U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 2000
[ ] Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from __________ to __________
Commission File Number 0-26325
ALOTTAFUN!, INC.
---------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 39-1765590
-------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
141 N. Main Street, Suite 207, West Bend, Wisconsin 53095
---------------------------------------------------------
(Address of Principal Executive Offices)
(262) 334-4500
--------------
(Issuer's Telephone Number)
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 a
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
--- ---
The number of shares outstanding of the Issuer's Common Stock, $.01 Par
Value, as of March 31, 2000 was 11,121,104.
Transitional Small Business Disclosure Format:
Yes No X
--- ---
<PAGE>
ALOTTAFUN!, INC.
Index
Page
Part I - Financial Information ----
Item 1. Financial Statements
Certified Public Accountants' Review Report..................... 1
Balance Sheet -
March 31, 2000................................................ 2
Statements of Operations -
Three months ended March 31, 2000 and 1999.................... 3
Statements of Changes in Stockholders' Deficit -
Three months ended March 31, 2000............................. 4
Statements of Cash Flows -
Three months ended March 31, 2000 and 1999.................... 5
Notes to Financial Statements................................... 6 - 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................... 8 - 11
Part II - Other Information
Item 1. Legal Proceedings................................................ 11
Signatures...................................................... 11
i
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Certified Public Accountants'
Review Report
Board of Directors
Alottafun!, Inc.
West Bend, Wisconsin
We have reviewed the accompanying balance sheet of Alottafun!, Inc. as of March
31, 2000 and the related statements of operations, changes in stockholders'
deficit, and cash flows for the three months then ended. All information in
these financial statements is the representation of the management of
Alottafun!, Inc.
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 financial statements taken 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 accompanying financial statements as of and for the period ended
March 31, 2000 in order for them to be in conformity with generally accepted
accounting principles.
As discussed in Note 1, certain conditions indicate that the Company may be
unable to continue as a going concern. The accompanying financial statements do
not include any adjustments to the financial statements that might be necessary
should the Company be unable to continue as a going concern.
/s/ Pender Newkirk & Company, CPAs
Certified Public Accountants
Tampa, Florida
May 10, 2000
1
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<TABLE>
<CAPTION>
Alottafun!, Inc.
Balance Sheet
March 31, 2000
(unaudited)
<S> <C>
Assets
Current assets:
Cash $ 212,918
---------------------
Property and equipment, net of accumulated depreciation 162,019
Other assets:
Acquisition deposits 62,500
Other assets, trademark, net of accumulated amortization 3,366
---------------------
65,966
---------------------
$ 440,803
=====================
Liabilities and Stockholders' Deficit
Current liabilities:
Current maturities of long-term debt 123,280
Accounts payable 211,451
Accrued expenses 127,112
---------------------
Total current liabilities 461,843
---------------------
Stockholders' deficit:
Preferred stock; par value of $.0001; 5,000,000 shares
authorized; 2,000,000 shares issued and outstanding. 200
Common stock; par value of $.01 per share; 50,000,000 shares
authorized; 11,121,104 shares issued and outstanding. 111,211
Additional paid-in capital 5,353,118
Accumulated deficit (4,906,669)
---------------------
557,860
Deferred offering costs (455,400)
Stock subscription receivable (123,500)
---------------------
Total stockholders' deficit (21,040)
---------------------
$ 440,803
=====================
</TABLE>
Read Certified Public Accountants Review Report.
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Alottafun!, Inc.
Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------
2000 1999
------------------------------------------
<S> <C> <C>
Sales, net of allowance and discounts $ (44) $ 19,460
Cost of sales 3,535 31,836
------------------------------------------
Gross profit (3,579) (12,376)
------------------------------------------
Operating expenses:
Selling 13,192 31,576
General and administrative 221,989 144,132
Depreciation and amortization 8,660 4,113
------------------------------------------
243,841 179,821
------------------------------------------
Loss from operations (247,420) (192,197)
------------------------------------------
Other expenses:
Net realized gain (loss) on sale of securities, trading 5,344 (6,346)
Unrealized (loss) on securities, trading - (78,615)
Interest expense (11,220) (195,652)
------------------------------------------
Total other expenses (5,876) (280,613)
------------------------------------------
Net loss before extraordinary gain (253,296) (472,810)
Extraordinary gain on forgiveness of debt 62,024 -
Net loss $ (191,272) $ (472,810)
==========================================
Loss per common share:
Loss before extraordinary gain (0.03) (0.08)
Extraordinary gain 0.01 -
------------------------------------------
Net loss per common share $ (0.02) $ (0.08)
==========================================
</TABLE>
Read Certified Public Accountants Review Report.
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Alottafun!, Inc.
Statements of Changes in Stockholders' Deficit
(unaudited)
<TABLE>
<CAPTION>
Common Stock Preferred Stock
---------------------------------------------- Additional
Shares $.01 Par Shares $.0001 Par Paid-in
Issued Value Issued Value Capital
---------- ---------- ---------------------- ----------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1999 9,034,104 $ 90,341 2,000,000 $ 200 $ 4,750,988
Issuance of common stock for cash
net of offering costs of $527,250 1,987,000 19,870 - - 540,630
Issuance of stock for deposit on acquisition 100,000 1,000 - - 61,500
Net loss for the three months ended March 31, 2000 - - - - -
========== ========== ========== ========= ==========
Balance, March 31, 2000 11,121,104 $ 111,211 2,000,000 $ 200 $ 5,353,118
========== ========== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
Stock
Accumulated Deferred Subscription
Deficit Offering Costs Receivable Total
------------ ----------------------------------------
<S> <C> <C> <C>
$ (4,715,397) $ (455,400) $ (123,500) $ (452,768)
- - - 560,500
- - - 62,500
(191,272) - - (191,272)
============ ============== ========= ===========
$ (4,906,669) $ (455,400) $ (123,500) $ (21,040)
============ ============== ========= ===========
</TABLE>
Read Certified Public Accountants Review Report.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
Alottafun!, Inc.
Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
----------------------------------------
2000 1999
----------------------------------------
<S> <C> <C>
Operating activities
Net loss $ (191,272) $ (472,810)
----------------------------------------
Adjustments to reconcile net loss to net
cash used by operating activities:
Depreciation and amortization 8,660 4,113
Write-off of obsolete inventory - 16,389
Loss (gain) on marketable securities (5,344) 6,346
Unrealized loss on marketable securities - 78,615
Interest on warrants - 192,043
Common stock issued for services - 30,000
(Increase) decrease in:
Accounts receivable 2,685 -
Inventory - (17,168)
Other assets (321) (11,687)
Deposits - 19,450
Increase (decrease) in:
Accounts payable (113,679) 2,130
Accrued expenses 18,728 (20,895)
----------------------------------------
Total adjustments (89,271) 299,336
----------------------------------------
Net cash used by operating activities (280,543) (173,474)
----------------------------------------
Investing activities
Acquisition of equipment and intangible assets (68,282) (16,066)
Proceeds from sale of marketable securities 5,344 -
Purchase of marketable securities - (699,495)
----------------------------------------
Net cash provided (used) by investing activities (62,938) (715,561)
----------------------------------------
Financing activities
Proceeds from issuance of note payable - 153,158
Proceeds from sale of common stock 560,500 367,907
Principal reductions of long-term debt (9,411) (29,681)
----------------------------------------
Net cash provided by financing activities 551,089 491,384
----------------------------------------
Net increase in cash 207,608 (397,651)
Cash at beginning of period 5,310 411,114
----------------------------------------
Cash at end of period $ 212,918 $ 13,463
========================================
Supplemental disclosures of cash flow information
and noncash financing activities
Cash paid during the period for interest $ 11,197 $ 2,628
</TABLE>
In February, 2000 the Company issued 100,000 shares of restricted common stock
to Faction, Inc. as an acquisition deposit. These shares were valued at the fair
market value at the date of issuance which totaled $62,500. This transaction is
accounted for as a non cash transaction in the statement of cash flows.
During the three month period ended March 31, 2000, the Company issued 1,987,000
shares of restricted common stock. The Company raised $560,500 which was net of
$527,250 of offering costs. These offering costs include $87,000 of cash and
572,000 shares of Alottafun! Restricted stock valued at a total fair market
value of $440,250. The issuance of these shares were treated as offering costs
and are recorded as non cash transactions in the statement of cash flows.
Read Certified Public Accountants Review Report.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
ALLOTAFUN!, INC.
Notes to Financial Statements
(Unaudited)
Note 1 - Basis of presentation
The accompanying unaudited financial statements, which are for interim periods,
do not include all disclosures provided in the annual financial statements.
These unaudited financial statements should be read in conjunction with the
financial statements and the footnotes thereto contained in the Audited
Financial Statements for the year ended December 31, 1999 and 1998 of
Alottafun!, Inc. (the "Company").
In the opinion of the Company, the accompanying unaudited financial statements
contain all adjustments (which are of a normal and recurring nature) necessary
for a fair presentation of the financial statements. The results of operations
for the three month periods ended March 31, 2000 and 1999 are not necessarily
indicative of the results to be expected for the full year.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. However, the Company has sustained
substantial losses since inception that total approximately $4,900,000 and has
used cash in operations of approximately $281,000 and $173,000 for the three
month periods ended March 31, 2000 and 1999, respectively. The Company has a
negative working capital of $248,925 at March 31, 2000 and has negative tangible
net worth of approximately $24,000 at March 31, 2000. In addition, the Company
is currently in default on approximately $81,000 of notes payable. Additionally,
the Company has not had significant revenues over the past two years. These
issues indicate that the Company may be unable to continue as a going concern.
Realization of the Company's assets is dependent upon the Company's ability to
raise additional capital, as well as generate revenues sufficient to result in
future profitable operations. The accompanying financial statements do not
include any adjustments that might be necessary should the Company be unable to
continue as a going concern.
Note 2 - Per share calculations
Per share data was computed by dividing net loss by the weighted average number
of shares outstanding during the periods ended March 31, 2000 and 1999. The
weighted average shares outstanding for the three month period ended March 31,
2000 was 10,040,642 as compared to 5,939,802 for the three months ended March
31, 1999.
Note 3 - Equity Transactions
Please refer to Audited Financial Statements consisting of the Company's balance
sheet as of December 31, 1999, and related statements of operations, changes in
stockholders' equity, and cash flows ended December 31, 1999, as audited by
Pender, Newkirk & Company, Certified Public Accountant.
During the three month period ended March 31, 2000, the Company issued an
aggregate of 1,987,000 shares of restricted common stock. The Company raised
$560,500 that was net of $527,250 of offering costs. These offering costs
included $87,000 of cash and 572,000 shares of Alottafun! Restricted stock
valued at a total fair market value of $440,250. The issuance of these shares
was treated as offering costs. The Company relied upon Section 4(2) of the
Securities Act of 1933 for the issuance of these securities.
In February 2000, the Company issued 100,000 shares of restricted common stock
as a deposit on the acquisition of Faction, Inc. Faction, Inc. is an Internet
software development company located in New York, NY. This acquisition is
expected to be completed in May 2000 pending the resolution of specific terms in
the stock purchase agreement. The shares issued for the deposit were valued at
the fair market value at the date of issuance that totaled $62,500. The Company
relied upon Section 4(2) of the Securities Act of 1933 for the issuance of these
securities.
Note 4 - Contingencies
The Company's past website host and e-commerce provider has terminated the
Company's website and refused to provide additional e-commerce support services.
This dispute involves a claim that the Company has failed to timely pay for past
services rendered. However, there is no executed written contract between the
parties. Also, the website provider is refusing to turn over the HTML web pages
that comprise the Company's website and has asserted certain copyright
infringement and trade secret misappropriation claims. No lawsuit has been
filed. If necessary, and litigation is instituted, the Company plans to
vigorously defend and assert substantial counterclaims.
6
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ALOTTAFUN!, INC.
Notes to Financial Statements
(Continued)
Management of the Company and its legal counsel indicate that the likelihood of
an unfavorable outcome, as well as the maximum potential loss, if any, is
remote. Therefore, the Company has written off the $60,000 payable to the past
Web site provider as an extraordinary gain.
7
<PAGE>
ALOTTAFUN, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The statements contained in this Report on Form 10-QSB, that are not purely
historical, are forward-looking information and statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These include statements regarding the Company's
expectations, intentions, or strategies regarding future matters. All
forward-looking statements included in this document are based on information
available to the Company on the date hereof. It is important to note that the
Company's actual results could differ materially from those projected in such
forward-looking statements contained in this Form 10-QSB. The forward-looking
statements contained here-in are based on current expectations that involve
numerous risks and uncertainties. Assumptions relating to the foregoing involve
judgments regarding, among other things, the Company's ability to secure
financing or investment for capital expenditures, future economic and
competitive market conditions, and future business decisions. All these matters
are difficult or impossible to predict accurately and many of which may be
beyond the control of the Company. Although the Company believes that the
assumptions underlying its forward-looking statements are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurance that
the forward-looking statements included in this form 10-QSB will prove to be
accurate.
GENERAL
We were originally established on August 15, 1993 as a distributor, and marketer
of collectible toys and candy products for children between the ages of three
and twelve years old. We have marketed products that include tea sets, games,
puzzles, books, plush toys, purses, ride-on cars, and unique surprise boxes that
contain gum and candy, collectible toys, trading cards, milk caps (pogs), comic
strips, tattoos, stickers, and various promotional inserts. Alottafun! has not
generated sufficient revenues in the last two years to fund its ongoing
operations and has sustained substantial losses since its inception and we do
not expect to become profitable until 2001. Accumulated losses to date are
approximately $4,907,000 and there is substantial doubt about our ability to
continue as a going concern.
In May 1999, Alottafun! joint ventured with E-Commerce Fulfillment, LLC. which
contracted with M.W Kasch, an independent U.S. toy distributor, to launch an
e-commerce Internet portal called TOYPOP.COM. The Joint venture was owned 33.3%
by E-Commerce Fulfillment and 67.7% by Alottafun!, Inc. E-Commerce Fulfillment
(ECF) was a wholly owned by Jeffrey C. Kasch, President of M.W. Kasch Company.
ECF's responsibilities and obligations included selling toy products to the
joint venture, at prices that did not exceed prices charged to ECF's typical
customers. ECF provided its products based on regular availability. ECF also
merchandised toys on the Web site and made decisions as to which toys to
highlight as special buys, to promote, or present as a `hot' toy. M.W. Kasch
Company warehoused and provided fulfillment to ECF. The relationship between
M.W. Kasch Company and ECF was exclusive as far as ECF was concerned, but not
exclusive with regard to M.W. Kasch. M.W. Kasch was free to sell any and all
other retailers, electronic or otherwise. Our role was to manage marketing
strategies, and to provide the electronic mediums for the sale, customer
support, and fulfillment of products that the joint venture purchases.
On February 28, 2000, the M. W. Kasch and us agreed to terminate our
relationship and thereupon, M.W. Kasch Co. gave notice that effective March 28,
2000 our agreement with them was terminated.
In October 1999, we commenced negotiations with a software developer, MHA, to
jointly develop a business-to-business site that would allow toy manufacturers
to sell direct to retailers as a further expansion of its TOYPOP site. We chose
not to partner with MHA, and instead decided to pursue a business-to-business
strategy ourselves. At Toy Fair 2000, we announced our strategy and began
signing up both manufacturers and retailers. We announced our
business-to-business Internet strategy on February 22, 2000.
On February 10, 2000 as a result of our independent pursuit of a
business-to-business strategy without MHA, who hosted the TOYPOP Internet site,
MHA shut down our TOYPOP site. We intend to remake the site into a channel in
the new MRABA Internet initiative. Sales of toy products through the TOYPOP site
amounted to $ 16,506 during the recent Holiday selling season, primarily due to
8
<PAGE>
the lack of marketing and the limited availability of the better selling toy
products through M. W. Kasch. We are optimistic that TOYPOP can be made a viable
internet retail portal through a reorganization and restructuring within our
MRABA internet opportunity.
According to Toy Manufacturers of America, the leading toy industry trade group,
total annual retail toy sales were estimated at $27.2 billion in 1998. This
represents traditional retail toy sales of $21 billion and video games of $6.2
billion. These figures represent the retail sales of toys through all major
retail outlets such as national toy stores, discount stores, department, drug,
food and variety stores; gift and novelty shops; price clubs; bookstores; home
supply stores, mail order catalogs and online toy stores.
Toy sales through the Internet represented the fastest growing segment of toy
retail sales during the last quarter of 1998. According to Jupiter
Communications, Inc., a New York research firm, retail sales through online toy
stores is expected to generate $52 million in 1999, $555 million in 2002, and
$1.5 billion by 2003 excluding software, books and other children's categories.
Without the joint venture with E-Commerce Fulfillment, we have revised the
expectation of our ability to sell toy products over the Internet. As we develop
relationships with the toy manufacturers through our MRABA initiative, and
providing that we can arrange the necessary capital, we now expect to capture
$20 million of this $1.5 billion toy electronic segment of the toy industry by
2003. There is no assurance that we will be successful in marketing and
distributing toys through electronic commerce. If we experience any difficulties
regarding the development of our Internet site, our future business prospects
will be adversely affected.
Our e-commerce site was originally launched on September 21, 1999. The Web-site
e-commerce development program cost about $235,144 through December 31, 1999. In
comparison with other retailers of toys, our expenditures were relatively small.
Our expected marketing program was not funded for the recent holiday selling
season. Our lack of marketing resources has had a negative impact on our sales
and our ability to meet our sales projections. Our Toypop.com site was operating
through February 10, 2000 when it was closed.
Our operating results may hinder our ability to raise additional capital to fund
our on-going operations. To date, we have funded our Web-site e-commerce
development with working capital provided by the sales of our securities and
borrowings. However, there is no assurance that these working capital reserves
will be sufficient to complete, launch, and market our e-commerce site.
Furthermore, there is no assurance that we will be able to raise additional
funds through securities sales and borrowings in the future.
RESULTS OF OPERATIONS
Three months ended March 31, 2000 compared to three months ended March 31, 1999
Total consolidated revenue for the three months ended March 31, 2000 was ($44)
compared to $19,460 for the same period of 1999, which represents an decrease of
$19,504. There was a refund during the recent quarter ended March 31, 2000 and
no sales revenues. Sales in the prior year reflected sales of our Hearthside
product line. This product line did not obtain any sales for the current period.
Gross profit was ($3,579) and ($12,376), respectively, for the three month
period ended March 31, 2000, as compared to the prior period ended March 31,
1999. This decrease is the result of the reduction in sales of products that we
did not have a positive margin. The year earlier period included a write-down of
obsolete inventory.
For the three months ended March 31, 2000, total selling expenses was $13,192 as
compared to $31,576 for the same period of the previous year, a decrease of
$18,384, or 59%. This decrease is the result of lower marketing expenses because
of no sales. Total general and administrative expense for the three months ended
March 31, 2000, was $221,989 as compared to $144,132 for the same period of the
previous year, an increase of $77,857, or 54%. Management continues to prepare
for an Internet presence despite the closing of its TOYPOP portal and is
developing its MRABA initiative. Expenses were primarily related to these
activities as well as the development of its collectible line of toys that will
were introduced at the February ToyFair 2000 and will be sold this selling
season.
9
<PAGE>
We had a loss from operations of $247,420 for the period ended March 31, 2000 as
compared to a loss of $192,197 for the same prior year period. This increase in
the operating loss over that of the preceding year period primarily reflects
higher general and administrative, together with a higher depreciation expense
despite lower selling expenses. The negative gross profit lower as compared to
the year ago period. Management anticipates that as sales are generated it will
result in an improvement in future operating performance and eventually
profitable operations.
During the quarter ended March 31, 2000 we closed out our security position that
resulted in a gain of $5,344. During the year ago period, we had realized and
unrealized losses of $84,961. All securities trading activities with our cash
balance has ceased. Management has utilized money market funds for its cash
prior to its use in our operations. Interest expense was $11,220 in the quarter
ended March 31, 2000 as compared to $195,652 in the same prior year period. This
represents a $184,432 decrease in interest expense, or 94%. The prior year
included convertible debt that was subsequently retired with the issuance of our
common stock.
We obtained the benefit of an extraordinary gain on the forgiveness of debt
during the period ended March 31, 2000 in the amount of $62,024. This resulted
from settlement of accounts payable balances
The basic loss and basic loss per share were $191,272 and $0.02 per share
respectively, for the three months ended March 31, 2000 as compared to a basic
loss and basic loss per share of $472,810 and $.08 respectively, for the same
period in 1999. This loss represents a 60% increase over the basic loss
experienced in the year ago quarter. The loss per share for the period decreased
75% over the previous year ago period. The extraordinary gain benefited the
reduction in loss per share by $0.01 in the current period. The weighted average
shares outstanding for the quarter ended March 31, 2000 was 10,040,642 as
compared 5,939,802 for the preceding year quarter ended March 31, 1999.
The Company has focused, in the recent quarter ended March 31, 2000, on
redeploying its internet presence within the MRABA portal that is a B2B
e-commerce business site within the toy industry. It is expected that MRABA will
be operating by the end of May 2000 and will begin to provide income to us. The
collectibles will begin generating revenues with the third quarter of this
calendar year. Management is optimistic about the benefits of its business
strategies.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company has largely funded its operations and its product
development activities with funds provided by issuing securities and from
borrowings. During the three months ended, the Company received $560,500 as an
equity investment for the issuance of 1,987,000 shares of common stock. These
funds were used for working capital purposes.
Net cash used in operating activities for the three months ended March 31, 2000
was $280,543 compared to net cash used of $173,474 for the three months ended
March 31, 1999. This increase in cash used by operating activities is primarily
due to an operating loss and a decrease in accounts payable that was not offset
as in the prior year by interest on warrants and the unrealized loss of
marketable securities that reduced the net loss.
Cash used in investing activities for the three months ended March 31, 2000 and
1999 was $62,938 and $715,561, respectively. We acquired equipment and
intangible assets of $68,282 in the three months ended March 31, 2000 as
compared to $16,066 in the prior year ago period. The major use of cash in the
year ago period was the purchase of marketable securities. We discontinued such
practices during the latter part of 1999.
10
<PAGE>
Cash provided by financing activities for the three months ended March 31, 2000
was $551,089 as compared to cash used in financing activities of $491,384 for
the three months ended March 31, 1999. During the recent quarter, the Company
issued common stock with an aggregate value of $560,500 to provide working
capital and to support its' spending. In the year ago period, we received note
proceeds of $153,158 and equity investment of $367,907.
As of March 31, 2000, the Company had net working capital deficit of $248,925.
The Company's ratio of current assets to current liabilities was 0.46 at March
31, 2000. The Company is not presently profitable and continues to fund itself
from the proceeds of securities placements. Only when the Company achieves
profitability, will then be in a position to fund itself on an operating basis.
Management believes that additional capital will be needed to fund its working
capital needs within this fiscal year. Funding is needed for the continuing
development of its MRABA Internet portal and to market and promote its toy
collectibles. The Company is optimistic that such funds will be available from
investment or financing sources to provide for its plan. Should funds not be
readily available, management intends to defer one or more of its business
activities to a later time when appropriate funding can be arranged. The Company
is in need of additional funding to provide for its working capital requirements
over the next six months. Should such funding not be available, the Company
would have to significant curtail its planned operations to achieve breakeven
operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
None
Item 2. Change in Securities and Use of Proceeds.
----------------------------------------
During the three month period ended March 31, 2000, the Company issued an
aggregate of 1,987,000 shares of restricted common stock. The Company raised
$560,500 that was net of $527,250 of offering costs. These offering costs
included $87,000 of cash and 572,000 shares of Alottafun! Restricted stock
valued at a total fair market value of $440,250. The issuance of these shares
was treated as offering costs. The Company relied upon Section 4(2) of the
Securities Act of 1933 for the issuance of these securities.
In February 2000, the Company issued 100,000 shares of restricted common stock
as a deposit on the acquisition of Faction, Inc. Faction, Inc. is an Internet
software development company located in New York, NY. This acquisition is
expected to be completed in May 2000 pending the resolution of specific terms in
the stock purchase agreement. The shares issued for the deposit were valued at
the fair market value at the date of issuance that totaled $62,500. The Company
relied upon Section 4(2) of the Securities Act of 1933 for the issuance of these
securities.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant had
duly caused the report to be signed on its behalf by the undersigned thereunto
duly authorized.
Alottafun!, Inc.
Dated 5/17/00
/s/ Michael Porter
------------------
Michael Porter
Chief Executive Officer
11
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 212,918
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 212,918
<PP&E> 162,019
<DEPRECIATION> 40,122
<TOTAL-ASSETS> 440,803
<CURRENT-LIABILITIES> 461,843
<BONDS> 0
0
0
<COMMON> 111,211
<OTHER-SE> (132,251)
<TOTAL-LIABILITY-AND-EQUITY> 440,803
<SALES> (44)
<TOTAL-REVENUES> (44)
<CGS> 3,535
<TOTAL-COSTS> 12,192
<OTHER-EXPENSES> 230,649
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (11,220)
<INCOME-PRETAX> (253,296)
<INCOME-TAX> 0
<INCOME-CONTINUING> (253,296)
<DISCONTINUED> 0
<EXTRAORDINARY> 62,024
<CHANGES> 0
<NET-INCOME> (191,272)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
