8-K 1 marcha3.htm AMENDMENT NO. 3 Form 8-K

As filed with the Securities and Exchange Commission on December 22, 2003

Securities And Exchange Commission
Washington, D.C. 20549

_________________

FORM 8-K

AMENDMENT NO. 3

CURRENT REPORT

_________________

Date of report (date of earliest event reported):   March 24, 2003

 

MILLENNIUM CAPITAL VENTURE HOLDINGS INC.
(Exact name of registrant as specified in its charter)

 Delaware
(State or other jurisdiction of
incorporation or organization)

0-31457
(Commission File Number)

23-3048444
(I.R.S. Employer
Identification No.)

9348 Basile Routhier, Montreal, Quebec, Canada H2M 1T8
(Address of principal executive offices) (Zip Code)

 N/A
(Former name or former address, if change since last report)

On March 31, 2003, Millennium Capital Venture Holdings Inc. ("Millennium") filed with the Securities and Exchange Commission a Current Report on Form 8-K in which disclosures were made under Item 2 regarding the acquisition of a subsidiary corporation, Mada Multimedia Inc. ("Mada") and under Item 4 regarding a change in Millennium's independent auditors.

On April 22, 2003, Millennium filed Amendment No. 1 to the Form 8-K to include the audited financial statements of Mada and Millennium's pro forma financial statements showing the effects of the acquisition of Mada.

On July 30, 2003, Millennium filed Amendment No. 2 to the Form 8-K to modify the disclosure under Item 4 to state that there were no disagreements with Millennium's prior auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure during Millennium's two most recent fiscal years and any subsequent interim period preceding the date of dismissal. Amendment No. 2 included as Exhibit 16.2 a letter from Millennium's prior auditor with respect to the disclosures made under Item 4 and such auditor's review thereof. Amendment No. 2 also made a modification to the audited financial statements of Mada included therein by adding "Note 7 - Supplemental cash flow information", which pertains to changes in non-cash working capital.

This Amendment No. 3 is being filed to indicate two additional changes to the audited financial statements of Mada. First, the auditor's report to the financial statements has been restated to include coverage for the fiscal year ended November 30, 2001. Second, a statement in the last sentence of the first paragraph of "Note 1 - Basis of Presentation" regarding Mada's revenues has been revised.

Inasmuch as this Amendment No. 3 relates only to the aforementioned minor revisions, the other disclosures under Items 2, 4 and 7 are incorporated herein by this reference and not restated in this Amendment No. 3.

Signatures

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

Dated at Montreal, Quebec, Canada, this 18th day of December, 2003.

 

Millennium Capital Venture Holdings Inc.

 

 

 

By:_/s/ Mario Drolet_______________
Mario Drolet
Chief Executive Officer
(principal executive officer)

3

Independent Auditors' Report

To the Shareholder of

Mada Multimedia Inc.

We have audited the balance sheets of Mada Multimedia Inc. (formerly Mada Formation Inc.) as at November 30, 2002 and 2001 and the statements of loss and shareholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at November 30, 2002 and 2001 and the results of its operations and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has insufficient sources of revenue has been unable to comply with certain long-term debt and is dependent on its ability to secure new financing. This raises uncertainty of its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Calgary, Canada

April 4, 2003

/s/ Grant Thornton LLP

Chartered Accountants

4

Mada Multimedia Inc.
(formerly, Mada Formation Inc.)
Balance Sheet

November 30

2002

2001

Assets

Current

Receivables

$

4,435

$

4,476

Advances to a director

27,198

15,051

31,633

19,527

Capital assets (Note 4)

183

255

$

31,816

$

19,782

Liabilities

Current

Bank indebtedness

$

7,721

3,924

Payables and accruals

10,398

6,395

Current portion of long-term debt

46,182

13,000

64,301

23,319

Long-term debt (Note 5)

--

37,616

64,301

60,935

Shareholders' Deficiency

Capital stock (Note 6)

65

65

Deficit

(32,550)

(41,218)

(32,485)

(41,153)

$

31,816

$

19,782

See accompanying notes to the financial statements.

F-1

Mada Multimedia Inc.
(formerly, Mada Formation Inc.)
Statements of Earnings and Deficit

Year Ended November 30

2002

2001

Sales

$

31,609

$

1,836

Operating expenses

Salaries and benefits

--

5,873

Rent

764

778

Office

45

393

Tax and permits

--

458

Advertising

--

1,102

Entertainment

--

391

Automotive

25

282

Professional fees

1,910

2,287

Depreciation

75

100

Interest - current

1,339

894

Interest - long-term

3,469

3,206

Development costs

--

32,172

Sub-contracting

15,255

--

Foreign exchange loss (gain)

59

(271)

22,941

47,665

Earnings (loss) before income taxes

8,668

(45,829)

Income Taxes

--

896

Net earnings (loss)

$

8,668

$

(44,933)

(Deficit) retained earnings, beginning of year

$

(41,218)

$

3,715

Net earnings (loss)

8,668

(44,933)

Deficit, end of year

(32,550)

(41,218)

See accompanying notes to the financial statements

F-2

Mada Multimedia Inc.
(formerly, Mada Formation Inc.)
Statement of Cash Flows

Year Ended November 30

2002

2001

Increase (decrease) in cash and cash equivalents

Operations

Net earnings (loss)

$

8,668

$

(44,933)

Depreciation

75

100

8,743

(44,833)

Change in non-cash operating working capital (Note 7)

(8,106)

(6,722)

637

(51,555)

Financing

Advances on long-term debt

--

65,000

Repayment on long-term debt

(4,434)

(14,384)

(4,434)

50,616

Decrease in cash and cash equivalents

(3,797)

(939)

Cash and cash equivalents (bank indebtedness),

Beginning of year

(3,924)

(2,985)

End of year

(7,721)

(3,924)

See accompanying notes to the financial statements.

F-3

Mada Multimedia Inc.
(formerly, Mada Formation Inc.)
Notes to the Financial Statements
November 30, 2002

1. Basis of presentation

The financial statements of Mada Multimedia Inc. (the "Company") are prepared using United States generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has not established consistent revenues sufficient to cover its operating costs, repay its liabilities and allow it to continue as a going concern.

The Company was incorporated December 11, 1997 as Mada Formation Inc. under Part 1A of Quebec Companies Act in Quebec, Canada. In 2002, the Company changed its name to Mada Multimedia Inc.

2. Nature of operations

The Company is in the business of designing, producing and marketing multimedia applications in the financial education sector.

3. Summary of significant accounting policies

Depreciation

Depreciation is provided on the diminishing balance method at the following rates:

Computer equipment

30%

Office equipment

20%

Use of estimates

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

F-4

Mada Multimedia Inc.
(formerly, Mada Formation Inc.)
Notes to the Financial Statements
November 30, 2002

3. Summary of significant accounting policies (Continued)

Cash and cash equivalents

For purposes of reporting the statement of cash flows, cash and cash equivalents include highly liquid investments with maturity of three months or less at the time of purchase, net of bank indebtedness.

Income taxes

The Company accounts for income taxes under the Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", ("SFAS 109"). Under SFAS 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. There were no current or deferred income tax expense or benefits due to the fact that the Company did not have any material operations for the period from June 2, 2000 (inception) through December 31, 2001.

4. Capital assets

 

 

 

 

 

 

2002

 

2001

 

 

Cost

 

Accumulated Depreciation

 

Net Book
Value

 

Net Book
Value

Computer equipment

$

320

$

187

$

133

$

188

Office equipment

 

152

 

102

 

50

 

67

 

 

 

 

 

 

 

 

 

 

$

472

 

289

$

183

$

255

F-5

Mada Multimedia Inc.
(formerly, Mada Formation Inc.)
Notes to the Financial Statements
November 30, 2002

5. Long-term debt

 

 

2002

 

2001

Unsecured bank loan, bearing interest at prime rate plus 1.75%, repayable by monthly principal only installments of $1,667 Cdn, maturing in November 2005

 

 

$

 

 

46,182

 

 

$

 

 

50,616

Less current portion

 

(46,182)

 

(13,000)

 

$

--

$

37,616

In December 2002, the above loan was transferred to the special loans group by the debt holder due to the Company falling behind in its payments. All of the amount due has been classified as current portion.

6. Capital stock

 

 

2002

 

2001

Authorized:
Unlimited number of common shares

 

 

 

 

Issued:
100 common shares

$

65

$

65

F-6

7. Supplemental cash flow information

Changes in non-cash working capital

Receivables

38

(4,476)

Due from directors

(12,147)

(6,672)

Payables and accruals

4,003

5,812

Income taxes payable

-

(1,386)
 

(8,106)

(6,722)

 Millennium Capital Venture Holdings, Inc.

Pro-Forma Consolidated Balance Sheet

Unaudited

December 31, 2002

Millennium Capital Venture Holdings, Inc.

Mada Multimedia Inc.

Pro-forma Adjustments

Total

Assets

Current

Receivables

$

--

$

4,435

$

--

$

4,435

Loan receivables

--

27,198

--

27,198

--

31,633

--

31,633

Investment

--

--

1,000

2(a)

(1,000)

2(a)

Capital assets

--

183

--

183

Software

--

--

33,485

2(a)

33,485

$

--

$

31,816

$

33,485

$

65,301

Liabilities

Current

Bank indebtedness

$

63

$

7,721

$

--

$

7,784

Payables and accruals

13,821

10,398

--

24,219

Due to shareholder

7,010

--

1,000

2(a)

8,010

Income taxes payable

90

--

--

90

Current portion of long-term debt

--

$

46,182

$

--

46,182

20,984

64,301

1,000

86,285

Shareholders' Deficiency

Capital stock

100,500

65

(65)

2(a)

100,500

Deficit

(121,484)

(32,550)

32,550

(121,484)

(20,984)

(32,485)

32,485

(20,984)

$

--

$

31,816

$

33,485

$

65,301

See accompanying notes to the pro-forma consolidated financial statements

F-8

Millennium Capital Venture Holdings, Inc.

Pro-Forma Consolidated Statement of Operations
Unaudited
Year Ended December 31, 2002

Millennium Capital Venture Holdings, Inc.

Mada Multimedia Inc.

Pro-forma Adjustments

 

Total

Revenue

Sales

$

--

$

31,609

$

--

$

31,609

Expenses

Consulting fees

71,909

--

--

71,909

Interest - current

--

1,339

--

1,339

Long-term

--

3,469

--

3,469

Other general and administration

14,546

968

--

15,514

Professional fees

34,439

1,910

--

36,349

Sub-contract

--

15,255

15,255

120,894

22,941

143,835

(Loss) earnings before income taxes

(120,894)

8,668

(112,226)

Income Taxes

30

--

30

Net (loss) earnings

$

(120,924)

$

8,668

$

$

(112,256)

Loss per share (Note 3)

$

(0.02)

See accompanying notes to the pro-forma consolidated financial statements

F-9  

Millennium Capital Venture Holdings, Inc.

Notes to the Pro-forma Consolidated Financial Statements
Unaudited
December 31, 2002

1. Basis of presentation

Pro-forma consolidated statements have been prepared for Millennium Capital Venture Holdings, Inc. ("Millennium" or the "Company") to reflect the acquisition of Mada Multimedia Inc.

Effective March 24, 2003, the Company entered into an share purchase agreement to acquire all of the issued and outstanding common shares of Mada Multimedia Inc. for consideration of $1,000, subject to regulatory approval. The pro-forma balance sheet gives effect to the transaction outlined in Note 2(a) as if it had occurred on December 31, 2002, while the statement of operations gives effect to this transaction as it had occurred on January 1, 2002.

2. Pro-forma transaction and assumptions

a) The proposed above amalgamation is to be accounted for using the purchase method. Net assets acquired are as follows:

Working capital

$

13,514

Purchase price allocated to software

 

33,485

Capital assets

 

183

Long-term debt

 

(46,182)

Cash consideration paid

$

1,000

T he excess of the purchase price and t eh accumulated deficit has been allocated to software costs, the principal asset of the Company.

b) The accounting policies used in the preparation of the pro-forma statements are in accordance with those disclosed in Millennium's audited financial statements for the year ended December 31, 2002.

c) These pro-forma financial statements do not include an estimate of costs to be incurred on the proposed transactions.

3. Per common share information

The pro-forma earnings per common share have been calculated using the weighted average common shares of Millennium at December 31, 2002. The pro-forma weighted average shares outstanding for the period ended December 31, 2002 is 5,728,767.

F-10