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Quadtech International Inc. – ‘10QSB’ for 7/31/04

On:  Wednesday, 10/20/04, at 1:10pm ET   ·   For:  7/31/04   ·   Accession #:  1108017-4-588   ·   File #:  0-27795

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

10/20/04  Quadtech International Inc.       10QSB       7/31/04    3:143K                                   Equity Tech Group Inc/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                  HTML    146K 
 2: EX-31       Certification per Sarbanes-Oxley Act (Section 302)  HTML      9K 
 3: EX-32       Certification per Sarbanes-Oxley Act (Section 906)  HTML      6K 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549

FORM 10-QSB

    (X)        Quarterly report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934.

For the quarterly period ended July 31, 2004

    (  )        Transition report pursuant to Section 13 or 15(d) of the Exchange Act for the transition period from
                          ____________ to ____________ .

Commission File Number: 0-27795

Meier Worldwide Intermedia Inc.
(Exact name of registrant as specified in charter)

Ste 320-1100 Melville Street
Vancouver, BC, Canada V6E 4A6
(Address of principal executive offices)

(604) 689-7572
(Registrant’s Telephone Number, Including Area Code)

Check whether the registrant: (1) has filed all reports required to be filed by Section by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 ( )

State the number of shares outstanding of each of the issuer’s classes of common equity, as of September 15, 2004

17,929,244

Transitional Small Business Disclosure Format:

YES ( ) NO (X)

-1-

Meier Worldwide Intermedia Inc. and Subsidiaries
(A Development Stage Enterprises)

INDEX TO FORM 10-QSB

-2-

PART I

FORWARD-LOOKING STATEMENTS

        Certain statements contained in this filing are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. These statements appear in a number of places in this Form 10-QSB and include all statements that are not statements of historical fact regarding intent, belief or our current expectations, with respect to, among other things: (i) our financing plans; (ii) trends affecting our financial condition or results of operations; (iii) our growth strategy and operating strategy; and (iv) the declaration and payment of dividends. The words “may,” “would,” “could,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend,” “plans,” and similar expressions and variations thereof are intended to identify forward-looking statements.

        Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond our ability to control. Actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Among the key risks, assumptions and factors that may affect operating results, performance and financial condition are changes in technology, fluctuations in our quarterly results, ability to continue and manage our growth, liquidity and other capital resources issues, competition and the other factors discussed in detail in our filings with the Securities and Exchange Commission.

-3-

Meier Worldwide Intermedia Inc.
(A Developmental Stage Enterprise)
CONSOLIDATED BALANCE SHEET
AS OF JULY 31, 2004
(Unaudited)

See accompanying notes.

-4-

MEIER WORLDWIDE INTERMEDIA INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

See accompanying notes.

-5-

MEIER WORLDWIDE INTERMEDIA INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

See accompanying notes.

-6-

Meier Worldwide Intermedia Inc.
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

A — ORGANIZATION AND DESCRIPTION OF BUSINESS

Covenant Corporation (“Covenant”), which was incorporated in the State of Nevada on May 10, 2002 for the purpose of developing tools to counteract the online piracy of video, music and software files, was acquired by Meier Worldwide Intermedia, Inc. (“Meier”) on June 26, 2003 (collectively referred to as “we”, “us”, “our”). Meier was formed in 1997.

For financial statement purposes, the transaction was treated as a reverse acquisition and a recapitalization with Covenant being treated as the acquirer. In connection therewith, Meier issued one share of its common stock for each of Covenant’s 16,540,500 outstanding shares. Immediately before the acquisition, Meier had 617,744 shares outstanding and liabilities in excess of assets of approximately $137,500. Since the transaction was accounted for as a purchase, the deficiency of $137,500 was reflected as an adjustment to stockholders’ equity as of the acquisition date.

Because we have not yet generated revenues and/or commenced our planned principal operations we are considered to be in the development stage as defined in Financial Accounting Standards Board Statement No. 7. Accordingly, some of our accounting policies and procedures have not yet been established.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make certain 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. The reported amounts of revenues and expenses during the reporting period may be affected by the estimates and assumptions we are required to make. Estimates that are critical to the accompanying financial statements include our estimate of expenses and related liabilities arising from certain contingent liabilities discussed at Note G. It is at least reasonably possible that our estimates could change in the near term with respect to this matter.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts and balances of Covenant, and Meier and its inactive subsidiaries since June 26, 2003 (date of the reverse acquisition). All significant intercompany accounts and balances have been eliminated in consolidation.

Basis of Presentation

Our accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-QSB and Rule 10-1 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, these consolidated financial statements do not include all of the footnotes required by accounting principles generally accepted in the United States of America. In our opinion, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended July 31, 2004 are not necessarily indicative of the results that may be expected for the year ended October 31, 2004. The accompanying consolidated financial statements and the notes thereto should be read in conjunction with our audited consolidated financial statements as of and for the year ended October 31, 2003 contained in our Form 10-KSB.

-7-

Marketable Equity Securities

During the three months ended January 31, 2004, we purchased 3,000 shares of Soloran, Inc. (SNRN) for $10,000. We are not actively trading the shares but they are available for sale, therefore any unrealized gains and losses are recognized as a separate component of stockholders’ deficit. As of July 31, 2004, we have recorded $7,870 as an unrealized loss for the decrease in Soloran’s stock price.

Revenue Recognition

During the nine months ended July 31, 2004, we performed consulting services for which recognize as the services are performed.

NOTE B – GOING CONCERN

Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We have suffered recurring losses from operations and have a stockholders’ deficit of approximately $215,000 at July 31, 2004. We are also involved in certain litigation that could adversely impact our results of operations and cash flow if we are unable to prevail in such matters. Finally, we will require a significant amount of capital to proceed with our business plan. Accordingly, our ability to continue as a going concern is ultimately dependent upon our ability to secure an adequate amount of capital to finance our planned principal operations and/or to pay any adverse judgments that may arise from the contingencies discussed at Note D. Our plans will include attempts to raise public and/or private equity or debt financing. However, there is no assurance that we will be successful in attracting the necessary capital and/or if such capital will be offered on terms acceptable to us. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time. Our financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

NOTE C- OTHER RELATED PARTY TRANSACTIONS

Certain related parties periodically advance funds to us. These advances, which are reflected as related party accounts payable and shareholder advances in the accompanying consolidated balance sheet, are unsecured, non-interest bearing and due on demand.

During 2003, certain officers and consultants received, in lieu of cash, 6,575,500 shares of common stock valued at approximately $720,000 (based on the estimated fair value of the shares at date of issuance). Approximately $512,500 of this amount was immediately expensed; the remaining $207,500 was deferred to account for the value of services, office space and other expenses expected to be provided by these individuals over twelve months from the date of issuance. During the year ended October 31, 2003, $149,200 of the deferred amount was amortized to expense and an additional $58,300 was amortized to expense during the nine months ended July 31, 2004 leaving $0 to be expensed during the remainder of 2004.

-8-

NOTE D — CONTINGENCIES

We are involved in certain litigation in which various plaintiffs have alleged damages in excess of $549,000. Approximately $41,435 of this amount is included in accounts payable in the accompanying consolidated financial statements, which represents our best estimate of the liability we are required to record in accordance with accounting principles generally accepted in the United States of America. In our opinion, the remaining litigation will not result in a material loss to us.

-9-

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OR PLAN OF OPERATION

The following discussion and analysis should be read in conjunction with the balance sheet as of July 31, 2004 and statements of operations for the three and nine months ended July 31, 2004 and 2003 included with this Form 10-QSB.

Plan of Operation

Until November 1, 1998, we and our subsidiaries were in the business of developing websites on the internet as well as the acquisition, management and leasing of sound studio space which it marketed to the local entertainment industry through its five wholly-owned British Columbia incorporated subsidiaries. On November 1, 1998, these subsidiaries were disposed of for total consideration of $6.50 to Meier Entertainment Group Inc., a company owned by James Meier, for their failure to produce revenue. They were: Meier Studios Inc., incorporated August 25,1997; G.G. Studios Inc., incorporated October 6, 1997; Meier Worldwide Intermedia Inc. (BC), incorporated November 28, 1996; Meier Studios (Lake City) Inc., incorporated December 18, 1997; and Meier Studios (B.B.) Inc., incorporated March 26, 1998.

On June 30, 1997 we acquired a movie industry website from Meier Entertainment Group Inc., a company wholly-owned by James Meier. On June 30, 1997, the Company issued 180,000 shares at $0.20 per share to Mr. Meier. These shares were issued for services and operating the Internet site.

On June 26, 2003, a Common Stock Purchase Agreement (the “Agreement”) was made and entered into and closed between Meier Worldwide Intermedia and Covenant Corporation, a Nevada corporation.

We acquired all issued and outstanding shares of common stock of Covenant. As a result of the exchange, the outstanding shares of Covenant common stock were exchanged for 16,540,500 shares of our common stock, making Covenant our wholly owned subsidiary.

Covenant is developing a service designed to counteract online piracy of music, video and software files. Covenant’s primary service essentially uploads to pirate sites a large number of fictitious files with a music, video or software name, making it more difficult for visitors to the pirate site to download the real music, video or software they are attempting to pirate.

Covenant was incorporated in the State of Nevada on May 10, 2002. For financial statement purposes, the transaction was treated as a reverse acquisition and a recapitalization with Covenant being treated as the acquirer. Immediately before the acquisition, Meier had 617,744 shares outstanding and liabilities in excess of assets of approximately $137,500.

As a result of the above, our financial information includes the accounts and balances of Covenant since its inception on May 10, 2002, and Meier and its inactive subsidiaries since June 26, 2003 (date of the reverse acquisition).

All amounts are stated in US$.

We are a development stage company. We have recognized our first revenues from consulting of $80,757 during the nine months ended July 31, 2004. However we continue to experience losses and have an accumulated loss of approximately $1,123,000 from inception on May 10, 2002 through July 31, 2004. Our losses result primarily from the issuance of common stock to various individuals and companies for assisting us with the development of our products, marketing and general business strategy.

-10-

At July 31, 2004, we had cash available of approximately $600 to fund future expenses. From May 10, 2002 through July 31, 2004, we raised approximately $100,000 through the sale of our common stock. Additionally, we borrowed approximately$90,000 from our shareholders. We have funded our development stage operations through these amounts.

As of Septemer 15, 2004 we only have enough cash on hand to satisfy our operating cash requirements for the next month. As a result we may reduce our operations and further delay payments our vendors. In order to remain operational and implement our business plan for the entire 12 month period, we will need an additional $200,000 We may not generate operating revenues or raise equity or debt financing sufficient to fund this amount. We currently have no sources of financing identified. If we don’t raise or generate these funds, the implementation of our short-term and long-term business plan will be delayed or eliminated.

As of July 31, 2004, we had assets of approximately $23,000 and liabilities of approximately $237,000. A portion of these liabilities totaling approximately $117,000 is owed to three of our shareholders. There are no notes. The debt is payable upon demand for no interest. Management anticipates settling substantially all current outstanding debt with existing creditors by issuing shares for debt.

Our anticipated business development milestones continue to be delayed as a result of poor funding but for the next 12 months we expect the following:

If any of the steps above are not completed as presented in the preceding milestone table, it could delay the overall schedule and eliminate or reduce revenues during the next 12 months.

Music CD release dates could run months behind schedule, which would effect Covenant’s timeframe for protecting certain bands. Covenant might not be able to get contracts with all the major record labels.

Critical Accounting Policies

Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in the notes to the consolidated financial statements. We have consistently applied these policies in all material respects. At this stage of our development, these policies primarily address matters of expense recognition. Management does not believe that our operations to date have involved uncertainty of accounting treatment, subjective judgment, or estimates, to any significant degree.

-11-

ITEM 3 — CONTROLS AND PROCEDURES

Within 90 days prior to the date of filing of this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer (who also effectively serves as the Chief Financial Officer), of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures are effective for gathering, analyzing and disclosing the information we are required to disclose in the reports we file under the Securities Exchange Act of 1934, within the time periods specified in the SEC’s rules and forms. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to the date of this evaluation.

PART II

Item 1. Legal Proceedings.

As of September 15, 2004 the following lawsuits and claims have been made against the Company and/or subsidiaries of the Company:

1.     Appin Holdings Ltd. v. Meier Studios (B.B.) Inc. and the Company (Supreme Court of British Columbia, Vancouver Registry, action # C992772, commenced June 1, 1999): under a written lease date March 31, 1998, Appin Holdings Ltd. Leased to Meier Studios (B.B.) Inc., movie studio premises located at 6228 Beresford Street, Burnaby, B.C. for a term of five years commencing April 1, 1998. Under a written agreement dated April 1, 1998, the Company agreed to guarantee the lease for a period of 12 months commencing April 1, 1998. The landlord terminated the lease on April 19, 1999, on the basis of its claim, which is disputed, that the tenant failed to pay rent in March and April 1999, and that two claims of builder’s liens were filed against the property. The landlord is claiming CDN$228,897.41 (US$153,880.61) against the Company pursuant to agreement, which the Company disputes. Since the Company’s guarantee expired on March 31, 1999, the Company calculates that its maximum exposure is CDN$61,634.53 (US$41,434.97), plus interest and costs.

2.     Crow Productions Inc. v. Meier Studios (B.B.) Inc. (Supreme Court of British Columbia, Vancouver Registry, action # C993605, commenced July 12, 1999): under a written sublease dated March 31, 1998, Meier Studios (B.B.) Inc. subleased to Crow Productions Inc. the premises described in item 1 above. The subtenant paid rent of CDN$48,150 (US$30,252) to the sub landlord for May, 1999. As a result of the termination of the head lease on April 19, 1999 described in item 1, the subtenant paid the May, 1999 rent again to Appin Holdings Ltd. Crow Productions Inc. is claiming CDN$48,150 (US$30,252) plus interest and costs against Meier Studios (B.C.) Inc. Since Meier Studios is no longer a subsidiary, Management does not believe any judgment would affect the Company.

-12-

3.     Ms. Renee Giesse. v. the Company, Meier Studio Management Inc., 532352 B.C. Ltd. and Dennis Rudd (Supreme Court of British Columbia, Vancouver Registry, action # C986645, commenced December 22, 1999): the plaintiff’s claim as against the Company and Meier Studio Management Inc. claiming unpaid wages of CDN $83,333.33 (US$56,816.88) plus damages for wrongful dismissal, interest and costs. In the statement of claim, the Ms. Giesse alleges that in December 1997 she agreed to be employed by the Company and it’s subsidiary, Meier Studio Management Inc., as a Vice President, Studio Management for the movie studios operated by the defendant in British Columbia. Ms. Giesse alleges that under the terms of the oral employment agreement she was to be paid a salary and benefits commensurate to similar industry executives. Ms. Giesse alleges that a commensurate salary is CDN $125,000 per annum plus the reimbursement of certain expenses. Ms. Giesse further alleges that she carried out her duties as Vice President from December 15, 1997 to August 18, 1998 when she was dismissed without cause. The plaintiff seeks damages in the amount of salary for the period of December 17, 1997 to August 18, 1998. Management denies each and every allegation fact contained in Ms. Giesse’s statement of claim. Specifically, management disputes that there was any employment agreement and believes that the claim is frivolous and without merit. Since the Company filed it’s statement of defense on January 18, 1999, there has been no further action taken by Ms. Giesse in relation to her claim.

4.     Michael McGowan v. the Company, Meier Studios (Lake City) Inc., Meier Worldwide Entertainment B.C. Ltd. and G.G. Studios Ltd. (Supreme Court of British Columbia, Vancouver Registry, action # C992476, commenced May 14, 1999): Mr. McGowan loaned CDN$40,000 (US$26,890.75) without specific terms as to interest and repayment to the Company on August 15, 1997. Mr. McGowan requested that the loan be repaid and when the Company did not comply, he commenced the above action. Prior to filing a statement of defense, the Company agreed to a consent judgment of CDN$43,552.49 (US$29,278.98) as at September 1, 1999, to make monthly payments of CDN$1,000.00 (US$672.26) commencing on October 1, 1999, to pay interest at 1% above the HSBC Canada Bank prime rate and to pay the balance on October 1, 2000. The loan and related accrued interest through January 31, 2003 is included in “Note payable and accrued interest in default” in the accompanying financial statements.

5.     Meier Studios Inc. v. 544553 B.C. Ltd. (Supreme Court of British Columbia, Vancouver Registry, action #C985401, commenced September 4, 1998). Meier Studios entered into a lease agreement with the defendant to lease 65,000 square foot building on lands owned by the defendant in Delta, British Columbia. Under the terms to the lease, the defendant was required to construct an addition to the existing building of approximately 115,000 square feet. Upon completion of the addition, the basic rent payable by Meier Studios Inc. was to increase to approximately $105,000 per month. In June of 1998, the defendant informed Meier Studios Inc. that the addition had been completed and demanded payment of additional rent. Meier Studios Inc. determined that the addition was not complete nor had the municipal government issued the necessary occupancy permits. Subsequently, the defendant informed Meier Studios Inc. that it had terminated the lease and blocked the plaintiff from accessing the premises. Meier Studios Inc. brought the action seeking a declaration that the lease was valid and requiring specific performance by the defendant. In October 1998, the defendant file its statement of defense and counterclaimed for damages against Meier Studios Inc. Specifically, the defendant sought damages in the amount of $308,040 (less $112,107.55 and $5,552.45 paid into court by Meier Studios Inc.) On November 1, 1998, the Company sold Meier Studios Inc. to Meier Entertainment Group Inc., a company controlled by the Company’s president, James Meier. While Meier Studios Inc. is no longer a subsidiary of the Company, the Company remains liable under the lawsuit as it acted as a guarantor on the original lease.

-13-

Item 2. Changes in Securities.

NONE

Item 3. Defaults upon Senior Securities.

NONE

Item 4. Submission of Matters to a Vote of Security Holders.

NONE

Item 5. Other Information.

NONE

Item 6. Exhibits and Reports on Form 8-K.

(a)    Exhibits

(b)     Reports on Form 8-K.

NONE

-14-

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

-15-

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10QSB’ Filing		Date		First		Last			Other Filings
		10/31/04		3					10KSB,  NT 10-K
Filed on:		10/20/04		5
		9/15/04		1		4			NT 10-Q
For Period End:		7/31/04		1		4			NT 10-Q
		1/31/04		3					10QSB
		10/31/03		3					10KSB,  NT 10-K
		7/31/03		2		4			10QSB,  NT 10-Q
		6/26/03		3		4			8-K/A,  S-8
		1/31/03		4					10QSB,  NT 10-Q
		5/10/02		2		4
		10/1/00		4
		12/22/99		4
		10/1/99		4
		9/1/99		4
		7/12/99		4
		6/1/99		4
		5/14/99		4
		4/19/99		4
		3/31/99		4
		1/18/99		4
		11/1/98		4
		9/4/98		4
		8/18/98		4
		4/1/98		4
		3/31/98		4
		3/26/98		4
		12/18/97		4
		12/17/97		4
		12/15/97		4
		10/6/97		4
		8/15/97		4
		6/30/97		4
		11/28/96		4
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Filing Submission 0001108017-04-000588   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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