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 June 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 No X
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: As of August 31, 1999, the Company
had 22,360,258 shares of Common Stock outstanding,
$0.001 par value.
ANDERSON COMPUTERS/TIDALWAVE CORP.
Form 10-QSB Quarterly Report
For the Period Ended June 30, 1999
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Page
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Unaudited Condensed Balance Sheet at June 30, 1999 4
Unaudited Condensed Statements of Operations for the Three 5
Months Ended June 30, 1999 and June 30, 1998
Unaudited Condensed Statements of Cash Flows for the 6-7
Three Months Ended June 30, 1999 and June 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
</TABLE>
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 December 31, 1998 and 1997. In the
opinion o 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 June 30, 1999 are not necessarily indicative
of results that may be expected for the year ending
December 31, 1999. The financial statements are
presented on the accrual basis.
ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED BALANCE SHEET
JUNE 30, 1999
(Unaudited)
ASSETS
------
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CURRENT ASSETS
Cash $ 11,885
Notes receivable and accrued interest 9,154
Prepaid expenses 4,000
------
Total Current Assets 25,039
COMPUTER SOFTWARE - Net of accumulated
depreciation of $795 -
INVESTMENT IN EQUITY SECURITY 297,717
---------
TOTAL ASSETS $322,756
---------
---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 13,793
Due to officer 7,950
---------
Total Current Liabilities 21,743
---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.001 par value 22,505,717
shares issued and outstanding
as of June 30, 1999 22,506
Additional paid-in capital 765,415
Deficit (486,908)
---------
Total Stockholders' Equity 301,013
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $322,756
---------
---------
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Read accompanying Notes to Financial Statements.
ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
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1999 1998
------ ------
NET SALES $ 121 $ 5,041
COST OF SALES 128 3,106
--------- --------
GROSS PROFIT (7) 1,935
--------- --------
EXPENSES
Selling, general and administrative 63,178 9,508
Depreciation 66 66
--------- --------
Total operating expenses 63,244 9,574
--------- --------
LOSS FROM OPERATIONS (63,251) (7,639)
--------- --------
OTHER INCOME
Interest income 519 582
Forgiveness of indebtedness 9,766 -
---------- --------
Total Other Income 10,285 582
---------- --------
NET LOSS $(52,966) $(7,057)
---------- --------
---------- --------
LOSS PER SHARE $ - $ -
---------- --------
---------- --------
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 21,867,720 20,216,153
---------- ----------
---------- ----------
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Read accompanying Notes to Financial Statements.
ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
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1999 1998
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(52,966) $(7,057)
Adjustments to reconcile net loss
to net cash (used in) provided by
operating activities:
Depreciation 66 66
Forgiveness of indebtedness 9,766 -
Issuance of common stock for
services 36,497 -
(Increase) decrease in:
Notes receivable 4,600 8,600
Prepaid expenses (4,000) -
Increase (decrease) in:
Accounts payable and accrued
expenses (32,451) 3,619
--------- --------
NET CASH (USED IN) PROVIDED BY OPERATING
ACTIVITIES (38,488) 5,228
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Repayment of stock subscription
receivable 108 -
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common
stock 28,140 -
---------- ---------
NET (DECREASE) INCREASE IN CASH (10,240) 5,228
CASH AND CASH EQUIVALENTS - BEGINNING 22,125 1,050
---------- ---------
CASH AND CASH EQUIVALENTS - ENDING $ 11,885 $ 6,278
----------- ----------
----------- ----------
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Read accompanying Notes to Financial Statements.
ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
On April 9, 1999, the Company issued 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, the Company issued 203,314 common
shares valued at $30,497 ($.15 per share) for
marketing services rendered to Micro Doctor Inc.
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. As
of September 27, 1999, such shares have not been
issued by the transfer agent.
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
JUNE 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
JUNE 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 quarter ended June 30,1999, 201,800
common shares were issued to various investors for a
total consideration of $28,140 net of issuance costs
of $12,060.
On April 9, 1999, the Company issued 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, the Company issued 203,314
common shares valued at $30,497 ($.15 per share) for
marketing services to Micro Doctor Inc.
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.
As of September 27, 1999, such shares have not been
issued by the transfer agent.
ANDERSON COMPUTERS/TIDALWAVE CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999
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 $121 for the three
months ended June 30, 1999 as compared to $5,041 for
the three months ended June 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
$63,178 for the three months ended June 30, 1999 as
compared to $9,508 for the three months ended June 30,
1998. This increase was primarily due to marketing,
website development and maintenance costs and
professional services rendered.
Liquidity
----------
Net cash flow from operations decreased from $5,228
during the quarter ended June 30, 1998 to a deficit of
$38,488 during the quarter ended June 30, 1999. This
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 $28,140
during the quarter ended June 30, 1999.
The Company had working capital of $3,296 as of June 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.
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 December 1999, 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.
During the quarter ended June 30,1999, 201,800
common shares were issued to the following investors
for a total consideration of $28,140 net of issuance
costs of $12,060:
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3/25/99 John Romano 10,000 shares at $0.15/share
3/26/99 Charles Creighton 6,667 shares at $0.15/share
3/31/99 James Miller 3,333 shares at $0.15/share
4/1/99 Antonio Santos 10,000 shares at $0.15/share
4/19/99 James Scarfo 10,000 shares at $0.15/share
5/7/99 Antonio Santos 4,000 shares at $0.25/share
5/7/99 Hal Howard 2,000 shares at $0.25/share
5/7/99 Charles Creighton 4,000 shares at $0.25/share
5/7/99 James Miller 6,000 shares at $0.25/share
5/7/99 Joann DelGuercio 2,000 shares at $0.25/share
5/18/99 Kenneth L. Folsom 4,800 shares at $0.25/share
5/19/99 Richard Franklin 4,000 shares at $0.25/share
5/20/99 Arline H. Gales 6,000 shares at $0.25/share
5/20/99 Charles N. Simmons 4,000 shares at $0.25/share
6/1/99 Santos A Rivera 125,000 shares at $0.20/share
</TABLE>
On April 9, 1999, the Company issued 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, the Company issued 203,314 common
shares valued at $30,497 ($.15 per share) for
marketing services Micro Doctor Inc.
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.
As of September 27, 1999, such shares have not been
issued by the transfer agent.
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.
No underwriter was involved in the above
transactions. The Company believes that the Securities
were issued in transactions not involving a public
offering in reliance upon an exemption from
registration provided by Section 4(2) of the
Securities Act of 1933, as amended.
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)
/s/ Leon Kline
--------------
Leon Kline
Chairman and President
Date: September 27, 1999
EXHIBIT 27 FINANCIAL DATA SCHEDULE
-----------------------------------
ANDERSON COMPUTERS\TIDALWAVE CORP.
Exhibit 27 - FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE MARCH 31, 1999 BALANCE SHEET
AND THE STATEMENTS OF OPERATIONS FOR FISCAL YEAR
ENDED MARCH 31, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
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[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] MAR-31-1999
[PERIOD-END] MAR-31-1999
[CASH] 11,885
[SECURITIES] 0
[RECEIVABLES] 9,154
4,000
[CURRENT-ASSETS] 25,039
[PP&E] 0
[DEPRECIATION] 0
<OTHER ASSETS> 297,717
[TOTAL-ASSETS] 322,756
[CURRENT-LIABILITIES] 21,743
[BONDS] 0
[COMMON] 22,506
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 278,507
[TOTAL-LIABILITY-AND-EQUITY] 322,756
[SALES] 121
[TOTAL-REVENUES] 121
[CGS] 128
[TOTAL-COSTS] 128
[OTHER-EXPENSES] 63,244
[LOSS-PROVISION] 0
<OTHER INCOME> 10,285
[INCOME-PRETAX] <52,966>
[INCOME-TAX] <52,966>
[INCOME-CONTINUING] <52,966>
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] <52,966>
[EPS-BASIC] <.002>
[EPS-DILUTED] 0
</TABLE>
