U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
Amendment No.1
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: July 31, 1999
Commission File Number: 0-22607
MERCHANTONLINE.COM, INC.
------------------------
(Exact name of small business issuer as specified in its charter)
FLORIDA
-------
(State or other jurisdiction of incorporation or organization)
84-1233073
----------
(IRS Employer Identification No.)
1600 S. Dixie Highway
Boca Raton, FL 33432
--------------------
(Address of principal executive offices)
33432
-----
(Zip Code)
(561) 395-3585
--------------
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 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 [ ].
The number of shares of the registrant's only class of common stock issued and
outstanding, as of July 31, 1999, was 17,525,000 shares.
<PAGE>
RESTATEMENT OF FINANCIAL STATEMENTS AND CHANGES TO CERTAIN INFORMATION
As a result of the Company's annual audit of its financial statements
with its independent accountants for the year ended October 31, 1999,
the Company determined that it would restate the amounts originally
reported for the third quarter of 1999 to correct an error in the
allocation of advertising expense into the proper period. The
correction in advertising expense resulted in advertising expense of
$575,000, deferred advertising of $955,000, and accrued advertising
liability of $1,530,000 reported for the three and nine months periods
ended July 31, 1999 (see Note 3 & 4 to the Company's financial
statements).
Additionally, the Company restated certain revenue amounts in
accordance with Staff Accounting Bulletin (SAB) No. 101 "REVENUE
RECOGNITION IN FINANCIAL STATEMENTS" which it early adopted for the
year ended October 31, 1999 during its regular annual audit. The
Company has restated its financial statements for the quarter ended
July 31, 1999 (see Note 7 to the Company's financial statements). This
Amendment No.1 of Quarterly Report on Form 10-QSB/A amends and restates
Item 1, Financial Statements, and Item 2, Management's Discussion and
Analysis of Financial Condition and Results of Operations, of the
Company's Quarterly Report on Form 10-QSB filed on August 26, 1999 for
the quarter ended July 31, 1999.
2
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
MerchantOnline.com, Inc
Balance Sheet
July 31, 1999
(unaudited)
CURRENT ASSETS
Cash $ (3,912)
Accounts receivable 189,465
Employee advances 300
Deferred advertising 753,750
-----------
TOTAL CURRENT ASSETS 939,603
Property and Equipment, net 129,333
Deferred advertising 201,250
Security deposits 9,007
-----------
TOTAL ASSETS $ 1,279,193
===========
CURRENT LIABILITIES
Accounts payable $ 393,477
Commission payable 12,540
Notes payable 409,700
Accrued advertising liability 1,530,000
-----------
Total current liabilities 2,345,717
-----------
Common Stock -Par Value is .001
100,000,000 shares authorized
17,525,000 issued and outstanding 17,525
Additional paid in capital 57,475
Accumulated deficit (1,141,524)
-----------
Total Shareholders' deficit (1,066,524)
-----------
Total Liabilities and Shareholders' deficit $ 1,279,193
===========
See accompanying notes to condensed financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
MerchantOnline.com, Inc
Statement of Operations
(unaudited)
(Restated, see Note 7)
Three Months Ended Nine Months Ended
July 31, July 31,
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES, net $ 208,411 $ 78,903 $ 373,220 $ 105,458
COSTS & EXPENSES
Costs of revenues 11,955 14,350 102,209 19,364
Advertising 575,000 -- 575,000 --
Labor 131,172 34,343 257,025 75,226
General & Administrative 148,488 50,477 355,179 100,100
------------ ------------ ------------ ------------
Total Costs & Expenses 866,615 99,170 1,289,413 194,690
------------ ------------ ------------ ------------
Net loss $ (658,204) $ (20,267) $ (916,193) $ (89,232)
============ ============ ============ ============
Net loss per share $ (.04) $ (.00) $ (.05) $ (.01)
============ ============ ============ ============
Weighted average shares outstanding 17,515,417 17,500,000 17,506,852 17,500,000
============ ============ ============ ============
See accompanying notes to condensed financial statements.
</TABLE>
4
<PAGE>
MerchantOnline.com, Inc
Statement of Cash Flows
For the Nine Months Ended July 31, 1999
(unaudited)
(Restated, see Notes 7)
OPERATING ACTIVITIES
Net loss $ (916,193)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 25,352
(increase) decrease in current assets:
Account receivable (177,103)
Employee advances (300)
Increase (decrease) in current liabilities:
Accounts payable 265,433
Accrued advertising liability 1,530,000
Deferred advertising (955,000)
Commissions payable (2,983)
-----------
Net cash used in operating activities (230,794)
-----------
Cash flows from investing activities:
Purchase of property and equipment (83,849)
Security deposits (2,442)
-----------
Net Cash used in investing activities (86,291)
-----------
Cash flows from financing activities:
Proceeds from notes payable 285,674
Proceeds from private placement 25,000
-----------
Net cash provided by financing activities 310,674
-----------
Net increase in cash (6,411)
Cash at beginning of period 2,499
-----------
Cash at end of period $ (3,912)
===========
See accompanying notes to condensed financial statements.
5
<PAGE>
MERCHANTONLINE.COM, INC.
Notes to Financial Statements (unaudited)
July 31, 1999
Note 1. Basis of Presentation
RESTATEMENT OF FINANCIAL STATEMENTS AND CHANGES TO CERTAIN INFORMATION.
The financial statements contain amounts that have been restated to
reflect a correction of advertising expense in the proper period. (see
Note 3). The accompanying unaudited financial statements have been
prepared in accordance with the instructions for Form 10-QSB and do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments, consisting only of normal
recurring adjustments considered necessary for a fair presentation,
have been included. Operating results for any quarter are not
necessarily indicative of the results for any other quarter or for the
full year. These statements should be read in conjunction with the
consolidated financial statements and notes thereto for the period from
November 1, 1997 to October 31, 1998, included in the Company's Form
8-K as filed with the Securities and Exchange Commission.
Note 2. Revenue Recognition
In December 1999, the Securities and Exchange Commission staff issued
Staff Accounting Bulletin (SAB) No. 101, REVENUE RECOGNITION IN
FINANCIAL STATEMENTS. The SAB establishes certain criteria for gross
versus net recording of sales transactions and requires companies to
comply with the SAB no later than the first fiscal quarter of the
fiscal year beginning after December 15, 1999 and to retroactively
reclassify for all periods presented. The Company has decided to early
adopt the SAB for the fiscal year ended October 31, 1999. Prior to
implementation of the SAB, the Company recorded gross revenues from
customers that used its merchant accounts and recorded corresponding
expenses, net of its fees, for distribution to its customers. The July
31, 1999 and 1998 quarterly information for the three months ended and
the nine months ended have been reclassified to comply with this SAB.
Note 3. Advertising Expense
The Company accounts for its advertising expense in accordance with SOP
93-7, REPORTING ON ADVERTISING COSTS, which requires advertising costs
to be expensed as incurred or at the time of first showing. Advertising
costs for the three months period ended and nine months period ended
July 31, 1999 were $575,000. There was no advertising costs for the
period from November 20, 1997(inception) through July 31, 1998.
Note 4. Deferred Advertising and Accrued Advertising Liability
In May 1999, the Company entered into an agreement with a unrelated
party that provided for the Company to receive advertising in the form
a sponsorship of a car-racing team and certain Internet advertising
blocks for a $1,530,000 fee, which was payable in bi-weekly
installments beginning June 10, 1999. The Company allocated $765,000 of
the fee to the sponsorship of the car-racing team and expensed $575,000
during the three month period ending July 31, 1999. The Company has the
right to use the Internet advertising blocks through December 31, 2000.
Accordingly, the Company has recorded deferred advertising of $955,000
at July 31, 1999.
Deferred advertising relates to: (1) a portion of the sponsorship of
the car-racing team for races which will occur subsequent to July 31,
1999 and (2) to Internet advertising blocks, which will become
available to the Company upon the payment of the Company's liability
under an advertising agreement.
Note 5. Reverse Merger
On February 16, 1999, Tarcyn Corporation (Tarcyn) entered into a
transaction whereby Tarcyn acquired all of the issued and outstanding
shares of MerchantOnline.com, Inc. (the "Company") in exchange for
15,750,000 common shares of Tarcyn stock. Tarcyn had 500,000 shares
outstanding prior to the acquisition. In connection with and prior to
this transaction, Tarcyn authorized a "forward split" whereby three and
one-half of common stock were issued for each share outstanding or an
aggregate of 1,750,000 common shares. Accordingly, the shareholders of
the "Company" will own 90% of the Tarcyn issued and outstanding shares
after the acquisition.
Tarcyn had no assets or operating activity, accordingly the transaction
is hereby accounted for as a reverse merger and recapitalization on
February 15, 1999, for an additional 1,750,000 shares (the outstanding
Tarcyn shares) in exchange for no assets. As a result the shares issued
(15,750,000) for the "Company" have been treated as if they were issued
since the "Company's" inception (November 20, 1997).
6
<PAGE>
MERCHANTONLINE.COM, INC.
Notes to Financial Statements (unaudited)
July 31, 1999
Note 6. Loss Per Share
Loss per share is computed by dividing net loss by the weighted average
number of shares of common stock outstanding during each period giving
effect to the 1,750,000 shares referred to above as outstanding since
February 15, 1999.
Note 7. Restatement
RESTATEMENT OF FINANCIAL STATEMENTS AND CHANGES TO CERTAIN INFORMATION
As a result of the Company's annual audit of its financial statements
with its independent accountants for the year ended October 31, 1999,
the Company determined that it would restate the amounts originally
reported for the third quarter of 1999 to correct an error in the
allocation of advertising expense into the proper period. The
correction in advertising expense resulted in advertising expense of
$575,000, deferred advertising of $955,000, and accrued advertising
liability of $1,530,000 reported for the three and nine months periods
ended July 31, 1999 (see Note 3 & 4 to the Company's financial
statements).
Additionally, the Company restated certain revenue amounts in
accordance with Staff Accounting Bulletin (SAB) No. 101 "REVENUE
RECOGNITION IN FINANCIAL STATEMENTS" which it early adopted for the
year ended October 31, 1999 during its regular annual audit. The
Company has restated its financial statements for the quarter ended
July 31, 1999 (see Note 7 to the Company's financial statements). This
Amendment No.1 of Quarterly Report on Form 10-QSB/A amends and restates
Item 1, Financial Statements, and Item 2, Management's Discussion and
Analysis of Financial Condition and Results of Operations, of the
Company's Quarterly Report on Form 10-QSB filed on August 26, 1999 for
the quarter ended July 31, 1999.
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
July 31, 1999 July 31, 1998
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
As Reported Restated As Reported Restated
------------ ------------ ------------ ------------
STATEMENT OF OPERATIONS
Revenues, net $ 217,776 $ 208,411 $ 237,128 $ 78,903
Cost of revenues 21,320 11,955 150,703 14,350
Advertising -- 575,000 -- --
General & administrative 279,660 279,660 106,692 84,820
Net loss $ (83,204) $ (658,204) $ (20,267) $ (20,267)
============ ============ ============ ============
Net loss per share $ (.00) $ (.04) $ (.00) $ (.00)
============ ============ ============ ============
Weighted average shares outstanding 17,181,818 17,515,417 15,750,000 17,500,000
Nine Months Ended Nine Months Ended
July 31, 1999 July 31, 1998
---------------------------- ----------------------------
As Reported Restated As Reported Restated
------------ ------------ ------------ ------------
STATEMENT OF OPERATIONS
Revenues $ 529,985 $ 373,220 $ 316,935 $ 105,458
Cost of Sales 251,891 102,209 208,970 19,364
Advertising -- 575,000 -- --
General & Administrative 619,287 612,204 197,197 175,326
NET (LOSS) $ (341,193) $ (916,193) $ (89,232) $ (89,232)
============ ============ ============ ============
Net loss per share $ (.02) $ (.05) $ (.01) $ (.01)
============ ============ ============ ============
Weighted average shares outstanding 16,450,000 17,515,417 15,750,000 17,500,000
</TABLE>
7
<PAGE>
MERCHANTONLINE.COM, INC.
Notes to Financial Statements (unaudited)
July 31, 1999
Note 7. Restatement (continued)
BALANCE SHEET
July 31, 1999
-------------------------
As Reported Restated
----------- --------
Deferred advertising -- 753,750
Total current assets 185,853 939,603
Deferred advertising -- 201,250
Prepaid advertising 1,530,000 --
Total assets 1,854,193 1,279,193
Accounts payable 1,923,477 393,477
Accrued advertising liability -- 1,530,000
Total current liabilities 2,345,717 2,345,717
Accumulated deficit (341,193) (1,141,524)
Total shareholders' deficit (491,524) (1,066,524)
Total liabilities and shareholders' deficit 1,854,193 1,279,193
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the
Company's unaudited financial statements and notes thereto included
herein. In connection with, and because it desires to take advantage
of, the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995, the Company cautions readers regarding certain
forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on the behalf of the
Company, whether or not in future filings with the Securities and
Exchange Commission. Forward looking statements are statements not
based on historical information and which relate to future operations,
strategies, financial results or other developments. Forward looking
statements are necessarily based upon estimates and assumptions that
are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond
the Company's control and many of which, with respect to future
business decisions, are subject to change. These uncertainties and
contingencies can affect actual results and could cause actual results
to differ materially from those expressed in any forward looking
statements made by, or on behalf of, the Company. The Company disclaims
any obligation to update forward looking statements.
OVERVIEW
MerchantOnline.com, Inc., f/k/a Tarcyn Corporation (the "Company"
or "MOL"), was incorporated under the laws of the State of Colorado on
March 19, 1993. On February 16, 1999, pursuant to the terms of an
Agreement and Plan of Reorganization, the Company undertook a forward
split of its issued and outstanding common stock whereby 3.5 shares of
common stock were exchanged for every share then issued and outstanding
and thereafter, the Company acquired all of the issued and outstanding
securities of CreditCo, Inc., a Delaware corporation, in exchange for
15,750,000 (post forward split) "restricted" common shares of the
Company. As a result, the Company was the surviving entity. As part of
the terms of the aforesaid transaction, the Company amended its
Articles of Incorporation, changing its name to its present name, as
well as reincorporating in the State of Florida.
The Company's principal business is to provide a diverse selection
of services which it has developed to allow Internet merchants to
quickly and easily establish a method of conducting business on the
Internet with a minimal initial investment and with low transaction
costs. MOL intends to attempt to take advantage of the anticipated
enormous growth of the Internet by providing an electronic payment
solution for merchants that market and sell their products and services
on the Internet. The electronic commerce services ("E-commerce")
provided by MOL include allowing merchants to accept credit cards,
debit cards and online checks from customers in a secure,
technologically advanced environment. MOL is currently a single source
of customer service which offers a variety of Internet services,
including electronic shopping carts, web site development and hosting,
merchant accounts and real-time credit card processing in a single
package for one installation fee and only one, combined monthly
billing. To date, most of MOL's revenues have been generated from
credit card transactions and set up fees.
MOL has developed proprietary real-time credit card processing
programs which it calls MOLcharge, which management believes meets or
exceeds the capabilities of all currently available software. It
intends to provide small and medium sized merchants with a single
vendor that furnishes everything needed to begin participating in
E-commerce. Its proposed client base includes merchants that already
have merchant bankcard accounts that require real-time processing only.
CreditCo commenced marketing its business in February 1998 and, in
September 1998, it began offering complete services to allow merchants
to become active on the Internet.
The following information is intended to highlight developments in
the Company's operations to present the results of operations of the
Company, to identify key trends affecting the Company's businesses and
to identify other factors affecting the Company's results of operations
for the nine month periods ended July 31, 1999 and 1998.
9
<PAGE>
RESULTS OF OPERATIONS
Results of Operations for the three month periods ended July 31, 1999
and 1998.
During the three month period ended July 31, 1999, the Company's
revenues were $208,411, compared to $78,903 for the similar period in
1998. This increase was attributable to the growth of the Company's
business. Costs of revenues were $ 11,955 for the three month period
ended July 31, 1999, compared to $14,350 for the three month period
ended July 31, 1998. Relevant thereto, on April 1, 1999, the Company
discontinued its "turnkey" product line whereby sales for customer
websites were reflected on the Company financial books in revenues and
commissions paid to customers were reflected in cost of revenues. By
discontinuing this product line, both revenues and costs of revenues
have been restated and reduced proportionately in order to reflect the
Company's position to adopt Staff Accounting Bulletin (SAB) No. 101 as
described in Note 2 of the footnotes to the financial statements
presented in Item 1. The remaining product lines of the Company yield
sales revenues by way of fees and charges, with little in the way of
cost of sales related specifically to these revenue items. This shift
in product mix will substantially affect the revenues and costs
reflected in the Company's future financial statements. For the three
month period ended July 31, 1999, the portion of previously reported
revenues that relate to the "turnkey" product line was $9,365, compared
to $158,225 for the three months ended July 31, 1998.
General and administrative expenses for the three month period
ended July 31, 1999, were $279,660 compared to $84,820 for the three
month period ended July 31, 1998, including $131,172 in independent
contractor expense, an increase of $96,829 for the similar period in
1998. The Company has retained nine separate independent contractors
who provide the Company with technical support, website design, public
relations and marketing. General and administrative expense increased
during the three month period ended July 31, 1999 compared to the
similar period in 1998 as a result of the Company moving its principal
place of business to a larger facility in order to accommodate the
growth of the business and salaries of the Company's increased number
of employees. It is expected that these expenses will remain relatively
constant or increase in the foreseeable future by reason of anticipated
expanded volume of transactions processed by the Company. As a result,
the Company generated a net loss from operations of $(658,204) during
the three month period ended July 31, 1999 ($.04 per share), compared
to a net loss of $(20,267) for the similar period in 1998. The large
increase in the loss is mainly attributable to the reallocation of
advertising expenses of $575,000 from subsequent periods in accordance
with SOP 93-7 "Reporting on Advertising Costs".
Results of Operations for the nine month periods ended July 31, 1999
and 1998.
During the nine month period ended July 31, 1999, the Company's
revenues were $373,220, compared to $105,458 for the similar period in
1998. This increase was attributable to the growth of the Company's
business. Costs of revenues were $102,209 for the nine month period
ended July 31, 1999, compared to $19,364 for the nine month period
ended July 31, 1998.
General and administrative expenses for the nine month period ended
July 31, 1999, were $612,204 compared to $175,326 for the nine month
period ended July 31, 1998, including $257,025 in independent
contractor expense, an increase of $181,799 for the similar period in
1998. The Company has retained nine separate independent contractors
who provide the Company with technical support, website design, public
relations and marketing. General and administrative expense increased
during the nine month period ended July 31, 1999 compared to the
similar period in 1998 as a result of the Company moving its principal
place of business to a larger facility in order to accommodate the
growth of the business and salaries of the Company's increased number
of employees. It is expected that these expenses will remain relatively
constant or increase in the foreseeable future by reason of anticipated
expanded volume of transactions processed by the Company. As a result,
the Company generated a net loss from operations of $(916,193) during
the nine month period ended July 31, 1999 ($.05 per share), compared to
a net loss of $(89,232) or ($.01 per share) for the similar period in
1998. The large increase in the loss is mainly attributable to the
reallocation of advertising expenses of $575,000 from subsequent
periods in accordance with SOP 93-7 "Reporting on Advertising Costs".
This shift in product mix from the turnkey business will substantially
affect the revenues and costs reflected in the Company's future
financial statements. For the nine month period ended July 31, 1999,
the portion of previously reported revenues that relate to the
"turnkey" product line was $156,765, compared to $211,477 for the nine
months ended July 31, 1998.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At July 31, 1999, the Company had $(3,912) in cash and $189,465 in
accounts receivable. Its accounts payable, commissions payable and
accrued advertising liability were, in the aggregate, $1,936,017. The
amount of $1,530,000 is due to Pagan Lewis Motors, Inc.(PLM) for
advertising costs. An agreement has been reached with PLM, that this
shall be paid in twelve monthly installments, starting on September 1,
1999, and PLM will release in the same amount advertising on Yahoo!.
Accounts Payables have increased during the nine month period due to
the shortfall of cash.
The Company has five outstanding notes payable, including two loans
from affiliates, including one note to Tarek Kirschen, President and a
Director of the Company, with an outstanding principal balance of
$40,269 and the other to Steven Landau in the principal amount of
$25,000. Mr. Kirschen's note accrues interest at the rate of 1% per
month on the outstanding balance. Mr. Landau's note accrues interest at
the rate of 8% per annum and is due on demand. The remaining
outstanding notes aggregate $360,000 and are payable to minority
shareholders pursuant to the same terms and conditions as Mr. Landau's
loan.
Management has recognized the Company's need for additional
operating capital. In response thereto, in May 1999, the Company
commenced a private offering of its common stock wherein it is offering
shares of its common stock at a price of $1.00 per share for aggregate
gross proceeds of up to $2 million. As of the date of this report, the
Company had sold an aggregate of 25,000 shares of its common stock for
gross proceeds of $25,000 pursuant to the offering. While no assurances
of closing the maximum dollar amount proposed to be raised can be
provided, it is anticipated that this offering will continue through
the end of August 1999. There can be no assurances that all of the
shares of common stock currently being offered will be sold, or that
the Company will generate sufficient interest in this offering to solve
its cash shortage. It is expected that the proceeds of this offering
will be utilized primarily for advertising the Company's services using
electronic banners on the major internet services, attendance of the
Company at trade shows, research and development and repayment of debt.
The Company's common stock was approved for trading on the OTC
Bulletin Board operated by the National Association of Securities
Dealers, Inc. in the end of April 1999.
TRENDS
Management believes that the Company will continue to operate the
Company's business at a loss for the next several months, but is
optimistic that the Company will begin generating profits from its
operations beginning thereafter. This is based upon numerous
opportunities for expansion of the services offered by the Company with
major internet companies, as well as establishing strategic alliances
with existing internet companies. Discussions have already commenced in
this regard, but as of the date of this report no definitive agreements
have been made and there can be no assurances that such agreements will
be consummated in the future. Further, there can be no assurances that
the Company will become profitable within the time parameters described
herein, or at all. The Company is currently processing over 1,000
clients. Once additional cash becomes available to the Company from the
private offering referenced above (of which there can be no assurance),
it is anticipated that the Company's sales campaign will be enhanced.
INFLATION
Although the operations of the Company are influenced by general
economic conditions, the Company does not believe that inflation had a
material affect on the results of operations during the nine month
period ended July 31, 1999.
YEAR 2000 DISCLOSURE
Many existing computer programs use only two digits to identify a
year in the date field. These programs were designed and developed
without considering the impact of the upcoming change in the century.
If not corrected, many computer applications could fail or create
erroneous results by or at the Year 2000. As a result, many companies
will be required to undertake major projects to address the Year 2000
issue. The Company presently owns approximately $83,000 worth of
computers and computer related equipment. However, the Company utilizes
Linux servers and Windows 98 personal computers with the modern ROM
BIOS. Both of these technologies are fully Y2K compliant, as the
internal calendars do not use truncated date representations. In
addition, there can be no assurances that the Company's business will
not be negatively affected by other third party failures, should they
occur after January 1, 2000.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - On August 4, 1999, at the Palm Beach
County Courthouse, Palm Beach County, Florida, a judgement was entered
in favor of James Pruden, case #SC-99-010542-RD in the amount of
$15,000. The Company has entered into a collaterized agreement that the
debt will be settled by August 30, 1999, at which time a Satisfactory
of Judgement will be filed.
ITEM 2. CHANGES IN SECURITIES - On or about May 18, 1999 the Company
issued 25,000 restricted shares of stock to Marx Four Enterprises, Inc.
for cash.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NONE
ITEM 5. OTHER EVENTS -
The financial consulting agreement between Worldwide Corporate Finance
and the Company that was entered on January 26, 1999, was terminated as
of August 18, 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MERCHANTONLINE.COM, INC.
(Registrant)
Dated: February 23, 2000
By: /s/ TAREK S. KIRSCHEN
----------------------
Tarek S. Kirschen,
President
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0001039947
<NAME> Merchantonline.com, Inc.
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> JUL-31-1999
<EXCHANGE-RATE> 1
<CASH> (3,912)
<SECURITIES> 0
<RECEIVABLES> 189,465
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 939,603
<PP&E> 166,642
<DEPRECIATION> (37,309)
<TOTAL-ASSETS> 1,279,193
<CURRENT-LIABILITIES> 2,345,717
<BONDS> 0
0
0
<COMMON> 75,000
<OTHER-SE> (1,066,524)
<TOTAL-LIABILITY-AND-EQUITY> 1,279,193
<SALES> 0
<TOTAL-REVENUES> 373,220
<CGS> 102,209
<TOTAL-COSTS> 714,413
<OTHER-EXPENSES> 575,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (916,193)
<EPS-BASIC> (.05)
<EPS-DILUTED> 0
</TABLE>
