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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2001
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to ___________________
Commission file number 000-28611
ISEMPLOYMENT.COM, INC.
-------------------------------------------------------
(Name of small business in its charter)
WYOMING 86-0970152
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
ncorporation or organization) Identification No.)
665 3rd Street, Suite 517
San Francisco, CA 94107
--------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number 415-861-7963
--------------
Securities Registered Pursuant To Section 12(B) Of The Act: None
Securities Registered Pursuant To Section 12(G) Of The Act:
Common Stock, Par Value $.001 Per Share
-----------------------
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
The registrant's revenue for the year ended September 30, 2002 was $0.
The aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant on February 4, 2002, was approximately $191,426
based upon the closing price of $.0150.
As of February 14, 2002, there were 24,711,738 shares of the registrant's common
stock, $.001 par value per share, issued and outstanding.
Transitional Small Business Disclosure Format (check one) Yes [ ] No [X]
1
DOCUMENTS INCORPORATED BY REFERENCE
See the Exhibit Index hereto.
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
OVERVIEW
Originally called Magical Marketing, Inc. (Magical Marketing) and incorporated
under the laws of the State of Wyoming on February 27, 1997, Magical Marketing
ceased all operating activities during the period from February 27, 1997 to
October 20, 1999 and was considered dormant.
On June 30, 2000, ISEmployment.com and Magical Marketing, Inc., merged in a
share exchange that resulted in Magical Marketing acquiring all of the issued
outstanding capital stock of ISEmployment.com for an aggregate of 400,000 shares
of Magical Marketing. In connection with the merger, Magical Marketing changed
its name to ISEmployment.com, Inc.
On October 16, 2002, Idoleyez.com LLC, ("Idoleyez") a California corporation
which specializes in high-end eye care, and ISEmployment entered into a share
exchange that resulted in ISEmployment acquiring 100% of the issued and
outstanding Units of Idoleyez Membership Interest.
ISEmployment.com, Inc. as of September 30, 2002 had not engaged in any
operations other than organizational and development matters. ISEmployment.com
was an Internet based development stage company, which intended to provide human
resources and recruiting services on-line. ISEmployment.com's site wanted to
differentiate itself from other employment-related sites by creating a virtual
human resources center and a virtual recruitment and selection system.
ISEmployment.com's targeted market was to provide its services to United States
corporations, which are recruiting information systems professionals.
The following Business discussion summarizes certain information as to the
Company both before and after the transaction with Idoleyez.
The Company is a "small business issuer" for purposes of disclosure and
filings under the Securities Act of 1933 and the Securities Act of 1934.
2
BUSINESS (WITH CONSIDERATION OF THE IDOLIZE TRANSACTION, SUMMARY):
IdolEyez was founded February 2001, is a high-end eye care enterprise,
integrating quality eyewear, exclusive brands, innovative styles, and custom
technology within a unique environment to deliver an exceptional retail buying
experience to the discriminating high-end eyewear consumer. To that end,
IdolEyez launched its first "bricks with clicks" concept store, Eyez 2.0,
through a Marketing Agreement, as a Beta store, in February 2002. This venture
generated customer, supplier and media interest due to the following reasons:
a) the unique technology and service combination is serving an affluent customer
base.
b) the site's Frame Search and Advisor create a unique experience not offered by
other eyewear retailers.
c) In store Virtual Try on station.
We have gathered real-world customer information to be able to address the
markets we have targeted. We have adjusted our staff, redirected our advertising
and sales force, and have added the products/services necessary to meet the
needs and expectations of our customers. The competitive advantages which
IdolEyez brings to this market and/or is developing include:
Sophistication in technology through our easy-to-use virtual try-on software.
Our entire collection of frames is catalogued and viewable online.
Online appointment tool saves time in booking appointments at the right time at
the right location.
Old-fashioned service philosophy whereby we offer house calls and after-hour
appointments to deepen the relationships between IdolEyez and our customers.
Certain supplier exclusives that bring new, unique, trend-setting and
hard-to-find collections of high-end eye wear to our customers. Brands include
Theo, SAMA, Face-A-Face, and IC Berlin.
In-store lab that ensures the accuracy and on-time delivery of customers'
prescription eye wear.
Online Frame Advisor that provides answers and education on eye care and eye
wear.
With a sales and marketing management team, an aggressive PR campaign is already
under way. To date, IdolEyez has received coverage in SF Chronicle, SOMA
Magazine, 20/20, and VisionMonday
E-commerce capabilities (estimated to be available Q2 2003) may enable our
customers to select and purchase contacts, and repurchase lost or stolen eyewear
faster and easier. We are subject to a variety of federal, state and local laws,
rules and regulations affecting the health care industry and the delivery of
health care services. State and local legal requirements vary widely among
jurisdictions and are subject to frequent change. Federal legal requirements are
also subject to change.
Our corporate headquarters are located at 665 3rd Street, Suite 517, San
Francisco, California 94107 and our telephone number is (415) 861-7963.
3
BUSINESS FOR THE FISCAL YEAR END SEPTEMBER 30, 2002:
ISEmployment.com was a development stage company, seeking to provide on-line
human resources and recruiting services for the Information Systems industry.
ISEmployment.com's on-line human resources and recruiting services, which were
under development, were to specifically address the tight labor market in the
United States for Information System Professionals and also provides a cost
effective mechanism for employers to access the relative abundance of qualified
foreign candidates. This service is different from the job and resume posting
sites currently available on the Internet by providing virtual human resources
center and a virtual recruitment and selection system. The system also contains
an advance module that simplifies the hiring of foreign workers.
ISEmployment.com's site was intending to be a virtual human resource site
designed to automate the recruiting and selection process. Our site requires the
candidate to input their personal information, which includes name, address, and
location preference, wage expectancy and job position sought. A candidate is
required to detail his or her hardware and software experience, showing both
years experience as well as age of experience. This information is gathered by a
precise technical application, a project resume and a section, which allows the
candidate to "paste" their version of their resume (candidates' resumes will be
searched using a "keyword" search application). The candidate will then be
required to complete a soft skill evaluation section of the database. This
section will allow the potential employer a brief insight into the candidate's
personality. The system will then ask the candidate to input three work-related
references that will be verified by ISEmployment.com's human resources
assistants. Once completed, the reference checks will be available for potential
employers to view on-line. If applicable, the candidate will be asked to fill
out the immigration questionnaires that will be presented as a form letter once
the process is complete. The pre-immigration screen will cover questions related
to inadmissibility issues, such as prior arrests, convictions and refused entry
into the United States of America. This visa assistance is only for TN (NAFTA)
visas only. If the candidate requires additional information or immigration
assistance, they will be linked automatically to approved immigration lawyers.
Once the data is entered into the database, one of ISEmployment.com's human
resources assistants will contact the candidate to check for truth and accuracy.
Once this is completed, the information becomes active in the database and the
applicant will be allowed to modify the application as time goes on. The system
will automatically e-mail each candidate every fifteen days, requesting his or
her status and availability.
An employer interested in the site is requested to complete a site registration
set up questionnaire and is issued a password. Once the set up is complete, the
employer will be asked to complete the profile section, which will provide
background information for candidates to use prior to an interview. When the
employer is ready to search the database, they will be prompted by the system to
log in using their assigned password. Once accepted, the employer will then be
allowed to input the skill set(s) that they are seeking along with the years of
experience required. The employer will then initiate the search query and the
system will produce a list of candidates, their skills that match the query,
along with the percentile rank of the match of skills to the query. The output
at this point will not offer personal information, references or candidate
qualifiers. The employer will only see the skill set synopsis, which consist of
the educational history, project resume, the candidates' personal resume and
soft skill evaluation. Once the employer selects the candidate(s) that they wish
to interview, their account automatically gets debited for each selection. The
employer is notified of the charge and the contact information for each
candidate is then given. Along with the contact information, the system will
allow the employer access to each candidate's audio/video clip and reference
checks.
ISEmployment.com was seeking to offer an "hr tools" section, which will allow
registered users access to chat sessions and human resource links. The chat
sessions will run at posted intervals and will offer free advice on current
human resource issues, including such issues as immigration, recruiting and
relocation. An accredited professional in the field will head each chat session.
The "hr tools" will offer the candidate numerous help pages like the dos and
don'ts of interviews, salary calculators and relocation information.
ISEmployment.com was looking into the feasibility of becoming an "Application
Service Provider" in the market place. An "ASP" is a company that runs software
for other companies on centralized servers. This consideration will be dependent
on our perception of the current market and if there is a current market demand
to be fill with a new product.
4
The market for online recruiting services is relatively new, intensely
competitive and rapidly evolving. There are minimal barriers to entry, and
current and new competitors can launch new web sites and add content at
relatively low costs within relatively short time periods. We expect competition
to persist and intensify and the number of competitors to increase significantly
in the future. We compete against other online recruiting services, such as
Monster.com, Headhunter.net, Career Path and Career Mosaic, as well as corporate
Internet sites, and not-for-profit web sites operated by individuals,
educational institutions and governments. In addition to this online
competition, we compete against a variety of companies that provide similar
content through one or more media, such as classified advertising, radio and
television. Many of our current and potential competitors, including those
mentioned above, have significantly greater financial, technical and marketing
resources, longer operating histories, better name recognition and more
experience that we do. Many of our competitors also have established
relationships with employers, recruiters and other job posters. To compete
successfully, we must attract employers, recruiters and job seekers, and
generate fees. The competitive factors attracting employers, recruiters and job
seekers to our web site include the quality of presentation and the relevance,
timeliness, depth and breadth of recruiting information and services offered on,
and the ease of use of, our web site. Our competitors' services may be
sufficiently attractive to employers, recruiters and job seekers to dissuade
them from using our web site. If we are unable to attract a significant number
of employers, recruiters and job seekers to our web site, our business,
financial condition and results of operation will suffer.
THE MARKET
The Internet is an increasingly significant global medium for communications,
content and commerce. Growth in Internet usage has been fueled by a number of
factors, including the availability of a growing number of useful products and
services, the large and growing installed base of personal computers in the
workplace and home, advances in the performance and speed of personal computers
and modems, improvements in network infrastructure, easier and cheaper access to
the Internet and increased awareness of the Internet among businesses and
consumers.
The increasing functionality, accessibility and overall usage of the Internet
and online services have made them an attractive commercial medium. Thousands of
companies have created corporate websites that feature information about their
product offerings and advertise employment opportunities. Through the web,
Internet content providers are able to deliver timely personalized content in a
manner not possible through traditional media. Internet content can be
continuously updated, distributed to a large number of consumers on a real-time
basis, and accessed by users at any time. Industry publications indicate that
the historical and projected adoption of online/Internet services represents a
faster rate of penetration than occurred with traditional media, such as radio,
broadcast television and cable television.
5
For job seekers, online recruiting can provide the ability to rapidly and more
easily build, update and distribute their resumes, conduct job searches and
gather information about employers. Online recruiting can also help to reduce
the time of a job search by permitting job seekers to define their specific job
needs and be contacted automatically when desired jobs become available. Online
recruiting is also proving to be attractive to employers and recruiters because
job seekers anywhere in the world at anytime and more cost effectively than
print media can access online job advertisements. Forrester Research estimates
that online spending by employers for recruitment will grow from $1.2 billion in
2000 to $7.1 billion in 2005.
GROWTH STRATEGY
ISEmployment.com's objective was to be one of the leading providers of online
recruiting services to employers and recruiters, especially within the
information systems niche of that field. The industry is currently served by a
small number of on-line systems that are interactively passive and have limited
capability. In contrast, ISEmployment.com's system is an advanced search engine
with a unique immigration function that will allow employers to access
additional qualified candidates.
EMPLOYEES
ISEmployment.com currently has 5 employees. ISEmployment.com relies
heavily on its current officers in operating and management of its business.
CERTAIN BUSINESS RISKS
We have limited operating history or any material revenues or earnings from
operations. We have no significant assets or financial resources.
We have operated at a loss to date and will, in all likelihood, continue to have
operating expenses without corresponding revenues. We have had losses since our
inception and we are likely to have losses for the foreseeable future, raising
doubts about our ability to continue as a company.
We have had losses since our inception.
We face significant competition from competitors who have significantly greater
financial resources.
We will require additional funds to achieve our current business strategy.
We cannot guarantee that we will be able to obtain additional financing, as we
need it.
6
Our shares are deemed "penny stock" and are subject to additional market
disclosure.
A penny stock is generally defined to be any equity security not listed on
NASDAQ or a national securities exchange that has a market price of less than
$5.00 per share, subject to certain exceptions. Our shares are not currently
traded on NASDAQ or a national exchange and, therefore, our shares would be
deemed penny stocks for purposes of the Exchange Act if and at any time our
shares trades below $5.00 per share. In such case, trading in our shares would
be regulated pursuant to "penny stock" rules. These rules may limit the ability
or willingness of brokers and other market participants to make a market in our
shares and may limit the ability of our shareholders to sell in the secondary
market, through brokers, dealers or otherwise. We also understand that many
brokerage firms will discourage their customers from trading in shares falling
within the "penny stock" definition due to the added regulatory and disclosure
burdens imposed by these Exchange Act rules.
A large percentage of our stock is owned by relatively few people, including
officers and directors.
7
ITEM 2. DESCRIPTION OF PROPERTY.
Idoleyez currently sub-leases corporate space in a 3,500 square foot loft. Our
store location is subject to lease arrangements which contain varying terms and
are not subject to short notice lease termination provisions. The lease provides
for monthly base lease payments AND DOES NOT INCLUDE AN ADDITIONAL RENT
PROVISION BASED ON A PERCENTAGE OF THE COMPANY'S SALES.
ITEM 3. LEGAL PROCEEDINGS.
The Company is not subject to any material litigation nor, to the company's
knowledge, is any material litigation currently threatened against the company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of the security holders during the
fourth quarter of the fiscal year ending on September 30, 2001.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
ISEmployment.com's common stock is listed and traded on the
over-the-counter market under the symbol "IPYC".
Our stock is traded on the Over the Counter Market under the symbol "IPYC."
For the periods indicated below, the following table sets forth the high and low
bid information of our stock as reported on the Over the Counter Market.
2002 CLOSING PRICES 2001 CLOSING PRICES
------------------- -------------------
QUARTER ENDED LOW HIGH LOW HIGH
--------------- ------ ----- ------- ------
October 1 - December 31 $___ $___ $___ $___
January 1 - March 31 ___ ___ ___ ___
April 1 - June 30 .040 1.51 ___ ___
July 1 - September 30 .022 .55 ___ ___
As of February 14, 2003, there were approximately 106 record holders of our
stock. We have not declared or paid any cash dividends on our stock since our
organization. We do not anticipate paying any cash dividends in the foreseeable
future as we intend to retain future earnings, if any, for the development of
our business.
DIVIDEND POLICY
The Company has not paid a cash dividend on its common stock. The Company does
not anticipate paying any cash dividends in the foreseeable future and intends
to retain future earnings, if any, for the development of its business.
8
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues,
expenses, and related disclosure of contingent assets and liabilities. We base
our estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of the assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.
The Company remains a development stage Company with no revenues and substantial
general and administrative expenses and operates at a loss. The Company believes
potential private placements of it's securities, and an eventual registered
public offering, if successful, will assist the Company in meetings its cash
needs, but there is no guarantee. Management estimates the Company's operating
expenses to be a minimum of $60,000 and a maximum of $85,000 per month, at this
time.
LIQUIDITY AND CAPITAL RESOURCES
The Company is not able to pay it's outstanding bills. The Company's financial
statements have been prepared assuming that it will continue as a going concern.
The company's losses from operations since its inception and the company's on
going need for capital to finish the development of the database raise
substantial doubt as to its ability to continue as a going concern.
Management believes that cash expected to be generated from operations, current
cash reserves, and existing financial arrangements will not be sufficient for
the company to meet its capital expenditures and working capital needs for its
operations as presently conducted. The company's future liquidity and cash
requirements will depend on a wide range of factors, including expected results
from operations as revenues are generated. In particular, as the company does
not expect cash flows from operations to be sufficient in the next twelve
months, the company is considering raising capital either through a private
placement or an initial public offering. There can be no assurance that such
capital would be raised in sufficient amounts to meet the company's financial
need in the next twelve months.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
We occasionally make forward-looking statements concerning our plans, goals,
product and service offerings, store openings and anticipated financial
performance. These forward-looking statements may generally be identified by
introductions such as "outlook" for an upcoming period of time, or words and
phrases such as "should", "expect", "hope", "plans", "projected", "believes",
"forward-looking" (or variants of those words and phrases) or similar language
indicating the expression of an opinion or view concerning the future. These
forward-looking statements are subject to risks and uncertainties based on a
number of factors and actual results or events may differ materially from those
anticipated by such forward-looking statements.
9
ITEM 7. FINANCIAL STATEMENTS
ISEmployment.com, Inc.
Financial Statements
September 30, 2002 and 2001
ISEmployment.com, Inc.
Index to the Financial Statements
September 30, 2002 and 2001
Page
Independent Auditors' Report...................................................1
Financial Statements
Balance Sheet............................................................2
Statements of Operations.................................................3
Statements of Changes in Stockholders' Equity..........................4-5
Statements of Cash Flows.................................................6
Notes to the Financial Statements.....................................7-14
i
Independent Auditors' Report
To the Board of Directors and Stockholders of ISEmployment.com, Inc.
We have audited the accompanying balance sheet of ISEmployment.com, Inc. (a
development stage company) as of September 30, 2002 and the related statements
of operations, stockholders' equity and cash flows for the years ended September
30, 2002 and 2001 and for the period from October 20, 1999 (development stage
inception) to September 30, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ISEmployment.com, Inc. as of
September 30, 2002 and the results of its operations, changes in shareholders'
equity and cash flows for the years ended September 30, 2002 and 2001 and from
October 20,1999 (development stage inception) to September 30, 2002 in
conformity with accounting principles generally accepted in the United States of
America.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in the notes to the
financial statements, the Company's significant operating losses raise
substantial doubt about its ability to continue as a going concern. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/s/ Rosenberg Rich Baker Berman & Company
Bridgewater, New Jersey
January 15, 2003
1
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Balance Sheet
September 30, 2002
Assets
Current Assets
Due from affiliate $ 39,611
--------------
Total Current Assets 39,611
--------------
Property and equipment, net of accumulated
depreciation of $955 at September 30, 2002 1,433
--------------
Other Assets
Deposit 353
--------------
Total Other Assets 353
--------------
Total Assets 41,397
==============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued expenses 227,478
Due to officers 5,428
Due to affiliate 2,388
Loan payable 34,100
--------------
Total Current Liabilities 269,394
--------------
Stockholders' Equity (Impairment)
Common stock, par value $0.001; 100,000,000 shares
authorized and 4,698,738 shares issued and
outstanding 4,699
Additional paid in capital 395,274
Subscription receivable (200)
Accumulated deficit during development stage (627,770)
--------------
Total Stockholders' Equity (Impairment) (227,997)
--------------
Total Liabilities and Stockholders' Equity $ 41,397
==============
See notes to the financial statements and accountants' report.
2
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Statements of Operations
Years Ended September 30, 2002 and 2001,
and Period from October 20, 1999 (Date of Development Stage Inception)
to September 30, 2002
October 20, 1999
(Development
Stage
Year Ended September 30, Inception) to
---------------------------------- September 30,
2002 2001 2002
--------------- --------------- ---------------
Expenses
System development costs $ - $ 9,530 $ 160,067
General and administrative costs 159,017 237,521 467,703
--------------- --------------- ---------------
Total Expenses 159,017 247,051 627,770
--------------- --------------- ---------------
Loss before income tax provision (159,017) (247,051) (627,770)
Income tax provision - - -
--------------- --------------- ---------------
Net loss $ (159,017) $ (247,051) $ (627,770)
=============== =============== ===============
Basic and Diluted loss per share (0.05) (0.22) (0.36)
=============== =============== ===============
Weighted average basic and diluted shares outstanding 3,172,854 1,101,370 1,737,260
=============== =============== ===============
See notes to the financial statements and accountants' report.
3
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
Years Ended September 30, 2002 and 2001, and
the Period from October 20, 1999 (Date of Development Stage
Inception) to September 30, 2002
Deficit
Accumulated
Common Stock Additional During the Total
------------------- Paid in Subscription Developmental Stockholders'
Date Shares Amount Capital Receivable Stage Equity
--------- --------- -------- -------- ------------ ----------- --------
Balance - October 1, 1999 and
October 20, 1999 - 1,000,000 $ 1,000 $ 75 $ - $ (1,075) $ -
Capital Contribution 03/31/2000 - - 880 - - 880
Merger Transaction: 06/30/2000
Shares issued 400,000 400 (400) - - -
Shares cancelled (800,000) (800) 800 - - -
Recapitalization - - (1,755) (200) 1,075 (880)
Net loss for the year ended
September 30, 2000 - - - - (221,702) (221,702)
--------- --------- -------- -------- ------------ ----------- --------
Balance - September 30, 2000 600,000 600 (400) (200) (221,702) (221,702)
Purchase of intellectual
property 06/30/2001 1,500,000 1,500 (1,500) - - -
Net loss for the year ended
September 30, 2001 - - - - (247,051) (247,051)
--------- --------- -------- -------- ------------ ----------- --------
Balance - September 30, 2001 2,100,000 $ 2,100 $(1,900) $ (200) $(468,753) $(468,753)
See notes to the financial statements and accountants' report.
4
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Statement of Changes in Stockholders' Equity
Years Ended September 30, 2002 and 2001, and
the Period from October 20, 1999 (Date of Development Stage
Inception) to September 30, 2002
Deficit
Accumulated
Common Stock Additional During the Total
------------------- Paid in Subscription Developmental Stockholders'
Date Shares Amount Capital Receivable Stage Equity
--------- --------- -------- -------- ------------ ----------- --------
Balance, September 30, 2001 2,100,000 $ 2,100 $ (1,900) $ (200) $(468,753) $(468,753)
Shares issued as loan payments 11/19/2001 478,238 478 397,174 - - 397,652
Shares issued as compensation
for consulting services-
Transactions (at par value): 03/27/2002 250,000 250 - - - 250
04/23/2002 225,000 225 - - - 225
04/29/2002 115,000 115 - - - 115
05/02/2002 100,000 100 - - - 100
05/16/2002 400,000 400 - - - 400
07/16/2002 450,000 450 - - - 450
07/18/2002 69,189 69 - - - 69
07/22/2002 22,000 22 - - - 22
07/29/2002 549,311 550 - - - 550
Shares cancelled for services
not performed (at par value): 07/19/2002 (60,000) (60) - - - (60)
Net loss for the year ended
September 30, 2002 - - - - (159,017) (159,017)
--------- --------- -------- -------- ------------ ----------- --------
Balance, September 30, 2002 4,698,738 $ 4,699 $395,274 $ (200) $(627,770) $(227,997)
========= ========= ======== ======== ============ =========== ========
See accountants' report on the financial statements.
5
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Statements of Cash Flows
Years Ended September 30, 2002 and 2001, and
October 20, 1999 (Development Stage Inception) to
September 30, 2002
October 20, 1999
(Development
Stage
Year Ended September 30, Inception) to
------------------------ September 30,
2002 2001 2002
------ ------ ------
Cash Flows From Operating Activities
Net Loss $(159,017) $(247,051) $(627,770)
Adjustments to Reconcile Net Loss to Net Cash
Provided by Operating Activities
Depreciation 955 - 955
Stock issued for services 2,121 - 2,121
System development expenses incurred
by assumption of a related party loan - - 96,555
System development expenses incurred
by assumption of advances payable - - 42,147
(Increase) Decrease in Assets
Deposit - (353) (353)
Increase (Decrease) in Liabilities
Accounts payable and accrued expenses 115,122 91,011 227,478
----------- ----------- -----------
Net Cash (Used) by Operating Activities (40,819) (156,393) (258,867)
----------- ----------- -----------
Cash Flows From Investing Activities
Loans to affiliates - (39,014) (39,611)
----------- ----------- -----------
Net Cash (Used) by Investing Activities - (39,014) (39,611)
----------- ----------- -----------
Cash Flows From Financing Activities
Net proceeds from officer loans 6,719 1,224 5,428
Proceeds from shareholder loans - 191,239 397,652
Repayment of a related party loan - - (96,555)
Repayment of advances payable - - (42,147)
Proceeds from third party loan 34,100 - 34,100
----------- ----------- -----------
Net Cash Provided by Financing Activities 40,819 192,463 298,478
----------- ----------- -----------
Net (Decrease) Increase in Cash and Equivalents - (2,944) -
Cash and Equivalents at Beginning of Year - 2,944 -
----------- ----------- -----------
Cash and Equivalents at End of Year - $ - $ -
=========== =========== ===========
See accountants' report on the financial statements.
6
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Statements of Cash Flows
Years Ended September 30, 2002 and 2001, and
October 20, 1999 (Development Stage Inception) to
September 30, 2002
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
October 20, 1999
(Development
Stage
Year Ended September 30, Inception) to
----------------------------------- September 30,
2002 2001 2002
--------------- --------------- -----------
Cash paid during the year for:
Interest $ - - $ -
Income taxes - - -
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
During the year ended September 30, 2002, the Company issued 478,238 common
shares to individual lenders in payment of loans totalling $397,652, resulting
in additional paid-in capital of $397,174.
During the year ended September 30, 2001, the Company acquired telephone
equipment in the amount of $2,388 by assuming a payable from a Company related
through common ownership.
See accountants' report on the financial statements.
7
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Organization
The Company was incorporated under the laws of the State of Wyoming on February
27, 1997. The Company ceased all operating activities during the period from
February 27, 1997 to October 20, 1999, and was considered dormant.
On June 30, 2000, ISEmployment.com, Inc. (ISEmployment), a Delaware corporation,
and Magical Marketing, Inc. (Magical Marketing), merged. Magical Marketing
became the surviving corporation and adopted the name ISEmployment.com, Inc. The
Company issued 400,000 shares of common stock to the shareholders of the former
ISEmployment.com, Inc. corporation and the Company's majority stockholder
cancelled his 800,000 shares of common stock upon the merger. The merger
transaction was treated as a recapitalization and was accounted for as a reverse
acquisition and recorded at historical cost with no goodwill or other
intangibles recorded. The 400,000 common share decrease as a result of the
merger transaction reflects the exchange of ISEmployment's 2,000,000 shares for
400,000 shares of the Company common stock and the retirement of 800,000 shares
of Company common stock.
The Company is primarily engaged in developing an on-line human resources and
recruiting service for the information systems industry.
Depreciation and Amortization
Property and equipment are carried at cost. Depreciation is provided for
financial reporting purposes on a straight-line basis over the estimated useful
lives of the assets: 5 years for machinery and equipment. Repairs and
maintenance expenditures which do not extend the useful lives of the related
assets are expensed as incurred.
Organization Costs
Organization costs are expensed as incurred in accordance with Statement of
Position 98-5 as issued by the American Institute of Certified Public
Accountants.
8
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Capitalization of Internal-Use Software Costs
The Company follows the guidance in Statement of Position 98-1, Accounting for
Costs of Computer Software Developed or Obtained for Internal Use, and EITF
00-2, Accounting for Web Site Development Costs. During the preliminary project
stage, the Company expenses internal and external costs it incurs, or assumes
from related parties, to develop internal-use software and systems. During the
application development product stage, the Company capitalizes such costs and
will amortize them on the straight-line method over their expected useful lives.
Substantially all costs incurred by the Company to date relate to the
preliminary project and planning stage including conceptual formulation,
evaluation of alternatives, determination of functionalities, and identification
of graphics and content. Accordingly, such costs have been expensed as system
development costs.
Revenue Recognition
Revenue from providing services to customers will be recognized when the
services are rendered.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences for financial and income tax reporting related
to net operating losses that are available to offset future federal and state
income taxes. The deferred tax assets and liabilities represent the future tax
return consequences of those differences, which will either be taxable or
deductible when the assets and liabilities are recovered or settled. Valuation
allowances are provided against deferred tax assets for which there is doubt the
asset will be realized.
Foreign Currency
The Company generates and expends cash in both U. S. dollars and Canadian
dollars. Management believes that the Company's primary economic environment is
U. S. dollars.
The Company's financial statements have been prepared on the basis of U. S.
dollars; however, certain transactions during the year were executed in Canadian
dollars. Gains or losses from changes in Canadian dollar to U. S. dollar
exchange rates for transactions denominated in Canadian dollars are included in
the determination of operating results in the period in which the exchange rate
changes. No significant transaction gains or losses were incurred for the years
ended September 30, 2002 and 2001.
Stock-Based Compensation
The Company has elected to comply with the fair value based method of accounting
prescribed by Statement of Financial Accounting Standards No. 123, Accounting
for Stock-Based Compensation, for its stock incentive plan.
Reclassifications
Certain accounts in the prior-year financial statements have been reclassified
for comparative purposes to conform with the presentation in the current-year
financial statements.
9
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Recently Issued Accounting Pronouncements
In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. Under SFAS No. 142, goodwill and tangible assets with indefinite lives
are no longer amortized but are reviewed annually at a minimum for potential
impairment by comparing the carrying value to the fair value of the reporting
unit to which they are assigned. The provisions of SFAS No. 142 apply to
goodwill and intangible assets arising for acquisitions completed subsequent to
June 30, 2001. SFAS No. 142 is required to be adopted for goodwill and
intangible assets arising from acquisitions prior to June 30, 2001 as of
December 31, 2001 and is effective for fiscal years beginning after December 15,
2001. The Company is currently determining the impact of adopting this standard
under the transition provisions of SFAS No. 142.
GOING CONCERN UNCERTAINTY
As shown in the financial statements, the Company has cumulative losses of
$627,770 and $-0- cash at September 30, 2002. The company currently has no
sales. These factors, among others, raise substantial doubt about the Company's
ability to continue as a going concern. In order to develop and commercialize
its technology and continue as a going concern, the Company will need, among
other things, additional capital resources and financing.
Management's plans to obtain such resources for the Company include (1) raising
additional capital through sales of common stock, the proceeds of which would be
used to perfect the company's technology and services and satisfy immediate
operating needs; and (2) using common stock to pay for consulting and
professional services.
In November 2001, management entered into an agreement with an investment
banking company wherein the investment bankers would endeavor to obtain, on a
best-efforts basis, up to $2 million in financing for the Company through the
sale of its common stock. No funds were raised under this agreement which
expired in May 2002. Subsequent to September 30, 2002, the Company executed an
Agreement of Reorganization effected by a reverse merger of another entity into
the Company as a public shell (see Note - SUBSEQUENT EVENTS).
The ability of the company to continue as a going concern is dependent upon its
ability to successfully accomplish the plans described in the preceding
paragraphs and eventually secure other sources of financing and attain
profitable operations. The accompanying financial statements do not include any
adjustments that might be necessary should the Company be unable to continue as
a going concern.
10
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
PROPERTY AND EQUIPMENT:
Equipment at cost, less accumulated depreciation, consists of the following
September 30,
2002
-----------
Telephone equipment $ 2,388
Less accumulated depreciation (955)
-----------
Total $ 1,433
===========
Depreciation expense charged to operations was $955 and $0 in 2002 and 2001,
respectively.
DUE TO OFFICERS
The Company has received advances from its President and Chief Executive Officer
from time to time. The advances are non-interest bearing and due on demand.
LOAN PAYABLE
During the year ended September 30, 2002, the company incurred debt from an
individual, which is non-interest bearing and due upon demand. The balance due
at September 30, 2002 is $34,100.
RECEIVABLE FOR COMMON STOCK
On March 7, 2000, the former ISEmployment.com issued 2,000,000 shares of its
common stock in exchange for $200 in receivables. The receivables are
non-interest bearing and due on demand. The receivables are carried in the
balance sheet as a reduction to common stock.
INCOME TAXES
The income tax provision (benefit) is comprised of the following:
Years Ended September 30,
------------------------
2002 2001
---------- ----------
Current $ - $ -
Deferred (54,066) (83,997)
Valuation allowance 54,066 83,997
---------- ----------
$ - $ -
========== ==========
Income tax at the federal statutory rate is reconciled to the Company's actual
income tax provision as follows:
Years Ended September 30,
------------------------
2002 2001
---------- ----------
Federal income tax benefit 34% 34%
Valuation allowance (34) (34)
---------- ----------
Effective tax rate -% -%
========== ==========
11
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
INCOME TAXES (continued)
The Company's provision for income taxes differs from applying the statutory U.
S. federal income tax rate to income before income taxes. The primary
differences result from deducting certain expenses for financial statement
purposes but not for federal income tax purposes.
Those amounts have been presented in the Company's financial statements as
follows:
September 30,
2002
-----------
Deferred tax asset, noncurrent $ 213,442
Total valuation allowance recognized for deferred tax assets (213,442)
-----------
Net deferred tax asset (liability) $ -
===========
The Company has available net operating losses carryforwards which may be used
to reduce Federal and State taxable income and tax liabilities in future years
as follows:
Federal
------------
Available Through 2020 $ 221,702
2021 247,051
2022 159,017
------------
Total $ 627,770
============
LOSS PER SHARE
Basic loss per share is calculated by dividing the net loss to the common
shareholders by the weighted average number of shares outstanding for the
period. Diluted loss per share reflects the potential dilution of securities
that could share in earnings of an entity such as convertible debt, stock
options and warrants. Diluted loss per share is the same as basic loss per share
as all contracts to issue shares were anti-dilutive.
RELATED PARTY TRANSACTIONS
In June 2001, the Company purchased all rights to certain software developed by
a company wholly owned by the Company's Co-Chief Executive Officers in exchange
for one million five hundred thousand shares of the Company's common stock. This
software was developed prior to the formation of the original ISEmployment.com
and its merger with Magical Marketing, Inc. and was developed to be a part of
the Company's recruiting data base and web site. The Company recorded the
transfer at transferors' historical cost basis of the assets which approximates
zero.
The Company leases its office facilities from a stockholder on a month-to-month
basis. Rent is currently $938 per month in Canadian dollars or approximately
$591 in U. S. dollars at September 30, 2002 exchange rates. Rent at September
30, 2001 was $938 per month in Canadian dollars or approximately $594 in U. S.
dollars at September 30, 2001 exchange rates. Rent expense on this facility for
the years ended September 30, 2002 and 2001 totalled $2,400 and $10,272,
respectively. The Company is also obligated to pay for certain common area fees
and property taxes under the terms of the lease. These fees and property taxes
total $1,141 per month in Canadian dollars or approximately $719 in U. S.
dollars at September 30, 2002 exchange rates.
The Company has received advances from its officers in the amount of $6,719 and
$1,224 during the years ended September 30, 2002 and 2001, respectively. Amounts
due to officers at September 30, 2002 were $5,428.
12
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
RELATED PARTY TRANSACTIONS (Continued
The Company has advances to an entity related through common ownership in the
amount of $39,611 at September 30, 2002. These receivables from a related party
are non-interest bearing and are due on demand.
In the year ended September 30, 2001, the Company acquired telephone equipment
from a Company related through common ownership by assuming a payable for
$2,388.
OTHER TRANSACTIONS
In December 2001, the Company obtained an unpriced quotation on the NASD OTC
Bulletin Board from NASD Regulation, Inc. As a result, the Company issued
478,238 shares to the third party investors holding $397,652 in loans to the
Company payable in common shares at September 30, 2001. The loans payable were
due and payable once the Company became publicly traded on the NASDAQ OTC
market. Payment of the balance was made by issuing shares of Company common
stock at prices ranging from $0.50 to $0.85 per share for a total of 478,238
shares.
STOCK INCENTIVE PLAN
On April 22, 2002, the Company initiated a Stock Incentive Plan, which enabled
the Company to award options or other stock-based compensation up to a total of
1,000,000 shares, which may consist, in whole or in part, of unissued or
treasury shares. No award may be granted under the plan after April 22, 2012.
Any options granted under the plan would be non-qualified or incentive stock
options. The option price per share shall not be less than 100% of the fair
market value of the shares on the date an option is granted. Options are
exercisable within 10 years from grant date. As of September 30, 2002, no
options were granted under the plan.
Other stock-based compensation may be granted under the plan as awards of
shares, restricted shares or otherwise based on the fair market value of shares,
with the right to receive one or more shares upon completion of services,
occurrence of an event or attainment of performance objectives. During the year
ended September 30, 2002, the Company issued the maximum of 1,000,000 shares
under the plan as compensation for services provided. Compensation expense of
$1,000 was recognized based on the fair value of shares issued.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying value of cash and accounts payable approximates fair value due to
their short term nature. The fair value of the loans payable and receivables
from a related party are not determinable because quoted market prices are not
available and the cost of obtaining an independent valuation is excessive.
COMMITMENTS AND CONTINGENCIES
At September 30, 2002, the Company is party to a claim by inaVest, Inc. in the
amount of $25,000 in connection with its failed representation of the Company in
attempting to raise $500,000 in capital. The nature of the claim is unclear, and
the claimant has failed to substantiate their claim. Management contends that no
monies are owed under this arrangement and would vigorously contest any lawsuit
filed in connection with this claim.
13
ISEmployment.com, Inc.
(Formerly Known as Magical Marketing, Inc.)
(A Development Stage Company)
Notes to the Financial Statements
SUBSEQUENT EVENTS
On October 11, 2002, the Company's officers, Scott F. Murray and Frank Ulakovich
resigned their positions as officers and separated from the Company. Gerald W.
Belanger Jr. was appointed interim chief executive officer as of the same date.
On October 16, 2002, the Company executed an Agreement and Plan of
Reorganization with Idoleyez, LLC. The agreement stipulated that the Company
would transfer 1,000,000 convertible preferred shares of the Company's common
stock in exchange for 100% of the issued and outstanding membership interest of
Idoleyez, LLC. Pursuant to the agreement, upon conversion of the preferred
shares, Idoleyez, LLC will own approximately 80% of the then issued and
outstanding shares of the Company. Idoleyez, LLC also agreed to assume certain
accounts payable and other liabilities of the company, totalling $126,679.53. In
addition, further to the Employment Contract of Gerald W. Belanger, the Board
approved an amendment to the Articles of Incorporation, authorizing the creation
of a Class B Multiple Voting Share (with 10 votes per share and no cash value)
and authorized the issuance of 6,000,000 Class B Multiple Voting Shares and
150,000 Rule 144 common shares to Mr. Belanger. At the closing of the
reorganization agreement, Mr. Belanger retired the 6,000,000 Class B shares for
$75,000 in cash.
The following represents the unaudited proforma results of operations as if the
business combination had occurred at the beginning of the second year preceding
the year of acquisition.
Years Ended September 30,
------------------------
2002 2001
---------- ----------
Net Sales $ - $ -
Net Loss $(657,128) $(492,970)
Loss Per Share $ (0.16) $ (0.23)
On October 25, 2002, the Company agreed to sell all technologies, software and
intellectual properties associated with ITISHR, the recruitment software
environment developed by the Company (purchased in June 2001 for 1,500,000
common shares at a historical cost approximating zero). As consideration, the
buyers, Scott Murray, Frank Ulakovich and Crown Capital, LLC, agreed to the
complete extinguishment of loans payable to the buyers in the amount of $77,000
(Canadian dollars) or approximately $48,000 in U. S. currency.
On January 10, 2003, Gerry Belanger resigned his position with the Company.
14
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
As filed on Form 8-K, July 2002, the Company's principal auditing firm (Levitz,
Zacks & Ciceric) resigned and as filed on Form 8-K, February 13, 2003, the
Company engaged the firm of Rosenberg Rich Baker Berman & Co., New Jersey, as
the new principal auditing firm.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.
DIRECTORS AND EXECUTIVE OFFICERS
Certain of the past executive officers of the company were as follows:
NAME AGE POSITION
---------------- --- -----------------------
Scott F. Murray 32 Co-Chief Executive Officer
Frank Ulakovich 30 Co-Chief Executive Officer
BIOGRAPHIES OF THE PAST DIRECTORS AND EXECUTIVE OFFICERS
MANAGEMENT
Directors and officers are elected annually and serve for a one year term or
until their successor are elected and qualified. Information as to the directors
and officers of the ISEmployment.com is as follows:
10
Scott Murray, age 32, has served as a director of ISEmployment.com, Inc. since
its inception and became Co-Chief Executive Officer and President at that time;
he also has served as Chief Financial Officer since June 2000. Mr. Murray served
as President of International Technical Recruiting, Inc. a traditional
recruitment and placement firm that represents many Fortune 500 companies. Mr.
Murray was a co-founder of ITR, which was established in 1995 and is presently
inactive. Mr. Murray has also assumed the role of Chief Financial Officer of
ISEmployment.com. Mr. Murray founded ISEmployment.com with Mr. Ulakovich, his
Co-Chief Executive; these responsibilities include strategic planning, quality
control and management of the ISEmployment.com's personnel. Mr. Murray serves
Chairman of the Society of Manufacturing Engineers and holds a seat on the
Regional Committee for the Society of Manufacturing Engineers.
Frank Ulakovich, age 30, has served as a Chairman of the Board of
ISEmployment.com, Inc. since its inception and became Co-Chief Executive Officer
at that time; he also has served as Secretary since June 2000. Mr. Ulakovich has
served as Vice-President Technical Recruiting of ITR from its inception in 1995
through the first quarter of 2000. Mr. Ulakovich directed the operations and
expansion of ITR's technical division.
Current Management:
The following describes Management of the Company starting from the closing of
the transaction with Idoleyez; provided, however, on January 2, 2003, Mr.
Collins resigned.
THOM HAYWARD Mr. Hayward is currently President and C.E.O. .
Age: 44 Mr. Hayward serves as the President and Chief Executive Officer
Director since 2001 of Company. Thom has over twenty years of experience in the San
Executive, Audit and Compensation Francisco Bay Area as a creative and sales professional specializing
Committees in technology marketing, new media and advertising.
CHRISTOPHER T. COLLINS Mr. Collins is a Managing Director of International Asset Group,Ltd.
AGE: 38 an international investment/merchant banking group headquartered in
Director since 2002 London, specializing exclusively in the small cap market place. He
was formerly a Senior Vice President of Morgan Stanley Dean Witter, a
position he held for three years. Prior to this, as Director of
Sales in the South Florida District, he worked with a team of
professionals responsible for a portfolio of over $1.0 billion
comprised of High Net Worth Clients and small institutions. Mr.
Collins is licensed in all fifty states to provide investment advice
and currently has a Series 3, a Series 7, a Series 8, a Series 63 and
a Series 65 license.
MARK ZENGO Mr. Zengo has fifteen years of experience in the investment banking
AGE: 38 community in both domestic and international securities. He was most
Director since 2002 recently a Managing Director at ABN AMRO Sec. Ltd.-New York. In the
past he has been Head of domestic equity trading at Bankers Trust
Securities-New York, and Head of ADR trading in London for Natwest
Sec. Currently he is partnered with a new project; E-Partners, which
enables electronic connectivity within the equity markets. Mr. Zengo
currently has a Series 7, a Series 63, a Series 24 and a Series 55
license. He holds a B.A. in Economics from Bates College.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
company's directors, executive officers and persons who own more than 10% of a
class of the company's equity securities which are registered under the Exchange
Act to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes of ownership of such registered securities.
Such executive officers, directors and greater than 10% beneficial owners are
required by Commission regulation to furnish the company with copies of all
Section 16(a) forms filed by such reporting persons.
ITEM 10. EXECUTIVE COMPENSATION
Current members of Management were not paid any compensation from the Company
during the last fiscal year ended September 30, 2002. The Company is not paying
the director compensation.
DIRECTOR COMPENSATION
The company reimburses directors for out-of-pocket expenses incurred in
connection with the rendering of services as a director.
11
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as to shares of common stock
owned by (i) each person known to beneficially own more than 5% of the
outstanding common stock, (ii) each director and named executive officer of the
company, and (iii) all executive officers and directors of the company as a
group, all as of February 14, 2003: Unless otherwise indicated, each person has
sole voting and investment power over the shares beneficially owned by him.
Name and Address of Number of Shares Percentage
Beneficial Owner of Beneficially Owned Ownership of Class(1)
- ---------------------- ---------------------- -------------------
Thom Hayward (2) 5,000,000 20%
665 3rd Street, Suite 517
San Franciso, CA 94107
Mark Zengo(2) (3) 2,000,000 8%
665 3rd Street, Suite 517
San Franciso, CA 94107
Denice Zengo (4) 2,400,000 9%
C/o 665 3rd Street, Suite 517
San Franciso, CA 94107
All officers and Directors 7,000,000 28%
as a group, three persons (3)
- ---------
(1) Calculated on the basis of 24,711,738 shares of Common Stock issued and
outstanding and percentages are rounded and are approximates.
(2) Officer and/or Director.
(3) Does not consider the following shares held by relatives of Mr. Zengo:
Aaron Zengo, 1,000,000 shares, Denice Zengo, finacee to Mr. Mark Zengo,
2,400,000 shares.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Various disputes exist with former members of Management concerning monies owed,
services and related matters and the Company is unable to identify, at this
time, the details of such matters until further consultation and research is
conducted, and the same applies as to related transactions involving such
persons and the Company: current Management is unable to determine past related
transactions for the year ended September 30, 2002.
12
No director or officer is personally liable for the repayment of
amounts of any financing received by the company.
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K.
(a) EXHIBIT INDEX
2.1 Plan of Merger between ISEmployment.com, Inc. and the shareholders of
Magical Marketing, Inc., dated June 30, 2000 (Incorporated by reference
from registrant's Exhibit 2.1 to the Current Report on Form 8-K, filed
July 17, 1999)
2.2 Agreement dated October 16, 2002, between the Registrant and
Idoleyez.com, LLC. (incorporated by reference to Form 8-K, filed for
November 13, 2002)
3.1 Articles of Incorporation of ISEmployment.com, Inc. (Incorporated by
reference from registrant's exhibits 3.1 and 3.2 to the Registration of
Securities on Form 10-SB, filed December 22, 1999)
3.2 By-Laws of ISEmployment.com, Inc. (Incorporated by reference from
registrant's exhibit 3.3 to the Registration of Securities on Form
10-SB, filed December 22, 1999)
4.1 Form of Common Stock Certificate (Incorporated by reference from
registrant's exhibit 3.2 to the Registration of Securities on Form
SB-2, filed November 16, 2000)
(b) Reports on Form 8-K
July 1, 2002, the resignation of the former accountants (Levitz, Zacks &
Ciceric) was reported.
13
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ISEmployment.com, Inc.
(Registrant)
By: /S/ Thom Hayward
- ----------------------------------
Thom Hayward
President(principal executive officer) and Treasurer(principal financial officer)
Date: February 14, 2003
Pursuant to the requirements of the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant in the capacities
indicated and on the date indicated.
ISEMPLOYMENT.COM, INC.
By: /s/ Thom Hayward
- ----------------------
Thom Hayward
Director
Date: February 14, 2003
By: /s/ Mark Zengo
- ----------------------
Mark Zengo
Director
Date: February 14, 2003
14