<PAGE> 1
As filed with the Securities and Exchange Commission on June 4, 1999
Registration No. 0-25463
==============================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB/A
Amendment No. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
NETWORK INVESTOR COMMUNICATIONS
--------------------------------------------
(Name of Small Business Issuer in its Charter)
Nevada 88-0367792
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9645 Gateway Drive, Suite B, Reno, Nevada 89511
--------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (888) 372-1777
--------------
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
---- ---
Securities to be registered under Section 12(g) of the Act:
Common Stock, par value $0.001 per share
----------------------------------------
(Title of Class)
==============================================================================
<PAGE>
<PAGE> 2
NETWORK INVESTOR COMMUNICATIONS
FORM 10-SB/A
Amendment No. 1
TABLE OF CONTENTS
PART 1 Page
Item 1. Description of Business ..................................... 3
Item 2. Management's Discussion and Analysis or Plan of Operation ... 6
Item 3. Description of Property...................................... 10
Item 4. Security Ownership of Certain Beneficial Owners
and Management.............................................. 10
Item 5. Directors, Executive Officers, Promoters
and Control Persons......................................... 11
Item 6. Executive Compensation....................................... 10
Item 7. Certain Relationships and Related Transactions............... 13
Item 8. Description of Securities.................................... 13
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters................. 14
Item 2. Legal Proceedings............................................ 14
Item 3. Changes in and Disagreements with Accountants................ 14
Item 4. Recent Sales of Unregistered Securities...................... 14
Item 5. Indemnification of Directors and Officers.................... 15
PART F/S
Financial Statements......................................... 16
PART III
Item 1. Index to Exhibits............................................ 36
Signatures................................................... 37
<PAGE>
<PAGE> 3
PART I
Item 1. Description of Business
Corporate History
- -----------------
Network Investor Communications, a Nevada corporation (the "Company"),
was originally organized in Nevada on August 9, 1996, to engage in investor
and public relations for a corporate clientele. Between December 1996 and
February 1997, the Company sold shares of its common stock, par value $0.001
per share (the "Common Stock") to certain investors to raise capital to fund
its proposed business plan. Through the sale of the shares of Common Stock,
the Company raised $100,000 to fund initial operations.
The Company was formed on the belief that many corporations, particularly
those of relatively small size and corporations which have recently completed
initial public offerings("IPO's") would need experienced public and investor
relation services. The Company believes that many of these corporations
initially do not have the established in-house capabilities or the funds to
devote to a full time investor and public relation's staff. These
corporations, management believes, will need the services of outside investor
and public relation services to assist in the dissemination of information and
communication with shareholders, the public and the investment community.
The Company hopes to capitalize on the large number of IPO's and startup
Hi-Tech and Internet companies looking to establish a corporate profile and
recognition, not only among, investors, but also with customers and potential
employees. Additionally, with the advance of technology, particularly the
Internet, corporations have to be able to communicate to individual investors
who no longer rely on the traditional broker relationship for their investing
decisions. One of the Company's objectives is to help corporations reach this
new investing group with accurate, update, informative information of its
clientele. The Company does not, however, provide any investment advice on
its clients to anyone.
By offering investor and public relation's services, the Company
alleviates the need for its clients to have a full time investor relation's
staff or deal with the volume of telephone and other inquires as to the
client's business and financial position. The Company acts as an intermediary
in not only disseminating information on clients but also in handling inquires
into the client's status.
The Company has initially focused on the small public corporations, which
do not have the personnel or funds to establish investor and public relation's
departments. These corporations are readily identifiable and do to their
public status have an established need to communicate with and inform their
shareholders. Many of these companies are classified as "small cap" or
"micro-cap", which have trouble getting recognized by investors and responding
to investor inquiries. The Company assist these small corporations by
developing a corporate message and profile which it updates monthly or
quarterly as needed and disseminates press kits, public information and press
releases.
The Company is also expanding its focus to search for non-public
corporations, which are trying to create a corporate identity and
differentiate themselves from competitors. Many of these corporations are in
the Hi-Tech and Internet business which is becoming crowded and more difficult
<PAGE> 4
to attract customers. It is the Company's belief that these corporations can
become more competitive and attract customers by having a professional public
relations firm helping with preparing promotional material and advertising.
The Company has had difficulty obtaining new clients do to the large
number of competitors. Management has become concerned about the viability of
its operation and is investigating other options to increase shareholder
value. Management believes that if current operations are not viable that one
way to potentially increase shareholder value is through a merger or
acquisition with an existing corporation. In exploring this possibility,
management feels, although not supported by any empirical data, it is
beneficial to have its securities registered under the Securities and Exchange
Act as it feels a company which files reports with the Securities and Exchange
Commission ("SEC") would be a more attractive merger candidate for a private
company. Presently, the Company has had no conversations with any corporation
regarding mergers or acquisitions and is focused on making its current
operations successful. The Company contacted one of its shareholders, Jeff W.
Holmes, to seek advice on potential mergers or other combinations. At this
time Mr. Holmes has not offered any assistance. The Company is hopeful Mr.
Holmes, if needed, would assist in locating a merger candidate.
Operations
- ----------
Since inception, the Company has been hired by six (6) corporations to
assist in public and investor relations. The Company through the efforts of
its president, Robert Deller, relies on trade shows and networking to attract
new clients. As the Company is relatively new and small compared to many of
its competitors, the Company has had to rely on relationships created by Mr.
Deller to bring in new clientele. Although the Company has represented several
clients since inception presently, the Company represents one corporation,
Pacific Magtron International Corp., in handling investor and public relations
and is finalizing the extension of a contract with another client, Biopool
International, Inc. Pacific Magtron International Corp. is engaged in the
wholesale distribution of electronic products, computer components and
computer peripheral equipment to corporations. Biopool International, Inc. is
engaged in the research, development, production and sale of test kits used to
assess and diagnose disorders of the vascular system.
In addition to its current clients, the Company has represented Point of
Care Technologies, Inc., a medical device company that develops and markets
point of care medical products and service; Upland Energy, Inc., an oil and
gas Company; Zevex International, Inc., a manufacturer of medical products and
Pen Interconnect, Inc., a developer of interconnection and contract
manufacturing solutions for OEM's. All of these corporations are public in
that their securities are traded. The Company has charged these clients
between $3,000 and $5,000 per month on a six month contract, in addition to
expenses incurred, terminable on 30 days written notice.
The Company's investor and public relation services include preparing
press kits, handling the preparation and dissemination of press releases,
coordinating with printers the client's annual and quarterly reports, as well
as, proxy materials. The Company works as an intermediary between the
investment community and officers of the corporation often scheduling
conference calls with brokerage houses and road shows for officers and
directors of corporations to meet brokers.
The Company also helps establish a corporate image for its clients in
their community and industry. This corporate image is particularly important
in helping clients obtain business and attract qualified employees in their
field. The Company assists corporations in having articles published in trade
journals, establishing an Internet site, having articles placed in local
papers, and preparing trade show materials and displays.
<PAGE> 5
If the Company does not attract additional clients, it may be forced to
cease operations and to look for other business opportunities. Given its
current lack of funding; it may be difficult for the Company to pursue any
other business opportunities. The Company is down to one employee in addition
to its president, Robert Deller, who has been funding the Company. Mr. Deller
is currently evaluating the probability of future success of the Company based
on its current financial position. Although Mr. Deller will try to keep the
Company operating, if Mr. Deller is forced to terminate operations, the future
direction the Company would take is uncertain.
Management will attempt to keep its options open as to ways to make the
Company profitable. If the Company is forced to close its investor and public
relation's business, the Company will endeavor to seek other opportunities to
help provide shareholder value. As the Company has only limited resources, it
may be difficult to find profitable business opportunities. There can be no
assurance that the Company will be able to identify and acquire any business
opportunity, which will ultimately prove to be beneficial to the Company and
its shareholders.
Competition and Markets
- -----------------------
The Company's initial focus was on "small cap" or "micro cap" companies
which tend to be relatively small in size and cannot afford to have a full
time staff of investment and public relations' personnel. Additionally, with
the number of recent IPO's and the increasing number of Internet companies,
which tend to be smaller in size, entering into the public marketplace, the
Company felt there was a readily identifiable potential pool of clients. As
the Company, through experience, revives its business plan, the Company has
expanded its marketing efforts to include non-public companies, particularly
in the high tech and Internet fields, who are looking to create a distinctive
corporate image.
The marketplace for investor and public relation's companies is very
competitive and dominated by several very large companies who work with most
of the larger corporations. In addition to the large investor and public
relation firms, there are many smaller investor and public relations firms
specializing in certain industries or geographical areas.
The Company is at a competitive disadvantage to most of the financial
relation firms, as well as with many of the smaller firms. Management of the
Company is relatively new to the business and has not had the time to develop
the contacts that many of these other firms have established. Additionally,
new firms continually enter into the financial relation's business, as there
are few barriers to entry. The Company relies on the business contacts of its
president, Robert Deller, for the majority of its clientele. If the Company
is to be successful, it will have to be able to develop better ways to compete
or distinguish itself from the crowded financial relation's business field.
Government Regulation
- ---------------------
Currently, the financial relations field is not a heavily regulated
industry. Most of the regulations that apply deal with the Federal and State
Securities Laws and their effect on the timing of the dissemination of
information and the content of the information. These rules do not affect the
Company's business to any great extent. Instead the Company looks at these
rules as governing principles to follow when representing a client.
<PAGE> 6
Additionally, any publications produced by financial relation's firms, which
recommend certain corporations and their stock, must state that the
recommending firm is paid by the corporation they are recommending.
The Securities and Exchange Commission has created rules, which limit the
ability of financial relation's firms to accept stock in companies, which they
represent. These rules relate to potentially being covered by the Investment
Company Act of 1940 as well as to types of registration statements available
for registering stock issued to investor and public relations companies. These
rules have not affected the Company's business. The Company does not receive
stock as payment for service from any client and does not intend to in the
future. The Company did, however, have the potential to receive stock in
Pacific Magtron International, Inc. but has elected to not accept stock as
payment for services. The Company received 7,000 shares in Pen Interconnect,
Inc. as payment of an outstanding bill to Pen Interconnect, Inc. The Company
accepted the shares in an effort to receive some satisfaction on its
outstanding bill. The Company's original contract with Pen Interconnect, Inc.
was for cash not shares. The Company has not sold the shares and is unsure if
it will ever be able to sell the shares. The Company relies on cash payments
from its clients.
Year 2000 Computer Problem
- --------------------------
The Year 2000, or Y2K problem concerns potential failure of certain
computer software to correctly process information because of the software's
inability to calculate dates. As the Company is service based, the Company
does not depend on inventory or the sale of goods and does not anticipate any
Y2K problems. The Company's computer system is PC based and has been updated
with the latest software. Additionally, the Company has all of its material
saved on alternative media from that of the PC's harddrives in case of a
computer problem.
Employees
- ---------
The Company has 1 employee in addition to its president, Robert Deller.
(See "Directors and Executive Officers.")
Offices
- -------
The Company's principal executive offices are located at 9645 Gateway
Drive, Suite B, Reno, Nevada 89511. These offices are rented pursuant to a
three year lease expiring on July 31, 2000. The monthly lease amount is
$1,747.20. The Company believes that the above facilities are adequate for the
foreseeable needs of the Company; however, eventually as the Company expands
its employee base, it anticipates adding additional office space.
Item 2. Management's Discussion and Analysis or Plan of Operation
Overview
- --------
The Company was formed in 1996 to engage in public and investor
relations. Realizing that the Company needed operating capital to effectively
execute its proposed business plan, the Company engaged in an offering of its
securities in 1997 raising $100,000. These funds have helped the Company stay
<PAGE> 7
in business and attract additional clients. The Company currently receives
monthly revenue from its client of $7,000. Although the Company generates
revenue, the Company remains unprofitable and will need to increase its
revenues if it is to remain in business.
Plan of Operation
- -----------------
The Company operates in a very competitive environment often competing for
the same clients with well established and larger financial and investor
relation's firms. This competition has resulted in pressure on its revenue
stream with the Company often having to not only qualify with a potential
client from a professional and concept basis but with a competitive bid on
projects. Currently, clients are generated through personal contacts of the
Company's president, Bob Deller. By only having one person generating
clients, the Company has been slowed in its growth, often not having the
personnel to capitalize on and retain potential clients. The Company does not
anticipate that it will be able to hire any additional employees until several
more clients are retained and some of the Company's debt is paid.
Accordingly, revenue growth will be slow over the next twelve months.
The Company is service based receiving its revenue from corporate
clientele from whom the Company provides investor and public relation
services. Typically, the Company operates off of a flat fee structure with
monthly payments from its clients. The Company is also reimbursed for any
hard cost incurred in representing its clients for such items as printing and
travel cost.
Presently, the Company's expenses exceed its revenue. The Company
anticipated that it would take time to generate sufficient revenue to meet its
expenses as it was entering into a new business field; however, the client
generation has been slower than expected. Management still believes that the
client generating will accelerate along with revenue. If additional clients
cannot be attracted, the Company's future success will be questionable, and
the Company may be forced to examine other potential business opportunities to
generate revenue or cease operations. If the Company is forced to examine
other businesses, current shareholders may not have the opportunity to vote or
decide on the new business or direction of the Company. Additionally, the
future success of the Company and any other business it may engage in would
also be hindered by the Company's lack of funding.
In an effort to continue in business, the Company cut overhead expenses
by thirty percent (30%) during the first quarter of 1999 by reducing staff and
cutting travel and other costs. These reductions in expenses have slowed the
monthly cash flow drain expenses to approximately $15,552 per month.
Management is exploring other ways to reduce overhead and the Company's
president has agreed to not take his full salary until funds are available.
Once available the president hopes to be repaid his back salary. Even with
these reductions in overhead, revenues will still not be enough to cover
expenses for the foreseeable future. Accordingly, the Company will continue to
depend on loans from the Company's president to continue in operation. As
stated, Mr. Deller's resources are limited and he has already loaned the
Company $128,912 as of March 31, 1999.
At this time, management has estimated that it will need another $100,000
to continue in business for twelve months given current revenue and expenses.
Mr. Deller believes he can continue to fund the Company from personal loans
and credit cards for another twelve months. This continued funding would be
<PAGE> 8
conditional on Mr. Deller seeing increased clientele and resulting revenue and
the overall potential for success of the business.
If the Company is unable to generate additional revenue, it is unlikely
that Mr. Deller will continue to finance the Company. The Company would, in
such case, have to explore different business prospects. Management believes
one potential business path is to seek a merger or acquisition with a company
seeking to become public through a merger with a public company. At this time,
management has not set forth any criteria it would use in selecting a merger
or acquisition candidate and management is not prepared to restrict its search
to any particular industry or geographical area. Additionally, given the
Company's current financial position, it may be difficult to find a
corporation, which would want to merge with the Company.
If the Company engaged in a merger or acquisition, shareholders would
have little input into the corporation merged with or the terms. Most likely,
any merger or acquisition would require substantial dilution to current
shareholders ownership percentage. At this time, if the Company's current
business proves unsuccessful, there can be no assurance that the Company will
be able to identify and acquire any business opportunity, which will
ultimately prove to be beneficial to the Company and its shareholders. The
Company will select any potential business opportunity based on management's
business judgment.
Liquidity and Capital Resources
- -------------------------------
At December 31, 1998, the Company had assets of $36,700 with current
liabilities of $185,783 resulting in a working capital deficit of $149,083.
The majority of the current liabilities, $115,705, is a loan from the
Company's president Robert Deller. Excluding the related party loan from Mr.
Deller, the Company has $70,076 in expenses that are due or will shortly
become due. Additionally, $47,824 of the funds loaned by Mr. Deller to the
Company are from Mr. Deller's personal credit cards which the Company has been
paying on a monthly basis.
The Company will not be able to pay its existing obligations from
anticipated current revenue unless additional clientele are added to increase
revenue. Mr. Deller has indicated that he will continue to attempt to fund
the Company but he has also indicated that his ability to continue to provide
personal financing of the Company is limited. Since the end of the Company's
fiscal year in June 30, 1998, Mr. Deller's had loaned the Company an
additional $43,450. If the Company's revenues do not improve, the Company may
have to look at either ceasing operations or potentially engaging in different
business opportunities. Because of the continued losses and lack of
financing, the Company's financial statements contain a "going concern"
qualification.
Since June 30, 1998, payroll and other accrued liabilities has increased
from $23,860 to $70,751. Current revenues will not pay for all of these
accrued liabilities and the Company is seeking other loans to help defray
these immediate expenses. There can be no assurance that the Company will be
successful in finding financing to cover the current liabilities. If funding
is not obtained, the Company may not have the ability to pursue new clients or
to properly service existing clientele.
<PAGE> 9
Results of Operations
- ---------------------
The Company has been unprofitable since its formation in 1996. From its
inception in August 1996 until June 30, 1997, the Company lost a total of
$52,147. During this time, the majority of the activities of the Company
focused on its organization, raising funds and commencing limited operations.
Since June 30, 1997, the Company has been more aggressive in pursuing its
business plan and soliciting clients. As a result operating expenses have
increased substantially from $89,701 in expenses through June 30, 1997, to
$259,025 in expenses for the fiscal year ended June 30, 1998. The majority of
these new expenses related to hiring employees, advertisement and travel cost
and to increased office overhead.
During the year ended June 30, 1998, revenue increased substantially over
the period from inception through June 30, 1997. Revenues through June 30,
1997, were only $37,554; however, for the year ended June 30, 1998, revenues
increased to $130,321, as the Company was able to attract new clientele. The
increase in revenues unfortunately did not keep up with the increased overhead
resulting in a loss of $132,906. As a result of this loss, all of the funds
raised in the Company's offering were used and the Company's president, Robert
Deller, was forced to keep the Company going through his personal funding of
the shortfalls.
Quarter Ended December 31, 1998
- -------------------------------
For the six months ended December 31, 1998, the Company had revenue of
$45,423 with expenses of $106,790 resulting in a loss of $68,331. Revenues
for this six month period slowed as a result of the completion of work for
several clients. The Company has not been immediately able to replace these
clients.
For the six months ended December 31, 1998, general and administrative
expenses decreased to $104,222 from $124,062 for the same period in 1997. As
a result of this decrease in general and administrative expenses the loss for
the six months was down from the $79,606 for the six months ended December 31,
1997.
The three months ended December 31, 1998 also saw a decline in revenue to
$24,113 from $29,772. This decline concerns management as they had hoped that
as the Company became more established, revenues would begin to increase
offsetting the expenses, many of which are fixed. As it will be difficult to
reduce expenses without reducing an already minimal staff, the Company will
need to arrange additional financing if it hopes to continue in business.
With the decline in revenues and the current financial situation, it may be
difficult to arrange new financing.
Quarter Ended March 31, 1999
----------------------------
During the quarter ended March 31, 1999, the Company continued to lose
money with a net loss of $27,167. For the nine months ended March 31, 1999,
the Company lost $95,498. The Company was able to reduce expenses in the
quarter ended March 31, 1999. Operating Expenses decreased to $46,657 for the
three months ended March 31, 1999, as opposed to $68,886 for the same period
in 1998. This reduction was the result of decreased staff and reduction in
travel cost and general office overhead. The reduction in expenses was
unfortunately offset by reduction in revenue from $40,156 for the quarter
ended March 31, 1998, to $23,620 for the quarter ended March 31, 1999. This
reduction in revenue was the result of the loss of several clients and the
inability to obtain any additional clients.
<PAGE> 10
Management feels that one reason it has not attracted more clients is it
was to limiting in initially only seeking public companies to represent.
Management believes that by also seeking private companies, particularly those
in the local Reno community, it will be able to expand its clientele.
Additionally, the Company is becoming more flexible with the fees it charges.
Initially, the Company set a flat minimum monthly fee for its services, which
made it difficult for many smaller companies to afford the Company's services.
Now the Company performs more of an analysis of anticipated time per client
and adjusts its fees accordingly. The Company also will work on a project
basis for companies instead of requiring a long term contract. Management is
hopeful these changes will increase clientele over the next twelve months. If
immediate results are not seen from these changes, it is likely the Company
will have to cease operations given the Company currently has a negative
$194,036 in working capital.
Item 3. Description of Property
The Company currently does not have any real property and only leases its
offices. Its offices are located at 9645 Gateway Drive, Suite A Reno, Nevada
89511. This lease runs through July 31, 2000, and is at a monthly rental
amount of $1,747. The Company believes its current office space is adequate
for current and future needs.
Item 4. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth the number of shares of the Company's
Common Stock, par value $0.001, held by each person who is believed to be the
beneficial owner of 5% or more of the 1,500,000 shares of the Company's common
stock outstanding at May 20, 1999, based on the Company's transfer agent's
list, representations and affidavits from shareholders and beneficial
shareholder lists provided by the Depository Trust and securities broker
dealers, and the names and number of shares held by each of the Company's
officers and directors and by all officers and directors as a group.
Title of Name and Address Amount and Nature of Percent
Class Of Beneficial Owner Beneficial Ownership of Class
- -------- ------------------- --------------------- --------
Principal Shareholders
- ----------------------
Common Robert R. Deller 500,000 33.33%
9645 Gateway Drive, Suite B
Reno, Nevada 89511
Common Barbara Bruce
545 McDonald Drive
Incline Village, Nevada 89451 100,000 6.67%
Common Thomas E. Hofer
P.O. Box 3431
Carefree, Arizona 85377 100,000 6.67%
Common Jeff Holmes
P.O. Box 111207
Zephyr Cove, Nevada 89448 100,000 6.67%
Common Joe Thomas
3791 East Adonis Drive
Salt Lake City, Utah 84124 99,000 6.60%
<PAGE> 11
Common Kahalil P. Thomas
8200 Horeshoe Bend Land
Las Vegas, Nevada 89113 87,500 5.83%
Officers, Directors and Nominees
- --------------------------------
Common Robert R. Deller, President
and Director ---------See Above---------
All Officers, Directors, and
Nominees as a Group (1 Person) 500,000 33.33%
- --------------------------------
Item 5. Directors, Executive Officers, Promoters and Control Persons
The names of the Company's sole executive officer and director and the
positions held by him are set forth below:
Name Position
- ---- --------
Robert R. Deller President, Secretary, Treasure and
Director
The term of office of each director is one year and until his successor
is elected at the Company's annual shareholders' meeting and is qualified,
subject to removal by the shareholders. The term of office for each officer
is for one year and until a successor is elected at the annual meeting of the
board of directors and is qualified, subject to removal by the board of
directors.
Biographical Information
- ------------------------
Set forth below is certain biographical information with respect to each
of the Company's officers and directors.
Robert R. Deller, age 42, founded the Company in 1996 and has been its
president since inception. Prior to founding the Company, Mr. Deller was an
independent insurance agent for Country Companies Insurance where he received
the professional designation LUTCF. Mr. Deller worked for Country Companies
Insurance form June 1992 to July 1997. Mr. Deller was an officer and director
of USA Gold Mines, Inc., a heapleaching gold mine in Helena, Montana from May
1990 to December 1992. Mr. Deller has no current relationship with USA Gold
Mines. Mr. Deller attended the University of Alabama where he obtained a B.A.
degree in 1979.
ITEM 6. EXECUTIVE COMPENSATION
The following tables set forth certain summary information concerning the
compensation paid or accrued for each of the Company's last three completed
fiscal years to the Company's or its principal subsidiaries chief executive
officer and each of its other executive officers that received compensation in
excess of $100,000 during such period (as determined at June 30, 1998, the
end of the Company's last completed fiscal year):
<PAGE> 12
SUMMARY COMPENSATION TABLE
- --------------------------
<TABLE>
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ --------
Other Restricted
Name and Annual Stock Options LTIP All other
Principal Position Year Salary Bonus($) Compensation Awards /SARs Payout Compensation
- ------------------ ---- ------ -------- ------------ ------ ------- ------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert R. Deller 1998 $18,000(1) -0- -0- -0- -0- -0- -0-
President and CEO 1997 $18,000 -0- -0- -0- -0- -0- -0-
1996 -0- -0- -0- -0- -0- -0- -0-
</TABLE>
_________________
(1) Mr. Deller's base salary is $54,000 per year. In 1998, Mr. Deller did
not take a salary for several months. The Company has indicated that when
funds are available, they will pay Mr. Deller for the salary that he was
unable to take in 1998.
Options/SAR Grants in Last Fiscal Year
- --------------------------------------
The Company has never granted options or stock appreciation rights.
Bonuses and Deferred Compensation
- ---------------------------------
None
Compensation Pursuant to Plans
- ------------------------------
The Company does not have any compensation or option plans.
Pension Table
- -------------
Not Applicable
Other Compensation
- ------------------
None
Compensation of Directors
- -------------------------
Currently the only director of the Company is Robert R. Deller who
receives no additional compensation for being a director of the Company.
<PAGE>
<PAGE> 13
Termination of Employment and Change of Control Arrangement
- -----------------------------------------------------------
There are presently nor are there anticipated any agreements regarding
change of control of the Company.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Robert Deller, the Company's president, has loaned the Company
approximately $128,912 as of March 31, 1999. These loans consist of $80,000,
which is at an interest rate, of ten percent per annum and is due and payable
on demand. No payments have been made on this note to Mr. Deller.
Additionally, Mr. Deller has allowed the Company to borrow and receive cash
advances on his personal credit cards totaling $47,824. The Corporation has
been making all payments on the funds borrowed on the credit cards. Interest
on these credit cards range from 9.7% for $7,044 to 17-18% on $25,997 and
19.99% on $14,783. The Company has paid a total of $23,631 on these credit
cards between March of 1998 and March of 1999.
Item 8. Description of Securities
Description of Securities
- -------------------------
General
-------
The Company is authorized to issue fifty million shares of capital stock,
par value $0.001 per share designated as Common Stock. There are 1,500,000
fully paid and non-assessable shares of Common Stock currently issued and
outstanding as of February 15, 1998.
Common Stock
------------
The holders of Common Stock are entitled to one vote per share on each
matter submitted to a vote at any meeting of shareholders. Shares of Common
Stock do not carry cumulative voting rights and, therefore, a majority of the
shares of outstanding Common Stock will be able to elect the entire board of
directors and, if they do so, minority shareholders would not be able to elect
any persons to the board of directors. The Company's bylaws provide that a
majority of the issued and outstanding shares of the Company constitutes a
quorum for shareholders' meetings, except with respect to certain matters for
which a greater percentage quorum is required by statute or the bylaws.
Shareholders of the Company have no preemptive rights to acquire
additional shares of Common Stock or other securities. The Common Stock is
not subject to redemption and carries no subscription or conversion rights.
In the event of liquidation of the Company, the shares of Common Stock are
entitled to share equally in corporate assets after satisfaction of all
liabilities.
Holders of Common Stock are entitled to receive such dividends as the
board of directors may from time to time declare out of funds legally
available for the payment of dividends. The Company seeks growth and
expansion of its business through the reinvestment of profits, if any, and
does not anticipate that it will pay dividends in the foreseeable future
PART II
Item 1. Market Price of and Dividends on the Registrant's
Common Equity and Other Shareholder Matters
<PAGE> 14
The Company's Common Stock is currently not quoted or listed for trading
with any exchange or market.
Since its inception, the Company has not paid any dividends on its Common
Stock, and the Company does not anticipate that it will pay dividends in the
foreseeable future.
As of May 20, 1999, the Company had 1,500,000 shares of its Common Stock
issued and outstanding held by approximately 55 shareholders.
Item 2. Legal Proceedings
The Company is not, and has not been, involved in any legal proceedings.
Item 3. Changes in and Disagreements with Accountants
The Company has not changed, nor had any disagreements with, its
independent certified accountants.
Item 4. Recent Sales of Unregistered Securities
The Company upon formation issued 500,000 shares to Robert Deller, its
founder and president for consideration of $10,000. Subsequently, the Company
sold 1,000,000 shares in an offering under Rule 504 of Regulation D
promulgated by the Securities and Exchange Commission under the power granted
in the Securities Act of 1933, as amended. The Company filed a registration
statement on form U-7 in the State of Nevada for offers and sales made to
Nevada residents. The registration statement was declared effective on
December 6, 1996, by the Nevada Division of Securities. These sales were to
approximately 54 persons. All sales were made in 1997.
Item 5. Indemnification of Directors and Officers
The following is a brief summary of certain indemnification provisions of
the Company's certificate of incorporation and the Nevada Revised Statutes.
This summary is qualified in its entirety by reference to the text thereof.
Section 78.751 of the Nevada Revised Statutes confers on a director or
officer an absolute right to indemnification for expenses, including
attorneys' fees, actually and reasonably incurred by him to the extent he is
successful on the merits or otherwise in defense of any action, suit, or
proceeding. This section also entitles a director or officer to partial
indemnification against expenses to the extent that he has been successful in
defending any claim, issue, or matter asserted in such proceeding. The Nevada
indemnification section further permits the corporation to indemnify officers
and directors in circumstances where indemnification is not mandated by the
statute and certain statutory standards are satisfied. The Nevada statute
expressly makes indemnification contingent upon a determination that
indemnification is proper in the circumstances. Such determination must be
made by the board of directors, the shareholders, or independent legal
counsel. Nevada law also permits a corporation, in its articles of
incorporation, bylaws, or an agreement, to pay attorneys' fees and other
litigation expenses on behalf of a corporate official in advance of the final
disposition of the action upon receipt of an undertaking by or on behalf of
the corporate official to repay such expenses to the corporation if it is
ultimately determined that he is not entitled to be indemnified by the
corporation. The corporation may also purchase and maintain insurance to
provide indemnification. The Nevada statute also provides that
indemnification authorized by the statute is not exclusive of, but is in
<PAGE> 15
addition to, indemnification rights granted under a corporation's articles of
incorporation, an agreement, or pursuant to a vote of shareholders or
disinterested directors.
The certificate of the Company specifically provides that no director or
officer is personally liable to the Company for damages for breach of
fiduciary duty involving certain acts. The Company's bylaws also contain a
provision that the Company will indemnify the officers and directors for any
liability occurring during the scope of their duties as an officer or
director.
It is anticipated that the Company will indemnify its officers and
directors to the full extent permitted by the above referenced statute.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the small business issuer of expenses incurred or paid by a director, officer
or controlling person in connection with the securities being registered), the
small business issuer will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by the Company is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
The foregoing discussion of indemnification merely summarizes certain
aspects of indemnification provisions and is limited by reference to Section
78.751 of the Nevada Revised Statues.
<PAGE>
<PAGE> 16
PART F/S
--------
Financial Statements and Supplementary Data:
- -------------------------------------------
CONTENTS
PAGE
Year Ended June 30, 1998 and 1997:
_ Independent Auditors' Report 17
_ Consolidated Balance Sheets, June 30, 1998
and 1997 18
_ Consolidated Statements of Operations for the
year ended June 30, 1998, and
From August 9, 1996 (inception) to June 30, 1997 19
_ Consolidated Statement of Stockholders' Equity,
from inception on August 9, 1996, through
June 30, 1998 20
_ Consolidated Statements of Cash Flows for the
year ended June 30, 1998, and
from inception on August 9, 1996, through
June 30, 1998 21
_ Notes to Consolidated Financial Statements 22
Quarter Ended December 31, 1998
_ Unaudited Condensed Consolidated Balance, December 31,
1998 and June 30, 1998 27
_ Unaudited Condensed Consolidated Statements of
Operations for the six months ended
December 31, 1998, and December 31, 1997 28
_ Consolidated Statement of Stockholders' Equity,
for the six months ended December 31, 1998 and
August 9, 1996 (Inception) through June 30, 1998 29
_ Unaudited Condensed Consolidated Statements of
Cash Flows for the six months ended
December 31, 1998, and December 31, 1997 30
Quarter Ended March 31, 1999
_ Unaudited Condensed Consolidated Balance, March 31,
1999 and June 30, 1998 32
_ Unaudited Condensed Consolidated Statements of
Operations for the nine months ended
March 31, 1999, and March 31, 1998 33
_ Consolidated Statement of Stockholders' Equity,
for the nine months ended March 31, 1999 and
August 9, 1996 (Inception) through June 30, 1998 34
_ Unaudited Condensed Consolidated Statements of
Cash Flows for the nine months ended
March 31, 1999, and March 31, 1998 35
<PAGE> 17
David T. Thomson P.C. Certified Public Accountant
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Network Investor Communications, Inc.
I have audited the balance sheets of Network Investor Communications, Inc. as
of June 30, 1998 and 1997 and the related statements of operations,
stockholders' equity and cash flows for the year ended June 30, 1998 and the
period from inception (August 9, 1996) through June 30, 1997. These financial
statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audits.
I conducted my audits in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about 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. I believe that my audits provide a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Network Investor
Communications, Inc. as of June 30, 1998 and 1997, and the results of its
operations and its cash flows for the year ended June 30, 1998 and for the
period from inception (August 9, 1996) through June 30, 1997, in conformity
with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 5 to the financial
statements, the Company has suffered recurring losses, requiring capital
infusions, and has limited working capital. These factors, and the others
discussed in Note 5, raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans regarding those matters also
are described in Note 5. The financial statements do not include any
adjustments relating to the recoverability and classification of liabilities
that might be necessary in the event the Company cannot continue in existence.
/S/David T. Thomson
Salt Lake City, Utah
August 24, 1998
P.O. Box 571605 - Murray, Utah 84157 - (801) 966-9481
<PAGE>
<PAGE> 18
NETWORK INVESTOR COMMUNICATION, INC.
BALANCE SHEET
ASSETS
June 30, June 30,
1998 1997
----------- -----------
CURRENT ASSETS:
Cash $ 184 $ 16,648
Accounts receivable, net of allowance for
doubtful accounts of $46,915 and $0 14,573 11,719
----------- -----------
Total Current Assets 14,757 28,367
----------- -----------
PROPERTY AND EQUIPMENT, NET 14,216 8,170
----------- -----------
OTHER ASSETS
Deposits 2,475 270
Shareholder loan 0 10,000
Organization costs, net of amortization of
$2,357 and $1,127 3,793 5,023
Customer lists, net of amortization of
$171 and $82 1,169 1,258
----------- -----------
Total Other Assets 7,437 16,551
----------- -----------
TOTAL ASSETS $ 36,410 $ 53,088
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 7,831 $ 393
Shareholder loan 85,462 0
Payroll and other accrued liabilities 23,869 541
----------- -----------
Total Current Liabilities $ 117,162 $ 934
=========== ===========
STOCKHOLDERS' EQUITY (DEFICIT):
Capital stock, $.001 par value; 50,000,000 shares
authorized; 1,500,000 shares issued and
outstanding, both years 1,500 1,500
Additional paid-in capital 102,801 102,801
Retained earnings (deficit) (185,053) (52,147)
----------- -----------
Total Stockholders' Equity (Deficit) (80,752) 52,154
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 36,410 $ 53,088
----------- -----------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 19
NETWORK INVESTOR COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS
For the From August 9,
Year ended 1996 (Inception)
June 30, to June 30,
1998 1997
------------- ----------------
FEE INCOME $ 130,321 $ 37,554
------------- ----------------
EXPENSES:
Selling, general and administrative 251,120 86,450
Depreciation and amortization 7,905 3,251
------------- ----------------
TOTAL OPERATING EXPENSES 259,025 89,701
------------- ----------------
Net (loss) before other items $ (128,704) $ (52,147)
OTHER INCOME (EXPENSE)
Interest expense (4,202) 0
------------- ----------------
NET (LOSS) BEFORE TAXES (132,906) (52,147)
PROVISIONS FOR INCOME TAXES 0 0
------------- ----------------
NET (LOSS) $ (132,906) $ (52,147)
============= ================
EARNINGS (LOSS) PER SHARE $ (0.09) $ (0.09)
============= ================
WEIGHTED AVERAGE SHARES OUTSTANDING 1,500,000 601,538
============= ================
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 20
NETWORK INVESTOR COMMUNICATION, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEAR ENDED JUNE 30, 1998 AND
FROM AUGUST 9, 1996 (INCEPTION) THROUGH JUNE 30, 1997
<TABLE>
<CAPTION>
Additional Retained
Capital Stock Paid-in Earnings
Shares Amount Capital (Deficit) Total
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
BALANCE, August 9, 1996 0 $ 0 $ 0 $ 0 $ 0
Common stock issued for cash 500,000 500 9,500 0 10,000
Common stock issued for cash 1,000,000 1,000 99,000 0 100,000
Direct costs of stock offering 0 0 (5,699) 0 (5,699)
Net loss for the year ended
June 30, 1997 0 0 0 (52,147) (52,147)
------------ ------------ ------------ ------------ ------------
BALANCE, June 30, 1997 1,500,000 1,500 102,801 (52,147) 52,154
Net loss for the year ended
June 30, 1998 0 0 0 (132,906) (132,906)
------------ ------------ ------------ ------------ ------------
BALANCE, June 30, 1998 1,500,000 $ 1,500 $ 102,801 $ (185,053) $ (80,752)
============ ============ ============= ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 21
NETWORK INVESTOR COMMUNICATION, INC.
STATEMENTS OF CASH FLOWS
For the From August 9,
Year ended 1996 (Inception)
June 30, to June 30,
1998 1997
------------- ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (132,906) $ (52,147)
Adjustment to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 7,905 3,251
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable (2,854) (11,719)
(Increase) decrease in deposits (2,205) (270)
(Increase) in customer lists 0 (1,340)
Increase in accounts payable and
accrued liabilities 30,766 934
------------- ----------------
Net cash used in operating activities (99,294) (61,291)
------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in organization costs 0 (6,150)
Purchase of property and equipment (12,632) (10,212)
------------- ----------------
Net cash used in investing activities (12,632) (16,362)
------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock,
net 0 104,301
Shareholder loan, net 95,462 (10,000)
------------- ----------------
Net cash provided by
Financing activities 95,462 94,301
------------- ----------------
NET INCREASE (DECREASE)IN CASH (16,464) 16,648
CASH AT BEGINNING OF PERIOD 16,648 0
------------- ----------------
CASH AT END OF PERIOD $ 184 $ 16,648
============= ================
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest expense $ 4,202 $ 0
============= ================
Income taxes $ 0 $ 0
============= ================
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> 22
NETWORK INVESTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - THE COMPANY
Network Investor Communications, Inc. (the Company) was founded on
August 9, 1996 and is engaged in the business of providing investor relation
services to public companies. The Company's office is located in Reno, Nevada.
The Company sells its services nationally and internationally.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Property and Equipment - Property and equipment are stated at cost, less
accumulated depreciation. Maintenance and repairs are expensed as incurred.
Depreciation is determined using the declining balance method under tax
regulations over the estimated useful lives of the assets which range from
five to thirty-one and a half years.
Intangible Assets - The costs incurred with the organization of the Company
have been capitalized and are being amortized over five years using the
straight-line method.
The costs incurred to acquired certain client lists for the Company have been
capitalized and are being amortized over fifteen years using the straight-line
method.
Earnings (Loss) Per Share - Earnings (loss) per share is based on the weighted
average of common shares outstanding during the year.
Concentrations of Credit Risk - The Company sells its services to public
companies in the U. S. and certain Foreign Countries. The Company extends
credit based on an evaluation of the customers' financial condition, generally
without requiring collateral. Exposure to losses on receivables is principally
dependent on each customers financial condition. Total revenue came from six
customers in 1998 and two customers in 1997.
Income Taxes - Income tax expense includes federal and state taxes currently
payable, if any, and deferred taxes, if any, arising from temporary
differences between income for financial reporting and income tax purposes. At
June 30, 1998, the corporation had a timing difference between income for
financial reporting and income tax purposes for bad debt expense. At June 30,
1997`, the corporation had no timing differences between income for financial
reporting and income tax purposes.
Development Stage Company - The Company was formed on August 9, 1996 and was
in the development stage through June 30, 1997. The fiscal year ended June 30,
1998 is the first year during which it is considered an operating company.
Statement of Cash Flows - The Company considers (if and when they have any)
all highly liquid investments with maturities of three months or less to be
cash equivalents. The Company had no non cash investing or financing
transactions during 1998 and 1997.
Use of Estimates - The preparations of 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 assets and 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.
<PAGE>
<PAGE> 23
NETWORK INVESTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Allowance for doubtful accounts - Accounts for which no payments have been
received for six (6) consecutive months are considered delinquent and
customary collection efforts are initiated. Accounts for which no payments
have been received for twelve (120 months are written off. Collection on
accounts previously written off are included in income as received. The
allowance at June 30, 1998 is $46,915. This consists of three (3) major
accounts receivable which were deemed best to be reserved for because of
delinquency in payment per the terms of the contracts. Billings are based on
the contract with the clients and on the amounts reserved for, the client's
payment had not been received per the terms of the contract and work was
terminated. Collection activities were initiated against the clients, however,
recovery could not be determined as of June 30, 1998 and a reserve account was
set up against the appropriate receivables.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
June 30, June 30,
1998 1997
------------ ------------
Office equipment and furniture $ 5,492 $ -
Computer equipment 15,490 10,212
Leasehold improvements 1,862 -
------------ ------------
22,844 10,212
Less - accumulated depreciation (8,628) (2,042)
------------ ------------
$ 14,216 $ 8,170
============ ============
NOTE 4 - STOCKHOLDERS' EQUITY
On August 9, 1996, the Board of Directors authorized a stock issuance totaling
500,000 shares of common stock to an officer of the Company for a cash
consideration of $10,000.
During 1997, the Company sold 1,000,000 shares of its common stock at $.10 per
share for gross proceeds totaling $100,000. The related deferred offering
costs in the amount of $5,699 were offset against the gross proceeds from the
offering. Form "D" was filed with the Securities and Exchange Commission to
report the sale of the securities.
NOTE 5 - GOING CONCERN
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of
the Company as a going concern. However the Company has sustained substantial
operating losses since its inception. In addition, the Company has used
substantial amounts of working capital in its operations. Further, at June 30,
1998, current liabilities exceed current assets by $102,405 and total
liabilities exceed total assets by $80,752.
In view of these matters, realization of a major portion of the assets in the
accompanying balance sheets are dependent upon continued operations of the
Company, which in turn is dependent upon the Company's ability to meet its
financing requirements, and the success of its future operations. Management
believes their plans will provide the corporation with the ability to continue
in existence. Management plans to continue to sell stock of the Company and
borrow funds as needed to meet operating requirements. Management believes
that as it expands its product sales, it will be able to meet cash needs.
<PAGE> 24
NETWORK INVESTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - INCOME TAXES
Income tax expense (benefit) consists of the following components:
1998 1997
------------ ------------
Current $ - $ -
Deferred tax benefit (7,037) -
Valuation allowance 7,037 -
------------ ------------
$ $
============ ============
For tax return purposes the Company has estimated net operating loss
carryforwards (NOL) of $136,457 and $51,583 at June 30, 1998 and 1997,
respectively. $84,874 of the NOL expires in the year 2018 and $51,583 of the
NOL expires in 2017. A valuation allowance of $36,468 and $7,896 for the years
1998 and 1997 respectively, have been established for those credits which are
not expected to be realized. The change in the NOL allowance in 1998 was
$28,572.
NOTE 7 - OPERATING LEASES
The Company leases office space in Reno, Nevada under a operating lease which
expires in July 2000. The monthly lease payment is $1,747. The Company has an
option to extend the lease for two years. The option must be exercised 30 days
before the lease ends. The new payment under the extension option is $1,922.
Minimum future rental payments under the lease until expiration is as follows:
Year Ended Amount
------------ ----------
1999 $ 20,964
2000 20,964
2001 1,747
Rental expense under facility operating leases was $19,217 for 1998.
As of June 30, 1998, the Company had certain office equipment under
operating leases with remaining periods from two to three years. At June 30,
1998, the scheduled future minimum cash rental payments under noncancelable
operating leases with initial terms of more than one year are as follows:
Year Ended Amount
------------ ----------
1999 $ 4,692
2000 4,692
2001 1,406
Lease payments expensed under the equipment operating leases was $3,286
for 1998.
<PAGE>
<PAGE> 25
NETWORK INVESTOR COMMUNICATIONS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - RELATED PARTY TRANSACTION
The President of the Company has made certain loans to the Company during the
year. The cash loans are accruing interest at an annual rate of ten percent
per annum. Additionally, the officer has allowed the Company to obtain credit
and advances against certain credit cards under his personal name. The Company
makes all payments against these credit cards and pays the related finance
charges made by the credit card companies.
The balances of the above listed items are as follows:
Cash advances $ 52,750
Credit card advances 32,712
---------
Total $ 85,462
=========
During fiscal year ended June 30, 1997, the Company owed the same officer
$10,000. The loans are unsecured.
<PAGE>
<PAGE> 26
NETWORK INVESTOR COMMUNICATIONS, INC.
DECEMBER 31, 1998
QUARTERLY FINANCIAL STATEMENTS (UNAUDITED)
<PAGE>
<PAGE> 27
NETWORK INVESTOR COMMUNICATION, INC.
BALANCE SHEET
DECEMBER 31, 1998 AND JUNE 30, 1998
ASSETS
December 31, June 30,
1998 1998
(Unaudited)
----------- -----------
CURRENT ASSETS:
Cash $ 5,453 $ 184
Accounts receivable, net of allowance for
doubtful accounts of $46,915 at December 31,
1998 and June 30, 1998 12,162 14,573
----------- -----------
Total Current Assets 17,615 14,757
----------- -----------
PROPERTY AND EQUIPMENT, NET 12,308 14,216
----------- -----------
OTHER ASSETS
Deposits 2,475 2,475
Organization costs, net of amortization of
$2,975 and $2,357 3,175 3,793
Customer lists, net of amortization of
$213 and $171 1,127 1,169
----------- -----------
Total Other Assets 6,777 7,437
----------- -----------
TOTAL ASSETS $ 36,700 $ 36,410
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 8,000 $ 7,831
Shareholder loan 115,705 85,462
Payroll and other accrued liabilities 62,078 23,869
----------- -----------
Total Current Liabilities $ 185,783 $ 117,162
=========== ===========
STOCKHOLDERS' EQUITY/(DEFICIT):
Capital stock, $.001 par value; 50,000,000 shares
authorized; 1,500,000 shares issued and
outstanding 1,500 1,500
Additional paid-in capital 102,801 102,801
Retained earnings (deficit) (253,384) (185,053)
----------- -----------
Total Stockholders' Equity (Deficit) (149,083) (80,752)
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 36,700 $ 36,410
=========== ===========
<PAGE>
<PAGE> 28
NETWORK INVESTOR COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the For the For the For the
Six Months Six Months Three Months Three Months
Ended Ended Ended Ended
December 31, 1998 December 31, December 31,1998 December 31,
(Unaudited) 1997 (Unaudited) 1997
------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
SALES $ 45,423 $ 48,906 $ 24,113 $ 29,772
------------- ---------------- ------------- ----------------
EXPENSES:
General and administrative 104,222 124,062 33,703 39,711
Depreciation and amortization 2,568 3,953 1,284 1,977
------------- ---------------- ------------- ----------------
TOTAL OPERATING EXPENSES 106,790 128,015 34,987 41,688
------------- ---------------- ------------- ----------------
Net (loss) before other items (61,367) (79,109) (10,874) (11,916)
OTHER INCOME (EXPENSE)
Interest expense (6,964) (497) (5,564) (497)
------------- ---------------- ------------- ----------------
NET (LOSS) BEFORE TAXES (68,331) (79,606) (16,438) (12,413)
PROVISIONS FOR INCOME TAXES - - - -
------------- ---------------- ------------- ----------------
NET (LOSS) $ (68,331) $ (79,606) $ (16,438) $ (12,413)
------------- ---------------- ------------- ----------------
EARNINGS (LOSS) PER SHARE $ (0.05) $ (0.05) $ (0.01) $ -
============= ================ ============= ================
WEIGHTED AVERAGE SHARES OUTSTANDING 1,500,000 1,500,000 1,500,000 1,500,000
============= ================ ============= ================
</TABLE>
<PAGE>
<PAGE> 29
NETWORK INVESTOR COMMUNICATION, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT)
FOR THE SIX ENDED DECEMBER 31, 1998 AND
AUGUST 9, 1996 (INCEPTION) THROUGH JUNE 30, 1998
<TABLE>
<CAPTION>
Capital Stock Earnings
Shares Amount Deficit Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, August 9, 1996 - $ - $ - $ -
Common stock issued for cash 500,000 10,000 - 10,000
Common stock issued for cash 1,000,000 100,000 - 100,000
Direct costs of stock offering - (5,699) - (5,699)
Net loss for the year ended
June 30, 1997 - - (52,147) (52,147)
------------ ------------ ------------ ------------
BALANCE, June 30, 1997 1,500,000 104,301 (52,147) 52,154
Net loss for the year ended
June 30, 1998 - - (132,906) (132,906)
------------ ------------ ------------ ------------
BALANCE, June 30, 1998 1,500,000 104,301 (185,053) (80,752)
Net loss for the six months ended
December 31, 1998 (Unaudited) - - (68,331) (68,331)
------------ ------------ ------------ ------------
BALANCE, December 31, 1998 (Unaudited) 1,500,000 $ 104,301 $ (253,384) $ (149,083)
============ ============ ============ ============
</TABLE>
<PAGE>
<PAGE> 30
NETWORK INVESTOR COMMUNICATION, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six For the Six For the From August 9,
Months Ended Months Ended Year ended 1996 (Inception)
December 31, December 31, June 30, to June 30,
1998(unaudited) 1997 1998 1997
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (68,331) $ (79,606) $ (132,906) $ (52,147)
Adjustment to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 2,568 3,953 7,905 3,251
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable 2,411 (29,068) (2,854) (11,719)
(Increase) decrease in deposits - (458) (2,205) (270)
(Increase) in customer lists - - - (1,340)
Increase in accounts payable and
accrued liabilities 38,378 13,863 30,766 934
--------------- --------------- --------------- --------------
Net cash used in operating activities (24,974) (91,316) (99,294) (61,291)
--------------- --------------- --------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in organization costs - - - (6,150)
Purchase of property and equipment - (12,632) (12,632) (10,212)
--------------- --------------- --------------- --------------
Net cash used in investing activities - (12,632) (12,632) (16,362)
--------------- --------------- --------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock,
net - - - 104,301
Shareholder loan, net 30,243 86,500 95,462 (10,000)
--------------- --------------- --------------- --------------
Net cash provided by
Financing activities 30,243 86,500 95,462 94,301
--------------- --------------- --------------- --------------
NET INCREASE (DECREASE)IN CASH 5,269 (17,448) (16,464) 16,648
CASH AT BEGINNING OF PERIOD 184 16,648 16,648 -
--------------- --------------- --------------- --------------
CASH AT END OF PERIOD $ 5,453 $ (800) $ 184 $ 16,648
=============== =============== =============== ==============
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest expense $ 6,964 $ 497 $ 4,202 $ -
=============== =============== =============== ==============
</TABLE>
<PAGE>
<PAGE> 31
NETWORK INVESTOR COMMUNICATION, INC.
MARCH 31, 1999
QUARTERLY FINANCIAL STATEMENTS (UNAUDITED)
<PAGE>
<PAGE> 32
NETWORK INVESTOR COMMUNICATION, INC.
BALANCE SHEET
MARCH 31, 1999 AND JUNE 30, 1998
(Unaudited)
ASSETS
March 31, June 30,
1998 1998
----------- -----------
CURRENT ASSETS:
Cash $ 2,461 $ 184
Accounts receivable, net of allowance for
doubtful accounts of $46,915 at March 31,
1999 and June 30, 1998 12,162 14,573
----------- -----------
Total Current Assets 14,623 14,757
----------- -----------
PROPERTY AND EQUIPMENT, NET 11,339 14,216
----------- -----------
OTHER ASSETS
Deposits 2,475 2,475
Organization costs, net of amortization of
$3,284 and $2,357 2,866 3,793
Customer lists, net of amortization of
$234 and $171 1,106 1,169
----------- -----------
Total Other Assets 6,447 7,437
----------- -----------
TOTAL ASSETS $ 32,409 $ 36,410
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 8,996 $ 7,831
Shareholder loan 128,912 85,462
Payroll and other accrued liabilities 70,751 23,869
----------- -----------
Total Current Liabilities $ 208,659 $ 117,162
=========== ===========
STOCKHOLDERS' EQUITY/(DEFICIT):
Capital stock, $.001 par value; 50,000,000 shares
authorized; 1,500,000 shares issued and
outstanding 1,500 1,500
Additional paid-in capital 102,801 102,801
Retained earnings (deficit) (280,551) (185,053)
----------- -----------
Total Stockholders' Equity (Deficit) (176,250) (80,752)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 32,409 $ 36,410
=========== ===========
<PAGE>
<PAGE> 33
NETWORK INVESTOR COMMUNICATIONS, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the For the For the For the
Nine Months Nine Months Three Months Three Months
Ended Ended Ended Ended
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
SALES $ 69,043 $ 89,062 $ 23,620 $ 40,156
------------- ---------------- ------------- ----------------
EXPENSES:
General and administrative 149,581 191,635 45,359 67,573
Depreciation and amortization 3,866 5,266 1,298 1,313
------------- ---------------- ------------- ----------------
TOTAL OPERATING EXPENSES 153,447 196,901 46,657 68,886
------------- ---------------- ------------- ----------------
Net (loss) before other items (84,404) (107,839) (23,037) (28,730)
OTHER INCOME (EXPENSE)
Interest expense (11,094) (1,835) (4,130) (1,338)
------------- ---------------- ------------- ----------------
NET (LOSS) BEFORE TAXES (95,498) (109,674) (27,167) (30,068)
PROVISIONS FOR INCOME TAXES - - - -
------------- ---------------- ------------- ----------------
NET (LOSS) $ (95,498) $ (109,674) $ (27,167) $ (30,068)
============= ================ ============= ================
EARNINGS (LOSS) PER SHARE $ (0.06) $ (0.07) $ (0.02) $ (0.02)
============= ================ ============= ================
WEIGHTED AVERAGE SHARES OUTSTANDING 1,500,000 1,500,000 1,500,000 1,500,000
============= ================ ============= ================
</TABLE>
<PAGE>
<PAGE> 34
NETWORK INVESTOR COMMUNICATION, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT)
FOR THE NINE MONTHS ENDED MARCH 31, 1999 AND
AUGUST 9, 1996 (INCEPTION) THROUGH JUNE 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
Capital Stock Earnings
Shares Amount Deficit Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
BALANCE, August 9, 1996 - $ - $ - $ -
Common stock issued for cash 500,000 10,000 - 10,000
Common stock issued for cash 1,000,000 100,000 - 100,000
Direct costs of stock offering - (5,699) - (5,699)
Net loss for the year ended
June 30, 1997 - - (52,147) (52,147)
------------ ------------ ------------ ------------
BALANCE, June 30, 1997 1,500,000 104,301 (52,147) 52,154
Net loss for the year ended
June 30, 1998 - - (132,906) (132,906)
------------ ------------ ------------ ------------
BALANCE, June 30, 1998 1,500,000 104,301 (185,053) (80,752)
Net loss for the nine months ended
March 31, 1999 - - (95,498) (95,498)
------------ ------------ ------------ ------------
BALANCE, March 31, 1999 1,500,000 $ 104,301 $ (280,551) $ (176,250)
============ ============ ============ ============
</TABLE>
<PAGE>
<PAGE> 35
NETWORK INVESTOR COMMUNICATION, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine For the Nine For the For the
Months Ended Months Ended Three Months Three Months
March 31, March 31, March 31, March 31,
1999 1998 1999 1998
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (95,498) $ (109,674) $ (27,167) $ (30,068)
Adjustment to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 3,866 5,266 1,298 1,313
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable 2,411 (2,541) - 26,527
(Increase) decrease in deposits - (2,205) - (1,747)
(Increase) in customer lists - - - -
Increase in accounts payable and
accrued liabilities 48,048 25,880 9,670 12,017
--------------- --------------- --------------- --------------
Net cash used in operating activities (41,173) (83,274) (16,199) 8,042
--------------- --------------- --------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in organization costs - - - -
Purchase of property and equipment - (12,632) - -
--------------- --------------- --------------- --------------
Net cash used in investing activities - (12,632) - -
--------------- --------------- --------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock,
net - - - -
Shareholder loan, net 43,450 76,700 13,207 (9,800)
--------------- --------------- --------------- --------------
Net cash provided by
Financing activities 43,450 76,700 13,207 (9,800)
--------------- --------------- --------------- --------------
Net increase (decrease)in cash 2,277 (19,206) (2,992) (1,758)
CASH AT BEGINNING OF PERIOD 184 16,648 5,453 (800)
--------------- --------------- --------------- --------------
CASH AT END OF PERIOD $ 2,461 $ (2,558) $ 2,461 $ (2,558)
=============== =============== =============== ==============
SUPPLEMENTARY CASH FLOW INFORMATION:
Interest expense $ 11,094 $ 1,835 $ 4,130 $ 1,338
=============== =============== =============== ==============
</TABLE>
<PAGE>
<PAGE> 36
PART III
--------
ITEM 1. INDEX TO EXHIBITS
- -------------------------
Copies of the following documents are included as exhibits to this Form
10-SB pursuant to item 601 of regulation S-B.
SEC
Exhibit Reference
No. No. Title of Document
- ------- --------- -----------------
1 3 Articles of Incorporation of the Company and related
Amendments
2 3 Bylaws of the Company
3 4 Specimen Stock Certificate
4 4 Article IV of the Articles of Incorporation (See Exhibit
No. 3)
5 10 Consulting Agreement with Pacific Magtron International,
Inc.
6 27 Financial Data Schedule
<PAGE>
<PAGE> 37
SIGNATURES
------------
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunder duly authorized.
NETWORK INVESTOR COMMUNICATIONS
By:/S/Robert Deller, President
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by
the undersigned in the capacities and on the dates stated.
Signature Title Date
- --------- ----- ----
/S/Robert Deller President, Director May 28, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001034777
<NAME> NETWORK INVESTOR COMMUNICATIONS, INC.
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 9-MOS 6-MOS YEAR YEAR
<FISCAL-YEAR-END> JUN-30-1999 JUN-30-1999 JUN-30-1998 JUN-30-1997
<PERIOD-END> MAR-31-1999 DEC-31-1998 JUN-30-1998 JUN-30-1997
<CASH> 2,461 5,453 184 16,648
<SECURITIES> 0 0 0 0
<RECEIVABLES> 12,162 12,162 14,573 11,719
<ALLOWANCES> 0 0 0 0
<INVENTORY> 0 0 0 0
<CURRENT-ASSETS> 14,623 17,615 14,757 28,367
<PP&E> 11,339 12,208 14,216 8,170
<DEPRECIATION> 0 0 0 0
<TOTAL-ASSETS> 32,409 36,700 36,410 53,088
<CURRENT-LIABILITIES> 208,659 185,783 117,162 934
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 104,301 104,301 104,301 104,301
<OTHER-SE> (280,551) (253,384) (185,053) (52,147)
<TOTAL-LIABILITY-AND-EQUITY> 32,409 36,700 36,410 53,088
<SALES> 69,043 45,423 130,321 37,554
<TOTAL-REVENUES> 69,043 45,423 130,321 37,554
<CGS> 0 0 0 0
<TOTAL-COSTS> 153,447 106,790 259,025 89,701
<OTHER-EXPENSES> 0 0 0 0
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 11,094 6,964 4,202 0
<INCOME-PRETAX> (95,498) (68,331) (132,906) (52,147)
<INCOME-TAX> 0 0 0 0
<INCOME-CONTINUING> 0 0 0 0
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> (95,498) (68,331) (132,906) (52,147)
<EPS-BASIC> (0.06) (0.05) (0.09) (0.09)
<EPS-DILUTED> (0.06) (0.05) (0.09) (0.09)
</TABLE>
