SEC Info - Petrone Worldwide, Inc. - ‘10QSB’ for 3/31/00

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Petrone Worldwide, Inc. – ‘10QSB’ for 3/31/00

On: Wednesday, 6/7/00, at 8:11am ET · For: 3/31/00 · Accession #: 1096132-0-22 · File #: 0-30380

  As Of                Filer                Filing    For·On·As Docs:Size

 6/07/00  Petrone Worldwide, Inc.           10QSB       3/31/00    3:37K

Quarterly Report — Small Business — Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                    20     84K 
 2: EX-11       Statement re: Computation of Earnings Per Share        1      4K 
 3: EX-27     ƒ Article 5 Fin. Data Schedule for 1st Qrt. 10Qsb        1      5K

10QSB — Quarterly Report — Small Business
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Exhibits and Reports on Form 8K
1	1st Page - Filing Submission
19	Item # 6. Exhibits and Reports on Form 8K

10QSB 1st Page of 20 TOC ↑Top Previous Next ↓Bottom Just 1st
 
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UNITED STATES OF AMERICA                                                        
SECURITIES AND EXCHANGE COMMISSION                                              
WASHINGTON, DC. 20546                                                           

FORM 10-QSB                                                                     

Mark One:                                                                       

[x]  QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES              
EXCHANGE ACT OF 1934                                                  

For the quartely period from January 1, 2000 to March 31, 2000        

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANTE ACT.            

Commission File Number 03-0380                                                  

      DIABETEX INTERNATIONAL, CORP
----------------------------------------------------------------------------    
(Exact name of small business issuer as specified in its charter)               

Nevada                                       87-0458228                         
-------------------------------         --------------------------------        
(State or other jurisdiction of         (I.R.S. Employer identification         
incorporation or organization)          No.)                                  

7321 ROSEVILLE ROAD, SCARMENTO, CA.            95842                            
-------------------------------------   ----------------------------------      
(Address of principal offices)           (Zip Code)                             

Issuer's telephone number:   (916) 331-3300                                     
----------------------------------------------                                  

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APPLICABLE ONLY TO CORPORATE ISSUERS                                            

State the number of shares oustanding of each of the issuer's classes of        
common equity, as of the latest practicable date:  13,201,599                   

Transitional Small Business Disclosure Format (check one): Yes [ ] No [x]       

PART 1    FINANCIAL INFORMATION                                                 

Diabetex International Corporation and Subsidiary               

Consolidated Financial Statements                               

March 31, 2000                                                  

10QSB 2nd Page of 20 TOC 1st Previous Next ↓Bottom Just 2nd
INDEPENDENT AUDITOR'S REPORT                                    

To the Board of Directors and Stockholders of                                   
Diabetex International Corporation                                              
Salt Lake City, Utah                                                            

We have reviewed the accompanying consolidated balance sheet of Diabetex        
International Corporation and subsidiary as of March 31, 2000 and the related   
consolidated statements of income, stockholders' equity and cash flows for      
the period then ended.   These financial statements are the responsibility of   
the company's management.                                                       

We conducted our review in accordance with standards established by the         
American Institute of Certified Public Accountants.  A review of interim        
financial information consists principally of applying analytical procedures    
to financial data and making inquiries of persons responsible for financial     
and accounting matters.  It is substantially less in scope than an audit.       
conducted in accordance with generally accepted auditing standards, the         
objective of which is the expression of an opinion regarding the finacial       
statements as a whole.  Accordingly, we do not express such an opinion.         

Based on our review, we are not aware of any material modifications that        
should be made to the condensed consolidated financial statements referred to   
above for them to be in conformity with generally accepted accounting           
principles.                                                                     

We have previously audited, in accordance with generally accepted auditing      
standards, the balance sheet as of December 31, 1999, and the related           
statements of income, stockholders' equity and cash flows for the year then     
ended; and in our report dated April 12, 2000, we expressed an unqualified      
opinion on those financial statements.                                          

The accompanying statements of operations and cash flows for the period ended   
March 31, 1999 were not audited or reviewed by us and, accordingly, we do not   
express an opinion on them.                                                     

Crouch, Bierwolf & Chisholm                                                     
May 16, 2000                                                                    

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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Consolidated Balance Sheets                                     

                                                        [Enlarge/Download Table]


        ASSETS                                                  March 31,               December 31,
                                                                2000                    1999        

CURRENT ASSETS                                                                                      
                                                                                                    
Cash (Note 1)                                   $               90,423          $       351         
Account Receivable                                                                                  
 (Net of allowance of $0)                                       23,647      23,418                  
Total Current Assets                                                    114,070     23,769          

Property, Plant & Equipment                                                                         
 (Note 4)(Net)                                            2,258              2,408                  

Other Assets                                                                                        
Intangible Assets (Note 3) (Net)                        14,382,068              14,770,772          
Prepaid expenses (Note 7)                                         783,595            249,703        
                                  ------------- -----------------                                   
                                                $             15,281,991        $  15,046,652       

                                                        [Enlarge/Download Table]

        LIABILITIES AND STOCKHOLDERS' EQUITY                                                    
                                          MARCH 31         DEC. 31                              
CURRENT LIABILITIES                         2000             2000                               
                                                                                                
Accounts payable & accrued expenses     $       175,250    $          152,952                   
Accounts payable-related party (Note 6)         156,342                       183,812           
                                        ----------- ----------------                            
Total Current Liabilities                               331,592                       335,765   

CONTINGENCIES AND                                                                               
   COMMITMENTS (Note 8)                                         -                              -

STOCKHOLDERS' EQUITY                                                                            
Common stock; $.002 par value;                                                                  
 50,000,000 shares authorized,                                                                  
 13,265,299 and 13,110,929 shares                                                               
 issued and outstanding (Note 2)                26,531                                26,222    
Additional paid-in capital                      17,239,305                    16,509,414        
Deficit accumulated during the                                                                  
          development stage                         (2,315,437)         (1,824,750)             

Total Stockholders' Equity               14,950,399                    14,710,886               
                                             $      15,281,991        $          15,046,652     


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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Consolidated Statements of Operations                           

                                                        [Enlarge/Download Table]

                STATEMENT OF OPERATIONS                                                                                    
                                                                                        From                               
                                                                                            Inception on                   
                                                                                For the                       September 14,
                                                        Three Months Ended              1983 to                            
                                                                           March 31,                          March 31,    
                                                                    2000        1999                    2000               
                                                                                                                           

REVENUES                                $     26,700            $       -       $            67,305                        

EXPENSES                                                                                                                   

Amortization and                                                                                                           
Depreciation                               388,854            150                  1,166,862                               
Professional Services       108,932                             -        950,291                                           
Legal                                                         7,400                             -             88,632       
Public Relations                                         300                1,600               14,094                     
Administrative                                  111,902             318,320                  162,364                       

   Total Expenses                                  517,388                  320,070         2,382,243                      

NET LOSS BEFORE                                                                                                            
INCOME TAXES                                            (490,688)   ( 320,070)     (2,314,938)                             

PROVISION FOR                                                                                                              
TAXES (Note 1)                                               -                     -                  (500)                

NET LOSS                                $           (490,688)  $( 320,070)      $ (2,315,438)                              

LOSS PER SHARE                                                                                                             
   (Note 1)                             $           (.04)   $           (.02)                                              

AVERAGE SHARES                                                                                                             
   OUTSTANDING                                 13,201,599             11,322,411                                           


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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Consolidated Statements of Stockholders' Equity                 

                                                        [Enlarge/Download Table]
                    STOCKHOLDERS' EQUITY                                                                     

                                                            Accumulated                                      
                                                                   Capital in          Deficit During        
                                  Common       Common    Excess of     Retained                              
Stockholders' Equity       Shares              Stock      Par Value     Deficit                              
                                                                                                             
Balance, December 31, 1989    862  $       2           $         94,173        $               (96,973)      

Loss for the Year               -          -                   -                (130)                        
Balance, December 31, 1990    862       2               94,173                         (97,103)              

Issues 225 shares to an                                                                                      
officer in cancellation of                                                                                   
debt at $16.77 per share                225      1         3,772                       -                     

Loss for the Year                  -       -            -                (3,333)                             
Balance, December 31,1991   1,087                 3                 97,945                     (100,436)     

Expenses paid on the Company's                                                                               
behalf contributed to capital   -          -        2,666                      -                             

March 5, 1992, issued 1,250                                                                                  
shares for services rendered                                                                                 
for $8 per share           1,250                     2         9,998                     -                   

Loss for the Year               -        -              -                      (10,278)                      
Balance, December 31,1992 2,337                     5        110,609                   (110,714)             

Loss for the Year               -           -                  -                          (136)              
Balance, December 31,1993 2,337        5             110,609                        (110,850)                

October 17, 1994, issued                                                                                     
25,000 shares for expenses.                                                                                  
paid on the Company's behalf                                                                                 
for  $.84 per share      25,000            50        20,950                                    -             

Expenses paid on the Company's                                                                               
behalf contributed                                                                                           
to capital                              -        -            612                              -             

Loss for the Year               -        -               -                             (22,903)              
Balance, December 31,                                                                                        
1994                      27,337        55       132,171                         (133,753)                   

Expenses paid on                                                                                             
the Company's behalf                                                                                         
contributed to capital          -              -          1,227                                -             

Loss for the Year               -              -              -                          (100)               
Balance, December 31,                                                                                        
1995                     27,337                     55                133,398                       (133,853)

Loss for the Year               -              -                   -                              (100)      
Balance, December 31,                                                                                        
1996                     27,337         55        133,398                         (133,953)                  


(continued)                                                     

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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Consolidated Statements of Stockholders' Equity                 
(continued)                                                     

                                                        [Enlarge/Download Table]
                 STOCKHOLDERS' EQUITY [CONTINUED]                                                  
                                                                                Accumulated        
                                                        Capital in      Deficit During             
                                Common          Common          Excess of               Retained   
STOCKHOLDERS'EQUITY       Shares           Stock       Par Value     Deficit                       
                                                                                                   

Balance, December 31, 1996        27,337 $     55       $       133,398         $         (133,953)

Shares issued for asset of                                                                         
Aladdin Transportation,                                                                            
Landmark, Inc.                                                                                     
and Over 100, Inc. for                                                                             
$0 per share                  82,500       165           (165)                     -               

Shares issued for                                                                                  
incentives for loans                                                                               
to Aladdin Transportation,                                                                         
Landmark, Inc. and                                                                                 
Over 100, Inc.                                                                                     
for $.80 per share                25,163      50           20,081                  -               

Shares canceled by various                                                                         
shareholders              (10,000)     (20)                     20                 -               

Shares canceled for                                                                                
acquisition of                                                                                     
Aladdin Transportation,                                                                            
Landmark,Inc. and                                                                                  
Over 100, Inc.            (82,500)     (165)                    165                 -              

Shares issued for                                                                                  
Presidential and                                                                                   
Regal Limousine Service                                                                            
for $0 per share         4,000          8                         (8)               -              

Shares canceled for                                                                                
Presidential                                                                                       
and Regal                                                                                          
Limousine Service            (4,000)         (8)                           8                      -

Net Loss for the Year       -           -                  -                    (23,031)           

Balance, December 31,                                                                              
1997                      42,500                 85             153,499            (156,984)       

Rounding due to reverse                                                                            
stock split (Note 2)         11             -               -                         -            

Net Loss for the Year       -             -               -                        (650)           

Balance, December 31,                                                                              
1998                  42,511           85          153,499             (157,634)                   


(continued)                                                     

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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Consolidated Statements of Stockholders' Equity                 
(continued)                                                     

                                                        [Enlarge/Download Table]
                 STOCKHOLDERS' EQUITY [CONTINUED]                                                      

                                                                              Accumulated              
                                                                          Capital in  Deficit During   
                                   Common          Common  Excess of   Retained                        
STOCKHOLDERS'EQUITY         Shares           Stock   Par Value   Deficit                               
                                                                                                       
Balance,December 31,1998           42,511       $          85 $ 153,499         $    (157,634)         

Shares issued for cash at                                                                              
$.002 per share                 8,387,800            16,775       530               -                  

Shares issued for services                                                                             
at $.05 per share                                                                                      
(Note 2)                                2,000,000       4,000    96,000                  -             

Shares issued for cash                                                                                 
at $.05  per share                875,100               1,750    45,767             -                  

Shares issued for services                                                                             
at $3  per share (Note 2)          50,000               100   149,900             -                    

Shares issued for cash at                                                                              
$3 per share                1,000                  2         2,998                  -                  

Shares issued for cash at                                                                              
$10 per share              21,307                43         213,027             -                      

Shares issued for 100% of                                                                              
shares of  Advanced                                                                                    
Metabolic Technology at                                                                                
$10 per share                                                                                          
(Note 3)                        1,232,261                 2,465 12,320,145                    -        

Shares issued for                                                                                      
intellectual properties                                                                                
Hamilton-May, Inc.                                                                                     
at $10 per share                                                                                       
(Note 3)                   300,000                  600   2,999,400               -                    

Expenses paid by shareholder                                                                           
in  Company behalf                  -                   -       4,050                     -            

Shares issued to Phoenix                                                                               
Energy (Note 3)         35,000                  70           349,930                -                  

Shares issued for services                                                                             
at $10. (Note 2)                    12,500                       25          124,975                  -

Shares issued for cash                                                                                 
at $10                    3,450           7            34,493                 -                        

Shares issued for services at                                                                          
$.10 (Note 2)          150,000                300              14,700                     -            

Net Loss for the Year        -             -           -        (1,667,116)                            

Balance, December 31,                                                                                  
1999                   13,110,929       $  26,222       $16,509,414 $     (1,824,750)                  


(continued)                                                     

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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Consolidated Statements of Stockholders' Equity                 
(continued)                                                     

                                                        [Enlarge/Download Table]
                 STOCKHOLERS' EQUITY [continued]                                                     

                                                                            Accumulated              
                                                            Capital in      Deficit During           
                                Common          Common      Excess of               Retained         
Stockholders'Equity       Shares                Stock       Par Value     Deficit                    
                                                                                                     

Balance,December 31,                                                                                 
1999                    13,110,929       $        26,222    $  16,509,414 $    (1,824,750)           

Shares issued for cash at                                                                            
$10 per share                1,770                       4          17,696                      -    

Shares issued for services                                                                           
at $5 per share            2,000                         4           9,996                      -    

Shares issued for services at                                                                        
$5 per share                100,000                  200            499,800               -          

Shares issued for cash at $5                                                                         
per share                       12,100                      24        54,976                      -  

Shares issued for cash at $5                                                                         
per share (net of commissions                                                                        
of $ 27,500)             38,500                    77       147,423                -                 

Net Loss, March 31, 2000      -                 -           -             (490,688)                  

Balance, March 31,                                                                                   
2000                     13,265,299       $        26,531   $       17,239,305      $     (2,315,438)


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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Consolidated Statements of Cash Flows                           

                                                        [Enlarge/Download Table]

              CASH FLOWS                                                                                                                         
                                                                        From                                                                     
                                                                                                                Inception on                     
                                                For the Three                     September 14,                                                  
                                                    Months Ended                      1983 to                                                    
                                                          March 31,                         March 31,                                            
                                                                  2000          1999                    2000                                     
CASH FLOWS FROM                                                                                                                                  
OPERATING ACTIVITIES                                                                                                                             
                                                                                                                                                 

Net loss                                $            (  490,688)    $ (320,070) $       ( 2,315,438     )                                        
Adjustments to net cash                                                                                                                          
used by operating activities:                                                                                                                    
Depreciation &                                                                                                                                   
Amortization                                         388,854               150         1,166,862                                                 
Stock issued for services/                                                                                                                       
expenses                                           10,000              250,000            676,131                                                
Expenses paid by                                                                                                                                 
a shareholder on the                                                                                                                             
Company's behalf                          -              -                 8,535                                                                 
Increase (Decrease)                                                                                                                              
in accrued expenses       ( 4,173)             -                331,592                                                                          
Increase (Decrease)                                                                                                                              
in prepaids                      (33,892)             -               (158,594)                                                                  
Increase (Decrease)                                                                                                                              
in accounts receivable  ( 229)             -                 ( 23,647)                                                                           
Net Cash Used by                                                                                                                                 
operating Activities (130,128)      (69,920)             (314,539)                                                                               

CASH FLOWS FROM                                                                                                                                  
INVESTING ACTIVITIES                                                                                                                             
Cash paid for acquisition                                                                                                                        
of intangibles                                                          -                               -                       (225,570)        
Cash paid for fixed                                                                                                                              
assets                                                          -                       (  3,008        )                       (  3,008)        
Net Cash Provided by                                                                                                                             
 Investing Activities                           -                       (  3,008        )               (228,578)                                

CASH FLOWS FROM                                                                                                                                  
FINANCING ACTIVITIES                                                                                                                             
Issuance of common                                                                                                                               
stock                                           247,700                 76,117                          676,865                                  
Stock offering                                                                                                                                   
costs                                                                   ( 27,500        )               -                              (  43,325)
Net Cash Provided by                                                                                                                             
Financing                                                                                                                                        
Activities                                                      220,200                 76,117                          633,540                  

NET INCREASE                                                                                                                                     
(DECREASE)IN CASH                       90,072                  3,189                           90,423                                           

CASH, BEGINNING                                                                                                                                  
OF PERIOD                                                       351                             -                                       -        

CASH, END                                                                                                                                        
OF PERIOD                                               $       90,423           $            3,189             $       90,423                   

(continued)                                                     

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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Consolidated Statements of Cash Flows                           

                                                        [Enlarge/Download Table]

                    CASH FLOWS  (Continued)                                                                              
                                                      From                                                               
                                                     Inception on                                                        
                                For the three        Sept. 14                                                            
                                months ended         1983 to                                                             
                                March 31             March 31                                                            
                                2000                 2000                                                                

                                2000           1999   2000                                                               
CASH PAID FOR:                                                                                                           
                                                                                                                         
  Interest                                                      $       -      $     -        $          -               
  Income taxes                                                  $  -          $            -     $              -        

Non Cash Transactions                                                                                                    
 Stock Issuance for                                                                                                      
  Services                                                      $  10,000     $    250,000       $     676,000           
  Acquisition of Intangibles                            $       -          $  -                  $  15,322,610           
  Prepaid expenses                                              $  500,000      $  -                         $    125,000


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Diabetex International Corporation and Subsidiary               
(A Development Stage Company)                                   
Notes to the Consolidated Financial Statements                  
March 31, 2000 and December 31, 1999                            

NOTE 1 - ORGANIZATION AND HISTORY                                               

A.  Organization                                                                

The financial statements presented are those of Diabetex International          
Corporation (formerly  Sheridan Industries, Inc.) ( a development stage         
company).  The Company was incorporated under the laws of the State of Utah     
on September 14, 1983.  The Company changed its name to Associated              
Healthcare, Inc. during 1991 but later rescinded the name change and reverted   
back to Sheridan Industries, Inc.  The Company has never had any operations     
up to December 31, 1998 and in accordance with SFAS #7, is considered a         
Company is now involved in the treatment and diagnosis of diabetes.             

In 1998, the Company created, and later merged with, a Nevada subsidiary and    
changed its name to Diabetex International Corporation.                         

In June 1999, the Company purchased all of the shares of Advanced Metabolic     
Technologies,  a Nevada corporation (AMT) (See Note 3 for discussion of AMT     
and its activity).  AMT  was formed on May 19, 1999 as a wholly owned           
subsidiary of Advanced Metabolic Systems (AMS) which transferred an exclusive   
license to patented proprietary technology for the treatment of diabetes        
known as Metabolic Activation.                                                  

b.  Accounting Method                                                           

The Company's financial statements are prepared using the accrual method of     
accounting.  The Company has elected a December 31 year end.                    

c.   Loss Per Share                                                             

The computations of loss per share of common stock are based on the weighted    
average number of shares outstanding at the date of the financial statements.   
Fully diluted loss per share and basic loss per share at December 31, 1999 is   
the same since any outstanding stock equivalents at December 31, 1999           
(335,243 shares) would be antidilutive.  There were no outstanding stock        
equivalents for all other periods; therefore, basic and fully diluted shares    
are the same.                                                                   

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Diabetex International Corporation                              
(A Development Stage Company)                                   
Notes to the Financial Statements                               
March 31, 2000 and December 31, 1999                            

NOTE 1 - ORGANIZATION AND HISTORY (continued)                                   

d.  Provision for Taxes                                                         

The Company adopted Statement of Financial Standards No. 109 "Accounting for    
Income taxes" in the fiscal year ended December 31, 1998 and was applied        
retroactively.                                                                  

Statement of Financial Accounting Standards No. 109 " Accounting for Income     
Taxes" requires an asset and liability approach for financial accounting and    
reporting for income tax purposes.  This statement recognizes (a) the amount    
of taxes payable or refundable for the current year and (b) deferred tax        
liabilities and assets for future tax consequences of events that have been     
recognized in the financial statements or tax returns.                          

Deferred income taxes result from temporary differences in the recognition of   
accounting transactions for tax and financial reporting purposes.   There       
were no temporary differences at December 31, 1999 and earlier years;           
accordingly, no deferred tax liabilities have been recognized for all years.    

The Company has cumulative net operating loss carryforwards of over             
$1,850,000 at December 31, 1999.  No effect has been shown in the financial     
statements for the net operating loss carryforwards as the likelihood of        
future tax benefit from such net operating loss carryforwards is highly         
improbable.  Accordingly, the potential tax benefits of the net operating       
loss carryforwards, estimated based upon current tax rates at December 31,      
1999 have been offset by valuation reserves of the same amount.  The net        
operating loss carryforwards, estimated based on current tax rates as of        
December 31, 1999 have been offset by valuation reserves of the same amount.    
The net operating losses begin to expire in the year 2003.                      

e.   Cash or Cash Equivalents                                                   

The Company considers all highly liquid investments with maturities of three    
months or less to be cash equivalents.                                          

f.   Consolidated Financial Statements                                          

The consolidated financial statements include the accounts of Diabetex          
International Corporation and its subsidiary, Advanced Metabolic Technology.    
Collectively, these entities are referred to as the Company.  All significant   
intercompany transactions and accounts have been eliminated.                    

g.   Impairment of Long Lived Assets                                            

All long-lived assets (including intangible assets)  are evaluated for          
impairment wherever events or changes in circumstances indicate that the        
carrying amount of an asset may not be recoverable.  An impaired asset is       
written down to its estimated fair market value based on the best information   
available.  The Company determines whether an impairment has occurred by        
comparing the estimated undiscounted future cash flows expected to result       
from the use of the asset and its eventual disposal to the asset's carrying     
amount.  If the amount exceeds the undiscounted future cash flows, then the     
impairment charge is calculated as the excess of the carrying amount of the     
asset over its fair market value.                                               

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Diabetex International Corporation                              
(A Development Stage Company)                                   
Notes to the Financial Statements                               
March 31, 2000 and December 31, 1999                            

NOTE 1 - ORGANIZATION AND HISTORY (continued)                                   

h.   Stock compensation awards and other non cash transactions                  

The Company entered into several transactions that involved stock or stock      
options for goods or services and acquisitions of subsidiaries and medical      
technologies.  These transactions were recorded at estimated fair market        
value of the stock being offered at private placement prices to the general     
public, publically traded prices, or some other fair value as best determined   
by the board of directors with the facts and circumstances present at the       
time of the transaction.  (See Note 2 regarding specific tranactions.)          

NOTE 2 - NON CASH TRANSACTIONS                                                  

During 1999, the Company issued stock for services and the purchase of a        
subsidiary and other intellectual properties related to the medical field,      
specifically technology that advances the treatment and diagnosis of diabetes.  

The transactions were recorded at estimated fair market value of the stock,     
specifically the price of stock being offered at private placement prices to    
the general public, or some other negotiated arms length transaction as best    
determined at the time by the board of directors.  The following transactions   
occurred in the first six months of 1999:                                       

-In January, 1999, 2,000,000 shares were issued for services rendered for       
assistance in obtaining the Company's license to 44 patents covering            
technology related to non invasive blood glucose monitoring.  These shares      
were valued at $.05 per share or total value of $100,000.                       

-In March, 1999, 50,000 shares were issued for services rendered related to     
the acquisition of Advanced Metabolic Technologies.  The shares were valued     
at $3 per share or $150,000.                                                    

- In June, 1999, 1,232,261 shares were issued for acquisition of all of the     
stock of Advanced Metabolic Technologies (see note 3).  The purchase price      
was $10 per share or a total value of $12,322,610.  The fair market value of    
the stock was $10 (private placement purchase price).  The Company had an       
appraisal completed on Advanced Metabolic Technologies intellectual             
properties which substantiated a value greater than the purchase price          
(Note 3).                                                                       

In June, 1999, 300,000 shares were issued for acquisition of a license for      
all the intellectual properties related to an insulin pump developed by         
Hamilton May, Inc.  The purchase price was $10 per share or a total value of    
$3,000,000.  The fair market value of the stock was $10 (private placement      
purchase price).                                                                

In July, 1999, 35,000 shares were issued to Phoenix Energy for consulting       
services.  The fair market value of the stock was $10 (Private Placement        
purchase price).                                                                

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Diabetex International Corporation                              
(A Development Stage Company)                                   
Notes to the Financial Statements                               
March 31, 2000 and December 31, 1999                            

NOTE 2 - NON CASH TRANSACTIONS - (continued)                                    

In September, 1999, 12,500 shares were issued to Anatoli Tsaliovich for         
services to be rendered in connection with the miniaturization and perfection   
of the non-invasive blood glucose monitors and hyper/hypo glycemic warning      
devices.  The fair market value of the stock was $10. (Private Placement        
purchase price).  These expenses were expenses of Solid State Farms and         
credited as a prepaid royalty. (Note 8).                                        

In December, 1999, 50,000 shares of stock were issued to Nathan Drage for       
services performed for the Company and not previously compensated.  The         
shares are further restricted than normal Rule 144 restrictions and have        
required revenue platforms before sales of the shares can occur.  Due to        
these additional restrictions, the shares were valued at $0.10 per share.       

In December, 1999, 100,000 shares of stock were issued to Philip Blomquist      
for services performed for the Company and not previously compensated.  The     
shares are further restricted than normal Rule 144 restrictions and have        
required revenue platforms before sales of the shares can occur.  Due to        
these additional restrictions, the shares were valued at $0.10 per share.       

In October, November and December, 1999, Dominion exercised 3,450 options at    
$10 per share it possessed from an option grant in March 1999.                  

In January, February and March, 2000, Dominion exercised 1,770 options at $10   
per share it possessed from an option grant in March 1999.                      

In February, 2000, 100,000 shares were issued at $5 per share to Dr. Sami       
Hashim for consulting work regrading the miniaturization and perfection of      
DIC's noninvasive blood glucose monitors and hyper/hypo glycemic warning        
devices.                                                                        

NOTE 3 - ACQUISITION OF INTANGIBLE ASSETS                                       

Advanced Metabolic Technologies (AMT)                                           
AMT owns an exclusive license to market, and otherwise exploit, that certain    
therapy known as hepatic activation or metabolic activation (the therapy).  A   
patent has been granted covering the therapy (May 1988) and the patent is a     
subject of the license.  The license includes any and all improvements to the   
therapy, the subject patent or any related subsequent patents.  The therapy     
has been developed at the Aoki Diabetes Research Institute (ADRI) under the     
direction of Dr. Thomas Aoki.  ADRI is associated with and maintains its        
offices and clinic on the campus of University of California, Davis, in         
Sacramento California.                                                          

This treatment is delivered by special intravenous infusion devise (pump)       
with the treatment programed into the devise.  The devise (Bionica Microdose)   
with the Company's treatment embedded in the devise has been FDA approved and   
in use since 1988.  The treatment has been refined over the years including     
clinical use on human subjects, and clinical trials for over ten years with     
constant following of patients to demonstrate the ability of the treatment to   
prevent, stop and in some ways reverse the common complications of diabetes     

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Diabetex International Corporation                              
(A Development Stage Company)                                   
Notes to the Financial Statements                               
March 31, 2000 and December 31, 1999                            

NOTE 3 - ACQUISITION OF INTANGIBLE ASSETS (continued)                           

Patients that have undergone regular treatments have reported improvements in   
diabetes related health complications such as restoration of kidney function    
or cessation of kidney degeneration, restoration of eyesight or cessation of    
eyesight degeneration, improved heart metabolism, cessation of diabetic         
hyper/hypo glycemic blackouts, and improved sense of general health and well    
being and other benefits.  Presently, ADRI and five private clinics             
administer the therapy to patients on a fee basis.  The Company carries the     
asset on its books at a cost of $12,548,180 paid in stock and cash.             

The Company issued 1,232,261 shares of common stock for all the outstanding     
shares of AMT (800,000 shares).  The only asset of AMT was the license to       
market a therapy known as hepatic activitation or metabolic activation.  As     
part of the acquisition, the Company agreed to pay a $50,000 outstanding debt   
of AMT, pay all legal costs of the acquisition, and pay directly to the         
stockholder of AMT, cash in the amount of $150,000 over a period of 10 months.  

Hamilton May                                                                    
Hamilton May Corporation has sold the Company a license to market, and          
otherwise exploit, that certain mechanical device known as the Hamilton May     
Pump (the pump).  The license includes any and all improvements to the pump     
and rights to patent protection if a patent, covering the pump, is ever         
granted.  The pump has been developed under the direction of Dr. Nardo Zaias    
of Miami, Florida.  The pump has been shown to have the ability to deliver      
pulses of insulin and insulin related products to patients with tremendous      
precision without shear.  The pump has the feature of being a two-way system    
in that it has the capacity to both deliver and draw when attached to a         
patient.   The pump is in design stage and has not been approved by the FDA.    

The Company issued 300,000 shares of common stock for the Hamilton/May pump.    

Herein is a summary of the purchase of Advanced Metobolic Technology (AMT)      
and Hamilton/May pump:                                                          

AMT                                                                             

Purchase of AMT intellectual properties:                                        
Stock (1,232,261 shares @ $10 per share)                        $     12,322,610
Cash paid for legal services on transaction                               25,570
Cash paid over time ($15,000 over 10 months)(note 6)           150,000          
Assumption of debt (note 6)                                               50,000
                                            12,548,180
Hamilton/May                                                                    

Purchase of Hamilton/May pump                                                   
Stock (300,000 shares @ $10 per share)                                 3,000,000

Total                                                                $15,548,180

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Diabetex International Corporation                              
(A Development Stage Company)                                   
Notes to the Financial Statements                               
March 31, 2000 and December 31, 1999                            

NOTE 3 - ACQUISITION OF INTANGIBLE ASSETS (continued)                           

The amortization of the intellectual properties of AMT and Hamilton/May began   
June 30, 1999.  Amortization expense for 1999 is $777,408.                      

NOTE 4 - PROPERTY, PLANT AND EQUIPMENT                                          

Property and equipment are recorded at cost.  Repairs and maintenance are       
charged to operations, and renewals and additions are capitalized.              

Property and equipment consists of the following:                               
                         December  31,
                                                      1999                  1998
Computer Equipment                                                   $ 3,008 $ -
        Less: Accumulated Depreciation                                   (600) -
                                    $         2,408          $       -

Depreciation is based on the estimated useful life of the asset on a straight   
line basis over 5 years.                                                        

Depreciation expense for 1999 and 1998 was $600 and $0, respectively.           
Depreciation expense was $150 for the quarters ending March 31, 2000 and 1999.  

NOTE 5 - USE OF ESTIMATES                                                       

The preparation of financial statements in conformity with generally accepted   
accounting principles requires management to make estimates and assumptions     
that affect reported amounts of assets and liabilities, disclosure of           
contingent assets and liabilities at the date of the financial statements and   
revenues and expenses during the reporting period.  In these financial          
statements, assets, liabilities and earnings involve extensive reliance on      
management's estimates.  Actual results could differ from those estimates.      

NOTE 6 - RELATED PARTY TRANSACTIONS                                             

At the time of the purchase of American Metabolic Technology (Note 3), the      
Company agreed to pay $150,000 in closing and other costs over a period of      
time and another $50,000 for research performed by another research             
development firm for AMT before the purchase.  These payments were part of      
the negotiated purchase price of AMT and were included in the basis of the      
cost of AMT. $17,187 was paid in 1999.                                          

Solid State Farms and the Company have several common shareholders with the     
Company and has entered into a 7% royalty agreement for any sale of its         
products or services.  The Company has advanced $783,595 towards those          
royalties as of March 31, 2000. (See Note 7 and 8).                             

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Diabetex International Corporation                              
(A Development Stage Company)                                   
Notes to the Financial Statements                               
March 31, 2000 and December 31, 1999                            

NOTE 7 - PREPAID EXPENSES                                                       

Prepaid expenses consists of the following:                                     

Advances to affiliate for advance                                               
royalties (Note 8)                                                     $ 783,595
                         =============
                       $ 783,595

NOTE 8 - COMMITMENTS AND CONTINGENCIES                                          

As part of the purchase of AMT, the Company agreed to pay $200,000 to           
Advanced Metobolic Systems (AMS), former parent of AMT, in closing costs and    
other expenses related to the purchase of AMT.  The Company also agreed to      
pay AMS $75,000 for services related to the insurance billing of AMT for its    
metobolic activation therapy. $12,500 of unpaid consulting fees was accrued     
for the six months ended December 31, 1999.                                     

The Company also agreed to pay two consultants to AMT for a period of one       
year at $5,000 each per month.                                                  

In 1999, The Company entered into a licensing agreement with Solid State        
Farms, Inc. for their 44 international patents covering proprietary             
technology to monitor blood glucose levels non-invasively.  The agreement       
calls for a payment of a 7% of the adjusted gross sales price on all licensed   
products.  The Company has made advance royalty payments of $783,595 on this    
royalty as of March 31, 2000.                                                   

NOTE 9 - STOCK OPTIONS                                                          

In March, 1999, the board of directors set the price of restricted stock        
sales at $10 per share and offered an option to a foreign corporation to        
exercise its option to purchase 50,000 restricted shares for the $10 price      
for a period of one year. 25,243 options remain unexercised at December 31,     
1999.                                                                           

In August, 1999, the Company issued a one year option to Hank Bagly to          
purchase up to 10,000 shares at a price of $6.00 each.  No options were         
exercised in 1999.                                                              

In November, 1999, the Company issued a five year option to M. H. Meyerson      
and Co., Inc. to purchase up to 300,000 shares at a price of $10 each in        
exchange for investment banking services during the five year term.  No         
options were exercised in 1999.                                                 

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Diabetex International Corporation                                              
(A Development Stage Company)                                                   
Notes to the Financial Statements                               
March 31, 2000 and December 31, 1999                            

NOTE 10 - REVERSE STOCK SPLIT                                                   

In 1998, the Company shareholders approved a 1 for 400 reverse stock split of   
its common shares.  The financial statements have been restated retroactively   
to show the effects of the split.                                               

NOTE 11 - MARKET SEGMENT INFORMATION                                            

The company is in the business of providing equipment for the monitoring and    
treatment of diseases of improper metabolism including its first major          
market, Diabetes.  The company has three independent but related lines of       
products and services; a) non-invasive biological monitoring; b) metabolic      
activation equipment and treatment, and c) new high accuracy infusion devices   
for the automatic delivery of its treatments.                                   

Non-invasive Biological Monitoring                                              

An exclusive worldwide license to exploit, manufacture and market patented      
devices to non-invasively determine blood glucose, hemoglobin A1C, and other    
blood levels to help treat diabetes and potentially other diseases.  These      
device prototypes are in development, are being tested and refined, and have    
not been submitted for approval by the US Food and Drug Administration          
("FDA").                                                                        

Metabolic Activation                                                            

An exclusive license to exploit and market a patented metabolism treatment      
called Metabolic Activation (also known as hepatic activation of Continuous     
Intermittent Insulin Therapy, CIIIT in some medical publications).  This        
treatment is delivered by a special infusion device with the treatment          
programmed into the device, and is FDA approved since 1988.  The treatment      
has been in development for over ten years by Advanced Metabolic Systems,       
Inc., and has been used for the last ten years, with constant following         
to demonstrate the stopping  of the complications of diabetes, and certain      
other metabolism related disease states.  The Company acquired this             
treatment, business, licenses, special infusion devices and know-how by         
exchange of its shares with Advanced Metabolic Systems, Inc., (AMS).            

Infusion Devices                                                                

An exclusive worldwide license to finish development, exploit, manufacture      
and sell an ultra accurate pumping system which will replace the current FD     
approved device, and provide for automatic delivery of the treatment, and any   
insulin or insulin related products.  This technology was acquired from         
Hamilton/May, Inc.                                                              

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Diabetex International Corporation                                              
(A Development Stage Company)                                                   
Notes to the Financial Statements                               
March 31, 2000 and December 31, 1999                            

NOTE 11 - MARKET SEGMENT INFORMATION (continued)                                

As of December 31, 1999, the Company has not realized significant income from   
any of the three distinct technologies.  Other selected financial information   
regarding each segment as follows:                                              

                                                        [Enlarge/Download Table]
                       Biological    Metabolic   Infusion                                        
                       Monitoring   Activation   Devices   Corporate    Total                    

Income Statement                                                                                 
Information                                                                                      
                                                                                                 
Sales                                   $        -    $  40,605 $    -     $     -    $  40,605  
Expenses                                          -      422,594   45,000  1,365,127   1,832,721 
Profit/loss from                                                                                 
operations               $        -    $(381,989)$(45,000)$(1,240,127)$(1,667,116)               

Balance Sheet Information                                                                        

Assets                      $        -  $11,920,771 $ 2,850,000$ 275,881  $15,046,652            

Liabilities                    $       -          $   310,248   $       -  $   25,517  $  335,765

        The accompanying notes are an integral part of these financial statements                

PART II         OTHER INFORMATION                                                                

Item # 6   Exhibits and Reports on Form 8K                                                       

      [a] Exhibits                                                                               

          EX - 11  Computation of Earnings per share                                             
          EX - 27  Financial Data Schedule                                                       

      [b] Reports on Form 8K                                                                     

        The Company submitted the following information on Form 8K in April                      
2000:                                                                                            
        The addition of Benjamin Brucker Weisman, Ph.D. to the Board of                          
        Directors and his appointment as Chief Executive Officer.  Mr.                           
        Bloomquist continues as Secretary of the Company.                                        

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                            SIGNATURES                                                           

Pursuant to the requirement of the Securities Exchange Act of 1934, the                          
registrant has duly caused this report to be signed on its behalf by the                         
undersigned thereunto duly authorized .                                                          

                                 DIABETEX INTERNATIONAL, CORP                                    
                               ---------------------------------------                           
                               (Registrant)                                                      

May 31,2000                   /s/ Benjamin Weisman                                               
------------------           ---------------------------------------                             
Date                          Benjamin Weisman, President

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Filing Submission 0001096132-00-000022 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Petrone Worldwide, Inc. – ‘10QSB’ for 3/31/00

On: Wednesday, 6/7/00, at 8:11am ET · For: 3/31/00 · Accession #: 1096132-0-22 · File #: 0-30380

Quarterly Report — Small Business — Form 10-QSBFiling Table of Contents

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