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 Act of 1934
Date of Report (Date of earliest event reported): March 1, 2001
AMERICAN INTERNATIONAL VENTURES, INC.
(Name of Small Business Issuer in its charter)
Delaware 000-30368 22-3489463
(State of Commission File No. (I.R.S. Employer
Incorporation) I.D. Number)
260 Garibaldi Avenue, Lodi, New Jersey 07644
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (973) 335-4400
Item 1. CHANGES IN CONTROL OF REGISTRANT.
Pursuant to a Share Exchange Agreement ("Share Exchange Agreement") dated
February 20, 2001 by and between American International Ventures, Inc.
("Company") and TLM Industries, Inc. ("TLM") and the shareholders of TLM ("TLM
Shareholders"), the Company acquired all of the issued and outstanding shares of
capital stock of TLM in exchange for 3,225,000 shares of common stock, $.00001
par value, of the Company. The Share Exchange Agreement became effective March
1, 2001 ("Effective Date").
The Share Exchange Agreement was adopted by the unanimous consent of the
Board of Directors of the Company on March 1, 2001. The Share Exchange Agreement
was adopted by the unanimous consent of the Board of Directors of TLM and by all
of the TLM Shareholders on February 20, 2001.
On March 14, 2001, TLM merged with its wholly owned subsidiary,
GetToner.com, Inc. ("GetToner"), pursuant to which GetToner was the surviving
entity.
Immediately prior to the Effective Date, the Company had 10,570,544 shares
of common stock issued and outstanding. On the Effective Date, the Company
issued 3,225,000 shares of common stock in exchange for all of the issued and
outstanding shares of capital stock of TLM. Immediately following the Effective
Date, the Company had 13,795,544 shares of common stock issued and outstanding.
The existing officers and directors of the Company will continue to serve
in their respective capacities, and Dominic Taglialatella, chairman of TLM,
became an executive vice president and a director of the Company (see "Officers
and Directors" below). In connection with the share exchange, Dominic
Taglialatella and Anthony Lauro, chairman and president of TLM, respectively,
entered into employment agreements with TLM and the Company. Pursuant to the
employment agreements, Messrs. Taglialatella and Lauro received annual salaries
of $78,000 and $75,000, respectively, and each will participate in a monthly
bonus program that equals two percent (2%) of the gross sales of TLM for each
month gross sales exceed $50,000, however, not to exceed $500,000. No change was
made to the Company's by-laws and certificate of incorporation, as amended, as a
result of the share exchange.
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A copy of Share Exchange Agreement and copies of the referenced employment
agreements were included as exhibits to the Company's Form 8-K filed with the
Securities and Exchange Commission on March 19, 2001 and such exhibits modify
the foregoing description.
(b) The following table contains information regarding the shareholders
of Company, its current directors and executive officers, and those
persons or entities who beneficially own more than 5% of its common
stock as of a date immediately after the Effective Date:
Name, Title and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Owner of Class(1)
Common Dr. Emanuel Ploumis(2) 2,000,000 14.50%
Chairman and Chief
Executive Officer
Common Jack Wagenti(2) 2,000,000 14.50%
President and Director
Common Charles A. Fitzpatrick, Esq.(2) 50,000 0.36%
Director
Common Thomas F. August(2) 50,000 0.36%
Director
Common Brian Russell(2) 50,000 0.36%
Director
Common Dale Truesdell(2) 25,000 0.18%
Director
Common Jonathan E. Downs(2) 1,400,000 10.15%
Secretary and Treasurer
Common Dominic Taglialatella(2) 1,342,500 09.73%
Executive Vice President and
Director
Common Anthony Lauro(2)(3) 1,342,500 09.73%
Common Officers and 6,907,500 50.07%
Directors of the Company
as a group (8 persons)
(1) Based upon 13,795,544 shares of common stock of the Company issued and
outstanding immediately after the share exchange.
(2) The address for each is 260 Garibaldi Avenue, Lodi, New Jersey 07644,
the address of the Company.
(3) Mr. Lauro is president of GetToner, a wholly owned subsidiary of the
Company.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) The consideration exchanged pursuant to the Stock Exchange Agreement
was negotiated in an arms length transaction between the parties. In evaluating
TLM as a candidate for the merger, the Company considered the business of TLM
and the overall business market for the products sold by TLM. Both parties
determined the considerations reasonable.
(b). The plan of operations of TLM provides for the further expansion of
the marketing and sale of its imaging products (see "Business" below).
FORWARD LOOKING STATEMENTS.
Certain of the statements contained in this Form 8-K/A includes "forward
looking statements" within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended ("Exchange Act"). All statements other than statements
of historical facts included in this Form 8-K/A regarding the Company's
(including its wholly owned subsidiary) financial position, business strategy,
and plans and objectives of management for future operations and capital
expenditures, and other matters, are forward looking statements. These forward
looking statements are based upon management's expectations of future events.
Although the Company believes the expectations reflected in such forward looking
statements are reasonable, there can be no assurances that such expectations
will prove to be correct. Additional statements concerning important factors
that could cause actual results to differ materially from the Company's
expectations ("Cautionary Statements") are disclosed in the Risk Factor section
below and elsewhere in this Form 8-K/A. All written and oral forward looking
statements attributable to the Company or persons acting on behalf of the
Company subsequent to the date of this Form 8-K/A are expressly qualified in
their entirety by the Cautionary Statements.
BUSINESS
Introduction.
GetToner.com, Inc. ("GetToner") was organized under the laws of the State
of New Jersey on May 24, 2000. TLM Industries, Inc. ("TLM") was organized under
the laws of the State of New Jersey on June 6, 2000. On June 2, 2000, GetToner
acquired TLM Industries, LLC., a predecessor company that was formed under the
laws of the State of New Jersey on September 5, 1997. On June 6, 2000, TLM
acquired all of the issued and outstanding shares of GetToner. Following the
acquisition of TLM by the Company, on March 14, 2001, TLM merged with GetToner,
pursuant to which GetToner became the surviving entity.
GetToner's offices are located at 30 Hillside Avenue, Springfield, New
Jersey 07081, its telephone number is (800) 933-8211, and its web site is
www.gettoner.com.
Unless the context indicates otherwise, any reference to GetToner includes
its former parent and its predecessor limited liability company.
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GetToner sells office supply products, principally disposable imaging
products such as laser toner, inkjet, and fax ribbon cartridges for computer
printers, fax machines and copiers. GetToner's products generally are sold at
discounted prices to major office supply retailers. GetToner targets
home-officer users, small to medium sized businesses, and large associations or
user groups. GetToner sells its products through e-commerce at its gettoner.com
web-site, through direct sales to wholesale office suppliers, and through
specially designed marketing programs for large user groups such as school
systems and charitable organizations.
During 1997, GetToner, through its predecessor (TLM), commenced operations
as a wholesale distributor of office supply products, principally impact
ribbons. During 1998, it repositioned its business to focus on the sale of
compatible and remanufactured toner cartridges. For fiscal year ended December
31, 1999 (audited), TLM generated revenues of $342,540, resulting in a profit
for the period of $35,719. For fiscal year December 31, 2000 (audited), TLM
generated revenues of $388,411, resulting in a loss for the period of $216,447.
As of December 31, 2000, TLM had a working capital deficiency of $258,636. The
Company's auditor in his audited statements for the period ended December 31,
2000 has expressed doubt over the ability of GetToner to continue as "going
concern". The business of GetToner will require an immediate infusion of capital
in order to sustain its operations. The Company intends to raise funds for
purposes of sustaining GetToner's business, for which no assurances can be given
(see "Risk Factors").
Business of GetToner.
Nature of Business.
GetToner participates in certain segments of the office supply industry.
The office supply industry is large and diversified, and in addition to office
supply products, includes equipment, business machines, computer hardware and
software, and a growing array of business services. In recent years, major
retailers such as Staples, Office Depot, and Office Max have replaced the small,
independent office supply store as the traditional supply channel for small and
medium sized businesses. GetToner's targeted markets are home and home office
computer users, small and medium sized business, and user groups or associations
that have broad memberships or affiliations. GetToner core business is the
wholesale and retail sale of new (from the original equipment manufacturer or
"OEM"), remanufactured, and compatible inkjet and laser toner cartridges for
printers, fax machines and copiers. Manufacturers of these products include
Apple, Brother, Canon, Epson, Hewlett-Packard, IBM/Lexmark, and Xerox, among
other brands. Compatible cartridges are new inkjet cartridges manufactured to
similar, albeit not identical, specifications of the OEM model and are priced
approximately 60-70% less than the OEM model sold by the major retailers.
Remanufactured cartridges are recycled inkjet and laser cartridges that have
been cleaned, filled, and tested to work as an original and are priced
approximately 40-50% less than similar models sold by the major retailers. New
OEM cartridges are produced by the original equipment manufacturer. New OEM
inkjet cartridges are priced competitive with similar models sold by major
retailers, while new OEM laser cartridges are priced approximately 10-15% less
than, the similar model sold by the major retailers. To date, a significant
portion of GetToner's revenues (approximately 60%) has been the result of sales
of compatible inkjet and remanufactured laser toner cartridges. GetToner's
business strategy is to market and promote its compatible and remanufactured
products as an attractive alternative to the OEM and remanufactured products
sold by the major retailers. GetToner believes its discount pricing, its free
delivery, its incentive based purchasing programs, and the ecological
considerations of recycled or re-manufactured products provide strong purchasing
incentives for consumers. Although the market for GetToner's current products
are limited by comparison to the entire industry, nonetheless management
believes this market is significant (see "Industry" below).
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GetToner retails other office supply products such as fax ribbon
cartridges, photo-grade inkjet paper and transparencies, address labels, and CD
ROMs and diskettes. GetToner also wholesales cash register and credit card rolls
and impact ribbons to retailers. Additional products may be added to GetToner's
product line in the future as determined by management. Factors influencing the
addition of products include the ability to establish direct relationships with
vendors, product margins, and shipping costs, among other considerations.
GetToner's retail customers nationwide can place orders by telephone or
through GetToner's website. Orders received by GetToner are generally packaged
and shipped the same day and are subject to a standard $3.00 handling fee.
Standard shipping is free of charge and generally orders are received within one
to three business days. Overnight delivery is available for a fee. Retail orders
are billed to a customer's credit card, while wholesale orders are billed 30
days net.
GetToner provides a low price guarantee policy. Under this policy, GetToner
will match any competitor's lowest price and give the customer a 10% refund.
This program assures customers of always receiving the lowest price from
GetToner even during periodic sales promotions by competitors. GetToner warrants
that its products will be free from defects for a period of one year. GetToner
can either replace the product or refund the money to the customer. In addition,
GetToner warrants that under normal use, its products will not cause abnormal
wear or deterioration to any printer, copier or fax machine. Under this
warranty, GetToner can either fix or replace the unit, or directly pay the
customer for such repairs. GetToner offers free shipping in the continental US
on all items with no minimum amount.
Product Pricing.
GetToner has limited it product line to items that can be sold at a
discount to the OEM products sold by major retailers such as Staples, Office
Max, and Office Depot. GetToner generally sells its remanufactured and
compatible cartridges at discounts ranging from 40% to 70% of OEM prices charged
by these retailers. New OEM inkjet cartridges generally are competitive with
retail pricing, while new OEM laser cartridges and other imaging products
generally are 10-15% less than the major retailers. Pricing on compatible fax
ribbons, inkjet paper and transparencies, address labels, and CD ROMs and
diskettes generally is 50% less than OEM prices charged by major retailers.
GetToner's average retail order ranges from $60 to $100.
Distributors and Distribution.
GetToner has established relationships with national distributors and
re-manufacturers and international manufacturers for its imaging and other
products. Distributors maintain their own inventory and drop ship directly to
GetToner's customers irrespective of the size of the order.
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To date, GetToner has maintained limited inventory. Its inventory consists
of smaller-sized products, such as inkjet cartridges, that are inexpensive and
can be shipped without special packaging requirements. Management believes this
strategy reduces capital requirements for inventory purchases and limits
associated overhead. Subject to available capital, GetToner plans increase its
inventory of inkjet cartridges and expand its inventory to other inexpensive,
shipping-friendly products, so as to maximize purchase discounts. GetToner
believes that its existing facility will provide sufficient warehouse space to
house projected increased inventory. In the future, GetToner also may purchase
directly from foreign vendors to improve its operating margins.
Sales and Marketing.
GetToner sells its products through a variety of sales channels. These
channels include sales through the internet, including through its
www.gettoner.com web-site, sales through its specially designed donor-affiliate
and school system marketing programs, and sales to wholesale office suppliers.
In addition, GetToner maintains a website www.GetOfficeNeeds.com, that contains
a 25,000 item catalogue of office supply products. At this time, GetToner is
presently evaluating whether it will actively promote the catalogue website.
GetToner strives to achieve a high ranking in popular search engines in an
effort to drive Internet sales. It also advertises in a national "thrifty"
newspaper published weekly that promotes its Internet site. It may expand its
advertising program to include, radio promotions, advertisements in the student
newspapers of approximately 25 major universities in the United States, and
selective B2B email campaign. Its current and future advertising program is
designed to direct prospective customers to GetToner's Internet site or to its
toll free number for ordering purposes.
GetToner's donor-affiliate program is designed to attract the purchasing
power of non-profit organizations with large memberships, generally in excess of
500. GetToner provides cash rebate incentives to these organizations on member
purchases. The cash rebate ranges from 2-10% of the purchase price on all items
purchased from GetToner. GetToner assists each organization in the preparation
and distribution of promotion materials designed to encourage its members to
purchase their imaging needs from GetToner. Depending on the organization,
GetToner may link its website to the home page of the organization to facilitate
purchases. GetToner initiated its donor program in January 2000, and presently
has 40 organizations with in excess of 40,000 member participants in its donor
program, which includes the Muscular Dystrophy Association, North Jersey chapter
of the Cystic Fibrosis Foundation, National Association of Independent
Appraisers, United Way of Ulster County, New York, and Community Research
Initiative on AIDS. Each of the 40 organizations are in various phases of
implementing GetToner's program, however, as of this date, product sales through
such organizations have been limited. GetToner's school system program consists
of product marketing to municipalities for their elementary and high school
systems. The initial concentration will be select municipalities located
initially in New Jersey, New York and Pennsylvania. In order to effectively
promote its donor-affiliate and school system programs, the GetToner will be
required to hire an additional marketing person, which will subject to available
capital.
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Industry.
In the past few years, high-volume office products retailers employing
various formats have emerged in several geographic markets of the United States
targeting the smaller businesses that traditionally purchased from dealers by
offering significantly lower prices. These price advantages result primarily
from direct, high-volume purchasing from manufacturers and warehouse retailing,
thereby avoiding the distributor's mark-up and eliminating the need for a
commissioned sales force and a central distribution facility. High-volume office
products retailers typically offer substantial price savings to individuals and
small- and medium-sized businesses, which traditionally have had limited
opportunities to buy at significant discounts off the retail list prices. Larger
customers have been, and continue to be, serviced primarily by full service
contract stationers. These stationers traditionally serve larger businesses
through commissioned sales forces, purchase in large quantities primarily from
manufacturers and offer competitive pricing and customized services to their
customers.
Although GetToner does not participate in the entire office supply market,
its does participate in a segment of the market, namely the imaging market,
which independently is significant. Industry data reports that retail sales in
1999 of laser toner, inkjet and fax ribbon cartridges totaled approximately $10
billion, $9 billion, and $1.3 billion, respectively. The same industry data
projects $14 billion, $14 billion, and $1.8 billion in retail sales, for each
respective category in year 2004. It also has been reported that only 10% of the
inkjet cartridges used today are non-OEM products (Recharger May 1998).
Consequently, management believes that a significant market exists for
GetToner's products.
Competition.
GetToner operates in a highly competitive environment. Its markets are
presently served primarily by traditional, independent office products
suppliers, by superstores such as Staples, Office Max, and Office Depot, and by
other e-tailers of office supply products. Substantially all of these companies
have greater resources including financial, marketing and purchasing, than
GetToner. GetToner attempts to compete in these markets by offering compatible
or remanufactured products at a deep price discount to similar OEM products
offered by these superstores. GetToner may face increased competition in the
future from these larger retailers to the extent that they, reduce their prices
on OEM products, or begin to carry similar compatible and re-manufactured
products at competitive prices. In addition, GetToner faces competition from
other e-tailers with a business model or strategy similar to that of GetToner.
No assurance can be given that increased competition will not have an adverse
effect on GetToner.
Facilities.
GetToner's headquarters are located in a 5,000 square foot facility located
in Springfield, New Jersey. Of the total facility, 1,500 square feet is used for
its administrative offices, 1,500 square feet is used for inventory and order
fulfillment, and 2,000 square feet is subleased to a third party. GetToner
leases the facility on a month-to-month basis at monthly rental of $4,500. The
sublease also is on a month-to-month basis and GetToner receives a monthly
rental of $2,000.
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Employees.
As of this date, GetToner has four full time employees, including its two
principal officers, and one part time employee.
MARKET FOR COMPANY'S SECURITIES
The Company's common stock has traded on the NASDAQ OTC Bulletin Board
since February 2000 and currently trades under the symbol "AIVN". Prior to such
time, the Company's common stock traded on the National Quotation Bureau's
("NQB") "pink sheets".
The table below sets forth the high and low bid prices of the Common stock
of the Company as reported by NASDAQ and/or NQB. The quotations reflect
inter-dealer prices, without retail mark-up, mark-down, or commissions and may
not necessarily represent actual transactions. There is an absence of an
established trading market for the Company's common stock, as the market is
limited, sporadic and highly volatile. The absence of an active market may have
an effect upon the high and low priced as reported.
1999 Low Bid High Bid
1st Quarter $0.03 $0.11
2nd Quarter 0.062 0.187
3rd Quarter 0.11 0.15
4th Quarter 0.10 0.20
2000 Low Bid High Bid
1st Quarter $0.10 $0.50
2nd Quarter 0.07 0.50
3rd Quarter 0.13 0.187
4th Quarter 0.10 0.187
As of March 1, 2001, there are 291 shareholders of record of the Company's
common stock. Although there are no restrictions on the Company's ability to
declare or pay dividends, the Company has not declared or paid any dividends
since its inception' and does not anticipate paying dividends in the future.
OFFICERS AND DIRECTORS
Position
With Year First became
Name Age Company Director or Officer
--------------------------------------------------------------------------------
Dr. Emanuel Ploumis 73 Chief Executive Officer 1996
And Chairman
Jack Wagenti 63 President/Director 1996
Charles A. Fitzpatrick 52 Director 1998
Thomas F. August 47 Director 1998
Brian Russell 71 Director 1998
Jonathan E. Downs 24 Secretary/Treasurer 1998
Dale Truesdell 57 Director 1998
Dominic Taglialatella 59 Executive Vice President/ 2001
Director
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Each director serves until the next annual meeting of Shareholders and
until his respective successor is duly elected and qualifies; Executive officers
are elected by the Board to serve at the discretion of the directors.
Dr. Emanuel Ploumis, D.D.S., Chief Executive Officer/Chairman.
Dr. Ploumis has been the Chairman and Chief Executive Officer of the
Company from 1996 to the present. Dr. Ploumis received his D.D.S. from Temple
University in 1961, and from such date until January 20, 2000 when he retired,
Dr. Ploumis was engaged in the practice of dentistry.
Mr. Jack Wagenti, President/Director.
Mr. Wagenti has been President and Director of the Company from 1996 to the
present. From 1988 to 1996, Mr. Wagenti owned and operated a real estate
brokerage business located in Lodi, New Jersey.
Mr. Charles A. Fitzpatrick, Esq., Director.
Mr. Fitzpatrick has been a Director of the Company since 1998. From 1976 to
the present, Mr. Fitzpatrick has been an attorney engaged in private practice,
specializing in medical malpractice law. Mr. Fitzpatrick is a member of the
Philadelphia and Pennsylvania Bar Associations, Defense Research Institute and
American Academy of Hospital Attorneys, and is admitted to the United States
Court of Appeals for the Third Circuit and Supreme Court of the United States.
He received a B.A. from St. Joseph's University and a J.D. from the University
of Pennsylvania.
Mr. Thomas F. August, M.S., RPH., Director.
Mr. August has been a Director of the Company since 1998. from January 2001
to the present, Mr. August has been a registered pharmacist. From 1998 to
December 2000, Mr. August had been the manager of laboratory services of United
Chemical Technologies, Inc. From 1992 to 1998, he was team leader at Sterling
Winthrop Pharmaceuticals. Mr. August received a Master Degree in Pharmacy and
Chemistry from Philadelphia College of Pharmacy and Science.
Mr. Dale B. Truesdell, B.S., M.S., Director.
Mr. Truesdell has been a Director of the Company since 1998. From 1996 to
the present he has been employed by a residential and commercial construction
firm. Mr. Truesdell received a B.A. and a M.S. in geology from the University of
Massachusetts in 1970 and 1974, respectively.
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Mr. Brian G. Russell, Director.
Mr. Russell has been a Director of the Company since 1998. Mr. Russel has
acted as a mining consultant for a number of North American mining companies. He
worked for nineteen years with the Council for Mineral Technology (MINTEK) in
South Africa doing analytical research, established an x-ray fluorescence
section and directed the Development Metallurgical Process Technology. While at
MINTEK he presented and published many scientific papers and supervised several
masters and doctorate degrees. In 1974, he was appointed Director of the South
African Minerals Bureau and represented South Africa on the International
Standards Organization Committee for the standardization of Ferro alloys and
received an award for meritorious service from the American Institute for
Mining, Metallurgical and Petroleum Engineers.
Mr. Jonathan Exter Downs, Secretary/Treasurer.
Mr. Downs has been Secretary and Treasurer of the Company since 1998. From
1999 to the present, he has been employed at Muscular Dystrophy Association as
Support Staff. Mr. Downs received a B.A. degree from Curry College, Milton,
Massachusetts in 1998.
Mr. Dominic Taglialatella, Executive Vice President/Director.
Mr. Taglialatella became an Executive Vice President and a Director of the
Company in March 2001. Mr. Taglialatella has been Chief Executive Officer and
Chairman of the GetToner and its predecessors since May 1998. From December 1996
to February 1998, Mr. Taglialatella was a president and principal owner of TR
Ribbon Manufacturing ("TR Manufacturing"). From 1991 to 1997, he acted as an
advisor to a large office supply company. From 1984 to 1996, he owned and
operated an art gallery in New York City, New York. In 1998, both Mr.
Taglialatella and TR Manufacturing filed for protection under the federal
bankruptcy laws. Mr. Taglialatella received a B.S. degree from Seton Hall
University in 1963.
EXECUTIVE COMPENSATION
For fiscal years ended prior to May 31, 2000, no compensation has been
awarded to, earned by, or paid to the Company's officers and directors. In
February 2001, the Company and the its chairman and president each have agreed
to certain compensation arrangements for the one year period ending May 31,
2001. In consideration for acting as chairman of the Company for such period,
Dr. Ploumis received 300,000 shares of common stock of the Company, and in
consideration for acting as president of the Company for such period, Mr.
Wagenti received 300,000 shares of common stock of the Company.
RISK FACTORS.
The following risks factors relate to the Company, GetToner and the
business of GetToner. Unless the context indicates otherwise, the Company shall
mean its wholly owned subsidiary, GetToner.com, Inc.
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CURRENT OPERATIONS AND CURRENT FINANCIAL CONDITION.
For 12-month period ended December 31, 2000 (audited), GetToner's
predecessor (TLM) recorded $388,411 in revenues, and a loss from operations of
$216,447, and as of that date had a working capital deficiency of $258,636 (see
"Financial Statements" included herein). The financial statements contain note
disclosures describing the circumstances that lead to doubt over the ability of
the Company to continue as a going concern. In his report on the financial
statements for the year ended December 31, 2000, the Company's independent
auditor included an explanatory paragraph regarding its ability to continue as
going concern. The Company will be required to raise additional funds
immediately to sustain the operations of GetToner, for which no assurances can
be given. If the Company is unable to raise funds immediately for the operations
of GetToner, the business of GetToner may fail which will have a material
adverse impact on the Company and the price of the Company's stock.
NEED FOR ADDITIONAL CAPITAL/SIGNIFICANT DILUTION.
The business of GetToner presently in not profitable. The Company has an
immediate need for additional capital in order to sustain the operations of
GetToner for the near term. In addition, the Company will require additional
capital in the future to sustain GetToner's operations until it achieves
profitable operations. No assurances can be given that the Company will be
successful in raising the capital necessary for both near term and future
operations. The inability to raise such capital may have a material adverse
impact upon the Company. In addition, if the Company is successful in raising
additional funds, it is likely that any such additional capital will be in the
form of the sale and issuance of the additional Company' common stock. The sale
and issuance of common stock may substantially increase the number of shares of
common stock outstanding and cause significant dilution to shareholders.
IMMEDIATE AND FUTURE MARKETING STRATEGY.
The success of GetToner, in addition to other factors, will be dependent
upon a successful product marketing strategy. The Company presently is seeking
to raise capital to be used to develop and expand the business of GetToner. A
portion of the capital will be used for advertising and marketing purposes,
which includes print and internet media advertising (See "Business of
GetToner-Sales and Marketing"). Although GetToner believes its marketing
strategy will result in increased sales, this strategy is relatively untested,
and, no assurances can be given that this marketing strategy will prove
successful. Moreover, in addition to its immediate marketing strategy, the
Company will be required to dedicate significant resources for future marketing
efforts of GetToner. If the Company is unsuccessful in these marketing efforts,
it will have a material adverse impact upon the Company.
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SALE OF COMPATIBLE AND REMANUFACTURED PRODUCTS.
GetToner's core business is and will continue to be the sale of compatible
and remanufactured inkjet and laser toner cartridges. These cartridges are an
alternative to original equipment manufactured (OEM) products. The business of
selling non-OEM products is subject to certain risks. OEMs have attempted to
protect their businesses by continually altering their products and/or improving
the quality and sophistication of its products, and by taking an aggressive
position in the defense of their patents, copyrights, and trademarks. In the
event OEMs are able to successfully protect their businesses in the future
through one or more business strategies so as to limit or reduce the use of
non-OEM products, such event or events will have a material adverse impact upon
the business of the Company.
COMPETITION.
GetToner faces competition from, major retailers such as Staples, Office
Max and Office Depot, from other independent office supply stores, and from
other e-tailers of office supplies. Many of these companies have greater
resources, including financial, marketing and purchasing, than GetToner. These
major retailers sell products through their retail outlets and through their
websites. It is conceivable that one or more of these major retailers could
engage in a loss leader or deep discounted policy for products similar to
GetToner's core products. In addition, GetToner also may face increased
competition from the growth of other e-tailers that have a business model
identical or similar to that of GetToner. Finally, it is likely that if GetToner
business develops, for which no assurances can be given, it will face increased
competition from both existing and new sources. The occurrence of one or more of
the competitive events could have an adverse impact upon GetToner and its
business.
RELIANCE UPON DISTRIBUTORS/VENDORS.
GetToner presently purchases and will purchase in the future products from
a number of distributors or vendors. In the event its relationship with one or
more distributors or vendors is terminated for any reason, such event may have a
material adverse impact upon the business of GetToner.
LACK OF PROPRIETARY PROTECTION.
Although management has developed GetToner's business, which includes
certain marketing and pricing strategies, the business model itself is not
subject to any proprietary protection by law or otherwise. Consequently, it is
conceivable that GetToner's business model could be replicated or otherwise
developed by third parties. The occurrence of such event would result in a loss
of the competitive advantages of GetToner and could cause a material adverse
impact upon GetToner and its business. In addition, due to the non-proprietary
nature of its business, the valuation of the Company's business in both the
private and public markets could be lessened.
12
MANAGEMENT AND DEPENDENCE ON MANAGEMENT.
The ability of the Company to conduct its business affairs in a successful
fashion will be subject to the capabilities and business acumen of current
management. Accordingly, no person should purchase the Company's common stock
unless such person is willing to entrust all aspects of the business affairs of
the Company to its current management.
CONTROL EXERCISED BY PRINCIPAL SHAREHOLDER.
The Company's officers and directors own approximately 50% of outstanding
voting shares of the Company, which exceeds a majority interest in the Company.
Consequently, such parties will continue to exercise significant control of the
Company.
PENNY STOCK REGULATION.
The Company's common stock may be deemed a "penny stock" under federal
securities laws. The Securities and Exchange Commission has adopted regulations
that define a "penny stock" generally to be any equity security that has a
market price of less than $5.00 per share, subject to certain exceptions. These
regulations impose additional sales practice requirements on any broker/dealer
who sell such securities to other than established investors and accredited
investors. For transactions covered by this rule, the broker/dealer must make
certain suitability determinations and must receive the purchaser's written
consent prior to purchase. Additionally, any transaction may require the
delivery prior to sale of a disclosure schedule prescribed by the Commission.
Disclosure also is required to be made of commissions payable to the
broker/dealer and the registered representative, as well as current quotations
for the securities. Finally, monthly statements are required to be sent
disclosing recent price information for the penny stock held in the account of
the customers and information on the limited market in penny stocks. These
requirements generally are considered restrictive to the purchase of such
stocks, and may limit the market liquidity for such securities.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable.
ITEM 5. OTHER EVENTS.
Not applicable
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The following are (i) the financial statements of the Company for the
periods indicated therein, and (ii) the proforma financial statements of the
Company for the periods indicated therein to reflect the acquisition of TLM
Industries, Inc.
13
ITEM 7 (i)
TLM INDUSTRIES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
TLM INDUSTRIES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Table of Contents
Page
Independent Auditor's Report 1
Consolidated Balance Sheet 2
Consolidated Statements of Operations 3
Consolidated Statements of Changes in Stockholder's Deficit 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
INDEPENDENT AUDITOR'S REPORT
To the Stockholders of
TLM Industries, Inc.
I have audited the accompanying consolidated balance sheet of TLM
Industries, Inc. and its wholly owned subsidiary ("the Company") as of December
31, 2000, and the related consolidated statements of operation, changes in
stockholders' deficit, and cash flows for the years ended December 31, 2000 and
1999. These consolidated financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
consolidated financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. I believe that my audit provides
a reasonable basis for my opinion.
In my opinion, based on my audit, the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of TLM Industries, Inc. and its wholly owned subsidiary as of December
31, 2000 and the results of their operations and their cash flows for the years
ended December 31, 2000 and 1999 in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As shown in the
accompanying consolidated financial statements, at December 31, 2000, the
Company had a working capital deficiency of $258,636 as well as an accumulated
deficit of $327,377. These factors among other things, also discussed in Note 1
to the consolidated financial statements, raise substantial doubt about its
ability to continue as a going concern. The consolidated financial statements do
not include any adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts or classification of liabilities that
might be necessary should the Company be unable to continue in operation.
ROBERT G. JEFFREY, CPA
Wayne, New Jersey
May 7, 2001
TLM INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
December 31, 2000
ASSETS
Current Assets
Cash $ 2,300
Accounts receivable 24,152
Inventory 7,981
--------------
Total current assets $ 34,433
Fixed Assets
Office furniture and equipment 10,022
Less, accumulated depreciation 1,432
--------------
Net fixed assets 8,590
Other Assets
Stockholder advances 8,100
Deferred financing cost 9,250
Security deposits 5,544
--------------
Total other assets 22,894
------------
TOTAL ASSETS $ 65,917
============
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable and accrued liabilities $ 127,311
Payroll and sales taxes payable 23,053
Notes payable 132,905
Security deposit payable 1,800
Stockholder advance 8,000
-------------
Total current liabilities $ 293,069
Notes Payable 98,225
------------
TOTAL LIABILITIES 391,294
Stockholders' Deficit
Common stock - authorized, 10,000,000
shares without par value; 2,010,000
issued and outstanding 2,000
Preferred stock - authorized, 1,000,000
shares without par value; 200,000
issued and outstanding 1,000
Subscriptions receivable (1,000)
Retained deficit (327,377)
------------
Total stockholders' deficit (325,377)
------------
TOTAL LIABILITIES AND
STOCKHOLDER'S DEFICIT $ 65,917
============
The accompanying notes are an integral part of these financial statements.
-2-
TLM INDUSTRIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For The Years Ended December 31, 2000 and 1999
2000 1999
---------- ----------
Net Sales $ 388,411 $ 342,540
Cost of Goods Sold 288,384 223,804
---------- ----------
Gross Profit 100,027 118,736
Selling and Administrative Expenses 316,474 83,017
---------- ----------
Operating (loss) profit (216,447) 35,719
Other Income and Expense
Rental income 7,650 -
Interest expense (12,329) (4,309)
---------- ----------
Net income (loss) $(221,126) $ 31,410
========== ==========
Earnings (Loss) Per Share:
Basic and diluted $(.19) $.03
========== ==========
The accompanying notes are an integral part of these financial statements.
-3-
TLM INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S DEFICIT
For The Years Ended December 31, 2000 and 1999
Common Stock Preferred Stock
---------------------- ---------------------
Subscriptions Retained
Shares Amount Shares Amount Receivable Deficit Total
--------- ---------- -------- --------- ------------- ---------- -----------
Balance, January 1, 1999 - $ - - $ - $ - $ (42,811) $ (42,811)
Net income for the year 31,410 31,410
Distributions (74,440) (74,440)
--------- ---------- -------- --------- ------------- ---------- -----------
Balance, December 31, 1999 - - - - - (85,841) (85,841)
Subscriptions to
common stock 1,000 1,000 (1,000) -
Stock issued in exchange
for stock of Get-
Toner.com, Inc. 1,679,000 -
Stock issued for services 330,000 1,000 200,000 1,000 2,000
Net loss for the year (221,126) (221,126)
Distributions (20,410) (20,410)
---------- ---------- -------- --------- ------------- ---------- -----------
Balance, December 31, 2000 2,010,000 $2,000 200,000 $ 1,000 $ (1,000) $(327,377) $ (325,377)
========== ========== ======== ========= ============= ========== ===========
The accompanying notes are an integral part of these financial statements.
-4-
TLM INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000 and 1999
2000 1999
---------- ----------
Cash Flows From Operations:
Net profit (loss) $(221,126) $ 31,410
Adjustments to reconcile net profit (loss) to
net cash consumed in operating activities:
Depreciation and amortization 2,182 -
Value of capital stock issued for services 2,000
Changes in current assets and liabilities:
Increase in accounts payable 44,669 27,405
Increase in taxes and other accrued liabilities 22,552 1,036
Increase in liability for stockholder advance 8,000 -
Decrease (increase) in accounts receivable 6,337 (2,642)
Decrease (increase) in inventory 5,319 (500)
Increase in liability for security deposit 1,800 -
Increase in security deposits (3,710) -
---------- ----------
Net cash (consumed) provided by operating
activities (131,977) 56,709
Cash Flows From Investing Activities:
Purchase of equipment (10,022) -
---------- ----------
Net cash consumed by investing activities (10,022) -
Cash Flows From Financing Activities:
Proceeds of borrowing 240,465 29,810
Repayments of debt (68,228) (21,274)
Shareholder distributions (20,410) (74,440)
Increase (decrease) in stockholder advances (8,100) 4,265
---------- ----------
Net cash provided (consumed) by
financing activities 143,727 (61,639)
---------- ----------
Net increase (decrease) in cash 1,728 (4,930)
Cash balance, beginning of period 572 5,502
---------- ----------
Cash balance, end of period $ 2,300 $ 572
========== ==========
The accompanying notes are an integral part of these financial statements.
-5-
TLM INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note 1. ORGANIZATION & BUSINESS
Organization
The Company was incorporated in New Jersey on June 5, 2000. On June 6,
2000, it acquired all the capital stock of its subsidiary, GetToner.com, Inc.
(GetToner). GetToner was formed May 24, 2000 as a successor to a limited
liability company which since 1997 had been conducting business as a seller of
imaging products for computer printers, fax machines, and copiers. The Company
has had no other business transactions except for it's ownership of the stock of
GetToner.
On March 1, 2001, all of the outstanding stock of the Company was acquired
by American International Ventures, Inc., a reporting company under Federal
securities law, and on March 14, 2001 the Company merged with GetToner, with
GetToner emerging as the surviving company.
Business
The Company markets and sells office supplies, principally imaging products
such as laser toner, inkjet, and fax ribbon cartridges for computer printers,
fax machines, and copiers. These products are sold at discounted prices to major
office supply retailers. The Company conducts its business principally through
the internet at its gettoner.com website. The Company operates from its
headquarters in Springfield, New Jersey. Since the principal source of its sales
is its website, it is not limited geographically.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Consolidated Statements
The consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, GetToner. All significant
intercompany balances and transactions have been eliminated in
consolidation.
For financial accounting purposes, the merger of GetToner and the
predecessor limited liability company and the stock acquisition of
GetToner by the Company were accounted for as poolings of interests.
b. Cash
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or
less to be cash equivalents.
-6-
TLM INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note 2 (continued)
c. Fair Value of Financial Instruments
The carrying amounts of the Company's financial instruments, which
include cash equivalents, accounts receivable, accounts payable and
accrued liabilities approximate their fair values at December 31, 2000.
d. Losses Per Share
Basic and diluted net loss per common share is computed by dividing the
net loss available to common shareholders for the period by the
weighted average number of shares of common stock outstanding during
the period. The number of weighted average shares outstanding as well
as the amount of net loss per share are the same for basic and diluted
per share calculations for all periods reflected in the accompanying
financial statements.
e. Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes",
which requires the use of the "liability method". Accordingly, deferred
tax liabilities and assets are determined based on differences between
the financial statement and tax bases of assets and liabilities, using
enacted tax rates in effect for the year in which the differences are
expected to reverse. Current income taxes are based on the income that
is currently taxable.
f. Inventory
Inventory consists principally of finished product. Inventories are
stated at the lower of cost (determined on a first in-first out basis)
or market.
g. Fixed Assets
Fixed assets are recorded at cost. Depreciation is computed by using
accelerated methods, with useful lives of seven years for furniture and
equipment and five years for computers and automobiles.
h. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
-7-
TLM INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note 2 (continued)
i. Advertising Costs
The Company expenses advertising costs when the advertisement occurs.
Advertising costs amounted to $19,704 in 2000 and $983 in 1999.
j. Segment Reporting
Management treats the operation of the Company and its subsidiary as
one segment.
k. Recognition of Revenue
Revenue is realized from product sales. Recognition occurs upon
delivery.
l. Capital Stock
Capital stock, both common and preferred, has been issued in return for
services. Values are assigned to these issuances equal to the value of
services received or the market value of the common stock, whichever is
most clearly evident. Values were not assigned to previous issuances as
there has been no market for the Company stock and these issuances did
not change the proportions of stock ownership of the existing
shareholders.
Note 3. GOING CONCERN UNCERTAINTY
Accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As shown in the consolidated
financial statements, the Company had a material working capital deficiency and
an accumulated deficit at December 31, 2000. These factors raise substantial
doubt about the ability of the Company to continue as a going concern. The
consolidated financial statements do not include adjustments relating to the
recoverability of assets and classification of liabilities that might be
necessary should the Company be unable to continue in operation.
Present plans of the Company, the realization of which cannot be assured,
to overcome these difficulties include but are not limited to the raising of
additional funds from American International Ventures, Inc., the Company parent.
-8-
TLM INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note 4. RELATED PARTY TRANSACTIONS
In connection with the incorporation of the Company, the Company chairman
and president each received 135,000 shares of common stock and 100,000 shares of
10% voting preferred stock in return for services.
On February 20, 2001, employment agreements were executed with the
president and chairman of the Company. Each agreement has a three-year term.
During 1998, the wife of the chairman made an advance to the Company in the
amount of $29,600. During the year 2000, the wife of the president made an
advance to the Company in the amount of $8,000. These advances are evidenced by
promissory notes which bear interest at rates of 12.25% and 16.6%, respectively.
The balances due on these notes at December 31, 2000 were $29,489 and $4,460,
respectively. In addition, the chairman advanced $8,000 to the Company during
the year 2000. This advance is due on demand and does not bear interest.
Note 5. LOSS PER SHARE
Basic and diluted earnings (loss) per share is based on the net earnings
(loss) divided by the weighted average number of common shares outstanding
during the period. Although the Company was a limited liability company in 1999,
the per share amount has been calculated using the average shares outstanding in
the year 2000.
Year 2000
---------
Weighted
Income Average Shares Per Share
(Loss) Outstanding Amount
------------------------------------
Net Loss $(221,126)
Adjustment for preferred stock dividends (1.139)
------------------------------------
Loss allocable to common shareholders-
basic and diluted $(222,265) 1,144,583 $(.19)
========== =========== =========
Year 1999
---------
Net Income $ 31,410 1,144,583 $ .03
========== =========== =========
-9-
TLM INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note 6. NOTES PAYABLE
The Company has two lines-of-credit under which it can borrow up to $50,000
and $10,000, respectively. It also has a business flex loan arrangement with
American Express under which credit card charges are summarized each month and
paid in six monthly installments. In addition, the Company is obligated under
two notes payable to banks, two notes payable to American International
Ventures, Inc. (AIV), and a note payable to each of the wives of the Company
chairman and president. The notes payable to AIV were converted to capital
during March 2001 (see Note 1).
This debt is summarized below:
Due
Currently Long Term Total
--------- --------- ---------
Line of credit, with interest
at 13.49% $ 42,775 $ - $ 42,775
Line of credit, with interest
at 10.5% 8,456 - 8,456
Flex loan, with interest
at 11% 69,497 - 69,497
Note payable to bank, due
March 2003, in monthly
installments of $415, with
interest at 10% 4,164 5,832 9,996
Note payable to bank, due
May 2005, in monthly
installments of $861, with
interest at 10.5% 6,840 29,617 36,457
Note payable to AIV, due
11/27/02, with interest
at 12% - 10,000 10,000
Note payable to AIV, due
12/13/02, with interest
at 12% - 20,000 20,000
Note payable, due 5/15/03,
with interest at 16.6% 1,057 3,403 4,460
Note payable, due 11/22/14,
in monthly installments of
$310, with interest at 12.25% 116 29,373 29,489
--------- --------- ---------
Totals $ 132,905 $ 98,225 $ 231,130
========= ========= =========
-10-
TLM INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note 6 (continued)
Maturities of long term debt are as follows:
Year Amount
2002 $43,534
2003 11,196
2004 10,077
2005 4,681
Thereafter 28,737
--------
$98,225
========
Note 7. RENTALS UNDER OPERATING LEASES
The Company conducts its operations from facilities that are leased under a
five-year noncancelable operating lease which expires in May, 2005. There is an
option to renew the lease for an additional five years at an increased monthly
rental. In addition, a computer system and a variety of office equipment is
leased under operating leases, most of which expire in 2003.
The following is a schedule of future minimum rental payments required
under these operating leases as of December 31, 2000:
YEAR AMOUNT
2001 $ 60,857
2002 60,857
2003 56,857
2004 54,000
2005 22,500
---------
$255,071
=========
Rent expense amounted to $31,255 in 2000 and $11,930 in 1999.
Part of the headquarters facility is being subleased to an outside party on
a month to month basis at a rate of $2,250 per month.
-11-
TLM INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note 8. INCOME TAXES
The Company and its subsidiary have experienced a net operating loss since
June 2, 2000. As a result, neither has incurred Federal income taxes. Prior to
June 2, 2000, the Company operated as a limited liability company. As such, it
would pay no taxes as any income or loss would be reported on the personal tax
returns of its members. The available net operating loss totaled $213,513 at
December 31, 2000. This loss can be carried forward and deducted in any year in
which the Company has taxable income. If not used, this carryforward will expire
in the year 2020.
Under Statement of Financial Accounting Standards No. 109, the recognition
of deferred tax assets is permitted unless it is more likely than not that the
assets will not be realized. The Company has recorded a noncurrent deferred tax
asset as follows:
Deferred Tax Assets $32,027
Realization Allowance 32,027
-------
Balance Recognized $ -
========
Note 9. PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of preferred stock,
without par value. On July 14, 2000, 200,000 of these shares were designated
"10% voting preferred stock". Each of these shares entitles the holder to a 10%
cumulative dividend based on a $.10 per share stated value. This issue of
preferred stock also provides a voting right of ten votes for each share. The
holders of this preferred stock own substantially all of the common stock of the
Company presently outstanding. The characteristics of the remaining 800,000
preferred shares authorized have not been specified.
At December 31, 2000, unpaid dividends on the outstanding preferred stock
totaled $1,139. On March 14, 2001, this issue of preferred stock was cancelled
coincident with a merger of the Company and its wholly owned subsidiary. (See
Note 1).
-12-
TLM INDUSTRIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2000
Note 10. SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash was paid for interest and income taxes during these years, as follows:
2000 1999
------ ------
Interest $5,184 $3,320
Income taxes - -
There were no noncash investing activities during either 2000 or 1999. The
following noncash financing activities occurred:
a. Shares of common stock totaling 1,000 shares were issued during 2000 in
return for subscription receivables.
b. Shares of common stock were issued during the year 2000 in exchange for
the stock of GetToner.com, Inc.; these totaled 1,679,000 shares.
c. Shares of common and preferred stock were issued for services during
2000; these totaled 330,000 shares of common and 200,000 shares of
preferred.
Note 11. SUBSEQUENT EVENTS
On March 1, 2001, all of the outstanding stock of the Company was acquired
by American International Ventures, Inc., a reporting company under Federal
securities law.
On March 14, 2001, the Company merged with its subsidiary, GetToner, with
GetToner emerging as the surviving entity. All of the capital stock of the
Company was cancelled as a result of this merger.
-13-
ITEM 7. (ii)
AMERICAN INTERNATIONAL VENTURES, INC.
PROFORMA BALANCE SHEETS
February 28, 2001
American
International
ASSETS Ventures, Inc. TLM Industries Adjustment Combined
-------------- -------------- ---------- ----------
Current Assets $ 55,589 $ 34,433 $ (30,000) $ 60,022
Fixed Assets 11,567 10,022 21,589
Less accumulated depreciation 3,649 1,432 5,081
-------------- -------------- ---------- ----------
Net Fixed Assets 7,918 8,590 - 16,508
Other Assets:
Investment 118,830 118,830
Stockholder advances - 9,100 9,100
Deferred financing cost - 9,250 9,250
Security deposits - 5,544 5,544
-------------- -------------- ---------- ----------
Total Other Assets 118,83 23,894 142,724
-------------- -------------- ---------- ----------
Total Assets $ 182,337 $ 66,917 $ (30,000) $ 219,254
============== ============== ========== ==========
LIABILITIES AND STOCKHOLDER'S EQUITY
(DEFICIT)
Current Liabilities $ 15,000 $ 298,815 $ 313,815
Notes Payable - 98,225 $ (30,000) 68,225
-------------- -------------- ---------- ----------
Total Liabilities 15,000 397,040 (30,000) 382,040
Stockholder's Equity (Deficit) 88,909 (330,123) (241,214)
Accumulated Other Comprehensive Income 78,428 - 78,428
-------------- -------------- ---------- ----------
Total Liabilities and Stockholder's $ 182,337 $ 66,917 $ (30,000) $ 219,254
Equity (Deficit) ============== ============== ========== ==========
-1-
AMERICAN INTERNATIONAL VENTURES, INC.
PRO FORMA STATEMENTS OF OPERATIONS
For the Years Ended May 31, 2000 and 1999
American International
Ventures, Inc. TLM Industries, Inc. Adjustments Combined
2000 1999 2000 1999 2000 1999 2000 1999
---------------------- -------------------- ------------------ --------------------
Sales $ - $ - $390,605 $267,006 $ - $ - $390,605 $267,006
Cost of Goods Sold 275,996 141,709 - - 275,996 141,709
---------------------- -------------------- ------------------ --------------------
Gross Profit - - 114,609 125,297 - - 114,609 125,297
Selling and Administrative Expenses 29,537 91,008 100,679 92,407 - - 130,216 183,415
---------------------- -------------------- ------------------ --------------------
Operating Profit (Loss) (29,537) (91,008) 13,930 32,890 - - (15,607) (58,118)
Other Income and Expense:
Interest Expense - - (2,874) (4,345) - - (2,874) (4,345)
---------------------- -------------------- ------------------ --------------------
Net Income (Loss) $(29,537) $(91,008) $ 11,056 $ 28,545 $ - $ - $(18,481) $(62,463)
====================== ==================== ================== ====================
Net Income (Loss) Per Share $ - $ (.01) $ - $ - $ - $ - $ - $ (.01)
====================== ==================== ================== ====================
-2-
AMERICAN INTERNATIONAL VENTURES, INC.
PRO FORMA STATEMENTS OF OPERATIONS
For the Nine Month Periods Ended February 28, 2001 and 2000
American International
Ventures, Inc. TLM Industries, Inc. Adjustments Combined
2000 1999 2000 1999 2000 1999 2000 1999
---------------------- -------------------- ------------------ --------------------
Sales $ - $ - $ 300,414 $301,525 $ - $ - $ 300,414 $301,525
Cost of Goods Sold 179,228 207,592 - - 179,228 207,592
---------------------- -------------------- ------------------ --------------------
Gross Profit - - 121,186 93,933 - - 121,186 93,933
Selling and Administrative Expenses 130,656 19,632 306,900 71,575 - - 437,556 91,207
---------------------- -------------------- ------------------ --------------------
Operating Profit (Loss) (130,656) (19,632) (185,714) 22,358 - - (316,370) 2,726
Other Income and Expense:
Rental Income - - 12,150 - - - 12,150 -
Interest Expense - - (3,663) (1,961) - - (3,663) (1,961)
---------------------- -------------------- ------------------ --------------------
Net Income(Loss) Before Inc Taxes (130,656) (19,632) (177,227) 20,397 - - (307,883) 765
Income Tax Benefit 40,402 - 40,402
---------------------- -------------------- ------------------ --------------------
Net Income (Loss) (90,254) (19,632) (177,227) 20,397 - - (267,481) 765
Other Comprehensive Income 78,428 - - - - - 78,428 -
(Net of Tax)
---------------------- -------------------- ------------------ --------------------
Net Income (Loss) $(11,826) $(19,632) $(177,227) $ 20,397 $ - $ - $(189,053) $ 765
====================== ==================== ================== ====================
Net Income (Loss) Per Share $ (.01) $ - $ (.02) $ - $ - $ - $ (.03) $ -
====================== ==================== ================== ====================
-3-
These schedules contain summary financial information extracted from the
financial statements of February 28, 2001 and 2000 (unaudited) and May 31, 2000
and 1999, and are qualified in their entirety by reference to such financial
statements.
American International Ventures, Inc. (AIV) uses a May 31 fiscal year,
whereas TLM Industries, Inc. (TLM) has used a calendar year. The statements of
TLM were combined with those of AIV as follows:
The TLM balance sheet of December 31, 2000 does not differ by more than 93
days from the February 28, 2001 balance sheet of AIV, so the two were combined.
Statements of operations of TLM were prepared for years ended May 31, 2000
and 1999 by eliminating from the calendar year statements the results of the
first five months of each year and adding the results of the first five months
of the following year. These were combined with May 31 fiscal year statements of
AIV.
Statements of operations of TLM were prepared for the nine month periods
ended February 28, 2001 and 2000 by eliminating from the calendar year
statements the results of the first five months of each year and adding the
results of first two months of the following year. These were combined with nine
month statements of AIV.
None of the periods were included more than once. The only excluded period
was the statement of operations of TLM for the first five months of 1998. The
sales and income of this period are presented below:
Sales $87,438
Net Income 12,194
-4-
Exhibit Number Description
3(i)a. Certificate of Incorporation of GetToner.com, Inc. dated May
24, 2000. (Incorporated by reference to the Company's Form
8-K filed with the Securities and Exchange Commission on
March 19, 2001).
3(i)b. Certificate of Incorporation of TLM Industries, Inc. dated
June 5, 2000. (Incorporated by reference to the Company's
Form 8-K filed with the Securities and Exchange Commission on
March 19, 2001).
3(i)c. Certificate of Merger TLM Industries, Inc. and GetToner.com,
Inc. dated March 7, 2001. (Incorporated by reference to the
Company's Form 8-K filed with the Securities and Exchange
Commission on March 19, 2001).
3(ii)(a) By-Laws of GetToner.com, Inc.
10 (i) Share Exchange Agreement by and between American
International Ventures, Inc. and TLM Industries, Inc. and the
shareholders of TLM Industries, Inc. dated February 20, 2001.
(Incorporated by reference to the Company's Form 8-K filed
with the Securities and Exchange Commission on March 19,
2001).
99(i) Employment Agreement by and between American International
Ventures, Inc., TLM Industries, Inc. and Dominic
Taglialatella dated February 20, 2001. (Incorporated by
reference to the Company's Form 8-K filed with the Securities
and Exchange Commission on March 19, 2001).
99(ii) Employment Agreement by and between American International
Ventures, Inc., TLM Industries, Inc. and Anthony Lauro dated
February 20, 2001. (Incorporated by reference to the
Company's Form 8-K filed with the Securities and Exchange
Commission on March 19, 2001).
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
American International Ventures, Inc.
May 23, 2001
/s/ Jack Wagnenti
-----------------
Jack Wagenti
President