UNITED STATES
SECURITIES 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, 2000
( ) 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)
Page 1
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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: $40,984.
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, 2000 was undeterminable, no trading market.
As of June 30, 2000, there were issued and outstanding 1,500,000 shares of the
Registrant's Common Stock.
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<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
2000 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
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PART I
Item 1. Description of Business
Corporate History
Network Investor Communications Inc., 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 relations staff. These corporations,
management believed, need the services of outside investor and public relation
services to assist in the dissemination of information and communication with
shareholders, and the public and the investment community.
The Company had hoped 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 was 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 alleviated
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 acted as an intermediary in not only
disseminating information on clients, but also in handling inquires into
the client's status.
The Company had 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 assisted these small
corporations by developing a corporate message and profile, which it updated
monthly or quarterly as needed, as well as disseminated press kits, public
information and press releases.
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The Company had expanded its focus to search for non-public corporations,
which were 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.
On December 8, 1999, the Company ceased operations.
The Company is currently looking for new business opportunities.
Operations
Since inception, several corporations hired the Company to assist in public
and investor relations. The Company through the efforts of its President,
Robert Deller, relied on trade shows and networking to attract new clients.
As the Company was relatively new and small compared to many of its competitors,
the Company had to rely on relationships created by Mr. Deller to bring in new
clientele.
The Company's investor and public relations services included 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 worked 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 helped 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 assisted 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.
Since the Company did not attract sufficient clients to meet its obligations,
it was 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 or reorganization opportunities. The Company was down
to two employees including its President, Robert Deller, who had 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 has kept the Company viable as an entity since it was forced to
terminate operations, the future direction of the Company is uncertain.
Management will attempt to keep its options open as to ways to make the
Company profitable. Since the Company was 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 or reorganization
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 tended 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 initiated its business plan, the Company had expanded its
marketing efforts to include non-public companies, particularly in the high
tech and Internet fields, who were 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 was 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 was 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 relied
on the business contacts of its President, Robert Deller, for the majority of
its clientele. If the Company was to be successful, it would have had to be
able to develop better ways to compete or distinguish itself from the crowded
financial relations' business field.
Due to the fact that the Company was not able to compete and obtain enough
business in this industry, it ceased operations on December 8,1999.
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 that limit the
ability of financial relations firms to accept stock in companies which they
represent. These rules have not affected the Company's business as it did not
rely on the revenues from the sale of stock in corporations it represents. The
Company relied on the cash payments from its clients.
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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 B, Reno,
Nevada 89511. This lease ran through July 31, 2000, and was at a monthly
rental amount of $1,747. The Company believed its current office space was
adequate for current and future needs. The President of the Company assumed
the lease at the time of ceasing of operation December 8, 1999.
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
(a) Market Information.
The securities of the Company has been listed on the over-the-counter
market, and quoted in the National Quotation Bureau, Inc.'s "pink sheets"
and on the NASD Electronic Bulletin Board.
(b) The number of record holders of the Common Shares on June 30, 2000 was
approximately 55.
(c) Dividends.
The Company has paid no dividends.
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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 had helped the Company stay in business and attract
additional clients. Although the Company had generated revenue, the Company
remained unprofitable, which predicated the cessation of operations in December
1999.
Plan of Operations
The Company operated in a very competitive environment often competing for the
same clients with well established and larger financial and investor relations
firms. This competition had 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. Clients
were generated through personal contacts of the Company's President, Robert
Deller. By only having one person generating clients, the Company had been
slowed in its growth, often not having the personnel to capitalize on and retain
potential clients. The Company did not anticipate that it would be able to hire
any additional employees unless several more clients were retained and some of
the Company's debt was paid. Accordingly, revenue growth was slow over the last
twelve months until operations ceased on December 8, 1999.
The Company was service based receiving its revenue from corporate clientele
from whom the Company provided investor and public relation services. Typically,
the Company operated off of a flat fee structure with monthly payments from its
clients. The Company was also reimbursed for any hard costs incurred in
representing its clients for such items as printing and travel.
The Company's expenses exceeded 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 believed that the client generation
would accelerate along with revenue. Additional clients could not be attracted
and the Company was forced to cease operations. Prior to ceasing operations,
the Company examined the 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, were loans from the
Company's President Robert Deller. Excluding the related party loan from
Mr. Deller, the Company had $89,602 in expenses that were due or would shortly
come due. Additionally, $51,302 of the funds loaned by Mr. Deller to the Company
was from Mr. Deller's personal credit cards, which the Company had been paying
on a monthly basis.
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The Company was not able to pay its existing obligations from its revenue.
Mr. Deller had indicated that he would continue to attempt to fund the Company,
but he had also indicated that his ability to continue to provide personal
financing of the Company was limited. Since the end of the Company's fiscal year
in June 30, 1999, Mr. Deller's had loaned the Company an additional $7,600.
Since the Company's revenues did not improve, the Company had to cease
operations when the Company was unable to find additional 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. The Company's revenues could not pay
for all of these accrued liabilities and the Company ceased all operations
December 8, 1999, with the President of the Company assuming all liabilities.
There were no assurances that the Company would be successful in finding
financing to cover the liabilities. Since funding was not obtained, the
Company did not have the ability to pursue new clients or to properly service
existing clientele.
Results of Operations
The Company had been unprofitable since its formation in 1996. From its
inception in August 1996 until June 30, 1999, 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 had been more aggressive in pursuing its
business plan and soliciting clients. As a result operating expenses had
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, 2000, and only through December 31, 2000,
revenues decreased to $40,984, as the Company was not able to attract new
clientele. The decrease in revenues resulted in a net loss of $40,144.
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 until it ceased
operations on December 9, 1999.
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 did not depend
on inventory or the sale of goods and did not experience any Y2K problems. The
Company's computer system is PC based and had been updated with the latest
software. Additionally, the Company had 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, 2000 Position Position Held Since
---------------- --------------- ---------------------- --------------------
Robert R. Deller 44 President and Director August 9, 1996
Kenneth E. Bedell 60 Secretary and Director August 9, 1996
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 44, 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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Kenneth E. Bedell, age 60, attended and graduated from the public school
system in northern New Jersey. Mr. Bedell attended New York University where
he obtained a B.S. degree in 1969. From 1967-1994 Mr. Bedell was employed
as a controller for the United Federation of Teachers of New York City,
New York. Mr. Bedell took an early retirement and became an Independent
Financial Consultant in 1994. Mr. Bedell is currently an Independent
Financial Consultant.
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 $100,000 during such period (as determined at June 30, 2000,
the end of the Company's last completed fiscal year):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ --------
Other Restricted
Name and Annual Stock Options LTIP
All other
Principal Position Salary Bonus($) Compensation Awards /SARs Payout
Compensation Year
---------------- ---- ------- -------- ------------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert R. Deller 2000 -0- -0- -0- -0- -0- -0-
President and CEO 1999 -0- -0- -0- -0- -0- -0-
1998(1) $18,000 -0- -0- -0- -0- -0-
1997 $54,000 -0- -0- -0- -0- -0-
1996 -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 had indicated that when funds
are available, they would pay Mr. Deller for the salary that he was unable to
take in 1998 through 2000.
Options/SAR Grants in Last Fiscal Year
The Company had never granted options or stock appreciation rights.
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Bonuses and Deferred Compensation
None
Compensation Pursuant to Plans
The Company did not have any compensation or option plans.
Pension Table
Not Applicable
Other Compensation
None
Compensation of Directors
Currently, the two directors of the Company are Robert R. Deller and Kenneth
E. Bedell who receive no additional compensation for being a director of the
Company.
Termination of Employment and Change of Control Arrangement
There are not 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 October 12, 2000, 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.
<TABLE>
<CAPTION>
Title of Name and Address Amount and Nature of Percent
Class of
Beneficial Owner
Principal Shareholders
---------------------- ------------------ -------------------- -------
<S> <C> <C> <C>
Common Robert R. Deller
9645 Gateway Drive
Suite B
Reno, Nevada 89511 500,000 33.33%
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) 100,000 33.33%
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Item 13. Certain Relationships and Related Transactions
Robert Deller, the Company's President, had loaned the Company approximately
$129,592. These loans consisted of $78,290, which is at an interest rate of ten
percent per annum and was due and payable on demand. Additionally, Mr. Deller
had allowed the Company to borrow and receive cash advances on his personal
credit cards totaling $51,302. The Corporation had been making all payments
on the funds borrowed on the credit cards. These debts were forgiven for the
transfer of all the assets and operations of the Company from the ceasing of
operations.
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) Balance Sheets as of June 30, 2000 and 1999.
(b) Statements of Operations for the Years ended June 30, 2000 and 1999.
(c) Statements of Stockholders' Equity/(Deficit) for the Years ended
June 30, 2000 and 1999.
(d) Consolidated Statements of Cash Flows for the Years ended June 30,
2000 and 1999.
(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, 2000 and 1999..................................17
_ Statements of Operations for the years ended June 30, 2000 and 1999.....18
_ Statements of Stockholders' Equity, from July 1, 1998, through
June 30, 2000...........................................................19
_ Statements of Cash Flows for the years ended June 30, 2000 and 1999.....20
_ Notes to Financial Statements...........................................21
Page 15
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT................................................1
FINANCIAL STATEMENTS
Balance Sheets............................................................2
Statements of Operations..................................................3
Statements of Stockholders' Equity........................................4
Statements of Cash Flows..................................................5
Notes to Financial Statements.............................................6-9
<PAGE>
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, 2000 and 1999 and the related statements of operations,
stockholders' equity and cash flows for the years ended June 30, 2000
and 1999. 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, 2000 and 1999, and the results of its
operations and its cash flows for the years ended June 30, 2000 and 1999,
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 4 to the
financial statements, the Company has suffered recurring losses, requiring
capital infusions, and has limited working capital and has ceased operations,
which raises substantial doubt about its ability to continue as a going
concern. Management's plans regarding those matters also are described in
Note 4. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
Salt Lake City, Utah
October 4, 2000
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
BALANCE SHEET
JUNE 30, 2000 AND 1999
ASSETS
</TABLE>
<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
------------ ------------
<S> <C> <C>
CURRENT ASSETS:
Cash $ - $ 1,470
Accounts receivable, net of allowance for
doubtful accounts of $46,982 at June 30, 1999 - 961
Employee advances - 902
Marketable securities-available for sale - 6,125
------------ ------------
Total Current Assets - 9,458
------------ ------------
PROPERTY AND EQUIPMENT, NET - 13,770
------------ ------------
OTHER ASSETS
Deposits - 2,475
Organization costs, net of amortization
of $3,587 at June 30, 1999 - 2,563
Customer lists, net of amortization of $261
at June 30, 1999 - 1,079
------------ ------------
Total Other Assets - 6,117
------------ ------------
TOTAL ASSETS $ - $ 29,345
============ ============
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ - $ 7,971
Shareholder loan - 129,592
Payroll and other accrued liabilities 7,261 81,631
------------ ------------
Total Current Liabilities 7,261 219,194
------------ ------------
STOCKHOLDERS' EQUITY/(DEFICIT):
Common stock, $.001 par value;
50,000,000 shares authorized; 1,500,000
shares issued and outstanding 1,500 1,500
Additional paid-in capital 321,067 102,801
Accumulated other comprehensive (loss) - (4,466)
Retained earnings (deficit) (329,828) (289,684)
------------ ------------
Total Stockholders' Equity(Deficit) (7,261) (189,849)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ - $ 29,345
============ ============
</TABLE>
Page 2
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Year Ended
June 30,
------------------------------
2000 1999
-------------- --------------
<S> <C> <C>
SALES $ 40,984 $ 90,044
-------------- --------------
EXPENSES:
General and administrative 69,543 177,166
Depreciation and amortization 2,643 5,865
-------------- --------------
TOTAL OPERATING EXPENSES 72,186 183,031
-------------- --------------
Net (loss) before other items (31,202) (92,987)
-------------- --------------
OTHER INCOME (EXPENSE)
Interest expense (8,942) (15,744)
-------------- --------------
TOTAL OTHER INCOME(EXPENSE) (8,942) (15,744)
-------------- --------------
NET (LOSS) BEFORE INCOME TAXES (40,144) (108,731)
PROVISIONS FOR INCOME TAXES - -
-------------- --------------
NET (LOSS) $ (40,144) $ (108,731)
============== ==============
EARNINGS (LOSS) PER SHARE
Net (loss) $ (0.03) $ (0.07)
============== ==============
WEIGHTED AVERAGE SHARES OUTSTANDING 1,500,000 1,500,000
============== ==============
</TABLE>
Page 3
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
STATEMENTS OF STOCKHOLDERS' EQUITY/(DEFICIT)
FOR THE YEARS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
Accumulated
Other
Capital Stock Additional Retained Comprehensive
------------------------ Paid-In Earnings Earnings
Shares Amount Capital (Deficit) (Deficit) Total
------------ ---------- ------------ ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, July 1, 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)
Contribution of paid-in capital - - 218,266 - - 218,266
Comprehensive income:
Net loss for the year ended
June 30, 2000 - - - (40,144) - (40,144)
Net unrealized gain on marketable
securities - - - - 4,466 4,466
Comprehensive income - - - - - (35,678)
------------ ---------- ------------ ----------- ------------- -----------
BALANCE, June 30, 2000 1,500,000 $ 1,500 $ 321,067 $ (329,828) $ - $ (7,261)
============ ========== ============ =========== ============= ===========
</TABLE>
Page 4
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the Year Ended
June 30,
------------------------------
2000 1999
-------------- --------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Continuing operations
Net loss $ (40,144) $ (108,731)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 2,643 5,865
Contribution of additional paid-in capital 800 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 181 13,612
(Increase) decrease in employee advances (2,026) (902)
(Increase) in marketable securities-Trading - (10,591)
Increase in accounts payable and accrued liabilities 33,577 57,903
-------------- --------------
Net cash (used) in operating activities (4,969) (42,844)
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash assumed by officer and director (66) -
-------------- --------------
Net cash used in investing activities (66) -
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Shareholder loan-net 3,565 44,130
-------------- --------------
Net cash provided by financing activities 3,565 44,130
-------------- --------------
Net Increase (decrease) in Cash (1,470) 1,286
CASH AT BEGINNING PERIOD 1,470 184
-------------- --------------
CASH AT END OF PERIOD $ - $ 1,470
============== ==============
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest expense $ 8,942 $ 15,744
============== ==============
Income taxes $ - $ -
============== ==============
SUPPLEMENTAL NONMONETARY TRANSACTION
Officer and director assets and liabilities
assumption and debt forgiveness. $ 217,532 $ -
============== ==============
</TABLE>
Page 5
<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 was engaged in the business of providing investor relation services
to public companies. The Company ceased operations in December 1999 and is
currently seeking business opportunities. The Company's office is located in
Reno, Nevada.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A summary of significant accounting policies applied in the accompanying
financial statements 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 and declining balance
methods 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 were amortized over five years using the straight-
line method.
The costs incurred to acquired certain client lists for the Company were
capitalized and were amortized over fifteen years using the straight-line
method.
Earnings (Loss) Per Share - In February 1997, the Financial Accounting Standards
Board issued SFAS No. 128, Earnings per Share. SFAS No. 128 simplifies the
standards for computing earnings per share ("EPS") and was effective for
financial 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, only basic earnings
per share is presented in the financial statements.
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 2000 and 1999.
Page 6
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Income Taxes - Effective from inception Network Investor Communications Inc.
adopted SFAS No. 109, "Accounting for Income Taxes," which requires a
liability approach to financial accounting and reporting for income taxes.
The differences between the financial statement and tax bases of assets and
liabilities is determined annually. Deferred income tax assets and
liabilities are computed for those differences that have future tax
consequences using the currently enacted tax laws and rates that apply to
the period in which they are expected to affect taxable income. Valuation
allowances are established, if necessary, to reduce deferred tax asset accounts
to the amounts that will more likely than not be realized. Income tax expense
is the current tax payable or refundable for the period, plus or minus the net
change in the deferred tax asset and liability accounts.
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.
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. Accumulated other comprehensive income, loss or zero
value shown in the statements of stockholders' equity at June 30, 2000 and 1999,
is solely comprised of the accumulated unrealized change in gains and losses on
marketable securities. There was no comprehensive income prior to June 30,
1999.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
<TABLE>
<CAPTION>
June 30, June 30,
2000 1999
---------- ----------
<S> <C> <C>
Office equipment and furniture $ - $ 5,492
Computer equipment - 15,490
Leasehold improvements - 1,862
---------- ----------
- 22,844
Less - Accumulated depreciation - 9,074
---------- ----------
$ - $ 13,770
========== ==========
</TABLE>
Page 7
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 4 - GOING CONCERN
The Company has experienced losses of $329,828 from inception through June 30,
2000. 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. Also, the Company ceased operations in
December of 1999 as explained in Note 8. 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 current efforts will provide the corporation with
the ability to continue in existence. The Company from January to June 2000
has been dormant. Management has paid for the costs to maintain the Company's
existence and Nevada Corporate standing and plans to do so in the future.
Management currently is seeking new business activities that will provide net
income and cash flows for the Company and its shareholders.
NOTE 5 - INCOME TAXES
Income tax expense consists of the following components:
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Current $ - $ -
Deferred - 1,409
Valuation allowance - (1,409)
---------- ----------
$ - $ -
========== ==========
</TABLE>
The deferred tax liability at June 30, 1999, was due to the use of accelerated
depreciation for tax purposes. For tax return purposes the Company has
estimated net operating loss carryforwards (NOL) of $328,334 and $288,325 at
June 30, 2000 and 1999, respectively. The NOL expires between the years 2012
and 2019. A valuation allowance of $111,634 and $98,031 for the years 2000 and
1999 respectively have been established for those credits, which are not,
expected to be realized. The change in the NOL allowance in 2000 was $13,603.
NOTE 6 - OPERATING LEASES
The Company leased office space in Reno, Nevada under an operating lease, which
expires in July 2000. The monthly lease payment was $1,747. The Company had an
option to extend the lease for two years. The option was required to be
exercised 30 days before the lease ended. The new payment under the extension
option was $1,922. Rental expense under facility operating leases was $10,482
for 2000.
The above office lease and certain office equipment operating leases with
remaining periods form one to two years were assumed by an officer and director
of the Company after the ceasing of operations as disclosed in Note 8.
Page 8
<PAGE>
NETWORK INVESTOR COMMUNICATIONS INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 7 - RELATED PARTY TRANSACTIONS
The President of the Company made certain loans to the Company until
December 31, 1999. The cash loans accrued interest at an annual rate of
ten percent per annum. Additionally, the officer allowed the company to
obtain credit and advances against certain credit cards under his personal
name. The Company made all payments against these credit cards and paid the
related finance charges made by the credit card companies until December 31,
1999.
These debts were forgiven for the transfer of all the assets and operations
of the Company from the ceasing of operations as disclosed in Note 8. During
January to June 2000, the President of the Company paid expenses of $800 to
maintain the Company's existence. These payments have been added to additional
paid-in capital. An additional amount of $217,466 was also added to additional
paid-in capital due to a transaction with the Company's President as explained
in Note 8. Thus, for the year ended June 30, 2000, the total added to
additional paid-in capital for the above transactions was $218,266.
NOTE 8 - CEASING OF OPERATIONS
Network Investor Communications Inc. was unable to continue business as a
Corporate/Investor Relations firm and ceased operations with an effective
measurement date of December 31, 1999, and with a disposal date of
December 8, 1999.
The Company's President for the transfer of all corporate assets, both tangible
and intangible, assumed all liabilities of the Company and forgave any loans to
the Company due to him since the Company's inception on August 8, 1996. This
transaction was recorded at the book value of the assets and liabilities assumed
and the loans forgiven. The net amount of $217,466 was added to additional
paid -in capital.
NOTE 9 - MARKETABLE SECURITIES
Marketable securities held at December 8, 1999, were assumed by an Officer and
Director of the Company at their book value, which was a cost of $10,591.
NOTE 10 - SUBSEQUENT EVENT
The Company has signed a letter of intent and the Board of Directors has
authorized management to further negotiate a definitive agreement for the
purchase of shares by an individual and the issuance of shares to a consultant
group. Terms of the proposal would have the Company execute a 3.75-for-1
reverse split of its shares to 400,000 shares post-split; issue 2,000,000
post-split shares to an individual at $.15 per share for $300,000; and issue
200,000 post-split shares to a consultant group for services rendered. After
these transactions are completed, the Company's management would resign and
new management would be nominated. Also, provisions of the proposal outline
in general terms how the $300,000 would be used by the Company.
Page 9
<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: October 11, 2000
By: /S/ ROBERT R. DELLER
---------------------
Robert R. Deller
President and Director
