE LENDING GROUP, INC.
SCHEDULE OF OTHER ASSETS
December 31, 2003
OTHER ASSETS
Advances to shareholders $ 20,328
Rent deposit 2,444
Utility deposit 615
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TOTAL OTHER ASSETS $ 23,387
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SUPPLEMENTARY INFORMATION
See Accountants' Report and Notes to Financial Statements
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