U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2004
Commission File Number: 001-16423
Old Commission File Number: 000-27373
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ISA INTERNATIONALE INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1925647
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2560 Rice Street, St. Paul, MN 55113
(Mailing address of principal executive offices)
(651) 489-6941
(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 [ ]
On May 14, 2004, there were 372,880 shares of the Registrant's common stock,
par value $.0001 per share, outstanding and 5,000.000 shares of convertible
preferred stock, par value $0001 per share issued and outstanding.
The preferred stock was convertible into common shares issued (pre-split) at a
conversion rate of 3.5 common shares for each preferred share being converted.
After giving effect to the reverse stock split that was effective January 22,
2004, the preferred stock is now convertible into shares at a convertible rate
of .025 common shares for every preferred share being converted, however, the
preferred shares also contain an anti-dilution provision clause into no less
than 75% ownership of the then common shares to be issued as of December 31,
2003 and computed on a post-split basis, the preferred shares upon conversion
would convert into no less than 4,716,978 additional common shares. The timing
of the conversion is at the discretion of the holder.
ISA INTERNATIONALE INC.
FORM 10-QSB
TABLE OF CONTENTS
Page
PART I. FINANCIAL STATEMENTS
Item 1. Financial statements
Balance Sheets as of March 31, 2004 and December 31, 2003 3
Statements of Operations for the three months ended March 31,
2004 and 2003 4
Statements of Cash Flows for the three months ended March 31,
2004 and 2003 5
Notes to Condensed Financial Statements 6-9
Item 2. Management's Discussions and Analysis of Financial Condition
And Results of Operations 9-12
PART II OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
Certifications 14-15
ISA INTERNATIONALE INC.
BALANCE SHEETS
March 31, December 31,
2004 2003
(UNAUDITED) (AUDITED)
ASSETS --------- ------------
Current assets:
Cash and cash equivalents $ 721 $ 5,055
---------- ----------
Total Assets $ 721 $ 5,055
========== ==========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Common stock payable $ 754,792 $ 754,792
Convertible debentures payable $ 150,000 $ 150,000
Convertible notes payable 353,861 346,312
Accrued interest 186,646 170,937
Accounts payable - trade 12,196 5,776
Accounts payable - related party 120,000 100,000
Accounts payable - disposed business 44,000 44,000
Accrued liabilities 2,000 2,000
---------- ----------
Total current liabilities 1,623,495 1,573,817
---------- ----------
Long-term liabilities:
Convertible debenture payable 50,000 50,000
---------- ----------
1,673,495 1,623,817
Commitments and Contingencies (note 6)
Stockholders' Deficit:
Preferred stock, $.0001 par value
30,000,000 shares authorized,
5,000,000 shares issued and outstanding
at March 31, 2004 and December 31, 2003 500 500
Common stock, $.0001 par value,
300,000,000 shares authorized;
372,880 shares issued and outstanding
at March 31, 2004 and
December 31, 2003, respectively 37 37
Additional paid-in capital 4,986,437 4,986,437
Accumulated deficit (6,659,747) (6,605,736)
---------- ----------
Total Stockholders' Deficit (1,672,773) (1,618,762)
---------- ----------
Total Liabilities and Stockholders' Deficit $ 721 $ 5,055
========== ==========
See accompanying notes to financial statements.
ISA INTERNATIONALE INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended March 31,
-----------------------------
2004 2003
-----------------------------
Operating expenses
General & administrative $ 38,302 $ 31,499
-----------------------------
Operating loss (38,302) (31,499)
Other income (expense):
Interest expense (15,709) (16,982)
-----------------------------
Net loss from continuing operations (54,011) (48,481)
Extraordinary item - gain on early
extinguishment of debt -- --
-----------------------------
Net Income (Loss) $ (54,011) $ (48,481)
=============================
Basic earnings (loss) per share:
Continuing operations $ (0.12) $ (0.13)
-----------------------------
Total Net (Loss) per share (0.12) (0.13)
=============================
Average shares of common stock outstanding:
Basic and diluted (post-split) 449,689 372,880
=============================
Dividends per share of common stock none none
=============================
See accompanying notes to financial statements.
ISA INTERNATIONALE INC.
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
Three Months Ended March 31,
-----------------------------
2004 2003
-----------------------------
Cash Flows From Operating Activities:
Loss from continuing operations $ (54,011) (48,481)
Adjustments to reconcile net loss
from continuing operations to cash flow
from operating activities:
Accounts payable 13,968 23,354
Accrued interest 15,709 16,982
Accrued liabilities 20,000 --
-----------------------------
Cash used by continuing operations (4,333) (8,145)
-----------------------------
Cash used by operating activities (4,333) (8,145)
Cash Flows From Financing Activities:
Proceeds from issuance of convertible debt -- 7,260
-----------------------------
Net (decrease) in cash and cash equivalents (4,333) (885)
Cash and cash equivalents at beginning
of period 5,055 1,542
-----------------------------
Cash and cash equivalents at end of period $ 721 $ 657
=============================
Non-cash investing and financing transactions:
Issuance of common stock for settlement
With accounts payable creditors 28,947
-----------------------------
$ -- $ 28,947
=============================
See accompanying notes to financial statements
NOTES TO CONDENSED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION
In the Company's opinion, the accompanying unaudited condensed financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to present fairly its financial position as of March
31, 2004, and the results of its operations and cash flows for the three
months ended March 31, 2004 and 2003. These statements are condensed and,
therefore, do not included all of the information and footnotes required by
accounting principles generally accepted in the United States of America for
complete financial statements. The statements should be read in conjunction
with the financial statements and footnotes included in the Company's Annual
Report on Form 10KSB for the year ended December 31, 2003. The results of
operations for the three months ended March 31, 2004 are not necessarily
indicative of the results to be expected for the full year.
On January 12, 2004, the Company's Board of Directors called for a reverse
stock split of 1 to 140, effective on common shares outstanding as of
January 22, 2004. The accompanying financial statements and notes reflect all
transactions on a post-split basis.
During the year 2003 the company executed certain stock based transactions.
As of March 31, 2004 and December 31, 2003, these transactions had not been
processed through its transfer agent. Consequently, these transactions are
recorded as "common stock payable".
(2) NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
(2.a) NATURE OF BUSINESS
ISA Internationale Inc. (ISA) was incorporated on June 2, 1989, under the laws
of the state of Delaware under a former name, and was inactive operationally
for some time prior to its May 1998 recapitalization through a merger with
Internationale Shopping Alliance Incorporated (Internationale). On May 8,
1998, Internationale Shopping Alliance Incorporated (Internationale), a
Minnesota corporation incorporated on October 7, 1997, was merged with the
Company (ISA), pursuant to a reverse merger agreement dated April 23, 1998.
Upon consummation of the merger of Internationale with ISA, Internationale
became a wholly owned subsidiary of ISA. Subsequent to this reverse merger the
name of Internationale Shopping Alliance Incorporated was changed to
ShoptropolisTV.com, Inc (Shoptropolis). The Company became a reporting
publicly held corporation on November 15, 1999.
The primary business strategy of ShoptropolisTV.com, Inc. was to develop a
multimedia home shopping network offering in-home shoppers a convenient
electronic shopping experience through broadcast, cable, and satellite
television or the Internet. During 2000 and 2001, the Company discontinued the
operations of its only two business segments and is currently re-organizing
its financial affairs.
(2.b) USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States of America (GAAP) requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
those estimates.
(3) LIQUIDITY AND GOING CONCERN MATTERS
The Company has incurred losses since its inception and, as a result, has an
accumulated deficit of $6,659,747 at March 31, 2004. The Company's ability to
continue as a going concern depends upon successfully obtaining sufficient
financing to maintain adequate liquidity and provide for capital expansion
until such time as operations produce positive cash flow. The accompanying
financial statements have been prepared on a going concern basis, which
assumes continuity of operations and realization of assets and liabilities in
the ordinary course of business. The financial statements do not include any
adjustments that might result if the Company was forced to discontinue its
operations.
The Company is still in default under the terms of its obligation to make
quarterly interest payments of certain defaulted convertible 12% debentures
issued between September 1999 and June 2000. The debentures in default total
$150,000 in principal and $77,983 in related interest as of March 31, 2003. No
interest payments were ever made by the Company on the debentures. These
debentures were classified as current liabilities as of the end of the 2nd
quarter of 2000. The Company converted $940,000 of principal and 1031 accrued
interest in the amount of $169,435 into 15,794,917 (pre-split) common shares
of the Company at the rate of $.07 per share during the year ended December
31, 2001. The Company also converted during the year ended December 31, 2002
$386,640 in principal and $112,247 in related interest into 9,977,750 shares
of common stock at the rate of $.05 per share
During the year ended December 31, 2003, $65,000 in debentures payable were
converted into common shares (pre-split) at $.02 plus additional accrued
interest due on extended debentures payable of $50,000 in the amount of
$21,633 was also converted into common shares (pre-split) at the rate of $.02
per share. Accordingly, 5,792,600 (pre-split) common shares were issued to
these debenture holders at the rate of $.02 per share for interest and
principal due thereon. The Company is presently attempting to convert the
remaining debenture holder to common shares at for principal and accrued
interest as of December 31, 2003. During the year ended December 31, 2003 The
Company authorized 513,328 (post-split) common stock shares for issuance to
all previously converted debenture holders for the express purpose of
equalizing their respective share conversion price for debenture principal and
interest due and debenture investments at the issued price of $.70 per share
post split (see note 4) common stock payable.
The Company plans to re-organize its financial affairs by negotiating with
creditors to restructure and convert debt to equity and actively seek new
business opportunities. There can be no assurance that these actions will be
successful.
(4) COMMON STOCK PAYABLE:
During the year ended December 31, 2003, the Company and its board of
directors approved for issuance 1,078,276 (post-split) shares of common stock
for the following services and debt restructuring costs. These new shares will
be issued after May 15, 2004.
The Company's Board of Directors approved 513,328 (post-split) common stock
shares for issuance to all previously converted debenture holders for the
express purpose of equalizing their respective share conversion price received
for debenture principal and interest due on debenture investments. All of the
debenture holders received common shares at the revised price of $.70 per
share (post-split) as of September 30, 2003, their final date of conversion.
This transaction resulted in settlement expense charge to the income statement
of the Company of $359,329 for the year ended December 31, 2003.
The Company also issued 41,376 (post-split) shares of common stock at the
rate of $.70 per share during the year ended December 31, 2003, as part of its
troubled debt restructuring for conversion of convertible debt and related
interest accruals of $115,823, combined.
In addition, the Company's Board of Directors approved the issuance of 523,572
(post-split) common shares that will be given as follows: 166,429 (post-split)
shares for payment for services rendered by the Company's Board of Directors
for the entire re-organization process and two consultants who rendered
additional reorganization services to the Company; 357,143 (post-split) common
shares to the Company's President as a partial payment for accrued consulting
services due as of December 31, 2003
(5) CONVERTIBLE NOTES PAYABLE
During the three months ending March 31, 2004 the Company issued an
additional $9,145 of convertible debt to an entity controlled by two of the
Company's shareholders. The convertible note holder continues to hold a
secured collateral interest in any assets the Company owns as of March 31,
2004 and any assets the Company may acquire in the future until the
convertible notes are either paid in full or converted into common shares of
stock at the option of the convertible note holder.
(6) CONTINGENT LIABILITIES
In December 2002, the Company was sued by Merrill Communications, Inc. for
$11,943 plus legal costs to collect for past due invoices. This debt less
payments not yet credited has been recorded on the Company books as of
therefore, the effect on the Company's financial statements is not material.
Other than the above, the Company is not a party to any pending legal or
administrative proceeding, and is not aware of any threatened litigation or
administrative proceeding being considered against the Company. However, the
current re-organization efforts of the Company may not be to the satisfaction
of any or all of its creditors and lawsuits could occur in the future. The
Company's property is not the subject of a pending legal proceeding, other
than described above. In addition, there is no material proceeding to which a
any director, officer, or affiliate of the issuer, any owner of record or
beneficial holder of more than 5% of any class of voting securities of the
Company, or security holder is a party adverse to the Company or has a
material interest adverse to the Company.
(7) RELATED PARTY TRANSACTIONS
The Company incurred expenditures with its president, who is also a
stockholder, for consulting services amounting to $75,000 in the year ended
December 31, 2003 and $20,000 for the three month period ended March 31, 2004.
These amounts have not been paid but are recorded as accounts payable related
party.
The Company has accrued interest payable also due to the entity controlled by
the President and another shareholder who are currently directing all
reorganization efforts. Interest at the rate of 12% per annum is due on all
loans made by the entity to the Company. As of March 31, 2004 and December 31,
2003, $103,437 and $92,963 were due respectively for accrued interest on loans
from the related party. Total principal on loans from the related party amount
to $353,861 and $346,312 on March 31, 2004 and December 31, 2003, respectively.
All of these loans have been used to pay operating expenses and debt liability
settlements deemed necessary by the President of the Company and the related
entity who are contributing all of the reorganization efforts and resources. No
cash payments for compensation to the directing officers have been made since
the reorganization efforts commenced in November 2000.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Forward Looking Statements
The information herein contains certain forward looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended, which are intended
to be covered by the safe harbors created thereby. Investors are cautioned
that all forward looking statements involve risks and uncertainties,
including, without limitation, the ability of the Company to continue its
present business strategy which will require it to obtain significant
additional working capital, changes in costs of doing business, identifying
and establishing a means of generating revenues at appropriate margins to
achieve profitability, changes in governmental regulations and labor and
employee benefits and costs, and general economic and market conditions. Such
risks and uncertainties may cause the Company's actual results, levels of
activity, performance or achievements to be materially different from those
future results, levels of activity, performance or achievements expressed or
implied by such forward-looking statements. Although the Company believes that
the assumptions and expectations reflected in these forward looking statements
are reasonable, any of the assumptions and expectations could prove inaccurate
or not be achieved, and accordingly there can be no assurance the forward
looking statements included in this Form 10-QSB will prove to be accurate. In
view of the significant uncertainties inherent in these forward looking
statements, their inclusion herein should not be regarded as any
representation by the Company or any other person that the objectives, plans,
and projected business results of the Company will be achieved. Generally,
such forward looking statements can be identified by terminology such as
"may," "anticipate," "expect," "will," "believes," "intends," "estimates,"
"plans," or other comparable terminology.
Overview
Through its two wholly-owned subsidiary Minnesota corporations,
ShoptropolisTV.com, Inc. (f/k/a Internationale Shopping Alliance, Inc.) and
International Strategic Assets, Inc., ISA Internationale, Inc. (ISAI) was
engaged in two distinct businesses: (1.) the development of a multimedia home
shopping network primarily for the purpose of generating direct retail sales
of varied products from TV viewers and Internet shoppers, and (2.) direct
sales via outbound telemarketing of precious metals consisting mainly of gold
and silver coins and bars.
ISAI is presently attempting to financially restructure itself. ISAI disposed
of International Strategic Assets, Inc. on May 19, 2000, and ISAI disposed of
the ShoptropolisTV.Com, Inc. on March 29, 2001 as a part of its re-
organization efforts. Additional re-organization efforts include negotiation
with creditors to restructure and convert debt to equity and actively seek new
business opportunities. After successful completion of its re-organization
efforts, ISAI plans to pursue strategic alternatives that may include the
purchase of a business or acquisition by another entity. Until its
reorganization efforts are completed, the Company does not believe it can
consummate a strategic business development transaction with third party or
strategic financial partner.
ISAI was incorporated in Delaware in 1989 under a former name, and was
inactive operationally for some time prior to its May 1998 recapitalization
through a merger with ShoptropolisTV.com, Inc. (f/k/a Internationale Shopping
Alliance Inc.), which is now a wholly owned subsidiary of ISAI. ISAI acquired
its home shopping network business through such merger, after which the former
shareholders of this subsidiary acquired 89% of the outstanding common stock
of ISAI through a stock exchange. ISAI issued 11,772,600 shares of its common
stock in exchange for all of the outstanding common stock of
ShoptropolisTV.com, Inc. This merger was effected as a reverse merger for
financial statement and operational purposes, and accordingly, ISA regards its
inception as being the incorporation of ShoptropolisTV.com, Inc. on October 7,
1997. ISAI sold ShoptropolisTV.com, Inc. on March 29, 2001.
ISAI incorporated its precious metals subsidiary, International Strategic
Assets, Inc., as a Minnesota corporation in March 1999. Its business is direct
sales via outbound telemarketing of precious metals consisting mainly of gold
and silver coins and bars. ISAI sold International Strategic Assets, Inc. on
May 19, 2000 to an individual who was an officer and director of the ISAI.
Results of Operations for the Three months ended March 31, 2004 and 2003.
Sales and Gross Profit.
No sales were recorded for the three months ended March 31, 2004 and 2003 as
operations have been suspended.
Operating Expenses.
The only operating expenses were general and administrative expenses and
interest expenses related to convertible debenture and convertible notes
payable. General and administrative expenses were $38,302 for the three months
ended March 31, 2004 and $31,499 for the three months ended March 31, 2003.
The expenses were principally for audit, consulting, office and stock transfer
fees costs. At this time the Company has no anticipation as to its operating
expenses in future periods as it is continues its re-organization efforts. No
current expenses are being incurred except minimal office, telephone, legal,
professional and consulting expenses relating to the re-organization efforts
and ultimate disposition of the Company.
Liquidity and Capital Resources
ISAI has obtained its capitalization primarily through the sale of its equity
securities to a limited group of private investors known to management of
ISAI. From the inception of ISAI in 1997 through December 31, 1997, ISAI
raised $400,000 in cash through the sale of its common stock with accompanying
warrants. In calendar year 1998, ISA raised an additional $833,376 in cash
through sales of common stock and common stock with accompanying warrants.
During a period from January through February 1999, ISAI raised a total of
$1,171,040 through the exercise of outstanding warrants by existing
shareholders, of which $528,702 was in cash and $642,838 was in gold bullion
and coins transferred to ISAI. Such gold bullion and coins were immediately
liquid to ISA, and were converted to cash. From September 1999 through
February 2000, the Company raised $1,336,640 through the sale of unsecured
convertible debentures.
From March 2000 through May 2000, the Company raised $255,000 from the sale
unsecured convertible debentures. In May 2000 the Company sold its wholly
owned subsidiary, International Strategic Assets, Inc. (ISA), for a cash sum
of $175,000. The $175,000 purchase price consisted of $75,000 for the purchase
of approximately 43% of the outstanding common stock of ISA and $100,000 paid
in connection with the subsequent redemption of the remaining 57% of the
outstanding common stock of ISA. During the quarter ended June 30, 2000, the
Company had one option exercised for 5,000 common shares for $6,850.
From July 2000 through October 2000, the Company sold a total of 902,857
shares of its Common Stock: 200,000 shares at a purchase price of $0.10 per
share, 299,999 shares at a purchase price of $0.15 per share, and 385,000
shares at a purchase price of $0.20 per share, and 17,858 shares at a purchase
price of $.28 per share for a total amount of $146,100. In November 2000 the
Company sold 5,000,000 shares of its Preferred Stock at a purchase price of
$0.0002 per share for total consideration of $1,000, and, 2,999,999 shares of
its Common Stock at a purchase price of $0.0097 per share for total
consideration of $29,000. Also in November and December 2000 the Company
obtained loans totaling $88,527 to settle unsecured debts using the Company's
television broadcast and production equipment and office equipment and
furniture as collateral. In March 2001 the collateral was disposed of in the
sale of the discontinued operations of the Company.
In 2001 the Board of Directors of the Company issued additional shares to
these stockholders to reflect a uniform purchase price for those shares
purchased from July 2000 through October 2000 at a price of $0.06 per share.
This resulted in an additional 1,547,142 shares being issued.
In the years end December 31, 2003 and 2002 the Company raised $78,756 and
$138,027 from convertible demand notes payable from a related investor. In the
three months ended March 31, 2004, the Company received $9,145 in loans
secured by convertible notes payable in connection with the continuing re-
organization efforts. Convertible Notes Payable outstanding at March 31, 2004
total $353,861. The convertible note holder continues since November 2000 to
hold a secured collateral interest in any assets the Company owns as of March
31, 2004. Any assets the Company may acquire in the future are also secured
and pledged as collateral until the convertible notes are either paid in full
or converted into common shares of stock at the option of the convertible note
holder.
As of March 31, 2004, the Company had current assets of $721 in cash and
$1,623,495 in current liabilities consisting of $176,196 in accounts payable,
$754,792 in common stock payable, $2,000 in accrued liabilities, convertible
debentures payable in default totaling $150,000, convertible notes payable of
$353,861 and related interest accruals of $186,646. Accordingly, the Company
had a working capital deficit position of $1,672,773.
The Company's current capital resources are not sufficient to supports its
development and operations. Additional capital will be necessary to support
future general and administrative and interest expenditures as well as
interest expense currently due. The Company cannot continue its existence
without a full and complete re-organization of all of its financial affairs
and obligations.
The Company is not currently seeking any additional sources of debt or equity
financing beyond that which is already in place with the financing agreement
in November 2000. Until the re-organization process is completed, the Company
cannot provide assurances as to its future viability or its ability to prevent
the possibility of a bankruptcy-filing petition either voluntary or
involuntary by any creditor of the Company. As a result of the Company's
history of operating losses and its need for significant additional capital,
the reports of the Company's independent auditors' on the Company's financial
statements for the years ended December 31, 2003 and 2002, include explanatory
paragraphs concerning the Company's ability to continue as a going concern.
Income Tax Benefit
The Company has an income tax benefit from net operating losses, which is
available to offset any future operating profits. None of this benefit was
recorded in the accompanying financial statements as of March 31, 2004. The
ability to utilize the net operating losses may be limited due to ownership
changes.
Impact of Inflation
The Company believes that inflation has not had any material effect on its
development or operations since its inception in 1997. Furthermore, the
Company has no way of knowing if inflation will have any material effect for
the foreseeable future.
Other Going Concern matters
One (1) remaining officer is currently managing the Company. The Company has
suspended its operations pending the resolution of its financial matters.
The Company is in default under the terms of its obligation to make quarterly
interest payments on convertible 12% debentures issued between September 1999
and June 2000. The debentures in default totaled $150,000 in principal and
$77,983 in accrued interest. No interest payments were ever made by the
Company on the debentures. As such, these debentures have been classified as
current liabilities as of March 31, 2004. The Company converted $940,000 of
principal and $169,435 in accrued interest into 15,794,917 common shares of
the Company at the rate of $.07 per share during the year ended December 31,
2001. During the year ended December 31, 2002 the Company converted $386,640
in principal plus $112,247 in accrued interest into 9,977,750 shares of common
stock at the rate of $.05 per share. The Company is attempting to convert the
remaining debenture holder's debt to common shares at $.70 per share (post-
split) for the total of principal and accrued interest owed up to the
conversion date. At March 31, 2004, $227,983 of convertible debentures and
related accrued interest in default remained on the Company's balance sheet.
Part II. Other Information
Item 1. Legal Proceedings
During the quarter ending March 31, 2004, the Company was not sued in any new
legal matters.
Item 2. Changes in Securities and Use of Proceeds
During the quarter ended March 31, 2004, there were no changes in securities.
Item 3. Defaults Upon Senior Securities
The defaults previously present on the Convertible Debentures as of December
31, 2003 continue as of March 31, 2004, after partial conversions into common
stock of the Company. These defaults arose because the Company has missed
payment of quarterly interest payments since June 2000. The default consists
of convertible debt principal amounting to $150,000 and accrued interest
thereon of $77,983 as of March 31, 2004.
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: none
(b) Form 8-K:
There was no 8-K forms filed for the three months ended March 31, 2004 through
May 14, 2004.
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.
ISA INTERNATIONALE INC.
/s/ Bernard L. Brodkorb
By: Bernard L. Brodkorb
President, CEO, CFO, And Chairman of the Board
Date: May 14, 2004
CERTIFICATIONS
I, Bernard L. Brodkorb, certify that:
1. I have reviewed the Quarterly Report on Form 10-QSB of ISA Internationale,
Inc.;
2. Based on my knowledge, this report does not contain any untrue statements
of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows
of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this report (the "Evaluation Date"); and
c) presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of
the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors:
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses
in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls.
6. The registrant's other certifying officers and I have indicated in this
report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and material
weaknesses.
/s/ Bernard L. Brodkorb
By: Bernard L. Brodkorb
President, Chief Executive Officer, Chief Financial Officer, and
Chairman of the Board
Date: May 14, 2004
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of ISA Internationale, Inc., (the
"Company") of Form 10-QSB for the period ending March 31, 2004, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Bernard L. Brodkorb, President, Chief Executive Officer of the Company, and
Chief Financial Officer certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that to
the best of my knowledge and belief:
(1.) the report fully complies with the requirements of Section 13(a) or 15
(d) of the Securities Exchange Act of 1934; and
(2.) the information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ Bernard L. Brodkorb
By: Bernard L. Brodkorb
President, Chief Executive Officer, Chief Financial Officer, and Chairman
of the Board
Dated: May 14, 2004