-----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, Wq2UrS75gSakSXjZ5hVIdtBVppyPhd45YvXtGT5mNVsNEfCfYrabMmE47alCSFuZ HlCGIJv/IyzUxXK5Ia5CBQ== 0000950123-00-004115.txt : 20000501 0000950123-00-004115.hdr.sgml : 20000501 ACCESSION NUMBER: 0000950123-00-004115 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20000426 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLDONLINE INTERNATIONAL INC CENTRAL INDEX KEY: 0001106836 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 731344983 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-29671 FILM NUMBER: 611574 BUSINESS ADDRESS: STREET 1: 7633 E. 63RD PLACE STREET 2: SUITE 220 CITY: TULSA STATE: OK ZIP: 74133 BUSINESS PHONE: 9184599689 MAIL ADDRESS: STREET 1: 7633 E 63RD PLACE STREET 2: SUITE 220 CITY: TULSA STATE: OK ZIP: 74133 FORMER COMPANY: FORMER CONFORMED NAME: BENTON VENTURES INC DATE OF NAME CHANGE: 20000214 8-K 1 GOLDONLINE INTERNATIONAL, INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act APRIL 26, 2000 Date of Report (Date of earliest event reported) GOLDONLINE INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) 111 RHODES ROAD CONROE, TX 77301 (Address of principal executive offices) (409) 756-6888 Registrant's telephone number BENTON VENTURES, INC. 7633 EAST 63RD PLACE, # 220 TULSA, OK 74133 Former name and former address DELAWARE 0-29671 13-3986493 (State or other jurisdiction) (Commission File (IRS Employer of incorporation) File Number) Identification No.) ITEM 1. CHANGES IN CONTROL OF REGISTRANT. (a) On April 20, 2000, Goldonline International, Inc., a Delaware corporation ("GDOL"), acquired 100% of the issued and outstanding stock of Benton Ventures, Inc., a Delaware corporation ("Registrant") pursuant to an Agreement and Plan of Reorganization which has previously been reported on Form 8-K and filed on April 24, 2000. As a result of GDOL's 100% ownership of the Registrant, the Board of Directors of GDOL, on April 25, 2000, by unanimous written consent, elected to merge the Registrant into GDOL 2 pursuant to Section 253 of Delaware's General Corporate Law ("Merger"). Pursuant to the Merger, GDOL will be the surviving company. Upon the effectiveness of the Merger, GDOL has an aggregate of 89,902,408 shares of common stock issued and outstanding, $.0001 par value. The officers of GDOL will continue as officers of the successor issuer. See "Management" below. The officers, directors, and bylaws of GDOL will continue without change as the officers, directors, and bylaws of the successor issuer. A copy of the Certificate of Ownership and Merger is filed as an exhibit to this Form 8-K and is incorporated in its entirety herein. The foregoing description is modified by such reference. (b) The following table contains information regarding the shareholdings of GDOL's current directors and executive officers and those persons or entities who beneficially own more than 5% of its common stock as of April 26, 2000:
Amount of Common % of Common Stock Name Stock Beneficially Owned Beneficially Owned James G. Gordon 67,500,000 75.08% President, Director 111 Rhodes Rd. Conroe, TX 77301 Phillip Walker 65,000 <1% Secretary 111 Rhodes Rd. Conroe, TX 77301 International Internet, Inc. 10,200,000 11.35% 6413 Congress Blvd., #240 Boca Raton, FL 33487 All directors and 75.15% executive officers as a group (2 persons)
The persons and entities named in the above table have sole voting and investment power with respect to all shares shown as beneficially owned by them, unless otherwise noted. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS (a) As a result of GDOL merging with Registrant, its wholly-owned subsidiary pursuant to Section 253 of the Delaware General Corporate Law, Registrant's outstanding shares shall be cancelled, and GDOL shall assume Registrant's reporting obligations under successor issuer status as more fully detailed in Section 12g-3(a). (b) GDOL intends to continue developing and marketing a variety of luxury and premium jewelry products, including, but not limited to, gold, silver and diamond jewelry on both a retail and wholesale basis, through the internet. 3 BUSINESS THE COMPANY GoldOnline International, Inc., a Delaware corporation ("GDOL") through its wholly-owned subsidiaries, Con-Tex Silver Imports, Inc. and Gold Online.com, Inc., is an Internet-based retailer and wholesaler focused exclusively on a variety of luxury and premium products including gold and silver jewelry, neckchains, bracelets, fancy necklaces, earrings, diamond jewelry, pre-owned high-end watches and mass-market watches. GDOL currently carries over 10,000 styles of jewelry which may be purchased at http://www.goldonline.com. GDOL's online store is designed to provide consumers with a convenient and enjoyable shopping experience in an Internet-based retail environment through easy-to-navigate Web pages. GDOL offers customers the convenience and flexibility of shopping 24 hours a day, seven days a week, from their homes, offices or other locations. By selling online, GDOL is able to offer an extensive selection of products throughout the U.S. and worldwide where the products might not otherwise be available. GDOL's current luxury and premium products offerings are well suited for online commerce, having high average prices and relatively low average distribution or shipping costs. GDOL offers its customers products at discounted prices providing compelling value to the customer. GDOL assists its customers in making informed purchasing decisions by providing significant content and detailed product information. Additionally, GDOL has considerable product inventory, which enables it to ship most products to its customers within 24 hours. GDOL's customer service representatives are available by phone and e-mail and are trained to answer questions regarding product styles and features. This informative shopping experience is being created to provide potential customers with a shopping experience consistent with a luxury shopping experience. MANAGEMENT
NAME AGE TITLE James G. Gordon 33 President, Director Philip Walker 45 Vice-President, Secretary
JAMES G. GORDON is the President and Director of GDOL since 1999. Prior to starting the Company, Mr. Gordon was founder and President of Con-Tex Silver Imports, Inc., a wholesale and retail jewelry operation from 1994 to the present. Mr. Gordon received a Bachelor of Science Degree from the University of Arkansas in 1990 and has been involved in the jewelry wholesale business since 1990. Mr. Gordon has also been a Certified Gemologist since 1990. PHILIP S. WALKER serves as Vice-President and Secretary of GDOL. Mr. Walker has served in various and progressively more responsible sales and marketing positions for Gordon's Jewelry Corporation, a division of Zales Corporation and for 18 years as Sales and Credit Manager for South Texas. In 1987, he supervised the Jewelry Department of Saks Department Store in New Orleans, Louisiana territories. From 1993 to 1996, Mr. Walker was instrumental in the formation and day to day operations of Walker Jewelry, Inc. From 1996 to the present, Mr. Walker has acted as Vice President for Con-Tex Silver Imports, Inc. and Goldonline International, Inc. 4 EXECUTIVE COMPENSATION James G. Gordon currently receives an annual salary of $75,000. He receives no other form of compensation. Mr. Walker receives an annual salary of $36,000. He receives no other form of compensation. ITEM 3. BANKRUPTCY OR RECEIVERSHIP Not Applicable. ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT Not Applicable. ITEM 5. OTHER EVENTS Successor Issuer. Pursuant to Rule 12g-3(a) of the General Rules Rules and Regulations of the Securities and Exchange Commission, the Company is the successor issuer to Benton Ventures, Inc. for reporting purposes under the Securities Exchange Act of 1934. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Audited financial statements of GDOL are filed herewith along with Proforma financial statements after the merger. (a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED The audited financial statements of the acquired business, Goldonline International, Inc. and Subsidiaries, together with the audit report of Stephen P. Higgins, CPA is attached hereto as Exhibit 99.1. (b) PRO FORMA FINANCIAL INFORMATION On April 20, 2000, Goldonline International, Inc., a Delaware corporation ("GDOL"), acquired 100% of the issued and outstanding stock of Benton Ventures, Inc., a Delaware corporation ("Registrant"), in exchange for 1,200,000 GDOL common shares. As a result of GDOL's 100% ownership of the Registrant, the Board of Directors of GDOL, on April 25, 2000, elected to merge the Registrant into GDOL pursuant to Section 253 of Delaware's General Corporate Laws. As a result of the merger, GDOL will be the surviving company. The pro forma exhibits include a combining consolidated balance sheet as of January 31, 2000 that reflects the effect of the stock issued in the acquisition. The acquisition 5 has been accounted for as an issuance of GDOL common stock in exchange for the net monetary assets of Registrant, accompanied by a recapitalization. In addition, two combining pro forma consolidated statements of operations are included which present income (loss) from operations for the year ended March 31, 1999, the four months ended July 31, 1999 and the six months ended January 31, 2000. (c) EXHIBITS 1.1 Certificate of Ownership and Merger Merging Benton Ventures, Inc. into GoldOnline International, Inc. 1.2 Original Unamended Certificate of Incorporation of GoldOnline International, Inc.(f/k/a Transun International Airways, Inc.) 99.1 Audited financial statements of Goldonline International, Inc. as of July 31, 1999 and March 31, 1999 and 1998 and for the periods then ended 99.2 Unaudited financial statements of Goldonline International, Inc. as of January 31, 2000 and 1999 and for the three and six months then ended 99.3.a Pro forma combined consolidated balance sheet as of January 31, 2000 99.3.b Pro forma combined consolidated statement of operations for the year ended March 31, 1999 99.3.c Pro forma combined consolidated statement of operations for the four months ended July 31, 1999 99.3.d Pro forma combined consolidated statement of operations for the six months ended January 31, 2000 99.4 Consent of Stephen P. Higgins, C.P.A. ITEM 8. CHANGE IN FISCAL YEAR Not Applicable. 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. GOLDONLINE INTERNATIONAL, INC. BY /s/ JAMES G. GORDON, PRESIDENT DATE: APRIL 26, 2000 EX-1.1 2 CERTIFICATE OF OWNERSHIP AND MERGER 1 CERTIFICATE OF OWNERSHIP AND MERGER MERGING BENTON VENTURES, INC. INTO GOLDONLINE INTERNATIONAL, INC. (PURSUANT TO SECTION 253) GOLDONLINE INTERNATIONAL, INC., a Delaware corporation (the "Corporation"), does hereby certify: FIRST: That the Corporation is incorporated in the State of Delaware pursuant to the General Corporation Law of the State of Delaware. SECOND: That the Corporation owns all of the outstanding shares of each class of the capital stock of Benton Ventures, Inc., a Delaware corporation. THIRD: That the Corporation, by the following resolutions of its Board of Directors, duly adopted on the 25th day of April, 2000, determined to merge itself with Benton Ventures, Inc. on the conditions set forth in such resolutions: RESOLVED: That Goldonline International, Inc. merge into itself its wholly-owned subsidiary, Benton Ventures, Inc., and assume all of said subsidiary's liabilities and obligations; FURTHER RESOLVED: That the President and the Secretary of the Corporation be and they hereby are directed to make, execute and acknowledge a certificate of ownership and merger setting forth a copy of the resolution to merge Benton Ventures, Inc. into this Corporation and to assume the subsidiary's liabilities and obligations on the date of adoption thereof and to file the same in the office of the Secretary of State of Delaware. IN WITNESS WHEREOF, Goldonline International, Inc. has caused its corporate seal to be affixed and this certificate to be signed by Greg Gordon, its authorized officer, this 26th day of April, 2000. GOLDONLINE INTERNATIONAL, INC. /s/ GREG GORDON GREG GORDON, PRESIDENT EX-1.2 3 ORIGINAL UNAMENDED CERTIFICATE OF INCORPORATION 1 CERTIFICATE OF INCORPORATION OF TRANSUN INTERNATIONAL AIRWAYS, INC. The undersigned, desiring to form a corporation pursuant to Section 103 of the General Corporation Law of the State of Delaware, does hereby certify, as follows: FIRST: The name of the corporation is TRANSUN INTERNATIONAL AIRWAYS, INC. (the "Corporation"). SECOND: The address of the Corporation's registered office in the State of Delaware is c/o UNITED CORPORATE SERVICES, INC., 15 East North Street, in the City of Dover, County of Kent, State of Delaware, 19901. The name of the registered agent at such address is United Corporate Services, Inc. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The aggregate number of shares which the Corporation shall have authority to issue is Ten Million Fifty Thousand (10,050,000) shares, of which Ten Million such shares shall be designated common stock and shall have a par value of $.0001 per share sand Fifty Thousand such shares shall be designated preferred stock and shall have a par value of $.0001 per share. The Corporation's Board of Directors is authorized, subject to the limitations prescribed by law and the provisions of this Article "FOURTH", to provide for the issuance of the above authorized preferred stock in series, and by filing a certificate of designations pursuant to Section 151 of the General Corporation Law of Delaware, as the same may be amended, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and qualifications, limitations or restrictions thereof. The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following: (a) The number of shares constituting that series and the distinctive designation of that series; (b) The dividend shall be cumulative, and, if so, from which dates or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series: 2 (c) Whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights; (d) Whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate upon events as the Board of Directors shall determine; (e) Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or date upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates; (f) The rights of the shares of that series in the event of voluntary or involuntary liquidation, dissolution or winding up of the Corporation, and relative rights of priority of payment of shares of that series; and (g) Any other relative rights, preferences and limitations of that series. Dividends on outstanding shares of preferred stock shall be paid or declared and set apart for payment before any dividends shall be paid or declared and set apart for payment on common shares with respect to the same dividend period. FIFTH: The name and mailing address of the incorporator of the Corporation is as follows: Bruce S. DePaola c/o Hofheimer Gartlir & Gross, LLP 633 Third Avenue New York, NY 10017 SIXTH: The names and mailing address of the person who is to serve as the initial director of the Corporation until the first annual meeting of stockholders or until his successors are elected and qualified is as follows: Douglas B. Cunningham 5335 S.E. Miles Grant Road Suite H204 Stuart, FL 34997 SEVENTH: The Corporation is to have perpetual existence. EIGHTH: The number of directors which shall constitute the whole Board of Directors 3 of the Corporation shall be designated in the By-Laws of the Corporation. NINTH: In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the By-laws of the Corporation, without the need for shareholder approval. TENTH: To the fullest extent permitted by the General Corporation Law of Delaware, as the same exists or as it may hereafter by amended, no director of the Corporation shall be personally liable for monetary damages for breach of his/her fiduciary duty as a director. The Corporation shall indemnify each officer and director of the Corporation to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware, as the same may be amended from time to time. ELEVENTH: Meetings of stockholders of the Corporation may be held within or without the State of Delaware, as the By-laws may provide. The books of the Corporation may be kept (subject to any contrary provision contained in the General Corporation Law of Delaware) outside of the State of Delaware at such place or places as may designated form time to time by the Board of Directors or in the By-laws of the Corporation. TWELFTH: The Corporation reserves the right to amend, alter change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. The effective time of this Certificate of Incorporation of the Corporation and the time when the existence of the Corporation shall commence is upon the filing hereof. Dated: May 14, 1996 /s/ Bruce S. DePaola, Incorporator EX-99.1 4 AUDITED FINANCIAL STATEMENTS OF GOLDONLINE 1 STEPHEN P. HIGGINS, C.P.A. 67 DUMBARTON DRIVE HUNTINGTON, NEW YORK 11743 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 1999 AND MARCH 31, 1999 AND 1998 2 GOLDONLINE INTERNATIONAL, INC. Index to Consolidated Financial Statements Page No. Index 2 Auditors Report 3 Consolidated Balance Sheet 4 Consolidated Statements of Operations 5 Consolidated Statement of Stockholders' Equity 6 Consolidated Statements of Cash Flows 7-8 Notes to Consolidated Financial Statements 9-13 2 3 STEPHEN P. HIGGINS, C.P.A. 67 DUMBARTON DRIVE HUNTINGTON, NEW YORK 11743 Board of Directors Goldonline International, Inc. and Subsidiaries We have audited the accompanying consolidated balance sheets of Goldonline International, Inc. and subsidiaries as of July 31, 1999 and the consolidated statements of operations, stockholders' equity and cash flows for the four months ended July 31, 1999 and the years ended March 31, 1999 and 1998. 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 generally accepted auditing standards. 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 Goldonline International, Inc. and subsidiaries as of July 31, 1999 and the results of its operations and its cash flows for the four months ended July 31, 1999 and the years ended March 31, 1999 and 1998 in conformity with generally accepted accounting principles. December 14, 1999 Huntington, New York 3 4 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES BALANCE SHEET JULY 31, 1999
ASSETS CURRENT ASSETS Cash and cash equivalents $ 34,426 Accounts receivable, net of allowance of $0 30,999 Inventory 413,208 Prepaid expenses and other assets 500 Deferred income taxes 31,648 -------- Total current assets 510,781 Property and equipment, net 154,597 Deposits 6,141 Goodwill, less accumulated amortization of $1,112 99,008 -------- $770,527 ======== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current installments of long-term debt and notes payable $202,146 Accounts payable 86,901 Bank overdraft 52,555 Accrued expenses 10,568 Income taxes payable 5,384 Due to shareholder 8,012 -------- Total current liabilities 365,566 Long-term debt less current installments 76,674 Deferred income tax liability 10,004 STOCKHOLDERS' EQUITY Common stock, $.0001 par value. Authorized 200,000,000 shares; issued and 8,700 outstanding 86,996,408 Paid-in capital 217,420 Retained earnings 92,163 -------- Total stockholders' equity 318,283 -------- $770,527 ========
See accompanying notes to consolidated financial statements. 4 5 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES STATEMENTS OF OPERATIONS FOUR MONTHS ENDED JULY 31, 1999 AND 1998 AND YEARS ENDED MARCH 31, 1999 AND 1998
FOUR MONTHS ENDED YEARS ENDED JULY 31, MARCH 31, 1999 1998 1999 1998 (UNAUDITED) SALES AND REVENUES $ 462,915 $ 440,116 $ 1,509,028 $ 1,411,585 COST OF SALES 229,340 221,257 814,835 876,384 ------------ ------------ ------------ ------------ GROSS PROFIT 233,575 218,859 694,193 535,201 OTHER EXPENSE (INCOME) Selling, general and administrative expense 257,656 204,889 659,063 483,044 Interest expense 7,426 4,545 17,542 16,963 Other income (25) (12) (165) (7,656) ------------ ------------ ------------ ------------ 265,057 209,422 676,440 492,351 ------------ ------------ ------------ ------------ EARNINGS (LOSS) BEFORE INCOME TAXES (31,482) 9,437 17,753 42,850 INCOME TAX EXPENSE (BENEFIT) (10,501) 744 (68) 3,196 ------------ ------------ ------------ ------------ NET EARNINGS (LOSS) (20,981) 8,693 17,821 39,654 ============ ============ ============ ============ BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $ (0.000) $ 0.000 $ 0.000 $ 0.001 ============ ============ ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING 80,014,892 75,000,000 75,000,000 75,000,000 ============ ============ ============ ============
See accompanying notes to consolidated financial statements. 5 6 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES STATEMENT OF STOCKHOLDERS' EQUITY APRIL 1, 1997 THROUGH JULY 31, 1999
Common Stock Paid-in Retained Shares Par Value Capital Earnings Total BALANCE, April 1, 1997 500 $ 1,000 $ -- $ 55,669 $ 56,669 Net earnings 39,654 39,654 ----------- ----------- ----------- ----------- ----------- Balance March 31, 1998 500 1,000 -- 95,323 96,323 Net earnings 8,693 8,693 ----------- ----------- ----------- ----------- ----------- Balance July 31, 1998 (unaudited) 500 1,000 -- 104,016 105,016 Net earnings 9,128 9,128 ----------- ----------- ----------- ----------- ----------- Balance March 31, 1999 500 1,000 -- 113,144 114,144 Recapitalization 74,999,500 6,500 (6,500) -- -- ----------- ----------- ----------- ----------- ----------- 75,000,000 7,500 (6,500) 113,144 114,144 Acquire Goldonline International, Inc 1,196,408 120 120 Acquire Gold Online.com, Inc. 10,000,000 1,000 24,000 25,000 Common stock sold for cash 800,000 80 199,920 200,000 Net loss (20,981) (20,981) =========== =========== =========== =========== =========== BALANCE, July 31, 1999 86,996,408 $ 8,700 $ 217,420 $ 92,163 $ 318,283 =========== =========== =========== =========== ===========
See accompanying notes to consolidated financial statements. 6 7 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOUR MONTHS ENDED JULY 31, 1999 AND 1998 AND YEARS ENDED MARCH 31, 1999 AND 1998
FOUR MONTHS ENDED YEARS ENDED JULY 31, MARCH 31, 1999 1998 1999 1998 (UNAUDITED) Cash flows used in operating activities Net earnings (loss) $ (20,981) $ 8,693 17,821 39,654 Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 11,523 6,435 22,681 14,106 Deferred income taxes (10,501) 1,202 (5,452) (10,043) Accounts receivable (12,091) (115) (4,422) (14,486) Inventory (125,401) (2,306) (11,898) (106,731) Other assets -- -- (3,691) (1,800) Accounts payable 43,482 (63,563) (17,472) 62,285 Accrued expenses 5,944 (5,110) (10,525) 2,126 --------- --------- --------- --------- Net cash used in operating activities (108,025) (54,764) (12,958) (14,889) --------- --------- --------- --------- CASH FLOWS USED IN INVESTING ACTIVITIES Capital expenditures (6,035) (4,076) (15,595) (23,673) Proceeds from sale of equipment -- -- -- 11,988 --------- --------- --------- --------- Net cash used in investing activities (6,035) (4,076) (15,595) (11,685) --------- --------- --------- --------- CASH FLOWS PROVIDED BY FINANCING ACTIVITIES Proceeds from sale of common stock 200,000 -- -- -- Loan proceeds 50,000 57,567 98,000 132,880 Repayment of long-term debt and notes payable (106,721) (23,657) (60,350) (103,235) Loans from (repayment) of amounts due shareholder (4,279) 19,433 (6,776) -- --------- --------- --------- --------- Net cash provided by financing activities 139,000 53,343 30,874 29,645 --------- --------- --------- --------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 24,940 (5,497) 2,321 3,071 CASH AND CASH EQUIVALENTS, beginning of period 9,486 7,165 7,165 4,094 --------- --------- --------- --------- CASH AND CASH EQUIVALENTS, end of period $ 34,426 $ 1,668 $ 9,486 $ 7,165 ========= ========= ========= =========
See accompanying notes to consolidated financial statements. Continued 7 8 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES STATEMENT OF CASH FLOWS FOUR MONTHS ENDED JULY 31, 1999 AND 1998 AND YEARS ENDED MARCH 31, 1999 AND 1998
FOUR MONTHS ENDED YEARS ENDED JULY 31, MARCH 31, 1999 1998 1999 1998 (UNAUDITED) SUPPLEMENTAL CASH FLOW INFORMATION Cash paid for interest and income taxes are as follows: Interest $ 7,426 $ 4,545 $ 17,542 $ 16,963 Income taxes $ -- $ 13,640 $ 13,640 $ -- Noncash investing and financing activities are as follows: Acquisition of equipment in exchange for long-term debt $ 19,983 $ -- $ 42,145 $ 22,985 Common stock issued to acquire Gold Online.com, Inc. $ 25,000 Common stock issued to acquire Goldonline International, Inc. $ 120 Note payable assumed to acquire Goldonline International, Inc. $100,000
See accompanying notes to consolidated financial statements. 8 9 GOLDONLINE INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Goldonline International, Inc. (formerly Transun International Airways, Inc.) ("GOII") and its wholly owned subsidiaries Con-Tex Silver Imports, Inc. ("Con-Tex") and Gold Online.com, Inc. ("GO.com") (collectively referred to as the "Company"). All material intercompany accounts and transactions have been eliminated. (b) ORGANIZATION GOII was incorporated May 22, 1996 in Delaware and until June 1999 was a development stage company with plans to establish itself as an air transport company providing non-scheduled air service (charter flights) for tour operators, charter brokers, cruise line casinos, theme parks and theme attractions. Con-Tex was incorporated September 12, 1994 in Texas. GO.com was incorporated on February 3, 1999 in Delaware. On June 10, 1999, GOII acquired all of the issued and outstanding common stock of Con-Tex and GO.com. For accounting purposes, the acquisitions have been treated as the acquisition of Con-Tex and GO.com by GOII with Con-Tex as the acquiror (reverse acquisition). The historical financial statements prior to June 10, 1999 are those of Con-Tex. (c) NATURE OF BUSINESS GOII is now a holding company principally engaged in acquiring and developing businesses. Con-Tex is a company involved in both the wholesale and retail jewelry business. GO.com is establishing an Internet jewelry business. (d) CASH EQUIVALENTS The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At July 31, 1999, cash equivalents consist of money market accounts and business checking accounts. (e) INVENTORIES Inventories consist primarily of silver jewelry and are carried at the lower of average cost or market. (f) MACHINERY AND EQUIPMENT Owned machinery and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets. (g) GOODWILL Costs in excess of the fair value of net assets acquired are amortized over a fifteen-year period on a straight-line basis. The carrying value of goodwill is reviewed if the facts and circumstances suggest that it may be impaired. If this review indicates that goodwill will not be recoverable, the Company's carrying value of the goodwill would be reduced. 9 10 (h) INCOME TAXES Deferred income taxes are recognized for income and expense items that are reported for financial purposes in different years than for income tax purposes. (i) REVENUE AND COST RECOGNITION Sales revenues are recognized when the product is shipped. Cost of sales, which is recognized simultaneously with the recognition of sales, is comprised of the cost of materials and indirect costs incurred during the manufacturing process. (j) NET EARNINGS (LOSS) PER SHARE Net earnings (loss) per share amounts are computed using the weighted average number of shares outstanding during the period. Fully diluted earnings (loss) per share is presented if the assumed conversion of common stock equivalents results in material dilution. (k) USE OF ESTIMATES The process of preparing consolidated financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the consolidated financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts. (l) FAIR VALUE DETERMINATION Financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, notes payable and long-term debt. The carrying amount of these financial instruments approximates fair value due to their short-term nature or the current rates which the Company could borrow funds with similar remaining maturities. 2. ACQUISITION On June 10, 1999, GOII issued 75,000,000 of its common shares to acquire all of the common shares of Con-Tex. Con-Tex is both a wholesale and retail marketer of jewelry, primarily silver. For accounting purposes, the acquisition has been treated as the acquisition of Con-Tex by GOII with Con-Tex as the acquiror (reverse acquisition). Simultaneously, GOII issued 10,000,000 of its common shares to acquire all of the common shares of GO.com. GO.com is a new Internet Company and it has the domain name Gold Online.com. A value of $25,000 was recorded for this acquisition. Pro forma information has not been presented as GOII had no prior continuing operations and GO.com had only recently commenced operations. 3. RELATED PARTY TRANSACTIONS Con-Tex leases its corporate headquarters from the principal shareholder of the Company at the rate of $2,200 per month. This amounted to $8,800 during the four month period ended July 31, 1999, amounted to $8,800 during the four month period ended July 31, 1998 (unaudited) and amounted to $26,400 during each of the years ended March 31, 1999 and 1998. The Company had received loans from its principal shareholder. The balance owed was $8,012 at July 31, 1999, $12,291 at March 31, 1999, $24,947 at July 31, 1998 (unaudited) and $5,515 at March 31, 1998. 10 11 4. PROPERTY AND EQUIPMENT Property and equipment consist of the following at July 31, 1999:
Equipment and store furnishings $ 46,322 Transportation equipment 133,663 Web site 26,000 Leasehold improvements 1,035 --------- 207,020 Less accumulated depreciation (52,423) --------- $ 154,597 =========
5. LONG-TERM DEBT AND NOTES PAYABLE Notes payable consists of the following:
Note payable to bank with interest at 10% payable on $136,400 demand or January 1, 2000 if no demand is made; accrued interest payable monthly; collateralized by all assets of Con-Tex and guaranteed by the principal shareholder of the Company Note payable to the brother of the principal shareholder 50,000 of the Company due on July 23, 2000 with interest at 8%, unsecured, convertible into common stock of the Company at $.01 per share Note payable to company in monthly installments of 13,913 $597.61, including interest at 10% through September 30, 2001; collateralized by transportation equipment Note payable to company in monthly installments of 19,377 $330.96, including interest at 9.8% through July 23, 2000 and a final payment of $17,464.96 due on August 23, 2000; collateralized by transportation equipment Note payable to company in monthly installments of 39,147 $730.18, including interest at 10.46% through November 7, 2001 and a final payment of $27,603.18 due on December 7, 2001; collateralized by transportation equipment Note payable to company in monthly installments of $442.44, including interest at 11.6% through July 21, 2004; collateralized by transportation equipment 19,983 -------- 278,820 Current installments of long-term debt and notes payable 202,146 -------- Long-term debt less current installments $ 76,674 ========
11 12 The aggregate maturities of long-term debt for the periods ending July 31, 2004 are as follows: 2000 - $25,214, 2001 $38,451, 2002 - $36,783, 2003 - $5,309 and 2004 - $5,309. 6. INCOME TAXES Income tax expense (benefit) for the four months ended July 31, 1999 and 1998 and the year ended March 31, 1999 and 1998 consists of:
CURRENT DEFERRED TOTAL July 31, 1999 - Federal $ -- ($ 10,501) ($ 10,501) ======== ========== ========= July 31, 1998 - Federal $ 1,946 (1,202) 744 ======== ========== ========= March 31, 1999 - Federal $ 5,384 (5,452) (68) ======== ========== ========= March 31, 1998 - Federal $ 13,239 (10,043) 3,196 ======== ========== =========
Actual income tax expense (benefit) applicable to earnings (loss) before income taxes is reconciled with the "normally expected" federal income tax expense (benefit) as follows:
JULY 31, MARCH 31, 1999 1998 1999 1998 "Normally expected" income tax expense (benefit) ($10,704) 3,209 6,036 14,569 Surtax exemption -- (2,465) (6,816) (11,485) Non-deductible entertainment 203 -- 712 112 -------- -------- -------- -------- ($10,501) 744 (68) 3,196 ======== ======== ======== ========
The deferred income tax assets and liabilities at July 31, 1999 are comprised of the following:
CURRENT NONCURRENT Expenses deferred for tax purposes $ 25,243 - Net operating loss carryforwards 6,405 - --------- -------- 31,648 - Less valuation allowance ( -) - --------- -------- Deferred income tax asset 31,648 - Deferred income tax liability - asset basis - (10,004) --------- -------- Net deferred income tax assets (liabilities) $ 31,648 ($10,004) ========= ========
7. CAPITAL STOCK The Company sold 200,000 units (The "Units") at $1.00 per Unit. Each Unit consisted of 4 shares of common stock, par value $.001, and 1 warrant. Each warrant entitled the holder to purchase eight shares of the common stock of the Company at a purchase price of $.50 per share. 12 13 Under the terms of the initial offering, the warrants are scheduled to expire on September 30, 1999. The exercise period for the warrants was extended until February 29, 2000. At July 31, 1999, warrants for the purchase of 1,600,000 shares of the Company's common stock at $.50 per share had been issued and all were outstanding. 8. COMMITMENTS The Company operates three retail jewelry stores in addition to its corporate headquarters, which also houses its wholesale jewelry operations. Rental expense was $58,554 and $48,550 during the four-month periods ended July 31, 1999 and 1998, respectively, and $215,531 and $86,976 during the years ended March 31, 1999 and 1998, respectively. Minimum rental commitments under all non-cancelable leases with an initial term in excess of one year are payable as follows: 2000 - $13,836, 2001 - $12,819, 2002 - $13,201, 2003 - $8,561. The majority of the Company's leases are month-to-month. 9. SUBSEQUENT EVENT On September 1, 1999, the Company established a stock option plan, which reserved 10,000,000 shares of the Company's common stock for issue to certain employees, directors and consultants. The Plan provides that options may be granted for no less than fair market value at the date of the option grant. 13 EX-99.2 5 UNAUDITED FINANCIAL STATEMENTS OF GOLDONLINE 1 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENT JANUARY 31, 2000 2 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES INDEX
Page No. Consolidated Balance Sheets - 3 January 31, 2000 and July 31, 1999 Consolidated Statements of Operations - 4 Three and Six Months Ended January 31, 2000 Consolidated Statement of Stockholders' Equity - 5 Six Months Ended January 31, 2000 Consolidated Statements of Cash Flows - 6-7 Six Months Ended January 31, 2000 Notes to Consolidated Financial Statements - 8-11 Six Months Ended January 31, 2000
2 3 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
JANUARY 31, JULY 31, 2000 1999 (UNAUDITED) (AUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $ 199,237 $ 34,426 Trade accounts receivable 83,519 30,999 Inventory 550,164 413,208 Prepaid expenses and other assets 500 500 Deferred income taxes 44,103 31,648 ---------- ---------- 877,523 510,781 Property and equipment, net 169,997 154,597 Goodwill, net of amortization of $4,448 and $1,112, respectively 95,672 99,008 Other assets 6,141 6,141 ---------- ---------- $1,149,333 $ 770,527 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current installments of long-term debt and notes payable 222,193 202,146 Accounts payable 163,892 86,901 Bank overdraft 89,935 52,555 Accrued expenses 10,271 10,568 Income taxes payable -- 5,384 Due to shareholder 3,659 8,012 ---------- ---------- 489,950 365,566 Deferred income taxes 10,004 10,004 Long-term debt less current installments 68,572 76,674 Stockholders' equity Common stock, $.0001 par value, 200,000,000 shares authorized, 87,616,408 and 86,996,408 shares issued and outstanding at January 31, 2000 and July 31, 1999, respectively 9,320 8,700 Additional paid-in capital 503,500 217,420 Retained earnings (deficit) 67,987 92,163 ---------- ---------- 580,807 318,283 ---------- ---------- $1,149,333 $ 770,527 ========== ==========
See accompanying notes to consolidated financial statements. 3 4 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED JANUARY 31, 2000 AND 1999 (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JANUARY 31, JANUARY 31, 2000 1999 2000 1999 Sales and revenues $ 501,483 $ 511,176 $ 910,961 $ 858,171 Cost of sales 391,330 271,594 748,342 459,966 --------- --------- --------- --------- Gross profit 110,153 239,582 162,619 398,205 Selling, general and administrative expense 123,368 177,641 187,497 340,841 --------- --------- --------- --------- Loss from operations (13,215) 61,941 (24,878) 57,364 Other income (expense): Interest expense (7,123) (4,734) (11,754) (9,438) Interest and other income -- 99 1 143 --------- --------- --------- --------- (7,123) (4,635) (11,753) (9,295) --------- --------- --------- --------- Net earnings (loss) before income taxes (20,338) 57,306 (36,631) 48,069 Income tax expense (benefit) (6,915) 19,484 (12,455) 16,343 --------- --------- --------- --------- Net earnings (loss) $ (13,423) $ 37,822 $ (24,176) $ 31,726 ========= ========= ========= ========= Net earnings (loss) per share $ (0.000) $ 0.001 $ (0.000) $ 0.000 ========= ========= ========= ========= Weighted average shares outstanding, in millions 87.2 75.0 87.1 75.0 ========= ========= ========= =========
See accompanying notes to consolidated financial statements. 4 5 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
COMMON STOCK PAID-IN RETAINED SHARES PAR VALUE CAPITAL EARNINGS TOTAL ------ --------- ------- -------- ----- BALANCE, August 1, 1999 86,996,408 $ 8,700 $217,420 $ 92,163 $318,283 Exercise of common stock options 50,000 50 1,650 1,700 Exercise of common stock warrants 570,000 570 284,430 285,000 Net earnings (loss) (24,176) (24,176) ------------------------------------------------------------------------ BALANCE, January 31, 2000 87,616,408 $ 9,320 $503,500 $ 67,987 $580,807 ========================================================================
See accompanying notes to consolidated financial statements. 5 6 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS SIX MONTHS ENDED JANUARY 31, 2000 AND 1999 (UNAUDITED)
2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES Net earnings (loss) $ (24,176) 31,726 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 21,623 4,348 Deferred income taxes (12,455) -- Changes in assets and liabilities: Accounts receivable (52,520) -- Inventory (136,956) (9,654) Other assets -- (4,812) Accounts payable and accrued expenses 71,310 27,883 Bank overdraft 37,380 -- --------- --------- Net cash provided by operating activities (95,794) 49,491 --------- --------- CASH FLOWS PROVIDED BY INVESTING ACTIVITIES Capital expenditures (14,225) (7,519) --------- --------- Net cash provided by investing activities (14,225) (7,519) --------- --------- CASH FLOWS PROVIDED BY FINANCING ACTIVITIES Proceeds from sales of common stock 286,700 -- Loan proceeds 50,000 -- Repayment of notes payable and long-term debt (57,518) (41,438) Increase (decrease) in amount due stockholder (4,352) -- --------- --------- Net cash provided by financing activities 274,830 (41,438) --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS 164,811 534 CASH AND CASH EQUIVALENTS, beginning of period 34,426 1,668 --------- --------- CASH AND CASH EQUIVALENTS, end of period $ 199,237 $ 2,202 ========= =========
See accompanying notes to consolidated financial statements. 6 7 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED SIX MONTHS ENDED JANUARY 31, 2000 AND 1999 (UNAUDITED)
2000 1999 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Interest paid $11,754 $ 9,438 ======= ======= Income taxes paid $ 5,384 $ -- ======= ======= SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Acquisition of transportation equipment for long-term debt $19,462
See accompanying notes to consolidated financial statements. 7 8 GOLDONLINE INTERNATIONAL, INC. NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of Goldonline International, Inc. (formerly Transun International Airways, Inc.) ("GDOL") and its wholly owned subsidiaries Con-Tex Silver Imports, Inc. ("Con-Tex") and Gold Online.com, Inc. ("GO.com") (collectively referred to as the "Company"). All material intercompany accounts and transactions have been eliminated. (b) ORGANIZATION GDOL was incorporated May 22, 1996 in Delaware and until June 1999 was a development stage company with plans to establish itself as an air transport company providing non-scheduled air service (charter flights) for tour operators, charter brokers, cruise line casinos, theme parks and theme attractions. Con-Tex was incorporated September 12, 1994 in Texas. GO.com was incorporated on February 3, 1999 in Delaware. On June 10, 1999, GDOL acquired all of the issued and outstanding common stock of Con-Tex and GO.com. For accounting purposes, the acquisitions have been treated as the acquisition of Con-Tex and GO.com by GDOL with Con-Tex as the acquiror (reverse acquisition). The historical financial statements prior to June 10, 1999 are those of Con-Tex. (c) NATURE OF BUSINESS GDOL is now a holding company principally engaged in acquiring and developing businesses. Con-Tex is a company involved in both the wholesale and retail jewelry business. GO.com is establishing an Internet jewelry business. (d) CASH EQUIVALENTS The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At January 31, 2000, cash equivalents consist of money market accounts and business checking accounts. (e) INVENTORIES Inventories consist primarily of silver jewelry and are carried at the lower of average cost or market. (f) MACHINERY AND EQUIPMENT Owned machinery and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the respective assets. (g) GOODWILL Costs in excess of the fair value of net assets acquired are amortized over a fifteen-year period on a straight-line basis. The carrying value of goodwill is reviewed if the facts and circumstances suggest that it may be impaired. If this review indicates that goodwill will not be recoverable, the Company's carrying value of the goodwill would be reduced. 8 9 (h) INCOME TAXES Deferred income taxes are recognized for income and expense items that are reported for financial purposes in different years than for income tax purposes. (i) REVENUE AND COST RECOGNITION Sales revenues are recognized when the product is shipped. Cost of sales, which is recognized simultaneously with the recognition of sales, is comprised of the cost of materials and indirect costs incurred during the manufacturing process. (j) NET EARNINGS (LOSS) PER SHARE Net earnings (loss) per share amounts are computed using the weighted average number of shares outstanding during the period. Fully diluted earnings (loss) per share is presented if the assumed conversion of common stock equivalents results in material dilution. (k) USE OF ESTIMATES The process of preparing consolidated financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions regarding certain types of assets, liabilities, revenues and expenses. Such estimates primarily relate to unsettled transactions and events as of the date of the consolidated financial statements. Accordingly, upon settlement, actual results may differ from estimated amounts. (l) FAIR VALUE DETERMINATION Financial instruments consist of cash, accounts receivable, accounts payable, accrued liabilities, notes payable and long-term debt. The carrying amount of these financial instruments approximates fair value due to their short-term nature or the current rates which the Company could borrow funds with similar remaining maturities. 2. ACQUISITION On June 10, 1999, GDOL issued 75,000,000 of its common shares to acquire all of the common shares of Con-Tex. Con-Tex is both a wholesale and retail marketer of jewelry, primarily silver. For accounting purposes, the acquisition has been treated as the acquisition of Con-Tex by GDOL with Con-Tex as the acquiror (reverse acquisition). Simultaneously, GDOL issued 10,000,000 of its common shares to acquire all of the common shares of GO.com. GO.com is a new Internet Company and it has the domain name Gold Online.com. A value of $25,000 was recorded for this acquisition. Pro forma information has not been presented as GDOL had no prior continuing operations and GO.com had only recently commenced operations. 3. RELATED PARTY TRANSACTIONS Con-Tex leases its corporate headquarters from the principal shareholder of the Company at the rate of $1,596.78 per month. This amounted to $9,581 during each of the six months periods ended January 31, 2000 and 1999. The Company had received loans from its principal shareholder. The balance owed was $3,659 at January 31, 2000 and $8,012 at July 31, 1999. 9 10 4. PROPERTY AND EQUIPMENT Property and equipment consist of the following at January 31, 2000 and July 31, 1999:
January 31, July 31, 2000 1999 Equipment and store furnishings $ 46,322 $ 46,322 Transportation equipment 156,125 133,663 Web site 37,225 26,000 Leasehold improvements 1,035 1,035 --------- --------- 240,707 207,020 Less accumulated depreciation (70,710) (52,423) --------- --------- $ 169,997 $ 154,597 ========= =========
5. LONG-TERM DEBT AND NOTES PAYABLE Notes payable consists of the following:
Note payable to bank with interest at 10% payable on $136,400 demand or January 1, 2000 if no demand is made; accrued interest payable monthly; collateralized by all assets of Con-Tex and guaranteed by the principal shareholder of the Company Note payable to the brother of the principal shareholder of the Company due on July 23, 2000 with interest at 8%, unsecured, convertible into common stock of the Company at $.01 per share 50,000 Notes payable to company in monthly installments aggregating $2,534, including interest at 9.8% to 11.6%; collateralized by transportation equipment 104,365 -------- 290,765 Current installments of long-term debt and notes payable 222,193 -------- Long-term debt less current installments $ 68,572 ========
6. INCOME TAXES Federal income tax expense (benefit) for the three and six months ended January 31, 2000 consists of deferred tax benefit in the amounts of $6,915 and $12,455, respectively. Federal income tax expense for the three and six month periods ended January 31, 1999 amounted to $19,484 and $16,343, respectively. 10 11 Actual income tax expense (benefit) applicable to earnings (loss) before income taxes is the same as the "normally expected" federal income tax expense (benefit). The deferred income tax assets and liabilities at January 31, 2000 are comprised of the following:
CURRENT NONCURRENT Expenses deferred for tax purposes $ 25,243 - Net operating loss carryforwards 18,860 - -------- -------- 44,103 - Less valuation allowance ( -) - -------- -------- Deferred income tax asset 44,103 - Deferred income tax liability - asset basis - (10,004) -------- -------- Net deferred income tax assets (liabilities) $ 44,103 ($10,004) ======== ========
7. CAPITAL STOCK The Company sold 200,000 units (The "Units") at $1.00 per Unit. Each Unit consisted of 4 shares of common stock, par value $.001, and 1 warrant. Each warrant entitled the holder to purchase eight shares of the common stock of the Company at a purchase price of $.50 per share. Under the terms of the initial offering, the warrants were scheduled to expire on September 30, 1999. The exercise period for the warrants was extended until February 29, 2000. At January 31, 2000, warrants for the purchase of 1,600,000 shares of the Company's common stock at $.50 per share had been issued and warrants for the purchase of 570,000 shares had been exercised. On September 1, 1999, the Company established a stock option plan, which reserved 10,000,000 shares of the Company's common stock for issue to certain employees, directors and consultants. The Plan provides that options may be granted for no less than fair market value at the date of the option grant. As of January 31, 2000, one option to acquire 50,000 shares had been granted and exercised at a price of $.034 per share. 8. SUBSEQUENT EVENTS During February 2000, the remaining warrants to purchase 1,030,000 shares of common stock of the Company were exercised at an exercise price of $.50 per share. On April 20, 2000, pursuant to an agreement and plan of reorganization dated April 11, 2000, DGOL acquired 100% of the issued and outstanding common stock of Benton Ventures, Inc. ("Benton or Registrant"), a Delaware corporation, in exchange for 1,2000,000 newly issued common shares of GDOL. On April 25, 2000, the Board of Directors of GDOL elected to merge Benton, Registrant, into GDOL pursuant to Section 253 of Delaware's General Corporate Laws. As a result of the merger, GDOL will be the surviving company. 11 EX-99.3.A 6 PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET 1 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES PRO FORMA COMBINED CONSOLIDATED BALANCE SHEET EXHIBIT 99.3.a JANUARY 31, 2000
PRO FORMA PRO FORMA BALANCE UNAUDITED ADJUSTMENT SHEET ASSETS CURRENT ASSETS Cash and cash equivalents $ 199,237 $ 199,237 Trade accounts receivable 83,519 83,519 Inventory 550,164 550,164 Other 44,603 44,603 ---------------------------------------------- 877,523 - 877,523 Property and equipment, net 169,997 169,997 Goodwill, net of amortization of $4,448 95,672 95,672 Other assets 6,141 6,141 ---------------------------------------------- $ 1,149,333 $ - $ 1,149,333 ============================================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current installments of long-term debt and notes payable 222,193 222,193 Accounts payable 163,892 163,892 Bank overdraft 89,935 89,935 Accrued expenses 10,271 10,271 Due to shareholder 3,659 3,659 - ---------------------------------------------- 267,757 - 267,757 Deferred income taxes 10,004 10,004 Long-term debt less current installments 68,572 68,572 Stockholders' equity Common stock, $.00001 par value, 1,000,000,000 shares authorized, 9,320 120 9,440 757,296,187 shares issued and outstanding at September 30, 1999 - Additional paid-in capital 503,500 (120) 503,380 Retained earnings (deficit) 67,987 67,987 ---------------------------------------------- 580,807 - 580,807 --------------------------------------------- $ 927,140 $ - $ 927,140 ==============================================
The adjustment records the issuance of 1,200,000 common shares of GDOL to acquire 100% of Benton Ventures, Inc. No assets were acquired. EX-99.3.B 7 PRO FORMA COMBINED CONSOLIDATED STATEMENT: 3/31/99 1 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS EXHIBIT 99.3.b YEAR ENDED MARCH 31, 1999
PRO FORMA PRO FORMA STATEMENT OF AUDITED ADJUSTMENT OPERATIONS Sales and revenues $ 1,509,028 $1,509,028 Cost of sales 814,835 814,835 ----------------------------------------------- Gross profit 694,193 - 694,193 Selling, general and administrative expense 659,063 659,063 ----------------------------------------------- Loss from operations 35,130 - 35,130 Other income (expense): Interest expense (17,542) (17,542) Interest and other income 165 165 ----------------------------------------------- (17,377) - (17,377) ----------------------------------------------- Net earnings (loss) before income taxes 17,753 - 17,753 Income tax expense (benefit) (68) (68) ----------------------------------------------- Net earnings (loss) $ 17,821 $ - $ 17,821 =============================================== Net earnings (loss) per share $ 0.000 $ 0.000 =============================================== Weighted average shares outstanding, in millions 75.0 1.2 76.2 ===============================================
The adjustment records the effect of the acquisition and merger which resulted in an increase in the weighted average shares outstanding. EX-99.3.C 8 PRO FORMA COMBINED CONSOLIDATED STATEMENT: 7/31/99 1 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS EXHIBIT 99.3.c FOUR MONTHS ENDED JULY 31, 1999
PRO FORMA PRO FORMA STATEMENT OF AUDITED ADJUSTMENT OPERATIONS Sales and revenues $ 462,915 $462,915 Cost of sales 229,340 229,340 -------------------------------------------- Gross profit 233,575 - 233,575 Selling, general and administrative expense 257,656 257,656 -------------------------------------------- Loss from operations (24,081) - (24,081) Other income (expense): Interest expense (7,426) (7,426) Interest and other income 25 25 -------------------------------------------- (7,401) - (7,401) -------------------------------------------- Net earnings (loss) before income taxes (31,482) - (31,482) Income tax expense (benefit) (10,501) (10,501) -------------------------------------------- Net earnings (loss) $ (20,981) $ - $(20,981) ============================================ Net earnings (loss) per share $ (0.000) $ (0.000) ============================================ Weighted average shares outstanding, in millions 80.0 1.2 81.2 ============================================
The adjustment records the effect of the acquisition and merger which resulted in an increase in the weighted average shares outstanding. EX-99.3.D 9 PRO FORMA COMBINED CONSOLIDATED STATEMENT:01/31/00 1 GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES PRO FORMA COMBINED CONSOLIDATED STATEMENTS OF OPERATIONS EXHIBIT 99.3.d SIX MONTHS ENDED JANUARY 31, 2000 (UNAUDITED)
PRO FORMA PRO FORMA STATEMENT OF UNAUDITED ADJUSTMENT OPERATIONS Sales and revenues $ 910,961 $ 910,961 Cost of sales 748,342 748,342 --------------------------------------------- Gross profit 162,619 - 162,619 Selling, general and administrative expense 187,497 187,497 --------------------------------------------- Loss from operations (24,878) - (24,878) Other income (expense): Interest expense (11,754) (11,754) Interest and other income 1 1 --------------------------------------------- (11,753) - (11,753) --------------------------------------------- Net earnings (loss) before income taxes (36,631) - (36,631) Income tax expense (benefit) (12,455) (12,455) --------------------------------------------- Net earnings (loss) $ (24,176) $ - $ (24,176) ============================================= - Net earnings (loss) per share $ (0.000) $ (0.000) ============================================= Weighted average shares outstanding, in millions 87.1 1.2 88.3 =============================================
The adjustment records the effect of the acquisition and merger which resulted in an increase in the weighted average shares outstanding. EX-99.4 10 CONSENT OF STEPHEN P. HIGGINS, C.P.A. 1 STEPHEN P. HIGGINS, C.P.A. 67 DUMBARTON DRIVE HUNTINGTON, NEW YORK 11743 INDEPENDENT AUDITOR'S CONSENT I consent to the use in this Form 8-K/A of Goldonline International, Inc. of the Financial Statements and Independent Auditor's Report for the four-month period ended July 31, 1999 and for the fiscal years ended March 31, 1999 and March 31, 1998 of Goldonline International, Inc. and Subsidiaries. Stephen P. Higgins, C.P.A. April 27, 2000 -----END PRIVACY-ENHANCED MESSAGE-----