SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission file number: 0-25909
Multi-Tech International, Corp.
(Name of small business issuer in its charter)
Nevada 86-0931332
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
9974 Huntington Park Drive
Strongsville, OH 44136-2516
(Address of principal executive offices) (Zip Code)
440-759-7470
(Issuer's telephone number)
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.001
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: 0
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked price of such common equity, as
of a specified date within the past 60 days: $ 696,000 as of March 31, 2004.
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 20,000,000 as of March 31,
2004
Transitional Small Business Disclosure Format (Check one): Yes; No X
TABLE OF CONTENTS
PAGE
PART I
Item 1. Description of Business..................................... 4
Item 2. Description of Property..................................... 6
Item 3. Legal Proceedings........................................... 6
Item 4. Submission of Matters to a Vote of Security Holders......... 6
PART II
Item 5. Market for Common Equity and Related Stockholder Matters.... 6
Item 6. Management's Discussion and Analysis or Plan of Operation... 8
Item 7. Financial Statements ..................................... 9
Item 8. Changes In and Disagreements With Accountants on
Accounting and Financial Disclosure......................... 29
Item 8A Controls and Procedures...................................... 29
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.. 29
Item 10. Executive Compensation...................................... 30
Item 11. Security Ownership of Certain Beneficial Owners and
Management.................................................. 30
Item 12. Certain Relationships and Related Transactions.............. 31
Item 13. Exhibits and Reports on Form 8-K............................ 31
Item 14 Principal Accountant Fees and Services...................... 31
SIGNATURES........................................................... 31
Page Two
Disclosure Regarding Forward-Looking Statements
Under the "safe harbor" provisions of the Private Securities Litigation Reform
Act of 1995 (the "PSLRA"), we caution readers regarding forward looking
statements found in this report and in any other statement made by, or on our
behalf, whether or not in future filings with the Securities and Exchange
Commission. Forward-looking statements are statements not based on historical
information and which relate to future operations, strategies, financial
results or other developments. Forward looking statements are necessarily
based upon estimates and assumptions that are inherently subject to significant
business, economic and competitive uncertainties and contingencies, many of
which are beyond our control and many of which, with respect to future business
decisions, are subject to change. These uncertainties and contingencies can
affect actual results and could cause actual results to differ materially
from those expressed in any forward-looking statements made by or on our
behalf. We disclaim any obligation to update forward-looking statements.
This report contains forward-looking statements. The forward-looking
statements include all statements that are not statements of historical fact.
The forward-looking statements are often identifiable by their use of words
such as "may," "expect," "believe," "anticipate," "intend," "could,"
"estimate," or "continue," "plans" or the negative or other variations of
those or comparable terms. Our actual results could differ materially from
the anticipated results described in the forward-looking statements. Factors
that could affect our results include, but are not limited to, those discussed
in Item 6, "Management's Discussion and Analysis or Plan of Operation" and
included elsewhere in this report.
Page Three
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Background and Organization
Multi-Tech International, Corp., a developmental stage company, hereinafter
referred to as "the Company", "we' or "us", was originally organized by the
filing of Articles of Incorporation with the Secretary of State of the State
of Nevada on September 21, 1998 under the name Oleramma, Inc. The Articles of
Incorporation authorized the issuance of one hundred fifty million
(105,000,000) shares, consisting of one hundred million (100,000,000) shares
of Common Stock at par value of $0.001 per share and five million (5,000,000)
shares of Preferred Stock at par value of $0.001. As of December 31, 2003, we
had 16,851,920 shares of Common Stock outstanding, no Preferred Stock issued
or outstanding, options to purchase 50,000 shares of Common Stock at $1.00 per
share and options to purchase 50,000 shares of Common Stock at $1.50 per share.
We were a company that hoped to develop a genetically engineered Pima cotton
seed, with a virus fatal to the bollworm. It was our hope to enter the
marketplace as the first genetically engineered Pima cotton, which is
genetically superior in combating infestations. Unfortunately we were not
able to achieve our original goals and on December 31, 2000 we changed our
name to BUCKTV.COM, Inc. pursued and began a new direction. At this time our
principal business strategy was to market consumer products through an
Interactive Website, and to promote this Website through commercial radio
promotions, and Internet search engines, utilizing the talent and skills of a
famous radio/television personality. However, this was unsuccessful and we
began a search for new opportunities.
On November 15, 2002, pursuant to an Asset Purchase Agreement (the
"Agreement") we acquired all the assets of AlphaCom, Inc. ("Alphacom"),
setting a new strategic direction for the Company, and changed the name of
the Company to Multi-Tech International, Inc. ("Multi-Tech" OTCBB:MLTI) and
new management joined the Company. On November 13, 2003 it was mutually
agreed to void this agreement. In connection with this the Company is now
actively pursuing companies to acquire, merge or otherwise enter into a
business combination.
Asset Purchase Agreement
Pursuant to the Agreement we issued a total of 30,320,552 shares of our
Common Stock (the "Shares") and a promissory note in the amount of $4,319,000
payable to Alphacom representing 74.1 percent of our outstanding shares of
Common Stock in exchange for all of the assets of Alphacom including all
business and technologic developments and licensing and marketing rights to
such assets. The Shares are being held in escrow for 12 months pursuant to
the terms of the Agreement, and are subject to downward adjustment based upon
financial contingencies set forth in the Agreement. The acquisition has been
accounted for under purchase method accounting. As a condition to the closing
we effected a 1-for-14.525 reverse split of our Common Stock in November 2002.
This Agreement was voided by both parties on November 13, 2003 and the note
was cancelled and the issuance of the shares was also cancelled.
Lack of Liability Coverage
We do not maintain any liability coverage. In the event of any claim against
us or any of our assets we may not have the resources to defend the Company
which could have a material adverse effect on the future prospects.
Page Four
Pursuit of Strategic Acquisitions and Alliances
We believe there are numerous opportunities to acquire other businesses with
established bases, compatible operations, experience with additional
synergistic aspects, and experienced management. We believe, that these
acquisitions, if successful, will result in mutually beneficial opportunities,
and could lead to an increase in our revenue and income growth. We intend to
seek opportunities to acquire businesses, services and/or technologies that we
believe will complement our business operations. We plan to seek
opportunistic acquisitions that may provide complementary services, expertise
or access to certain markets. No specific acquisition candidates have been
identified, and no assurance can be given that any transactions will be
effected, or if effected, will be successful.
In addition, we may execute strategic alliances with partners who have
established operations. As part of these joint venture agreements, we may
make investments in or purchase a part ownership in these joint ventures. We
believe that joint venture relationships, if successful, will result in
synergistic opportunities, allowing us to gain additional insight, expertise
and penetration in markets where joint venture partners already operate, and
may increase our revenue and income growth. No specific joint venture
agreements have been signed, and no assurance can be given that any agreements
will be effected, or if effected, will be successful.
At present, the Company is utilizing the resources of its major shareholders
and directors to fund operations. Nominal funds have been received from sales
to date of $ 4,280 and from the sale of some of the Company's equipment
totaling $7,287 and will not increase significantly over the next twelve
months.
The Company has not achieved revenues or profitability to date, and the
Company anticipates that it will continue to incur net losses for the
foreseeable future. As of December 31, 2003, the Company had an accumulated
deficit of Eleven million one hundred and twelve thousand three hundred and
eleven ($11,112,311) dollars. The Company expects that its operating expenses
will increase significantly during the next several months, especially in the
areas of business development and sales and marketing. The Company is seeking
a merger candidate and as such will have no revenues until a suitable business
is found. Even if the Company is able to merge with a suitable business there
is no guarantee that it will be profitable and/or generate sufficient cash
flows.
RESIGNATION OF OFFICERS AND DIRECTORS
David Boon resigned as Chief Operating Officer on March 30, 2003.
Steven Coutoumanos resigned as an Chief Executive Officer on June 9, 2003
and as a member of the Board of Directors on June 25, 2003.
Mark P. Wing resigned as a member of the Board of Directors on June 25,
2003.
Reverend Richard Rasch resigned as a member of the Board of Directors on
June 25, 2003.
John J. Craciun, III resigned as President and member of the Board of
Directors on June 30, 2003.
CURRENT BOARD OF DIRECTORS AND OFFICERS
Dr. David F. Hostelley, CPA Board of Directors Interim President,
Secretary/Treasurer,
and CFO.
Dr. Dennis Byrne Board of Directors Assistant Secretary
The Board of Directors is actively seeking other Board members and a
President with a business development background.
Page Five
ITEM 2. DESCRIPTION OF PROPERTY.
Office space is provided without charge by the CEO. The company does not own
or rent any property.
ITEM 3. Legal Proceedings
There are no current legal proceedings in connection with the Company.
ITEM 4: Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 2003.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
Market Information
Our common stock was cleared for trading on the OTC Bulletin Board
system under the symbol OLRM on November 2, 1999. On November 22, 2002 our
symbol changed to MLTI. A very limited market exists for the trading of our
common stock. On October 25, 2002 a 14.525 for 1 reverse split of our common
stock was effected.
The table below sets forth the high and low bid prices of our common
stock for each quarter shown. Quotations reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions.
Fiscal 2002 High Low
Quarter Ended March 31, 200 .14 .04
Quarter Ended June 30, 2002 .09 .01
Quarter Ended September 30, 2002 .03 .01
Quarter ended December 31, 2002 .025 .001
Fiscal 2003 High Low
Quarter Ended March 31, 2003 .40 .20
Quarter Ended June 30, 2003 .12 .05
Quarter Ended September 30, 2003 .02 .02
Quarter ended December 31, 2003 .015 .015
Holders
As of March 31, 2004, there were 889 holders of record of our common
stock.
Dividends
Holders of common stock are entitled to receive such dividends as the
board of directors may from time to time declare out of funds legally
available for the payment of dividends. No dividends have been paid on our
common stock, and we do not anticipate paying any dividends on our common
stock in the foreseeable future.
Recent Sales of Unregistered Securities
On November 20, 2002 we effected a 14.525 to 1 reverse stock split of
our common stock, after which there were six million five hundred thousand and
three hundred and eighty-two (6,500,382) common shares outstanding.
Page Six
On November 20, 2002 we issued 30,320,552 shares of common stock to
Alphacom in connection with the Asset Purchase Agreement.
On December 12, 2002 we issued one million (1,000,000) shares of common
stock.
On December 9, 2002 we issued 3,087,000 shares of common stock.
On December 10, 2002 issued options to purchase 50,000 shares of common
stock at $1.00 per share, which expire on December 10, 2005, and options to
purchase 50,000 shares of common stock at $1.50 per share3 and has until
December 10, 2005.
On January 15, 2003 we cancelled 500,000 shares of common stock in
cancellation of a consulting agreement.
On January 15, 2003 we cancelled 150,000 shares of common stock in
cancellation of a consulting agreement.
On April 8, 2003 we issued 70,000 shares of common stock for services.
On April 8, 2003 we issued 100,000 shares of common stock for services.
On May 20, 2003 we issue 30,000 shares of common stock for services.
On May 20, 2003 we issued 2,000,000 shares of common stock for
services.
On May 20, 2003 we issued 200,000 shares of common stock for services.
On May 20, 2003 we issued 100,000 shares of common stock for services.
On June 9, 2003 we cancelled 2,000,000 shares of common stock in
cancellation of a consulting agreement.
On June 24, 2003 we issued 500,000 shares of common stock for services.
On June 28, 2003 we issued 500,000 shares of common stock for services.
On June 28, 2003 we issued 400,000 shares of common stock for services.
On June 30, 2003 we issued 500,000 shares of common stock for services.
On July 9, 2003 we issued 50,000 shares of common stock for services.
On July 10, 2003 we issued 125,000 shares of common stock for services.
On August 10, 2003 we issued 125,000 shares of common stock for
services.
On September 10, 2003 we issued 125,000 shares of common stock for
services.
On November 11, 2003 we issued 100,000 shares of common stock for
services.
On November 13, 2003 we cancelled 30,320,552 shares of common stock in
cancellation of the contract with AlphaCom, Inc. as it pertains to the asset
purchase agreement.
On November 13, 2003 we issued 4,604,534 common shares for cash of
$23,023.
Page Seven
On November 13, 2003 we issued 1,000,000 shares of common stock for
services.
On November 13, 2003 we issued 150,000 shares of common stock as a loan
incentive.
On December 30, 2003 we cancelled 200,000 shares of common stock in
cancellation of a consulting agreement.
On December 30, 2003 we cancelled 65,000 shares of common stock in
cancellation of an agreement.
On December 30, 2003 we cancelled 1,000,000 shares of common stock in
cancellation of a consulting agreement.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
General
We will need to generate increased revenues to achieve profitability.
To the extent that increases in operating expenses precede or are not
subsequently followed by commensurate increases in revenues, or if are unable
to adjust operating expense levels accordingly, our business, results of
operations and financial condition would be materially and adversely affected.
There can be no assurances that we can achieve or sustain profitability or
that our operating losses will not increase in the future.
Our future success is substantially dependent upon the following:
Results of Operations
We have not generated any revenues to date. We do not expect to generate
significant revenues over the next approximately to twelve (12) months. During
calendar year 2003 we had net losses of $316,307 compared with net income of
$87,033 during fiscal 2002.
Liquidity and Capital Resources
The Company's capital requirements have historically consisted of
funding operations and capital expenditures through the sale of common stock
and the exchange of common stock for services. The Company has no significant
revenue from operations.
Net cash provided from operating activities for the twelve months ended
December 31, 2003 was $ 7,184 compared with cash provided from operating
activities for the year ended December 31, 2002 of $234,623 which included a
gain on settlement of debt of $ 300,000.
The Company's working capital deficiency is currently $ 300,762 for the
year ended December 31, 2003 compared with $4,239,588 for 2002. The greatest
portion of the deficiency for 2002 relates to a note payable in connection
with the asset purchase, which may be reduced if certain conditions relating
to the asset purchase as described above. This note was cancelled on November
13, 2003 as a result of the mutually voiding of the agreement that generated
the note.
The ability of the company to meet its business objectives as described
above depend upon the Company raising the required capital. The Company is
exploring a number of funding opportunities at the moment. Discussions have
been on a verbal basis only to date.
The Company has no material commitments for capital expenditures nor
does it foresee the need for such expenditures over the next year.
Page Eight
We have limited financial resources available, which has an adverse
impact on our liquidity, activities and operations. These limitations have
adversely affected our ability to obtain certain projects and pursue
additional business. There is no assurance that the proceeds that we will be
able to raise will be sufficient funding to enhance our financial resources
sufficiently to generate profits.
ITEM 7. FINANCIAL STATEMENTS.
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STATE COMPANY)
FINANCIAL STATEMENTS
December 31, 2003 and December 31, 2002
TABLE OF CONTENTS
INDEPENDENT AUDITORS REPORT F- 1
BALANCE SHEET - ASSETS F- 2
BALANCE SHEET - LIABILITIES AND SHAREHOLDER'S EQUITY F- 3
STATEMENT OF OPERATIONS F- 4
STATEMENT OF CASH FLOWS F- 5
STATEMENT OF CHANGES OF STOCKHOLDERS' EQUITY F- 6-10
NOTES TO FINANCIAL STATEMENTS F-11-19
Page Nine
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Multi Tech International Corp.
We have audited the accompanying balance sheets of Multi Tech
International Corp. (A Development Stage Company) as of December 31, 2003 and
2002, and the related statement of operations, cash flows, and changes in
stockholders' equity for the years then ended and for the period September 21,
1998 (inception) to December 31, 2003. 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 audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 audits provide 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. Multi Tech
International Corp, at December 31, 2003 and 2002, and the results of their
operations and their cash flows for the years then ended and for the period,
September 21, 1998 (inception) to December 31, 2003 in conformity with
accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company's recurring losses from operations raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 9.
The financial statements do not include any adjustments that might result
from the outcome of this uncertainty
Michael Johnson & Co., LLC
Denver, Colorado
April 12 , 2004
F-1
Page Ten
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STATE COMPANY)
BALANCE SHEET
DECEMBER 31, DECEMBER 31,
2003 2002
--------------------------------------
ASSETS
CURRENT
Cash $ 19 $ 0
Marketable securities 0 36,100
Prepaid assets and sundry assets 23 55,348
--------------------------------------
Total Current Assets 42 91,448
--------------------------------------
FIXED (NET OF ACCUMULATED
DEPRECIATION)
Equipment 0 33,479
Office furniture 0 5,619
Leasehold improvements 0 5,959
Vehicle 0 1,328
--------------------------------------
TOTAL FIXED ASSETS 0 46,385
--------------------------------------
OTHER
Patents rights 0 4,204,744
--------------------------------------
Total Other Assets 0 4,204,744
--------------------------------------
TOTAL ASSETS $ 42 $ 4,342,577
--------------------------------------
--------------------------------------
The accompanying notes are an integral part of these financial statements.
F-2
Page Eleven
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STATE COMPANY)
BALANCE SHEET
DECEMBER 31, DECEMBER 31,
2003 2002
--------------------------------------
LIABILITIES
CURRENT
Accounts payable $ 124,559 $ 18,434
Accrued Wages 150,000 0
Loans payable 26,226 10,826
Note payable 0 4,301,776
--------------------------------------
total Current Liabilities 300,785 4,331,036
--------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock, authorized 5,000,000
shares par value $0.001
-issued and outstanding - none - -
Common stock, authorized 100,000,000
shares, par value $0.001
issued and outstanding 16,851,920
(2002 - 40,907,934) 16,852 40,908
Additional Paid in Capital 9,975,845 9,947,766
Donated Capital 818,871 818,871
Deficit accumulated
during development stage (11,112,311) (10,796,004)
--------------------------------------
Total Stockholders' Equity (300,743) 11,541
--------------------------------------
Total Liabilities and
Stockholders' Equity $ 42 $ 4,342,577
--------------------------------------
--------------------------------------
The accompanying notes are an integral part of these financial statements.
F-3
Page Twelve
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STATE COMPANY)
STATEMENT OF OPERATIONS
FROM
SEPT 21, 1998
YEAR ENDED YEAR ENDED (INCEPTION)
DECEMBER DECEMBER DECEMBER
31, 2003 31, 2002 31, 2003
------------------------------------------------------------------------------
REVENUE $ 0 $ 197 $ 197
------------------------------------------------------------------------------
EXPENSES
Selling, general
and administrative expenses
315,586 213,164 11,411,787
------------------------------------------------------------------------------
Total Operating Expenses 315,586 213,164 11,411,787
------------------------------------------------------------------------------
NET LOSS BEFORE UNDERNOTED ITEM (315,586) (212,967) (11,411,590)
GAIN ON SETTLEMENT OF DEBT 300,000 300,000
LOSS ON DISPOSAL OF ASSETS (721) 0 (721)
------------------------------------------------------------------------------
NET INCOME (LOSS) FROM
OPERATIONS $ (316,307) $ 87,033 $ (11,112,311)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Weighted average number of
shares outstanding 11,666,882 10,565,237 16,851,920
Net income (loss) per share $ (0.03) $ 0.01 $ (0.66)
The accompanying notes are an integral part of these financial statements.
F-4
Page Thirteen
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STATE COMPANY)
STATEMENT OF CASH FLOWS
FROM
SEPT 21, 1998
YEAR ENDED YEAR ENDED (INCEPTION)
DECEMBER DECEMBER DECEMBER
31, 2003 31, 2002 31, 2003
------------------------------------------------------------------------------
CASH FLOW FROM OPERATING
ACTIVITIES
Net Income (Loss) $ (316,307) $ 87,033 $ (11,112,311)
------------------------------------------------------------------------------
Adjustments to reconcile net
income (loss) to net cash in
operating activities:
Stock issued for services 11,320 8,174 9,752,599
Depreciation and
Amortization 0 0 3,825
Loss on disposal of
fixed assets 721 0 721
Change in assets and liabilities
(Increase) Decrease in prepaid
expenses 55,325 120,982 (23)
Increase in accounts payable 106,125 18,434 124,559
Increase in Accrued Wages 150,000 0 150,000
------------------------------------------------------------------------------
Cash Used In Operating
Activities 7,184 234,623 (1,080,630)
------------------------------------------------------------------------------
Cash Flow From Financing
Activities
Increase in loans payable 15,400 10,826 26,226
Stock issued on account of
purchase of assets - (30,321) 30,321 0
Note payable on account of
purchase of assets (4,301,776) 4,301,776 0
Issuance of common stock for
cash - 23,023 0 239,397
Decrease in Loan to director 0 (300,000) 0
Donated capital 0 0 818,871
------------------------------------------------------------------------------
Cash Provided by Financing
Activities (4,293,674) 4,042,293 1,084,494
------------------------------------------------------------------------------
Cash Flow From Investing
Activities
Reversal (Purchase) of
fixed assets 38,377 (37,070) (11,133)
Disposal of fixed assets 7,287 0 7,287
Reversal (Acquisition) of
marketable securities 36,100 (36,100) 0
Reversal (Acquisition) of
patents rights 4,204,744 (4,204,744) 0
-----------------------------------------------------------------------------
Cash Used In Investing
Activities 4,283,508 (4,277,917) (3,846)
------------------------------------------------------------------------------
Increase (Decrease) In Cash $ 18 $ (368) $ 18
Cash and Cash Equivalents
Beginning of Year $ 0 $ 368 $ 0
----------------------------------------------
Balance at end of period $ 18 $ 0 $ 18
----------------------------------------------
------------------------------------------------------------------------------
SUPPLEMENTARY INFORMATION
Interest Paid $ 42 $ 0 $ 42
Taxes paid $ 0 $ 0 $ 0
The accompanying notes are an integral part of these financial statements.
F-5
Page Fourteen
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM INCEPTION (SEPTEMBER 21, 1998) TO DECEMBER 31, 2003
DEFICIT
ACCUMULATED
COMMON ADDITIONAL DURING TOTAL
STOCK PAID IN DONATED DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL CAPITAL STAGE EQUITY
September 21, 1998-
issued for cash 3,000,000 $ 3,000 $ 5,016 $ - $ - $ 8,016
Net loss for year ended
December 31, 1998 - - - - (6,841) (6,841)
----------------------------------------------------------------------------------
Balances as at
December 31, 1998 3,000,000 3,000 5,016 - (6,841) 1,175
----------------------------------------------------------------------------------
February 28, 1999 - issued
from sale of public
offering 767,000 767 37,591 - - 38,358
Net loss for year ended
December 31, 1999 - - - - (28,815) (28,815)
-----------------------------------------------------------------------------------
Balances as at
December 31, 1999 3,767,000 3,767 42,607 - (35,656) 10,718
-----------------------------------------------------------------------------------
March 10, 2000 -
issued for cash 3,000,000 3,000 27,000 - - 30,000
March 28 2000 -
issued for services 1,675,000 1,675 2,929,575 - - 2,931,250
April 24, 2000 - issued for
advertising services 1,000,000 1,000 1,199,000 - - 1,200,000
June 5, 2000 - issued for
services 200,000 200 119,800 - - 120,000
June 15, 2000 - issued for
services 944,220 944 376,744 - - 377,688
July 21, 2000 - issued for
services 500,000 500 134,500 - - 135,000
July 21, 2000 - issued for
services 2,000,000 2,000 538,000 - - 540,000
The accompanying notes are an integral part of these financial statements.
F-6
Page Fifteen
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM INCEPTION (SEPTEMBER 21, 1998) TO DECEMBER 31, 2003
DEFICIT
ACCUMULATED
COMMON ADDITIONAL DURING TOTAL
STOCK PAID IN DONATED DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL CAPITAL STAGE EQUITY
July 14, 2000 - issued for
services 575,000 575 154,675 - - 155,250
August 7, 2000 - issued for
services 660,000 660 184,140 - - 184,800
September 13, 2000 - issued
for services 760,000 760 212,040 - - 212,800
November 9, 2000 - issued
for services 5,000,000 5,000 1,395,000 - - 1,400,000
December 22, 2000 - issued
for services 5,720,500 5,720 1,596,020 - - 1,601,740
Shareholder donated capital - - - 730,936 - 730,936
Net Loss for year ended
December 31, 2000 - - - - (4,391,448) (4,391,448)
-----------------------------------------------------------------------------------
Balances as at
December 31, 2000 25,801,720 25,801 8,909,101 730,936 (4,427,104) 5,238,734
March 2, 2001 - issued for
services 10,890,000 10,890 479,160 - - 490,050
April 11, 2001 - issued for
services 22,625,000 22,625 181,000 - - 203,625
April 11, 2001 - sold shares
to qualified investor 12,500,000 12,500 57,500 - - 70,000
May 15, 2001 - sold shares
to qualified investor 12,500,000 12,500 57,500 - - 70,000
June 1, 2001 - issued for
services 3,500,000 3,500 171,500 - - 175,000
Shareholder paid expenses
of business - - - 87,935 - 87,935
The accompanying notes are an integral part of these financial statements.
F-7
Page Sixteen
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM INCEPTION (SEPTEMBER 21, 1998) TO DECEMBER 31, 2003
DEFICIT
ACCUMULATED
COMMON ADDITIONAL DURING TOTAL
STOCK PAID IN DONATED DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL CAPITAL STAGE EQUITY
2001 - issued restricted
shares 6,601,633 6,602 - - - 6,602
Net Loss for year ended
December 31, 2001 - - - - (6,455,933) (6,455,933)
-----------------------------------------------------------------------------------
Balances as at
December 31, 2001 94,418,353 94,418 9,855,761 818,871 (10,833,037) (113,987)
November 15, 2002 - Reverse
Stock Split (14.525:1) (87,917,971) (87,918) 87,918 - - 0
-----------------------------------------------------------------------------------
Balances - post stock split 6,500,382 6,500 9,943,679 818,871 (10,833,037) (113,987)
December 9, 2002 - issued
for asset purchase 30,320,522 30,321 - - - 30,321
December 9, 2002 - issued
for services 4,087,000 4,087 4,087 - - 8,174
Net Income for year ended
December 31, 2002 87,033 87,033
-----------------------------------------------------------------------------------
Balances as at
December 31, 2002 40,907,934 $ 40,908 $9,947,766 $ 818,871 $(10,796,004) $ 11,541
-----------------------------------------------------------------------------------
January 15, 2003 - cancelled
consulting services of
GCD Investments, LLC (500,000) (500) (500) - - (1,000)
January 15, 2003 - cancelled
consulting services of
Rodney R. Schoemann (150,000) (150) (150) - - (300)
April 8, 2003 - issued
for services 70,000 70 70 - - 140
The accompanying notes are an integral part of these financial statements.
F-8
Page Seventeen
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM INCEPTION (SEPTEMBER 21, 1998) TO DECEMBER 31, 2003
DEFICIT
ACCUMULATED
COMMON ADDITIONAL DURING TOTAL
STOCK PAID IN DONATED DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL CAPITAL STAGE EQUITY
April 8, 2003 - issued
for services 100,000 100 100 - - 200
May 20, 2003 - issued
for services 30,000 30 30 - - 60
May 20, 2003 - issued
for services 2,000,000 2,000 2,000 - - 4,000
May 20, 2003 - issued
for services 200,000 200 200 - - 400
May 20, 2003 - issued
for services 100,000 100 100 - - 200
June 9, 2003 - issued
for services (2,000,000) (2,000) (2,000) - - (4,000)
June 24, 2003 - issued
for services 500,000 500 500 - - 1,000
June 28, 2003 - issued
for services 400,000 400 400 - - 800
June 30, 2003 - issued
for services 500,000 500 500 - - 1,000
The accompanying notes are an integral part of these financial statements.
F-9
Page Eighteen
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM INCEPTION (SEPTEMBER 21, 1998) TO DECEMBER 31, 2003
DEFICIT
ACCUMULATED
COMMON ADDITIONAL DURING TOTAL
STOCK PAID IN DONATED DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL CAPITAL STAGE EQUITY
July 9, 2003 - issued
for services 50,000 50 50 - - 100
July 10, 2003 - issued
for services 125,000 125 125 - - 250
August 10, 2003 - issued
for services 125,000 125 125 - - 250
September 10, 2003 - issued
for services 125,000 125 125 - - 250
November 11, 2003 - issued
for services 100,000 100 100 - - 200
November 13, 2003 - voided
contract with
AlphaCom, Inc. (30,320,552) (30,321) - - (30,321)
November 13, 2003 - issued
for cash 4,604,538 4,605 18,418 - - 23,023
November 13, 2003 - issued
for services 1,000,000 1,000 9,000 - - 10,000
November 13, 2003 - issued
As loan incentive 150,000 150 150 - - 300
December 30, 2003 shares
returned by consultant (200,000) (200) (200) - - (400)
December 30, 2003 shares
returned by consultant (65,000) (65) (65) - - (130)
December 30, 2003 shares
returned by consultant (1,000,000) (1,000) (1,000) - - (2,000)
Net Loss for year ended
December 31, 2003 - - - - (316,307) (316,307)
Balances as at
December 31, 2003 16,851,920 126,852 9,975,844 818,871 (11,112,311) (300,744)
The accompanying notes are an integral part of these financial statements.
F-10
Page Nineteen
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
1. ORGANIZATION AND BASIS OF PRESENTATION
Nature of Business
Multi-Tech International, Corp. (the "Company") was incorporated on
September 21, 1998 under the laws of the State of Nevada. The
Company was originally incorporated under the name of Oleramma Inc.
On April 28, 1999, the Company changed its name to BuckTV,Com, Inc.
on the basis that the Company would market consumer products
through an Interactive Web site. The Company's primary business
operations are to engage in any lawful activity. The Company again
changed its name in November 2002 to Multi-Tech International, Corp
to more accurately describe the direction in which the Company has
taken which is more accurately described below reflecting the
acquisition made on November 15, 2002 as set out in Note 7 below.
The Company trades on OTCBB as MLTI.
On November 13, 2003 the Company agreed to mutually void the
transaction of November 15, 2002, whereby the Company acquired all
the assets of AlphaCom, Inc., setting a new strategic
direction for the Company. The Company's principal business was in
the field of spectrum technologies for communications.
The Company is focused on acquiring profitable businesses so that it
can move forward positively.
The Company's fiscal year end is December 31.
Development Stage Enterprise
The Company's activities are accounted for as those of a "Development
Stage Enterprise" as set forth in Financial Accounting Standards
Board Statement No. 7 ("SFAS 7"). Among the disclosures required by
SFAS 7 are that the Company's financial statements be
identified as those of a development stage company, and that
the statements of operations, stockholders' equity (deficit)
and cash flows disclose activity since the date of the Company's
inception.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
These financial statements are presented on the accrual method of
accounting in accordance with generally accepted accounting
principles accepted in the United States.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results may
differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments and
investments, purchased with an original maturity date of three months
or less, to be cash equivalents.
F-11
Page Twenty
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
2. SIGNIFICANT ACCOUNTING POLICIES(continued)
Fixed Assets
All fixed assets are recorded at their acquisition price. The Company
uses straight-line depreciation on these assets over their estimated
useful life. However, in view of the voiding of the AlphaCom
contract the Company did not own any fixed assets as of November 13,
2003.
Income Taxes
The Company accounts for income taxes under SFAS No. 109, which
requires the asset and liability approach to accounting for income
taxes. Under this method, deferred assets and liabilities are
measured based on differences between financial reporting and tax
bases of assets and liabilities measured using enacted tax rates
and laws that are expected to be in effect when differences are
expected to reverse.
Net earnings (loss) per share
Basic and diluted net loss per share information is presented under
the requirements of SFAS No. 128, Earnings per Share. Basic net
loss per share is computed by dividing net loss by the weighted
average number of shares of common stock outstanding for the
period, less shares subject to repurchase. Diluted net loss per
share reflects the potential dilution of securities by adding other
common stock equivalents, including stock options, shares subject
to repurchase, warrants and convertible preferred stock, in the
weighted-average number of common shares outstanding for a period,
if dilutive. All potentially dilutive securities have been
excluded from this computation, as their effect is anti-dilutive.
Fair Value of Financial Instruments
The carrying amount of cash, marketable securities, prepaid
expenses and sundry assets, accounts payable, loans payable, and
notes payable are considered to be representative of their
respective fair values because of the short-term nature of
these financial instruments
Recently Issued Accounting Standards
In November 2002, the FASB issued Interpretation, or FIN, No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees,
including Indirect Guarantees of Indebtedness of Others." FIN 45
elaborates on the existing disclosure requirements for most
guarantees, including residual value guarantees issued in
conjunction with operating lease agreements. It also clarifies that
at the time a company issues a guarantee, the company must
recognize an initial liability for the fair value of the obligation
it assumes under the guarantee and must disclose that information
in its interim and annual financial statements. The initial
recognition and measurement provisions apply on a prospective basis
to guarantees issued or modified after December 31, 2002 The
disclosure requirements are effective for the financial statements
of interim or annual periods ending after December 15, 2002. Our
adoption of FIN 45 will not have a material impact on our results
of operations and financial position.
F-12
Page Twenty One
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Recently Issued Accounting Standards (continued)
In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation -- Transition and Disclosure." This
statement amends SFAS 123, "Accounting for Stock-Based
Compensation," to provide alternative methods of transition for a
voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this statement
amends the disclosure requirements of SFAS 123 to require prominent
disclosures in both annual and interim financial statements about
the method of accounting for stock-based accounting for employee
compensation and the effect of the method used on reported results.
The Company is currently evaluating whether to adopt the fair
value based method.
In January 2003, the FASB issued FIN No. 46, "Consolidation of
Variable Interest Entities." FIN No. 46 requires that
unconsolidated variable interest entities be consolidated by their
primary beneficiaries. A primary beneficiary is the party that
absorbs a majority of the entity's expected losses or residual
benefits. FIN No. 46 applies immediately to variable interest
entities created after January 31, 2003 and to existing variable
interest entities in the periods beginning after June 15, 2003. Our
adoption of FIN No. 46 will not have a material impact on our
results of operations and financial position.
On April 30, 2003 the FASB issued Statement No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities." The
Statement amends and clarifies accounting for derivative instruments,
including certain derivative instruments embedded in other contracts,
and for hedging activities under Statement 133. The amendments set forth
in Statement 149 improve financial reporting by requiring that contracts
with comparable characteristics be accounted for similarly. In
particular, this Statement clarifies under what circumstances a contract
with an initial net investment meets the characteristic of a derivative
as discussed in Statement 133. In addition, it clarifies when a
derivative contains a financing component that warrants special
reporting in the statement of cash flows. This Statement is effective
for contracts entered into or modified after June 30, 2003.
On May 15, 2003 the FASB issued Statement No. 150, "Accounting for
Certain Financial Instruments with Characteristics of both
Liabilities and Equity". The Statement improves the accounting for
certain financial instruments that, under previous guidance, issuers
could account for as equity. The new Statement requires that those
instruments be classified as liabilities in statements of financial
position. In addition to its requirements for the classification and
measurement of financial instruments in its scope, Statement 150 also
requires disclosures about alternative ways of settling the
instruments and the capital structure of entities, all of whose
shares are mandatorily redeemable. Most of the guidance in Statement
150 is effective for all financial instruments entered into or
modified after May 31, 2003.
The company believes that none of the recently issued accounting
standards will have a material impact on the financial statements.
F-13
Page Twenty Two
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
3. MARKETABLE SECURITIES
Management determines the appropriate classification of
investments in debt and equity securities at the time of purchase
and re-evaluates such designation as of each subsequent balance
sheet date. Securities for which the Company has the ability and
intent to hold to maturity are classified as "held to maturity".
Securities classified as "trading securities" are recorded at fair
value. Gains and losses on trading securities, realized and
unrealized, are included in earnings and are calculated using the
specific identification method. Any other securities are classifie
as "available for sale." At December 31, 2003 the Company had no
marketable securities since these assets were returned to AlphaCom on
November 13, 2003.
4. CAPITAL STOCK TRANSACTIONS
On September 22, 1998, the Company issued 3,000,000 shares of its
$0.001 par value common stock for cash of $8,016.
On February 28, 1999, the Company completed a public offering that
was registered with the State of Nevada pursuant to N.R.S. 90.490
and was exempt from federal registration pursuant to Regulation D,
Rule 504 of the Securities Act of 1933 as amended. The Company
sold 767,000 shares of Common Stock at a price of $0.05 per share
for a total amount raised of $38,360.
On March 10, 2000, the Company issued 3,000,000 shares of its
$0.001 par value common stock for cash of $30,000.
On March 28, 2000, the Company filed Form S-8 with the U.S.
Securities and Exchange Commission and issued an additional
1,675,000 shares of its $0.001 par value common stock for services
to the Company for a total consideration of $ 2,931,250.
On April 24, 2000, by Board Resolution the company issued 1,000,000
restricted 144 shares to BuckBuilders.com, Inc., for advertising
the Company's website and auction partners plan for a total
consideration of $ 1,200,000.
On June 5, 2000, by Board Resolution the Company issued 200,000
restricted 144 shares to OTC Live, Inc for services for a total
consideration of $ 120,000.
On June 15, 2000, by Board Resolution the Company issued 944,220
restricted 144 shares to Myfreestore.com for services rendered for
a total consideration of $ 377,688.
On July 14, 2000, the Company filed Form S-8 with the U.S.
Securities and Exchange Commission and issued an additional 575,000
shares of its $0.001 par value common stock for services to the
Company for a total consideration of $ 155,250.
On July 21, 2000, by Board Resolution the company issued 500,000
restricted 144 shares to Rodney Schoemann, Sr. for services
rendered for a total consideration of $ 135,000.
On July 21, 2000, by Board Resolution the company issued 2,000,000
restricted shares to BuckBuilders.com, Inc. for services rendered
for a total consideration of $ 540,000.
F-14
Page Twenty Three
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
4. CAPITAL STOCK TRANSACTIONS (continued)
On August 17, 2000 the Company filed Form S-8 with the U.S.
Securities and Exchange Commission and issued an additional 660,000
shares of its $0.001 par value common stock for services to the
Company for a total consideration of $ 184,800.
On September 13, 2000, by Board Resolution, the Company issued
760,000 restricted 144 shares to Washington Hamilton Group, for
services to the Company for a total consideration $ 212,800.
On November 9, 2000, by Board Resolution, the Company issued
5,000,000 shares of restricted 144 shares to Bry Behrmann and Larry
E Hunter for services rendered for a total consideration of
$1,400,000.
On December 22, 2000, the Company issued 5,720,500 shares of
restricted 144 shares to Stephen Bishop for services rendered for a
total consideration of $ 1,601,740.
On March 2, 2001, the Company filed Form S-8 with the U.S.
Securities and Exchange Commission and issued an additional
10,890,000 shares of its $0.001 par value common stock for services
to the Company.
On April 11, 2001, the Company filed Form S-8 with the U.S.
Securities and Exchange Commission and issued an additional
22,625,000 shares of its $0.001 par value common stock for services
to the Company.
On April 11, 2001 the Company issued 12,500,000 shares of its
$0.001 par value common stock for $70,000 cash, to a qualified
investor.
On May 15, 2001 the Company issued 12,500,000 shares of its $0.001
par value common stock for $70,000 cash, to a qualified investor.
On June 1, 2001, the Company filed Form S-8 with the U.S.
Securities and Exchange Commission and issued an additional
3,500,000 shares of its $0.001 par value common stock for services
to the Company for a total consideration of $ 175,000.
During various times of the year 2001, the Company issued a total
of 6,601,633 shares of its $0.001 par value common stock for
services to the Company.
On November 20, 2002 the Company filed Form 8-K with the U.S.
Securities and Exchange Commission indicating that at a Board Of
Directors' meeting held on October 25, 2002 the Board announced a
14.525 to 1 reverse stock split, after which there were six million
five hundred thousand and three hundred and eighty-two (6,500,382)
common shares outstanding.
On November 20, 2002 the Company filed Form 8-K with the U.S.
Securities and Exchange Commission indicating that the Company had
acquired all of the assets of AlphaCom, Inc. in exchange for
30,320,552 of its $0.001 par value of common stock and a note for
$4,319,000.
F-15
Page Twenty Four
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
4. CAPITAL STOCK TRANSACTIONS (continued)
On December 9, 2002 the Company issued 3,087,000 of its $0.001 par
value common stock in exchange for services to the Company for a
total consideration of $6,174.
On December 12, 2002 the Company filed Form S-8 with the U.S.
Securities and Exchange Commission and issued one million
(1,000,000) of its $0.001 par value common stock in exchange for
services to the Company for a total consideration of $2,000.
On January 15, 2003, certain consulting agreements were cancelled
which resulted in the cancellation of 650,000 shares of common
stock.
On April 4, 2003 the Company filed Form S-8 with the U.S. Securities
and Exchange Commission and issued one hundred and thirty-five
thousand (135,000) of its $0.001 par value common stock in exchange
for services to the Company for a total consideration of $270.
On April 8, 2003 the Company issued 35,000 shares of its $0.001 par
value common stock in exchange for services to the Company for a
total consideration of $70.
On May 19, 2003 the Company filed Form S-8 with the U.S. Securities
and Exchange Commission and issued two million three hundred and
thirty thousand (2,330,000) shares of its $0.00I par value stock
in exchange for services to the Company for a total consideration
of $4,660.
On June 9, 2003 the Company cancelled a certain consulting
agreement, which resulted in the cancellation of 2,000,000 shares
of common stock.
On June 2, 2003 the Company filed Form S-8 with the U.S. Securities
and Exchange Commission for two million (2,000,000) shares of its
$0.001 par value common stock in exchange for services to the company
for a total consideration of $4,000. The agreement called for
scheduled issuance of shares based upon performance, and the Company
issued 500,000 shares of common stock as its initial payment, in
exchange for services to the Company for a total consideration of
$1,000.
On June 28, 2003 the Company issued 400,000 shares of its $0.001
par value common stock as consideration for entering into an
employment agreement with the Secretary/Treasurer/CFO, for a
total consideration of $800.
On June 30, 2003 the Company issued 500,000 shares of its $0.001 par
value stock as agreed in the separation agreement with its President,
for a total consideration of $1,000.
On July 10, 2003 the Company issued 125, 000 shares of its $0.001 par
value stock pursuant to the June 2, 2003 registration statement.
On August 10, 2003 the Company issued 125, 000 shares of its $0.001
Par value stock pursuant to the June 2, 2003 registration statement.
On September 10, 2003 the Company issued 125, 000 shares of its
$0.001 par value stock pursuant to the June 2, 2003 registration
statement.
On November 11, 2003 the Company issued 100,000 shares of its $ 0.001
Par value stock pursuant to the June 2, 2003 for services valued at
$ 200.
F-16
Page Twenty Five
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
4. CAPITAL STOCK TRANSACTIONS (continued)
On November 13, 2003 the Company voided the contract with AlphaCom, Inc.
and as result 30,320,552 shares previously issued were returned and
cancelled.
On November 13, 2003 the Company issued 4,604,538 at a price of
$ 0.005 per share in order to settle debts totaling $ 23,023.
On November 13, 2003 the Company issued 150,000 shares of its $ 0.001
par value stock as a loan incentive to advance funds to the Company
for a loan of $15,440 at 10% annual interest rate.
On December 30, 2003 the Company cancelled a total of 265,000 shares
that were returned by consultants.
5. INCOME TAXES
There has been no provision for U.S. federal, state, or foreign
income taxes for any period because the Company has incurred losses
in all periods and for all jurisdictions.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income tax
purposes. Significant components of deferred tax assets are as
follows:
Deferred tax assets
Net operating loss carry forwards $11,112,311
Valuation allowance for deferred tax assets (11,112,311)
------------
Net deferred tax assets $ -
------------
------------
Realization of deferred tax assets is dependent upon future
earnings, if any, the timing and amount of which are uncertain.
Accordingly, the net deferred tax assets have been fully offset by
a valuation allowance. As of December 31, 2003, the Company had net
operating loss carry forwards of approximately $11,112,311 for
federal and state income tax purposes. These carry forwards, if
not utilized to offset taxable income begin to expire in 2013.
Utilization of the net operating loss may be subject to substantial
annual limitation due to the ownership change limitations provided
by the Internal Revenue Code and similar state provisions. The
annual limitation could result in the expiration of the net
operating loss before utilization.
6. COMMITMENTS
All information in this category is superceed by the November 13,
2003 voiding of the Asset Purchase Agreement with AlphaCom, Inc.,
which was executed on November 14, 2002
Contracts
On the purchase of assets from Alphacom, Inc. as set out in 7
the Company has the following licenses and/or joint venture
agreements in place. These Assets were returned to AlphaCom, Inc.,
as a result of the mutual voiding of the agreement on November 13,
2003.
F-17
Page Twenty Six
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
6. COMMITMENTS (continued)
UNT, INC.
The Company has entered into a licensing agreement with UNT, Inc.,
a Pennsylvania company on July 29, 2002 which supercedes the
original agreement entered into by Alphacom, Inc. in March 1999.
The new agreement covers the territories of Israel and the Ukraine
and calls for UNT, Inc. to remit to Alphacom 50% of any sublicense
fees and to receive an ongoing royalty of $ 2.00 per Subscriber per
month whether such Subscriber is being billed for services or not.
This agreement expires in July 2012. This asset was returned to
AlphaCom, Inc., as a result of the mutual voiding of the agreement
on November 13, 2003.
E:GO SYSTEMS.COM PLC
On March 6, 2000, Alphacom, Inc. entered into an exclusive license
arrangement with E:Go Systems.com PLC which covers most of the
European Union Countries. The initial license fee was $ 500,000
cash and $ 500,000 of equivalent value in the shares of E:Go. The
Company is to receive an ongoing royalty of $2.00 per Subscriber
per month whether such Subscriber is being billed for services or
not. Additional license fees will be payable totaling 50% of such
license fees payable by sublicensees introduced by E:Go, or 70% if
such sublicensees are introduced by the Company. This asset was
returned to AlphaCom, Inc., as a result of the mutual voiding of the
agreement on November 13, 2003.
ITM
There is also an existing Joint Venture Master License agreement
with ITM Group which covers the countries of Asia, Eastern
Europe and South America. ITM and Alphacom have established a joint
venture under the name of Alphacom International, Ltd. of which
Alphacom owns 5%. The Joint Venture has agreed to pay to Alphacom
50% of any sublicensing fees earned up until such payments equal
$37,500,000 and in addition Alphacom shall receive an ongoing
royalty of $2.00 per Subscriber per month whether such Subscriber
is being billed for services or not. This asset was returned to
AlphaCom, Inc., as a result of the mutual voiding of the agreement
on November 13, 2003.
7. ACQUISITION OF ASSETS OF ALPHACOM, INC.
All information in this category is superceed by the November 13,
2003 voiding of the Asset Purchase Agreement with AlphaCom, Inc.,
which was executed on November 14, 2002
On November 14, 2002, the Company acquired the assets in a non-cash
transaction of AlphaCom, Inc. a Nevada Corporation. The assets
generally consist of physical and intellectual property. The value
of the assets is approximately 4.4 million dollars, based on the
results of an examination of the seller's audited and unaudited
financial statements. The Company believes that this valuation is
the current fair market value of the assets. The Company acquired
the assets in exchange for 30,320,552 shares of its common stock
and a promissory note in the amount of $4,319,000. For the purposes
of this transaction the stock of the Company was valued at
$0.002/share, the company's average market share price for the past
week. The purchase price may be adjusted downward regarding the
issuance common stock to the seller if the Company does not secure
equity funding and/or licensed revenue in the amount of $10,000,000
during the next twelve months. The adjustment would be based on a
percentage of the amount actually raised to the total agreed upon
of $10,000,000. There is no material relationship between AlphaCom,
Inc., and the registrant or any of its affiliates, any director or
officer of the registrant, or any associate of any such director or
officer. The shares used to accomplish the acquisition were derived
from the Company treasury and are deemed to be restricted, illiquid
shares pursuant to Rule 144 of Regulation D of the Securities Act.
F-18
Page Twenty Seven
MULTI-TECH INTERNATIONAL, CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2003
8. GOING CONCERN
The accompanying financial statements have been prepared in
conformity with generally accepted accounting principles, which
contemplates continuation of the Company as a going concern.
The future success of the Company is likely dependent on its
ability to attain additional capital to develop its proposed
technologies and ultimately, upon its ability to attain future
profitable operations. There can be no assurance that the
Company will be successful in obtaining financing, or that it will
attain positive cash flow from operations.
9. RELATED PARTY TRANSACTIONS
The financial statements reflect remuneration of $ 150,000 paid to
the Chief Executive Officer of the Company. All of the amount shown
in the statement of operations is due and payable to the Officer and
is reflected as such as liability in accrued wages on the balance
sheet.
F-19
Page Twenty Eight
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There are no changes or disagreements with accountants during the
current fiscal year.
ITEM 8A. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our
management, including our Chief Executive Officer and principal Financial
Officer, we conducted an evaluation of the effectiveness of our disclosure
controls and procedures as defined in Rule 13a-14(c) promulgated under the
Securities Exchange Act of 1934 within 90 days of the filing date of this
report. Based on their evaluation, our Chief Executive Officer and principal
Financial Officer concluded that the design and operation of our disclosure
controls and procedures were effective as of the date of the evaluation.
There have been no significant changes (including corrective
actions with regard to significant deficiencies or material weaknesses) in
our internal controls or in other factors that could significantly affect
these controls subsequent to the date of the evaluation referenced in the
preceding paragraph.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The following table sets forth our executive officers and directors:
Name Age Position(s)
Dr. David F. Hostelley 64 Board member, President,
Secretary, Treasurer
Dr. Dennis Byrne 56 Board member, Assistant Secretary
Dr. David F. Hostelley, CPA, Board member, President, Secretary, Treasurer
Dr. Hostelley has over 35 years experience in financial management with
expertise in mergers, acquisitions, and project management. He also has
taught at the university level in all areas of accounting, finance, and
management.
Dr. Dennis Byrne, Board member - Dr. Byrne is President of the Economic
Evaluation Group, which specializes in assisting the legal profession to
evaluate the worth of businesses and technology. Formerly, he served as
Professor of Economics with the University of Akron for 27 years.
Potential Conflicts of Interest
Potential conflicts of interest may arise between the Company and its
officers and directors. Although each of our officers and directors is
committed to devote full working time to our business, they also may be
engaged in other business activities. If these business activities are of
the same type as those engaged in or contemplated by us, conflicts of
interest will arise in the area of corporate opportunities or in the area of
conflicting time commitments with respect to our officers and directors.
Conflicts of interest also will develop with respect to any
Contractual relationships that may be entered into between us and any of our
officers and directors. We have established a policy pursuant to which the
Board of Directors will consider transactions with our officers, directors,
and shareholders and their respective affiliates.
Pursuant to this policy, the Board of Directors will not approve any
transaction unless it determines that the terms of the transaction are no
less favorable to us than those available from unaffiliated parties. Because
this policy is not contained in the our Articles of Incorporation or Bylaws,
the policy is subject to change by the Board of Directors, although it
currently is not contemplated that the policy will be changed.
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In addition, in the event any conflicts of interest arise with respect
to any officer or director of the Company, we anticipate that our officers
and directors will exercise their judgment consistent with their fiduciary
duties arising under the applicable state laws. There can be no assurance
that all conflicts of interest will be resolved in our favor.
Committees
We do not have any standing audit, nominating, or compensation
Committees of our board of directors. The board of directors as a whole has
been performing similar functions. This is due to the fact that new
management has been in place a short period of time. Management anticipates
creating such committees.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who beneficially own more than
ten percent of a registered class of our equity securities (referred to as
"reporting persons"), to file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of common
stock and other Company equity securities. Reporting persons are required
by Commission regulations to furnish us with copies of all Section 16(a)
forms they file.
Dr. Hostelley filed under Section 16(a) in April 2004.
ITEM 10. EXECUTIVE COMPENSATION.
No officer or director received compensation during the fiscal year
ended December 31, 2003. We intend to pay salaries when cash flow permits.
During the fiscal year ended December 31, 2003 the Company set up a liability
of $ 150,000 for executive compensation payable to Mr. Hostelley and/or his
assigns. The Board entered into an employment agreement with Dr. Hostelley
that called for an annual compensation as well as a stock option agreement
of 100,000 common shares beginning December 31, 2004 for a period of four
(4) years. By mutual agreement between Dr. Hostelley and the Company, this
agreement has been assigned to a company controlled by Dr. Hostelley and the
unpaid amounts are subject to a settlement. The stock option portion of the
agreement was cancelled.
We reimburse our officers and directors for reasonable expenses
incurred during the course of their performance. We have not paid our
outside directors fees for their services. However, we propose to pay them
in the future.
Stock Option Plan
On December 3, 2002 we filed a registration statement on Form S-8
registering the shares of Common Stock underlying the options described in
the Option Plan.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The following table sets forth certain information concerning the
beneficial ownership of our outstanding common stock as of March 31,2004, by
each person known by us to own beneficially more than 5% of the outstanding
common stock, by each of our directors and officer and by all of our directors
and officers as a group. Unless otherwise indicated below, to our knowledge
all persons listed below have sole voting and investment power with respect
to their shares of common stock except to the extent that authority is
shared by spouses under applicable law.
Name and Address Amount and Nature of
of Beneficial Owner Beneficial Ownership Percent of Class (1)
Dr. David F. Hostelley 2,600,000 (1) 13 %
Dr. Dennis Byrne 178,080 .009 %
(1) These shares are held in the name Margaret Hostelley who is the wife of
Dr. David F. Hostelley
Changes in Control
There are no agreements known to management that may result in a change
of control of our company.
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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our officers and directors are involved in other business activities
and may, in the future, become involved in other business opportunities.
Thus conflicts of interest may arise (See section entitled Potential
Conflicts of Interest above).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
The following documents are included or incorporated by reference as
exhibits to this report:
EXHIBIT
NO. DOCUMENT DESCRIPTION
10.1 Asset Purchase Agreement dated as of November 15, 2002 by and between
BUCK TV.com, Inc. and Alphacom, Inc. (1)
10.2 Legal Retention Agreement with Lawrence Hartman dated February 2003
10.3 Employment agreement with Dave Hostelley dated April 2003
10.4 Business Consulting Agreement with Rod Whiton dated April 30, 2003
10.5 Business Consulting Agreement with Dan Moldea dated May 8, 2003
10.6 Business Consulting Agreement with Red Room LLC June 2003
10.7 Termination Agreement dated as of November 13, 2003 by and between
Multi-Tech International, Corp. and Alphacom, Inc.
32.1 Certification of Principal Executive Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
32.2 Certification of Principal Financial Officer Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
(1) Previously filed as an exhibit to the registrant's current report on
Form 8-K dated November 20, 2002.
(b) REPORTS ON FORM 8-K
A report on Form 8-K dated November 20, 2003 was filed on November
20, 2003 reporting under Item 5, no financial statements were filed with
this report.
A report on Form 8-K dated November 20, 2003 was filed on November
20, 2003 reporting under Items 2 and 6, no financial statements were filed
with this report.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
(1) The audit fees paid in the last two fiscal years are as follows:
Year ended December 31, 2003 $ 6,000.00
Year ended December 31, 2002 $ 6,750.00
The services include review of the quarterly filings by the Company.
There were no fees paid for assurance and related services, tax
services and nor were there any other services performed by the audit firm.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: April 14, 2004 Multi-Tech International, Corp.
By: /s/ David F. Hostelley
-----------------------
David F. Hostelley President
In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated..
Signature Title Date
By: /s/ David F. Hostelley
-----------------------
David F. Hostelley President, Secretary, April 14, 2004
Treasurer and Director
(Principal Financial and
Accounting Officer
By: /s/Dr. Dennis Byrne Director, April 14, 2004
----------------------- Assistant Secretary
Dr. Dennis Byrne
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