UNITED STATES
SECURlTIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
(Mark One)
(X) ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1999
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (No Fee Required)
For the Transition period from______ to_______
Commission file number 0-25463
NETWORK INVESTOR COMMUNICATIONS INC.
----------------------------------------------------------
(Name of small business issuer in its charter)
Nevada 88-0367792
----------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
9645 Gateway Drive, Suite B, Reno, Nevada 89511
------------------------------------------------------------------
(Address of Principal Executive Offices) Zip Code
Issuer's telephone number: (888) 372-1777
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on
which registered
None None
------------------ ------------------
Securities registered under Section 12(g) of the Exchange Act:
None
---------
(Title of class)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes (x) No ( )
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure will be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. ( )
State issuer's revenues for its most recent fiscal year: $90,044.
The aggregate market value of the voting stock held by non-affiliates, computed
by reference to the average of the bid and asked prices for such stock as of
June 30, 1999 was undeterminable.
As of June 30, 1999, there were issued and outstanding 1,500,000 shares of the
Registrant's Common Stock.
Page 2
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NETWORK INVESTOR COMMUNICATIONS INC.
1999 FORM 10-KSB ANNUAL REPORT
TABLE OF CONTENTS
PART I
PAGE
Item 1. Description of Business 4
Item 2. Description of Property 7
Item 3. Legal Proceedings 7
Item 4. Submission of Matters to a Vote of Security Holders 7
PART II
Item 5. Market for Common Equity and Related Stockholder
Matters 7
Item 6. Management's Discussion and Analysis or Plan of
Operation 7
Item 7. Forward-Looking Statements 10
Item 8. Financial Statements 10
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 10
PART III
Item 10. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act 10
Item 11. Executive Compensation 11
Item 12. Security Ownership of Certain Beneficial Owners
and Management 13
Item 13 Certain Relationships and Related Transactions 14
Item 14. Financial Statements, Exhibits and Reports on Form 8K 14
Page 3
<PAGE>
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, who 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 relations 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, updated, informative information of its
clientele. The Company does not, however, provide any investment advice on
its clients to anyone.
By offering investor and public relations services, the Company alleviates the
need for its clients to have a full time investor relations 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 and micro-cap public
corporations, which do not have the personnel or funds to establish investor
and public relations departments. These corporations are readily
identifiable and due 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" stock, which have trouble
getting recognized by investors and responding to investor inquiries. The
Company assists 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.
Page 4
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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 to attract customers.
Operations
Since inception, several corporations have hired the Company 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 in handling investor and public relations.
The Company's investor and public relations 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 and other members of the
investment community.
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 work 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.
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 two employees including its president,
Robert Deller, who has been funding the Company. Mr. Deller is currently
evaluating the probability of future success of the Company given 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
relations business, the Company will endeavor to seek other opportunities to
help provide and preserve 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.
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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, 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 relations 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 in comparison to most of the
large 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 relations
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 relations' 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.
Additionally, any publications produced by financial relations firms, which
recommend certain corporations and their stock, must state that the
corporation they are recommending pays the recommending firm.
The Securities and Exchange Commission has created rules, which limit the
ability of financial relations firms to accept stock in companies, which
they represent. These rules have not affected the Company's business at it
does not rely to any great extent on the revenues from the sale of stock in
corporations it represents. The Company relies on the cash payments from its
clients.
Page 6
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Item 2. 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 3. Legal Proceedings
The Company is not, and has not been, involved in any legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
None
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company's Common Stock is currently not quoted or listed for trading with
any exchange or market and, as such, there is not reliable information on the
price of the Company's stock.
(a) The number of record holders of the Common Shares on June 30, 1999 was
approximately 55.
Item 6. 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 in 1997
raising $100,000. These funds have helped the Company stay in business
and attract additional clients. The Company currently receives monthly
revenue from its clients 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.
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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 relations
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 costs
incurred in representing its clients for such items as printing and travel.
Presently, the Company's expenses exceed its revenues. 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 in serious question, and
the Company may be forced to examine other potential business opportunities
to generate revenue or cease operations. Prior to ceasing operations, the
Company would examine potential other business opportunities. 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.
Liquidity and Capital Resources
At June 30, 1999, the Company had current assets of $9,458 with current
liabilities of $219,194 resulting in a working capital deficit of $209,736.
The majority of the current liabilities, $129,592, are loans from the
Company's president Robert Deller. Excluding the related party loan from
Mr. Deller, the Company has $89,602 in expenses that are due or will shortly
come due. Additionally, $51,302 of the funds loaned by Mr. Deller to the
Company is from Mr. Deller's personal credit cards, which the Company has
been paying on a monthly basis.
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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, 1999, Mr. Deller's has loaned the Company an
additional $7,600. If the Company's revenues do not improve, the Company
may have to look at either ceasing operations or potentially 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, accounts payables, payroll and other accrued liabilities
have increased from $31,700 to $89,602. 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.
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
$289,684. 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 $88,680 in expenses through June 30, 1997, to
$255,946 in expenses for the fiscal year ended June 30, 1998 and $183,031 in
1999. The majority of these new expenses related to employee costs,
advertisement and travel cost and to increased office overhead. Expenses
decreased in 1999 as the Company reduced staff and traveling expenses to
save money.
For the year ended June 30, 1999, revenues decreased to $90,044, as the Company
was not able to attract new clientele. The decrease in revenues resulted in a
net loss of $108,731. 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.
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 hard drives in case of a
computer problem.
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Item 7. Forward-Looking Statements
The statements in this Form 10-KSB that are not historical facts or statements
of current status are forward-looking statements (as defined in the Private
Securities Litigation Reform Act of 1995) that involve risks and
uncertainties. Actual results may differ materially.
Item 8. Financial Statements
The response to this Item in submitted under Item 13.
Item 9. Changes in and Disagreements with Accountants
No change was made in the Company's auditors from the prior year.
To the Company's and its management's knowledge, there is no accounting or
financial disclosure dispute involving any present or former accountant.
PART III
Item 10. Directors, Executives Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The names of the Company's sole executive officer and director and the
positions held by him are set forth below:
Age as of
Name June 30, 1999 Position Position Held Since
Robert R. Deller 43 President, Secretary, August 9, 1996
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 43, is 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 has also been an
officer and director of USA Gold Mines, Inc. since 1991. Mr. Deller
attended the University of Alabama where he obtained a B.A. degree in 1979.
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Item 11. 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 $100,000 during such period (as determined at June 30, 1999,
the end of the Company's last completed fiscal year):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ --------
Other Restricted
Name and Annual Stock Options LTIP
All other
Principal Position Salary Bonus($) Compensation Awards /SARs Payout
Compensation Year
- ---------------- ---- ------ -------- ------------ ------ ------- ------
<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-
_________________
(1) Mr. Deller's base salary is $54,000 per year. In 1997 and 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 1997 and 1998.
</TABLE>
Options/SAR Grants in Last Fiscal Year
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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.
Termination of Employment and Change of Control Arrangement
There are presently nor are there anticipated any agreements regarding change
of control of the Company.
Officer and Director Remuneration
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Item 12. 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 August 31, 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
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%
Common Kahalil P. Thomas
8200 Horseshoe 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%
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Item 13. Certain Relationships and Related Transactions
Robert Deller, the Company's president, has loaned the Company approximately
$129,592. These loans consist of $78,290, which is at an interest rate of
ten percent per annum and is due and payable on demand. Additionally, Mr.
Deller has allowed the Company to borrow and receive cash advances on his
personal credit cards totaling $51,302. The Corporation has been making
all payments on the funds borrowed on the credit cards.
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.
Item 14. Financial Statements, Exhibits and Reports on Form 8-K.
I. List of Financial Statements and Exhibits
1. List of Financial Statements:
(a) Consolidated Balance Sheets as of December 31, 1998 and
1997.
(b) Consolidated Statements of Operations for the Years ended
December 31, 1998 and 1997.
(c) Consolidated Statements of Stockholders' Equity
(Deficit) for the Years ended December 31, 1998 and 1997.
(d) Consolidated Statements of Cash Flows for the Years ended
December 31, l998 and 1997.
(e) Notes to Consolidated Financial Statements.
II. Reports on Form 8-K.
None
Page 14
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Financial Statements and Supplementary Data:
CONTENTS
PAGE
_ Independent Auditor's Report 16
_ Balance Sheets, June 30, 1999 and 1998 17
_ Statements of Operations for the years
ended June 30, 1999 and 1998, and
from August 9, 1996 (inception) to June 30, 1999 18
_ Statements of Stockholders' Equity,
from inception on August 9, 1996, through
June 30, 1999 19
_ Statements of Cash Flows for the years
ended June 30, 1999 and 1998, and
from inception on August 9, 1996, through
June 30, 1999 20
_ Notes to Financial Statements 21
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David T. Thomson P.C.
Certified Public Accountant
INDEPENDENT AUDITOR'S 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, 1999 and 1998 and the related statements of operations, stockholders'
equity and cash flows for the years ended June 30, 1999 and 1998 and for 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, 1999 and 1998, and the results of its operations and its
cash flows for the years ended June 30, 1999 and 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 which raises substantial doubt about
its 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 that might result from the outcome of this uncertainty.
/S/David T. Thomson
Salt Lake City, Utah
September 1, 1999
Page 16
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<TABLE>
NETWORK INVESTOR COMMUNICATIONS INC.
BALANCE SHEETS
JUNE 30, 1999 AND 1998
ASSETS
<CAPTION>
June 30, June 30,
1999 1998
--------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,470 $ 184
Accounts receivable, net of
allowance for doubtful
accounts of $-0- and $46,915
at June 30, 1999 and 1998 961 14,573
Employee advances 902 -
Marketable securities - available-for-sale 6,125 -
-------- --------
Total Current Assets 9,458 14,757
-------- --------
PROPERTY AND EQUIPMENT, NET 13,770 18,316
-------- --------
OTHER ASSETS
Deposits 2,475 2,475
Organization costs, net of amortization
of $3,587 and $2,357 2,563 3,793
Customer lists, net of amortization
of $261 and $171 1,079 1,169
-------- --------
Total Other Assets 6,117 7,437
-------- --------
TOTAL ASSETS $ 29,345 $ 40,510
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 7,971 $ 7,831
Shareholder loan 129,592 85,462
Payroll and other accrued liabilities 81,631 23,869
-------- --------
Total Current Liabilities 219,194 117,162
-------- --------
STOCKHOLDERS' EQUITY (DEFICIT):
Common stock, $.001 par value; 50,000,000
shares authorized; 1,500,000
shares issued at 1999 and 1998 1,500 1,500
Additional paid-in capital 102,801 102,801
Retained earnings (deficit) (289,684) (180,953)
Accumulated other comprehensive income (loss) (4,466) -
-------- --------
Total Stockholders' Equity (Deficit) (189,849) (76,652)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 29,345 $ 40,510
======== ========
</TABLE>
Page 17
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NETWORK INVESTOR COMMUNICATIONS INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION> For the For the For the
Year Ended Year Ended Period Ended
June 30, June 30, June 30,
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
SALES $ 90,044 $ 130,321 $ 37,554
----------- ----------- -----------
EXPENSES:
General and administrative 177,166 251,120 86,450
Depreciation and amortization 5,865 4,826 2,230
----------- ----------- -----------
TOTAL OPERATING EXPENSES 183,031 255,946 88,680
----------- ----------- -----------
Net (loss) before other items (92,987) (125,625) (51,126)
----------- ----------- -----------
OTHER INCOME (EXPENSE)
Interest expense (15,744) (4,202) -
----------- ----------- -----------
TOTAL OTHER INCOME(EXPENSE) (15,744) (4,202) -
----------- ----------- -----------
NET (LOSS) BEFORE TAXES (108,731) (129,827) (51,126)
PROVISIONS FOR INCOME TAXES - - -
----------- ----------- -----------
NET (LOSS) $ (108,731) $ (129,827) $ (51,126)
============ =========== ===========
EARNINGS (LOSS) PER SHARE
Income (loss) from continuing
operations $ (0.07) $ (0.09) $ (0.09)
============ =========== ===========
Net income $ (0.07) $ (0.09) $ (0.09)
============ =========== ===========
EARNINGS (LOSS) PER SHARE-ASSUMING
DILUTION
Income (loss) from continuing
operations $ (0.07) $ (0.09) $ (0.09)
============ =========== ===========
Net income $ (0.07) $ (0.09) $ (0.09)
============ =========== ===========
WEIGHTED AVERAGE
SHARES OUTSTANDING 1,500,000 1,500,000 601,538
============ =========== ===========
</TABLE>
Page 18
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED JUNE 30, 1999 AND 1998
AND FROM AUGUST 9, 1996 (INCEPTION) THROUGH JUNE 30, 1997
<TABLE>
<CAPTION>
Accumulated
Other
Additional Retained Comprehensive
Capital Stock Paid-in Earnings Income
-----------------------
Shares Amount Capital (Deficit) (Loss) Total
---------- --------- ---------- ----------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, August 9, 1996 - $ - $ - $ - $ - $ -
Common stock issued
for cash 500,000 500 9,500 - - 10,000
Common stock issued
for cash 1,000,000 1,000 99,000 - - 100,000
Direct costs of stock
offering - - (5,699) - - (5,699)
Comprehensive income:
Net loss for the
period ended
June 30, 1997 - - - (51,126) - (51,126)
Other comprehensive
income (loss) - - - - - -
Comprehensive income - - - - - (51,126)
---------- ---------- ---------- ----------- ---------- ---------
BALANCE,
June 30, 1997 1,500,000 1,500 102,801 (51,126) - 53,175
Comprehensive income:
Net loss for the year
ended June 30, 1998 - - - (129,827) - (129,827)
Other comprehensive
income (loss) - - - - - -
Comprehensive income - - - - - (129,827)
---------- ---------- ---------- ----------- ---------- ---------
BALANCE,
June 30, 1998 1,500,000 1,500 102,801 (180,953) - (76,652)
Comprehensive income:
Net loss for the year
ended June 30, 1999 - - - (108,731) - (108,731)
Net unrealized loss on
marketable securities - - - - (4,466) (4,466)
Comprehensive income - - - - - (113,197)
---------- ---------- ---------- ----------- ----------- ----------
BALANCE,
June 30, 1999 1,500,000 $ 1,500 $ 102,801 $ (289,684) $ (4,466) $ (189,849)
========== ========== ========== =========== ============ ==========
</TABLE>
Page 19
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the For the For the
Year Ended Year Ended Period Ended
June 30, June 30, June 30,
1999 1998 1997
----------- ----------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (108,731) $ (129,827) $ (51,126)
Adjustments to reconcile net
loss to net cash used
in operating activities:
Depreciation and amortization 5,865 4,826 2,230
Changes in assets and liabilities:
(Increase) decrease in accounts
receivable 13,612 (2,854) (11,719)
(Increase) in employee advances (902)
(Increase) in marketable
securities - trading (10,591) - -
(Increase) decrease in deposits - (2,205) (270)
(Increase) in customer lists - - (1,340)
Increase in accounts payable and
accrued liabilities 57,903 30,766 934
----------- ----------- ----------
Net cash used in operating
activities (42,844) (99,294) (61,291)
----------- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in organization costs - - (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 - - 104,301
Shareholder loan-net 44,130 95,462 (10,000)
----------- ----------- ----------
Net cash provided by financing
activities 44,130 95,462 94,301
----------- ----------- ----------
Net Increase (decrease) in Cash 1,286 (16,464) 16,648
CASH AT BEGINNING PERIOD 184 16,648 -
----------- ----------- ----------
CASH AT END OF PERIOD $ 1,470 $ 184 $ 16,648
=========== =========== ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest expense $ 15,744 $ 4,202 $ -
=========== =========== ==========
Income taxes $ - $ - $ -
=========== =========== ==========
</TABLE>
Page 20
<PAGE>
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
A summary of significant accounting policies applied in the accompanying
financial statement follows:
*Accounting Method - The Company's financial statements are prepared using the
accrual method of accounting.
*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 straight-line method over the estimated
useful lives of the assets which range from five to seven 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 - In February 1997, the Financial Accounting
StandardsBoard issued SFAS No. 128, "Earnings per Share." SFAS No. 128
simplifies thestandards for computing earnings per share ("EPS") and was
effective forfinancial statements issued for periods ending after December
15, 1997,with earlier application not permitted. Upon adoption, all prior
EPS data was restated.
Basic EPS is determined using net income divided by the weighted average shares
outstanding during the period. Diluted EPS is computed by dividing net income
by the weighted average shares outstanding, assuming all dilutive potential
common shares were issued.
Since the Company has no common shares that are potentially issuable, such as
stock options, convertible preferred stock and warrants, basic and diluted
earnings per share are the same.
*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 customer's financial condition. Total
revenue came from four customers in 1999 and six customers in 1998.
Page 21
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
*Income Taxes - Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently due plus
deferred income taxes related primarily to the difference between the Company
reporting depreciation, bad debt expenses and marketable securities gains and
loses for income tax purposes as compared to financial statement purposes.
Deferred income taxes or benefit represent the future income tax consequences
of those timing differences, which will either be taxable or deductible when
the assets and liabilities are recovered or settled.
*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 noncash investing or financing for the
periods covered by the financial statements.
*Use of Estimates - The preparation 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.
*Comprehensive Income - The Company adopted Statement of Financial Accounting
Standard No. 130, "Comprehensive Income"("SFAS No. 130"), which is effective
for annual periods ending after December 15, 1997. As provided by SFAS No.
130, reclassification adjustments to prior year amounts are reported in a
separate statement of comprehensive income along with current year components
of comprehensive income.
*Marketable Securities - Marketable securities consist of common stock.
Marketable securities are stated at market value as determined by the most
recently traded price of each security at the balance sheet date. All
marketable securities are defined as trading securities or available-for-sale
securities under the provisions of SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities."
Management determines the appropriate classification of its investments in
marketable securities at the time of purchase and reevaluates such
determination at each balance sheet date. Securities that are brought and
held principally for the purpose of selling them in the near term are classified
as trading securities and unrealized holding gains and losses are included in
earnings. Debt securities for which the Company does not have the intent or
ability to hold to maturity and equity securities are classified as
available-for-sale. Available-for-sale securities are carried at fair
value, with the unrealized gains and losses, net of tax, reported as a
separate component of stockholders' equity in accumulated other comprehensive
income. The Company at this time has no trading securities.
Page 22
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
June 30, June 30,
1999 1998
----------- ------------
Office equipment and furniture $ 5,492 $ 5,492
Computer equipment 15,490 15,490
Leasehold improvements 1,862 1,862
----------- ------------
22,844 22,844
Less accumulated depreciation 9,074 4,528
----------- ------------
$ 13,770 $ 18,316
=========== ============
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.
The Company has adopted SFAS 130 which requires presentation of comprehensive
income (net income plus all other changes in net assets from non-owner
sources) and its components in the financial statements. The Company has
changed the format of its statements of stockholders' equity (deficit) to
present comprehensive income. Accumulated other comprehensive income or
loss shown in the statements of stockholders' equity at June 30, 1999, is
solely comprised of the accumulated change in unrealized gains and losses on
marketable securities. There was no other comprehensive income prior to 1999.
NOTE 5 - GOING CONCERN
The Company has experienced losses of $113,197 and $129,827 for the periods
ended June 30, 1999 and 1998 and has stockholders' deficit of $189,849 and
$76,652 for the same periods. The Company also has experienced operating
capital needs and shortfalls requiring loans and the issuance of its common
stock for capital infusion to meet cash needs on a regular basis. In light
of the above circumstances, the ability of the Company to continue as a going
concern is substantially in doubt. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
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 sales and services, it will be able to meet
cash needs.
Page 23
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 6 - INCOME TAXES
Income tax expense consists of the following components:
1999 1998
------- ------
Current $ - $ -
Deferred 97,600 53,628
Valuation allowance (97,600) (53,628)
------- ------
$ - $ -
======= ======
For tax return purposes the Company has estimated net operating loss
carryforwards (NOL) of $292,427 and $180,457 at June 30, 1999 and 1998,
respectively. $111,970 of the NOL expires in the year 2018 and $128,874 of
the NOL expires in 2013 and $51,583 of the NOL expires in 2012. A valuation
allowance of $97,600 and $53,628 for the years 1999 and 1998 respectively have
been established for those credits which are not expected to be realized. The
change in the NOL allowance in 1999 was $43,972.
NOTE 7 - OPERATING LEASES
The Company leases office space in Reno, Nevada under an 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
---------- ---------
2000 $ 20,964
2001 1,747
Rental expense under facility operating leases was $20,964 for 1999.
As of June 30, 1999, the Company had certain office equipment under operating
leases with remaining periods from one to two years.
At June 30, 1999, 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
---------- -------
2000 $ 4,692
2001 1,406
Lease payments expensed under the equipment operating leases was $4,692 for
1999.
Page 24
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 8 - RELATED PARTY TRANSACTIONS
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:
1999 1998
----------- -----------
Cash advances $ 78,290 $ 52,750
Credit card advances 51,302 32,712
----------- -----------
Total $ 129,592 $ 85,462
=========== ===========
NOTE 9 - MARKETABLE SECURITIES
Marketable Securities are carried on the balance sheet at their Fair value.
As of June 30, 1999 the following applies to the Company's available-for-sale
securities.
Cost $ 10,591
==========
Unrealized loss $ 4,466
==========
Market value $ 6,125
==========
The market value of the securities at September 1, 1999 was $4,060.
NOTE 10 - PRIOR PERIOD ADJUSTMENTS
The accompanying financial statements for 1998 and 1997 have been restated to
correct depreciation from an accelerated tax basis method to a straight-line
method for financial statement purposes. The effect of the restatement was
to decrease the net loss $1,021 in 1997 and $3,037 in 1998 with a
corresponding reduction of accumulated depreciation of $4,100 on the 1998
balance sheet. The restatement had no effect on Income tax or EPS for 1998 or
1997.
Page 25
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
NETWORK INVESTOR COMMUNICATIONS INC.
Date: September 28, 1999
By: /S/ ROBERT R. DELLER
----------------------
Robert R. Deller
President and Director
Page 26
