U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 1999
Commission File Number 313-12979
VOICENET, INC.
(Exact name of small business issuer as specified in charter)
Delaware 13-3896031
(State of either jurisdiction of (IRS Employer
incorporation or organization Identification No.)
300 Park Avenue
17th Floor
New York, New York
(Address of principal executive offices)
212-399-6682
(Issuer's telephone number)
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(former name, address and former fiscal year, if changed since last report)
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
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State the number of shares outstanding of each of the issuer's classes of common
equity as of the lastest practicable date: 3,338,650
VOICENET, INC.
INDEX
Part I - Financial Statements
Balance Sheets - March 31, 1999 and December 31, 1998
Statements of Operations and Retained Deficit - For the Three Months Ended
March 31, 1999 and March 31, 1998
Statements of Cash Flows for the Three Months Ended March 31, 1999 and
March 31, 1998
Notes to Unaudited Financial Statements
Management's Discussion and Analysis
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VOICENET, INC.
BALANCE SHEET
ASSETS: March 31, 1999 Dec. 31, 1998
(unaudited) (audited)
Current Assets:
Cash and Cash Equivalents $ 104,985 $ 34,610
Investments - 12,246
Accounts Receivables 12,424 44,500
Prepaid Expenses 7,382 -
Due from VNA -
45,015
Total current assets 124,791 136,371
Organization costs, net 900 900
Intangible Assets, net 4,335,000
4,410,000
Security Deposits 14,757 12,475
Deferred Compensation 26,450 26,450
Total Assets 4,501,898 4,449,825
CURRENT LIABILITIES
Accounts Payable 244,481 217,249
Total current liabilities 244,481 217,249
Stockholders' Equity
Preferred Stock, $.01 par value,
1,000,000 shares authorized, no shares
outstanding Common Stock, $.01 par value,
10,000,000 shares authorized 3,338,650
and 3,261,550 shares issued and outstanding 33,387 33,387
Additional Paid in Capital 6,168,700 6,168,700
Stock Option Outstanding 916,500 916,500
Other non-owner change in equity (15,719) (15,719)
Retained Deficit (2,845,451) (2,733,921)
Total stockholders' equity 4,257,417 4,232,576
Total liabilities and stockholders' equity 4,501,898 4,449,825
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VOICENET, INC.
STATEMENTS OF OPERATIONS AND RETAINED DEFICIT
FOR THE THREE MONTHS ENDED MARCH 31,
1999 1998
Revenues
Interest Income $80 2,544
Other Income - 13,345
Total Income $80 $15,889
General and Administrative Expenses 21,210 186,401
Amortization 90,400 -
Total Expenses 111,610 186,401
Loss from Operations (111,530) (170,512)
Net Loss (111,530) (170,512)
Retained Deficit, beginning of period (2,733,921) (616,055)
Retained Deficit, end of period (2,845,451) (786,567)
Net loss per common share ($.04) ($.05)
Weighted Average number of
shares outstanding during the period 3,338,650 3,261,550
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VOICENET, INC.
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED
MARCH 31,
1999 1998
Net loss (111,530) (170,512)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amorization Expense 90,400 -
(Increase) Decrease in accounts receivable 32,076 -
(Increase) Decrease in due from VNA and
prepaid expenses 37,633
Increase (decrease) in accounts payable 24,098 (363,178)
Total adjustments 184,207 (363,178)
Cash provided (used) by operating activities 72,677 (533,690)
Increase in security deposits (2,302)
Net increase (decrease) in cash 70,375 (533,690)
Cash, beginnning of period 34,610 909,217
Cash, end of period $104,985 $375,527
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VOICENET, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
Note 1. Basis of Presentation
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission and reflect all adjustments which are, in the opinion of
management, necessary to present fairly the financial information required
herein. Certain information and footnote disclosures normally included in the
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations, although
management believes that the disclosures are adequate to make the information
presented not misleading.
Note 2: Nature of Business
Voicenet, Inc. was incorporated on April 2, 1996. The Company was established
for the marketing and distribution of continuous speech and voice recognition
systems and digital audio reporting, transcription, archival and retreival
systems in North America, Central America, and South America.
Note 3: Loss Per Share
Net loss per share is computed based on the weighted average number of shares of
common stock outstanding for the periods presented. The effect of stock options
and warrants on the net loss per share was antidilutive for the periods
presented.
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Management's Discussion and Analysis of Financial Condition and Results of
Operations.
General:
The Company was formed in April 1996. The Company was organized for the purpose
of acquiring and marketing speech recognition technologies and systems developed
by Voicenet (Aust.) Ltd. , an Australian publicly traded compan, listed on the
Australian stock exchange, which is the Company's majority shareholder.
The Company had limited revenues for the year ended December 31, 1998 and no
revenues from the sale of products in the quarter ended March 31, 1999. The
Company has incurred losses since its inception. The Company expects to continue
to incur operating costs and possible losses therefrom over the next several
years due primarily to expanded sales and marketing efforts, the staffing of
offices, and expenses incurred as sales personnel seek potential customers for
the Company's products. There can be no assurance of when and whether the
Company will generate revenue or become profitable on a sustained basis, if at
all.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1999; COMPARED TO
MARCH 31, 1998
Net losses incurred for the three months ened March 31, 1999 were $111,530 as
compared to $170,512 for the three months ended March 31, 1998. The Company had
no revenues from sales in either the March 31, 1999 or 1998 quarter.
Total general and administrative expenses decreased from $186,401 to $111,610
for the periods ended March 31, 1999 and 1998, respectfully. The decrease was
due primarily to a decrease in travel expenses and professional fees.
As of December 31, 1998 the Company had total assets of $4,449,825 as compared
to total assets of $4,501,898 as of March 31, 1999, an increase of $42,073. The
Company had total liabilities of $244,481 as of March 31, 1999 as compared to
$217,249 as of December 31, 1998, an increase of $27,232. The retained deficit
of the Company increased by $111,530, as a result of the net loss from
operations for the three months ended March 31, 1999.
Liquidity:
As of March 31, 1999 the Company had a working capital deficit of $119,690 as
compared to a working capital deficit of $80,868 as of December 31, 1998.
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The Company does not currently have any bank financing or has had any revenues
through from continuing operations from March 31, 1999 through the period ended
May 12, 1999. The Company can not be certain that its existing sources of cash
will be adequate to meet its liquidity requirements.
Unless the Company is able to generate revenues or obtain additional sources of
financing in the future, the continuing losses incurred by the Company raise
substantial doubt about the Company's ability to continue as a going concern.
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
May 17, 1999
Voicenet, Inc.
By: /s/ Frank Carr
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Frank Carr
Chairman
