U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
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For the transition period from to
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Commission File No. 0-26187
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ANDERSON COMPUTERS/TIDALWAVE CORP.
(Name of Small Business Issuer in Its Charter)
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Florida 65-0693777
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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1831 NE 45th Street, Fort Lauderdale, Florida 33308
(Address of Principal Executive Offices) (Zip Code)
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(954) 255-6753
(Issuer's Telephone Number, Including Area Code)
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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.
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Yes X No
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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 4, 2000, the Company had
24,508,594 shares of Common Stock outstanding, $0.001 par
value.
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ANDERSON COMPUTERS/ITDALWAVE CORP.
Form 10-QSB Quarterly Report
For the Period Ended June 30, 2000
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Page
Part I - FINANCIAL INFORMATION
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Item 1. Financial Statements 3
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Condensed Balance Sheet at June 30, 2000 4
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Condensed Statements of Operations for the Three 5
Months Ended June 30, 2000 and June 30, 1999
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Condensed Statements of Cash Flows for the 6-7
Three Months Ended June 30, 2000 and June 30, 1999
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Notes to Condensed Financial Statements 8-10
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Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-12
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PART II - OTHER INFORMATION 13
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Item 1. Legal Proceedings 13
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Item 2. Changes in Securities 13
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Item 3. Defaults Upon Senior Securities 14
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Item 4. Submission of Matters to a Vote of Security Holders 14
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Item 5. Other Information 14
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Signatures 14
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PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements:
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BASIS OF PRESENTATION
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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 year ended
March 31, 2000. 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 June 30, 2000 are not
necessarily indicative of results that may be expected for
the year ending March 31, 2001. The financial statements
are presented on the accrual basis.
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ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED BALANCE SHEET
JUNE 30, 2000
(Unaudited)
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ASSETS
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CURRENT ASSETS
Cash $ 108
Notes receivable 1,850
Prepaid expenses 48,448
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Total Current Assets 50,406
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COMPUTER SOFTWARE - Net of accumulated
depreciation of $795 -
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INVESTMENT IN EQUITY SECURITY 250,000
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TOTAL ASSETS $ 300,406
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LIABILITIES AND STOCKHOLDERS' EQUITY
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CURRENT LIABILITIES
Accounts payable and accrued expenses $ 27,536
Due to officer 4,400
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Total Current Liabilities 31,936
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EQUITY SUBJECT TO POTENTIAL REDEMPTION 10,600
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STOCKHOLDERS' EQUITY
Common stock, $.001 par value 25,181,293
shares issued and outstanding 25,181
Additional paid-in capital 1,387,856
Deficit (807,773)
Accumulated other comprehensive income (347,394)
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Total Stockholders' Equity 257,870
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 300,406
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Read accompanying Notes to Financial Statements.
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ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
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2000 1999
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NET SALES $ - $ 121
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COST OF SALES - 128
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GROSS PROFIT - (7)
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EXPENSES
Selling, general and administrative 114,816 63,178
Depreciation - 66
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Total operating expenses 114,816 63,244
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LOSS FROM OPERATIONS (114,816) (63,251)
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OTHER INCOME
Interest income 37 519
Forgiveness of indebtedness - 9,766
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Total Other Income 37 10,285
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NET LOSS $(114,779) $(52,966)
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LOSS PER SHARE $ - $ -
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WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 25,175,783 21,867,720
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Read accompanying Notes to Financial Statements.
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ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
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2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(114,779) $(52,966)
Adjustments to reconcile net loss
to net cash (used in) operating
activities:
Depreciation - 66
Forgiveness of indebtedness - 9,766
Issuance of common stock for
services 46,875 36,497
Stock options granted 52,950 -
(Increase) decrease in:
Notes receivable - 4,600
Prepaid expenses 1,927 (4,000)
Increase (decrease) in:
Accounts payable and accrued
expenses 7,362 (32,451)
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NET CASH (USED IN) OPERATING
ACTIVITIES (5,665) (38,488)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Repayment of stock subscription
receivable - 108
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of common
stock - 28,140
Increase in amount due to officer 4,000 -
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NET CASH PROVIDED BY FINANCING
ACTIVITIES 4,000 28,140
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NET (DECREASE) IN CASH (1,665) (10,240)
CASH AND CASH EQUIVALENTS - BEGINNING 1,773 22,125
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CASH AND CASH EQUIVALENTS - ENDING $ 108 $11,885
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Read accompanying Notes to Financial Statements.
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ANDERSON COMPUTERS/TIDALWAVE CORP.
CONDENSED STATEMENTS OF CASH FLOWS (CONTINUED)
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(Unaudited)
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SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
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On April 1, 2000, the Company issued 501,337 common shares
valued at $93,750 ($.19 per share) and granted stock options
valued at $52,950 for marketing and public relations
services.
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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.
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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.
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On April 12, 1999, the Company issued 203,314 common shares
valued at $30,497 ($.15 per share) for marketing services.
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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.
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Read accompanying Notes to Financial Statements.
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ANDERSON COMPUTERS/TIDALWAVE CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
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NOTE 1. ORGANIZATION
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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 and services via the Internet. The Company's
headquarters is in Fort Lauderdale, Florida.
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The Company is in the process of shifting its focus away
from sales of computer products to providing mortgage
services via the Internet. The Company is also looking to
acquire profitable companies as well as to joint venture
with other companies involved in the Internet.
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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Basis of Presentation
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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, 2000,
included in the Company's Form 10-KSB as filed with the SEC.
Investment in Equity Security
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The investment is classified as an available for sale
security and is reported at fair value, with unrealized
gains and losses included in comprehensive income.
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ANDERSON COMPUTERS/TIDALWAVE CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
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NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
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Loss Per Share
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Loss per share is computed by dividing net loss for the
period by the weighted average number of shares outstanding.
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Use of Estimates
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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.
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NOTE 3. DUE TO OFFICER
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During the quarter ended June 30, 2000, working capital
advances totaling $4,000 were made by the Company's
President. These advances are non-interest bearing and are
expected to be repaid within the next twelve months.
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NOTE 4. CAPITAL STOCK
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On April 1, 2000, the Company issued 501,337 common
shares valued at $93,750 ($.19 per share) for marketing
and public relations services through October 1, 2000.
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Issuances of common stock pursuant to Section 4(2) of
the Securities Act of 1933 might be considered a public
offering in violation of federal securities laws. These
issuances might also have been in violation of certain state
securities laws. If these issuances were public offerings
under federal securities laws or in violation of certain
state securities laws, some of the holders of these
securities might be granted the right to rescind the sale of
shares and demand that the purchase price of the shares be
returned. Common stock was issued to
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ANDERSON COMPUTERS/TIDALWAVE CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 2000
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NOTE 4. CAPITAL STOCK (CONTINUED)
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approximately 20 of the Company's stockholders in offerings
that were believed to be conducted as private placements
under Section 4(2) of the Securities Act of 1933 as
amended, and did not require registration under
the federal securities laws. However, due to the
sophistication of the investors in the offering, it is
possible that holders of these securities may allege that
the offering and sale of these securities was not a valid
private placement under Section 4(2) and was not in
accordance with Section 5 of the Securities Act of 1933.
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Generally, the statute of limitations for this type of
claim is one year after the date of the alleged violation
and, if successful, would entitle the owners to rescind the
issuance of the securities to them and demand a return of
the purchase price of the securities. As of June 30, 2000,
if Section 5 of the Securities Act of 1933 was violated,
claims of approximately $10,600 could be made.
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The Company may have violated securities laws of
several states in connection with the issuances of common
stock. Similar to the recourse provided under the federal
securities laws, holders of these securities may be able to
make a claim to rescind the sale and demand a return of the
purchase price of the securities. The rescission rights that
may be granted to these holders under state law is not
cumulative to the rights granted under federal law.
Accordingly, if stockholders rescind the sale of the
securities under federal law, they would not have the right
to additional payments under state law.
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The Company is not aware of any pending claims for
rescission and intends to vigorously defend any potential
claims. Nevertheless, it is possible that a claim could be
made by holders of the securities, and if a court were to
hold that the private placement exemption is not available
for the sale of the securities or that the Company violated
state securities laws, the Company could be forced to
rescind the sales requiring significant monetary payments to
the claiming owners. These claims,
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ANDERSON COMPUTERS/TIDALWAVE CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999
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NOTE 4. CAPITAL STOCK (CONTINUED)
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if successful, could significantly exceed the Company's cash
reserves and may require the borrowing of funds adversely
affecting the Company's financial condition.
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NOTE 5. STOCK OPTIONS
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On April 1, 2000, an additional option to purchase
501,337 common shares at an exercise price of $.15 per share
was granted in payment of marketing and public relations
services. These options expire April 1, 2001.
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The Company has adopted Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based
Compensation". The fair value of the option of $52,950 was
estimated on the date of grant using the Black-Scholes
pricing model.
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Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
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ANDERSON COMPUTERS/TIDALWAVE CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS
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Forward-Looking Statements
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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, 2000 contains further discussion of these
matters.
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Results of Operations
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<S> <C> <C>
Quarter Ended June 30,
2000 1999
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Net Sales $ - $ 121
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Cost of Sales - 128
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Gross Profit - (7)
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Selling, General and
Administrative
Expenses 114,816 63,178
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There were no revenues from operations during the three
months ended June 30, 2000 as compared to $121 for the three
months ended June 30, 1999. 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).
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Selling, general and administrative expenses increased to
$114,816 for the three months ended June 30, 2000 as
compared to $63,178 for the three months ended June 30,
1999. This increase was caused by a combination of factors:
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1) Hiring of a marketing and public relations company to
increase exposure to public markets at a cost of $99,825
which includes the value of the stock options granted of
$52,950.
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2) A decrease in the amount for accounting and legal
fees rendered of approximately $15,000.
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3) A decrease in website development costs of
approximately $4,200.
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4) Elimination of a marketing fee of approximately
$30,500 paid to Micro-Doctor in April 1999.
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Liquidity
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<S> <C> <C>
Quarter Ended June 30,
2000 1999
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Net Cash Used in Operations $ 5,665 $ 38,488
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Working Capital 18,470 3,296
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Net cash flow used in operations decreased from $38,488
during the three months ended June 30, 2000 to $5,665 during
the three months ended June 30, 1999. This decrease was
primarily due to the Company financing major expenses such
as marketing and public relations costs through noncash
means. During the three months ended June 30, 2000, the cash
flow deficiency was financed by non-interest bearing
advances from the Company's president. During the three
months ended June 30, 1999, the cash flow deficiency was
financed primarily by common stock issuances.
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The Company had a working capital of $18,470 as of June 30,
2000 as compared to a working capital of $3,296 as of June
30, 1999. The increase in working capital was primarily due
to a three month prepayment of marketing and public
relations services .
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Future Outlook
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The Company is aggressively looking for profitable companies
to acquire as well as to joint venture and/or partner with
over the Internet. Depending on the nature of the business
the Company acquires, joint and/or partners with, the
Company may expand in new directions. On June 22, 1999 and
October 27, 1999, the Company acquired a 4.9% and 5.1%
interest respectively in Citizen's title Services, Inc., a
privately held fully automated insurance agent in Florida,
bring its minority interest to 10%. The Company anticipates
that it may have separate divisions for its mortgage
services, computer services as well as other potential e-
commerce business. The Company intends on changing its
corporate name by September 30, 2000 to better reflect its
future direction. With this and other planned acquisitions
through the issuance of common stock and strategic alliances
and joint ventures, we are optimistic that our Company will
be profitable in the near future.
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PART II - OTHER INFORMATION
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Item 1. Legal Proceedings. Not applicable
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Item 2. Changes in Securities. None
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Item 3. Defaults Upon Senior Securities. Not Applicable
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Item 4. Submission of Matters to a Vote of Security Holders.
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None
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Item 5. Other Information. None
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Item 6. Exhibits and Reports of Form 8-K. None
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Exhibit 27 - Financial Date Schedule - Electronic Filing
Only
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SIGNATURES
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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.
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ANDERSON COMPUTERS/TIDALWAVE CORP.
(Registrant)
Date: August 9, 2000 /s/ Leon Kline
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Leon Kline
Chairman and President
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