U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
For the transition period from to
Commission File No. 0-26187
ANDERSON COMPUTERS/TIDALWAVE CORP.
(Name of Small Business Issuer in Its Charter)
Florida 65-0693777
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1831 NE 45th Street, Fort Lauderdale, Florida 33308
(Address of Principal Executive Offices) (Zip Code)
(954) 255-6753
(Issuer's Telephone Number, Including Area Code)
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
----- -----
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: As of November 12, 1999, the Company
had 24,381,957 shares of Common Stock outstanding,
$0.0001 par value.
ANDERSON COMPUTERS/TIDALWAVE CORP.
Form 10-QSB Quarterly Report
For the Period Ended September 30, 1999
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Page
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Unaudited Condensed Balance Sheet at September 30, 1999 4
Unaudited Condensed Statements of Operations for the Three 5
Months Ended September 30, 1999 and September 30, 1998
Unaudited Condensed Statements of Cash Flows for the 6-7
Six Months Ended September 30, 1999 and September 30, 1998
Notes to Condensed Financial Statements 8-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-12
PART II - OTHER INFORMATION 13
Item 1. Legal Proceedings 13
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 14
Signatures 14
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
BASIS OF PRESENTATION
The accompanying unaudited financial statements are
presented in accordance with generally accepted
accounting principles for interim financial information
and the instructions to Form 10-QSB and item 310 under
subpart A of Regulation S-B. Accordingly, they do not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements. The accompanying statements should
be read in conjunction with the audited financial
statements for the years ended March 31, 1998. In the
opinion of management, all adjustments
(consisting only of normal occurring accruals) considered
necessary in order to make the financial statements not
misleading, have been included. Operating results for
the three months ended September 30, 1999 are not
necessarily indicative of results that may be expected
for the year ending March 31, 2000. The financial
statements are presented on the accrual basis.
ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED BALANCE SHEET
SEPTEMBER 30, 1999
(Unaudited)
ASSETS
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CURRENT ASSETS
Cash $ 6,735
Notes receivable and accrued interest 9,154
Prepaid expenses 4,000
--------
Total Current Assets 19,889
COMPUTER SOFTWARE - Net of accumulated
depreciation of $795 -
INVESTMENT IN EQUITY SECURITY 297,717
-------
TOTAL ASSETS $317,606
--------
--------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 18,196
Due to officer 7,950
--------
Total Current Liabilities 26,146
--------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.001 par value 22,546,384
shares issued and outstanding 22,546
Additional paid-in capital 769,645
Deficit (500,731)
---------
Total Stockholders' Equity 291,460
--------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $317,606
--------
--------
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Read accompanying Notes to Financial Statements.
ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
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THREE MONTHS SIX MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1999 1998 1999 1998
---- ---- ---- ----
NET SALES $ 145 $ 934 $ 266 $ 5,975
COST OF SALES 137 620 265 3,726
------- -------- -------- -------
GROSS PROFIT 8 314 1 2,249
------- -------- -------- -------
EXPENSES
Selling, general and
administrative 14,207 12,444 77,385 21,952
Depreciation - 67 66 133
------ ------- ------- ------
Total operating expenses 14,207 12,511 77,451 22,085
------ ------- ------- ------
LOSS FROM OPERATIONS (14,199) (12,197) (77,450) (19,836)
------- ------- ------- ------
OTHER INCOME
Interest income 376 666 895 1,248
Forgiveness of indebtedness - - 9,766 -
------ ------- ------ -----
Total Other Income 376 666 10,661 1,248
------ ------- ------ ------
NET LOSS $(13,823) $(11,531) $(66,789) $(18,588)
--------- --------- --------- ---------
--------- --------- --------- ---------
LOSS PER SHARE $ - $ - $ - $ -
--------- --------- --------- ---------
--------- --------- --------- ---------
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 22,516,254 20,216,153 22,194,660 20,216,153
---------- ---------- ---------- ----------
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Read accompanying Notes to Financial Statements.
ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
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1999 1998
-------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(66,789) $(18,588)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities:
Depreciation 66 133
Forgiveness of indebtedness 9,766 -
Issuance of common stock for
services 36,497 -
(Increase) decrease in:
Notes receivable 4,600 13,150
Prepaid expenses (4,000) -
Increase (decrease) in:
Accounts payable and accrued
expenses (28,048) 4,770
---------- -------
NET CASH (USED IN) OPERATING ACTIVITIES (47,908) (535)
---------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Repayment of stock subscription
receivable 108 -
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common
stock 32,410 -
--------- -------
NET (DECREASE) IN CASH (15,390) (535)
CASH AND CASH EQUIVALENTS - BEGINNING 22,125 1,050
--------- -------
CASH AND CASH EQUIVALENTS - ENDING $ 6,735 $ 515
--------- -------
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Read accompanying Notes to Financial Statements.
ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
SIX MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(Unaudited)
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
On April 9, 1999, the Company issued 25,800 common
shares in payment of accounts payable of $6,900 and
website development services of $6,000.
On April 12, 1999, the Company issued 203,314 common
shares valued at $30,497 ($.15 per share) for marketing
services.
On May 7, 1999, the Company issued 145,459 common shares
in payment of the amount due to Internet TV Connector
Corp. (a major stockholder) of $111,017.
On June 22, 1999, the Company issued 488,060 common
shares valued at $297,717 ($.61 per share)for a 4.9%
interest in Citizen's Title Services, Inc.
Read accompanying Notes to Financial Statements.
ANDERSON COMPUTERS/TIDALWAVE CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 1. ORGANIZATION
------------
Anderson Computers/Tidalwave Corp. was incorporated on
April 23, 1996 under the laws of the State of Florida.
The company operates as a reseller of its customized
"Tidalwave" brand and other non "Tidalwave" brand
computer products via the Internet. The Company's
headquarters is in Fort Lauderdale, Florida.
The Company is in the process of shifting its focus away
from sales of computer products to providing mortgage
services via the Internet.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
Basis of Presentation
---------------------
The accompanying condensed financial statements are
unaudited. These statements have been prepared
in accordance with the rules and regulations of the
Securities and Exchange Commission (SEC). Certain
information and footnote disclosures normally included in
financial statements prepared in accordance with
generally accepted accounting principles have been
condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all
adjustments (which include only normal recurring
adjustments) considered necessary for a fair presentation
have been included. These financial statements should be
read in conjunction with the Company's financial
statements and notes thereto for the year ended March
31,1999, included in the Company's Form 10-KSB as filed
with the SEC.
Loss Per Share
--------------
Loss per share is computed by dividing net loss
for the period by the weighted average number of shares
outstanding.
ANDERSON COMPUTERS/TIDALWAVE CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
------------------------------------------
Use of Estimates
----------------
Management uses estimates and assumptions in
preparing financial statements in accordance
with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of
assets and liabilities, the disclosure of contingent
assets and liabilities, and the reported revenues and
expenses. Accordingly, actual results could vary from
the estimates that were assumed in preparing the
financial statements.
NOTE 3. INVESTMENT IN EQUITY SECURITY
-----------------------------
On June 22, 1999, the Company purchased a
4.9% interest in Citizen's Title Services, Inc., a
privately held title insurance company, for $297,717 by
issuing 488,060 common shares. The common stock was
valued using the 30 day average trading market price. On
July 19, 1999, the Company signed a letter of intent to
purchase an additional 20.1% interest. This transaction
has not yet closed.
NOTE 4. CAPITAL STOCK
-------------
During the six months and quarter ended
September 30, 1999, 242,467 and 41,667 common shares were
issued for a total consideration of $32,410 and $4,270
net of issuance costs of $13,890 and $1,830,respectively.
On April 9, 1999, the Company issued 25,800
common shares in payment of accounts payable of $6,900
and website development services of $6,000.
On April 12, 1999, the Company issued 203,314
common shares valued at $30,497 ($.15 per share) for
marketing services.
On May 7, 1999, the Company issued 145,459
common shares in payment of the amount due to Internet TV
Connector Corp. (a major stockholder) of $111,017.
ANDERSON COMPUTERS/TIDALWAVE CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 4. CAPITAL STOCK (CONTINUE)
------------------------
On June 22, 1999, the Company issued 488,060
common shares valued at $297,717 ($.61 per share)for a
4.9% interest in Citizen's Title Services, Inc.
NOTE 5. FORGIVENESS OF INDEBTEDNESS
---------------------------
On April 19, 1999, the Company settled a
delinquent account payable totaling $19,566 for
$9,800.
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Forward-Looking Statements
---------------------------
Forward-looking statements, based on management's current
views and assumptions, are made throughout the
Management's Discussion and Analysis and elsewhere in
this report to stockholders. These statements are subject
to certain risks and uncertainties that could cause
actual results to differ materially from historical
results and those presently anticipated or projected.
Among the factors that may affect operating results are
the following: success of the Company's change in focus;
competitive environment; and general economic conditions.
Our Form 10-KSB for the year ended March 31, 1999
contains further discussion of these matters.
Results of Operations
---------------------
Revenues from operations decreased to $266 for the six
months ended September 30, 1999 as compared to
$5,975 for the six months ended September 30, 1998 and
decreased to $145 for the three months ended September
30, 1999 as compared to $934 for the three months ended
September 30, 1998. The decrease in sales as well as the
decrease in gross profit was due to the Company changing
its focus from providing technical computer services and
selling computer products to aggressively seeking
potential acquisitions for financing and future expansion
in noncomputer related industries (See Future Outlook).
Selling, general and administrative expenses increased to
$77,385 for the six months ended September 30, 1999
as compared to $21,952 for the six months ended September
30, 1998. This increase was primarily due to marketing,
website development and maintenance costs and
professional services rendered. For the three months
ended September 30, 1999, selling, general and
administrative expenses increased to $14,207 as compared
to $12,444 for the three months ended September 30, 1998.
This increase was primarily due to professional services
rendered.
Liquidity
---------
Net cash flow used in operations increased from $535
during the six months ended September 30, 1998 to $47,908
during the six months ended September 30, 1999. This
increase in deficit is due to the Company incurring
selling, general and administrative expenses with
insufficient sales to cover these expenses. As
mentioned in results of operations above, this was due to
the Company seeking to change its direction. The cash
flow deficiency was financed primarily by common stock
issuances. Cash received from common stock sales amounted
to $32,140 during the six months ended September 30, 1999
net of issuance costs of $13,890.
The Company had working capital deficiency of $6,257 as
of September 30, 1999 compared to a working capital
deficiency of $126,466 as of March 31, 1999. The increase
in working capital was primarily due to the payment
of the amount due to Internet TV Connector Corp. ( a
major stockholder) of $111,017 by issuing 145,459 common
shares and the payment of accounts payable and website
development services totaling $12,900 by issuing 25,800
common shares.
Future Outlook
--------------
During the quarter ended June 30, 1999, the Company was
looking to change directions in its Internet focus and
general course of business. Market research conducted
during the first quarter of 1999 concluded that the
Internet should remain our primary medium for conducting
business but that the computer hardware and software
industry was not where the Company's focus should be. In
April 1999, the Company began talks with several
mortgage and mortgage service companies as the Company
decided that it would like to begin marketing mortgage
and mortgage services over the Internet. On June 22,
1999, the Company acquired a 4.9% interest in Citizen's
Title Services, Inc., a privately held fully automated
insurance agent in Florida and in July 1999, the Company
signed a letter of intent to acquire an additional 20.1%.
By June 2000, the Company plans on having at least
a 40% interest. With this and other planned acquisitions
through the issuance of common stock and strategic
alliances with other mortgage origination and mortgage
service companies, we are optimistic that our Company
will be profitable in the near future.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. Not applicable
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. Not Applicable
Item 4. Submission of Matters to a Vote of Security
Holders.
On April 9, 1999, a majority of the shareholders
of the Company approved of the issuance of 25,800
common shares to CyberlinkCom Corp. in payment of
accounts payable of $6,900 and website development
services of $6,000.
On April 12, 1999, a majority of the shareholders
of the Company approved the issuance of 203,314 common
shares to Micro Doctor Inc. valued at $30,497 ($.15 per
share) for marketing services rendered.
On May 7, 1999, a majority of the shareholders of
the Company approved the issuance of 145,459 common
shares to Internet TV Connector Corp. (a major
stockholder) in payment of the amount due of $111,017.
As of September 27, 1999, such shares have not been
issued by the transfer agent.
On June 22, 1999, a majority of the shareholders
of the Company approved the acquisition of a 4.9%
interest in Citizen's Title Services, Inc. for 488,060
common shares of the Company valued at $297,717 ($.61
per share).
Item 5. Other Information. None
Item 6. Exhibits and Reports of Form 8-K. None
Exhibit 27 - Financial Date Schedule - Electronic Filing Only
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the Registrant has
duly caused this 10-QSB report to be signed on its behalf
by the undersigned thereunto duly authorized.
ANDERSON COMPUTERS/TIDALWAVE CORP.
(Registrant)
Date: November 12, 1999 /s/ Leon Kline
---------------------------
Leon Kline
Chairman and President
EXHIBIT 27 - FINANCIAL DATA SCHEDULE
------------------------------------
[DESCRIPTION] ART. 5 FDS FOR 10-QSB
[ARTICLE] 5
[MULTIPLIER] 1,000
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[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-999
[PERIOD-END] SEP-30-1999
[CASH] 6,735
[SECURITIES] 0
[RECEIVABLES] 9,154
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 19,889
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 317,606
[CURRENT-LIABILITIES] 26,146
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 22,546
[OTHER-SE] 268,914
[TOTAL-LIABILITY-AND-EQUITY] 317,606
[SALES] 266
[TOTAL-REVENUES] 266
[CGS] 265
[TOTAL-COSTS] 265
[OTHER-EXPENSES] 77,451
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 0
[INCOME-PRETAX] <66,789>
[INCOME-TAX] 0
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] <66,789>
[EPS-BASIC] <.003>
[EPS-DILUTED] <.003>
</TABLE>
