-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HEPUD/aOYhaNjTV88dwmG3Q68jgSWfoI6hyXwaK7GrSNQFRpixj2Zjxm89O04/L8 3s1YCLX9QHScUnoQzvjwIA== 0001094328-04-000014.txt : 20040123 0001094328-04-000014.hdr.sgml : 20040123 20040123122141 ACCESSION NUMBER: 0001094328-04-000014 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030925 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040123 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POINT GROUP HOLDINGS INCORP CENTRAL INDEX KEY: 0001099234 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 541838089 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-29113 FILM NUMBER: 04539749 BUSINESS ADDRESS: STREET 1: 2240 SHELTER ISLAND DRIVE #202 CITY: SAN DIEGO STATE: CA ZIP: 92106 BUSINESS PHONE: 6192263536 FORMER COMPANY: FORMER CONFORMED NAME: SYCONET COM INC DATE OF NAME CHANGE: 20000119 8-K/A 1 pointgrp8ka012304.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): September 25, 2003 POINT GROUP HOLDINGS, INCORPORATED (Exact name of Registrant as specified in its charter) Nevada (State or jurisdiction of incorporation or organization) 0-29113 (Commission File Number) 54-1838089 (I.R.S. Employer Identification Number) 1535 Blackjack Road, Franklin, Kentucky 42134 (Address of principal executive offices) (Zip Code) Registrant's telephone number: (270) 598-0385 (Former name or former address, if changed since last report) ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. On September 25, 2003, the Registrant entered into an acquisition agreement with the members of VeeGeeZ.com, LLC, a California limited liability company ("VC"). Under the terms of this agreement, on the closing date, the parties exchanged common stock on a 1-for-1 basis, with VC exchanging with the Registrant all of its issued and outstanding ownership units representing in the aggregate 14,000,000 shares and the Registrant exchanging with VC 14,000,000 shares of its restricted common stock. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. Financial Statements. The Registrant has determined that this acquisition must comply with Securities and Exchange Commission rules regarding financial disclosure. Therefore, financial statements are being furnished for VC as follows: (a) audited financial statements for the period from April 6, 2002 (inception) to December 31, 2002 and for the period from January 1, 2003 through September 30, 2003; (b) pro forma financial information. Exhibits. Exhibits included are set forth in the Exhibit Index pursuant to Item 601 of Regulation S-B. SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Point Group Holdings, Incorporated Dated: January 22, 2004 By: /s/ John Fleming John Fleming, President EXHIBIT INDEX Number Description 2 Acquisition Agreement between the Registrant and shareholders of Veegeez.com, LLC, dated September 25, 2003 (incorporated by reference to Exhibit 2 of the Form 8-K filed on October 9, 2003). INDEPENDENT AUDITOR'S REPORT Officers and Directors VeeGeeZ.com, LLC We have audited the balance sheets of VeeGeeZ.com, LLC as of September 30, 2003, and December 31, 2002, and the related statements of operations, members' equity and cash flows for the periods then ended. 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 of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant 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 the Company as of September 30, 2003, and December 31, 2002, and the results of its operations and its cash flows for the periods then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ Smith & Company Smith & Company Certified Public Accountants Salt Lake City, Utah January 12, 2004 VEEGEEZ.COM, LLC BALANCE SHEETS September 30 December 31 2003 2002 ASSETS Current Assets Cash $ 361 $ 15,405 Prepaid expenses 0 1,750 Total current assets 361 17,155 Fixed Assets Games library, net of accumulated amortization of $19,225 ($6,016 in 2002) (Note 1) 41,841 84,411 Furniture and equipment, net of accumulated depreciation of $2,207 ($1,082 in 2002) (Note 1) 1,650 2,614 Organization costs, net of accumulated amortization of $76 ($36 in 2002) (Note 1) 193 233 Total Fixed Assets 43,684 87,258 Total Assets $ 44,045 $ 104,413 LIABILITIES AND MEMBERS' EQUITY Current Liabilities Accounts payable $ 40,956 $ 28,809 Total Current Liabilities 40,956 28,809 Members' Equity Lance Wiseman, capital 0 26,866 Mark Wiseman, capital 0 48,738 PGHI (a public corporation), capital 3,089 0 Total members' equity 3,089 75,604 Total Liabilities and Members' Equity $ 44,045 $ 104,413 See accompanying notes to financial statements VEEGEEZ.COM, LLC STATEMENTS OF OPERATIONS
For the From Inception Nine Months (April 6, 2002) Ended through September 30, December 31, 2003 2002 Revenues Subscription revenue $ 80,465 $ 32,825 Other revenue from operations 8,610 331 Total Revenues 89,075 33,156 Cost of Sales Shipping costs 19,631 12,757 Other costs of sales 5,084 1,877 Total Cost of Sales 24,715 14,634 Gross Profit 64,360 18,522 Selling, General, and Administrative Expenses Advertising 7,992 5,311 Damaged game costs 19,672 7,044 Depreciation 14,374 7,134 Interest expense 8,859 1,976 Other selling, general, and administrative expenses 4,207 7,061 Total Selling, General, and Administrative Expenses 55,104 28,526 Net Income (Loss) From Operations 9,256 (10,004) Other Expenses Loss on disposal of games (Note 4) 49,640 0 Net Income (Loss) $ (40,384) $ (10,004)
See accompanying notes to financial statements VEEGEEZ.COM, LLC STATEMENT OF CHANGES IN MEMBERS' EQUITY Lance Mark Wiseman, Wiseman, PGHI Capital Capital Capital Balance at April 6, 2002 (date of inception) $ 0 $ 0 $ 0 Equity contributions, 2002 31,868 53,740 0 Net loss, December 31, 2002 (5,002) (5,002) 0 Balance at December 31, 2002 26,866 48,738 0 Equity contributions, 2003 178 3,000 0 Equity withdrawals, 2003 (8,241) (27,068) 0 Net loss, September 30, 2003 (20,192) (20,192) 0 Exchange of members' equity for stock in PGHI, September 30, 2003 1,389 (4,478) 3,089 Balance at September 30, 2003 $ 0 $ 0 $3,089 See accompanying notes to financial statements VEEGEEZ.COM, LLC STATEMENTS OF CASH FLOWS
For the From Inception Nine Months (April 6, 2002) Ended through September 30, December 31, 2003 2002 Operating Activities Net loss $ (40,384) $ (10,004) Adjustments to reconcile net income (loss) to cash used by operating activities: Depreciation and amortization expense 14,374 7,134 Damaged game costs 19,672 7,044 Loss on disposal of games 49,640 0 Changes in current assets and liabilities: Prepaid expenses 1,750 (1,750) Accounts payable 12,147 28,809 Net Cash Provided by Operating Activities 57,199 31,233 Investing Activities Purchase of game library (48,451) (97,470) Proceeds from sale of games 8,500 0 Purchase of furniture & equipment (161) (3,697) Organization costs 0 (269) Net Cash Used by Investing Activities (40,112) (101,436) Financing Activities Members' contributions 3,178 85,608 Members' withdrawals (35,309) 0 Net Cash Provided (Used) by Financing Activities (32,131) 85,608 Increase (Decrease) in Cash (15,044) 15,405 Cash at beginning of period 15,405 0 Cash at End of Period $ 361 $ 15,405 Interest paid $ 8,859 $ 1,976 Taxes paid $ 0 $ 0
See accompanying notes to financial statements NOTES TO FINANCIAL STATEMENTS NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The summary of significant accounting policies of VeeGeeZ.com, LLC ("Company") is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements. Nature of Business The Company was established as a limited liability company (LLC) in California on April 6, 2002, and provides video game rentals to subscribers using an Internet website to facilitate transactions. Subscribers are located within the United States of America. The Company maintains its headquarters and sole shipping facility in Santa Clarita, California. Effective September 30, 2003, the original members exchanged their entire ownership interests for 14,000,000 restricted shares of common stock in Point Group Holdings, Incorporated, a Nevada public corporation ("PGHI"). Consequently, the Company is presently a wholly owned subsidiary of PGHI. As an LLC, members' liability is limited by federal and state laws. Further, the Company's articles of organization state that the Company has a finite life expiring on January 1, 2033. Revenue Recognition The Company records revenue when payment is billed. Customers are required to authorize a monthly automatic charge to a major credit card. Because of this, the billing and receipt of revenue occur simultaneously. Subscribers pay on a monthly basis and may cancel service at anytime. The financial statements are prepared based on the accrual method of accounting. Cash and Cash Equivalents The Company considers all highly liquid short-term investments with original maturities of three months or less to be cash equivalents. Property, Plant and Equipment Furniture and fixtures are stated at cost and depreciated using the straight-line method, based on an estimated useful life of 2 years. Equipment and software are stated at cost and amortized using the straight-line method, based on an estimated useful life of 3 years. Repair and maintenance costs are charged to expense when incurred. Games Library The Company currently offers games compatible with Microsoft XBox, Nintendo GameCube, Sony PlayStation, and PlayStation 2. The cost of games is amortized using the straight-line method over a twenty-four month period to an estimated residual value of $10. Because of the nature of the business, the Company experiences a certain amount of loss, damage, or theft of its games. This loss is shown as a selling expense in the Income Statement. Any accumulated amortization associated with this item is accounted for on a first- in-first-out basis and treated as a reduction to amortization expense in the month the loss is recognized. Organization Costs Organization costs are stated at cost and amortized using the straight-line method, based on an estimated useful life of three years. Income Taxes The Company was organized as a limited liability company. As such, the Company's profits or losses are passed through to the members. This results in the Company not being subject to federal or state income tax. Estimates The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Because of the use of estimates inherent in the financial reporting process, actual results could differ significantly from those estimates. Shipping Costs Shipping costs are charged to cost of sales in the period in which they are incurred. Shipping costs for the periods ended September 30, 2003 and December 31, 2002 were $19,631 and $12,757, respectively. Advertising Costs Advertising costs are charged to expense in the period in which they are incurred. Advertising expenses for the periods ended September 30, 2003 and December 31, 2002 were $7,992 and $5,311, respectively. NOTE 2 RELATED PARTY TRANSACTIONS In 2002, the Company opened several credit card accounts with major financial institutions. Due to the Company's limited credit history, the members personally guaranteed all debts incurred through the use of those cards. In 2003, all the credit cards were closed. The Company is currently headquartered in property owned by one of its formers members, who now serves as a consultant to the Company. NOTE 3 PREPAID EXPENSES In 2002, the Company contracted to receive advertising on kiosks found on university campuses. The contract required the Company to pay for one year of advertising at the beginning of the contract. When the contract expired in 2003, the Company chose not to renew. Instead, they have pursued other avenues of marketing. NOTE 4 LOSS ON DISPOSAL OF GAMES In September 2003, the Company sold a portion of its games library to a local entertainment rental store for $8,500. The purpose of the sale was to generate cash flow for the Company. The book value of the games sold was $58,140. NOTE 5 SUBSEQUENT EVENTS On October 13, 2003, the Company entered into a formal agreement with Best Bits and Bytes, Inc. ("BBBI") to receive video games to be used in the Company's rental operations. Under the agreement BBBI receives PGHI stock as payment of the rental fee incurred by the Company for use of BBBI's games library. BBBI is compensated for any games that are lost or damaged in a given month at full retail price. Under the agreement, BBBI is restricted from entering into a similar agreement with any other online video game rental service for the period of one year, the life of the agreement. UNAUDITED PRO FORMA FINANCIAL INFORMATION The Unaudited Pro Forma Financial Information reflects financial information, which gives effect to the acquisition of all of the 14,000,000 outstanding ownership units of VeeGeeZ.com, LLC, a California limited liability company ("VC"), in exchange for 14,000,000 restricted shares of common stock of Point Group Holdings, Incorporated, a Nevada corporation ("PGHI"). The Pro Forma Statements included herein reflect the use of the purchase method of accounting for the above transaction. Such financial information has been prepared from, and should be read in conjunction with, the historical audited financial statements of VC and the audited and unaudited financial statements of PGHI. The Pro Forma Balance Sheets give effect to the transaction as having occurred on September 30, 2003. The Pro Forma Statements of Operations gives effect to the transaction as if it had occurred at the beginning of the earliest period presented, combining the results of PGHI for the nine months ended September 30, 2003 and VC for the nine months ended September 30, 2003. POINT GROUP HOLDINGS, INCORPORATED PRO FORMA BALANCE SHEETS SEPTEMBER 30, 2003 (unaudited)
Pro-forma Pro-forma PGHI VeeGeeZ Adjustments Consolidated ASSETS Current Assets Cash $ 7,974 $ 361 $ $ 8,335 Accounts receivable 63,002 - 63,002 Inventory 81,636 - 81,636 Total Current Assets 152,612 361 - 152,973 Fixed assets, net 6,385 43,684 (235) 49,834 Other assets 8,126 - 8,126 $ 167,123 $ 44,045 $ (235) $ 210,933 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued expenses $ 962,355 $ 40,956 $ $1,003,311 Notes payable 373,418 - 373,418 Other liabilities 62,533 - 62,533 Total Current Liabilities 1,398,306 40,956 - 1,439,262 Stockholders' Deficit Preferred stock, authorized 500,000 shares no shares issued and outstanding - - - - Common stock, $0.001 par value 900,000,000 shares authorized, 329,071,449 shares issued and outstanding 329,071 - 14,000 343,071 Additional paid-in capital 6,798,732 - (10,911) 6,787,821 Stock payable 39,200 - (39,200) - Deferred compensation (10,500) - - (10,500) Members' equity - 3,089 (3,089) - Retained deficit (8,387,686) - 38,965 (8,348,721) Total stockholders' deficit (1,231,183) 3,089 (235) (1,228,329) $ 167,123 $ 44,045 $ (235) $ 210,933
See Accompanying Notes to Pro Forma Financial Statements POINT GROUP HOLDINGS, INCORPORATED PRO FORMA STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 2003 (unaudited)
Pro-forma Pro-forma PGHI VeeGeeZ Adjustments Consolidated Revenue $ 121,270 $ 89,075 $ $ 210,345 Cost of revenue - 24,715 24,715 121,270 64,360 - 185,630 Expenses: Selling, general and administrative 49,061 55,104 104,165 Consulting fees 92,575 - 92,575 Professional fees 13,771 - 13,771 Compensation 38,965 - (38,965) - 194,372 55,104 (38,965) 210,511 Net operating income (loss) (73,102) 9,256 38,965 (24,881) Other income (expense) Other expenses Gain from forgiveness of debt 274,432 274,432 Gain from discontinued operation 16,079 16,079 Loss on disposal of games - (49,640) - (49,640) Net Income (loss) $ 217,409 $ (40,384) $ 38,965 $ 215,990 Basic and Fully diluted net income per share $ 0.00 $ (0.00) $ 0.00 Weighted average number of shares outstanding 305,027,493 14,000,000 319,027,493
See Accompanying Notes to Pro Forma Financial Statements -----END PRIVACY-ENHANCED MESSAGE-----