UNITED STATES
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 quarterly period ended June 30, 1999
- --------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _______
Commission file number: 001-14889
HOME.WEB, INC.
--------------
(exact name of registrant as specified in its charter)
NEVADA 77-0454933
- ------ ----------
(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
380 Foam Street, Suite 210, Monterey, California 93940
- ------------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (831) 375-6209
--------------
Indicate by check mark whether the registrant: (1) has filed all reports
required by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing for the
past 90 days. Yes X No
- --
The number of shares of the Registrant's Common Stock, $0.001 par value, as of
June 30, 1999: XXX,XXXX
----------
<PAGE>
HOME.WEB, INC.
FORM 10-QSB, QUARTER ENDED JUNE 30, 1999
INDEX
PART I FINANCIAL INFORMATION
----------------------------
ITEM 1 FINANCIAL STATEMENTS
Accountant's Review Report F-2
Balance Sheet, June 30, 1999 F-3
Statement of Operations, Three months
Ending June 30, 1999 F-4
Statement of Retained Earnings
June 30, 1999 F-5
Statement of Cash Flows,
June 30, 1999 F-6
Summary of Significant Accounting Policies F-7
Notes to Financial Statements F-8
Item 2 Management's Discussion and Analysis or Plan of Operations
PART II OTHER INFORMATION
Item 1 Legal Proceedings . .. . . . . . . . . . . . . . . . . . . . . . . 12
Item 2 Changes in Securities . . . . . . . . . . . . .. . . . . . . . . . 12
Item 3 Defaults Upon Senior Securities . . . . . . . . . .. . . . . . . . 12
Item 4 Submission of Matters to a Vote of Security Holders . .. . . . .. 13
Item 5 Other Information . . . . . . . . . . . . . . . . . . . . . . . . 13
Item 6 Exhibits and Reports on Form 8-K . . . . . . . .. . . . . . . . . .13
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . .13
<PAGE>
HOME WEB, INCORPORATED
----------------------
(A Development Stage Company)
Index to Financial Statements
Page
Accountant's Review Report 2
Balance Sheet, June 30, 1999 3
Statement of Operations, Three months
Ending June 30, 1999 4
Statement of Shareholders' Equity
June 30, 1999 5
Statement of Cash Flows,
June 30, 1999 6
Summary of Significant Accounting Policies 7-8
Notes to Financial Statements 9-11
<PAGE>
HAWKINS ACCOUNTING
CERTIFIED PUBLIC ACCOUNTANT 341 MAIN STREET SALINAS CA 93901
(831) 758-1694 FAX (831) 758-1699
To the Board of Directors and Shareholders
Home Web, Incorporated
Monterey, California
I have reviewed the accompanying balance sheet of Home Web, Incorporated as of
June 30, 1999, and the related statements of income and shareholders' equity and
cash flows for the three months and six months then ended June 30, 1999 and June
30, 1998, in accordance with Statements on Standards for Accounting and Review
Services issued by the American Institute of Certified Public Accountants. All
information included in these financial statements is the representation of the
management of Home Web, Incorporated.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be
made to the accompanying financial statements and the cumulative results of
operations and cash flows for them to be in conformity with generally accepted
accounting principles.
/s/ Hawkins Accounting
August 26, 1999
<PAGE>
HOME WEB, INCORPORATED
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 1999
ASSETS
<TABLE>
<CAPTION>
<S> <C>
Current assets
Cash in bank $ 3
Non-trade receivable 1,450
-----
Total current assets 1,453
Equipment
Coolers and equipment 40,308
Office equipment 9,841
-----
50,149
Accumulated depreciation (7,927)
------
Total equipment 42,222
Other assets
Trade name 11,000
------
Total other assets 11,000
TOTAL ASSETS $ 56,675
=============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 17,641
California Franchise Tax payable 3,116
Loan from affiliate 2,825
-----
Total current liabilities 23,582
Shareholders' equity
Capital stock 27,507
Paid in capital 1,347,493
Deficit accumulated during development stage (1,343,907)
----------
Total shareholders' equity 31,093
------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 54,675
=============
</TABLE>
See accompanying notes and accountant's review report.
2
<PAGE>
HOME WEB, INCORPORATED
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the three months and six months ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
June 30, 1999
Deficit
Accumulated
Three months ended Six months ended During
Development
1999 1998 1999 1998 Stage
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
Sales $ 0 $ 3,666 $ 528 $ 4,766 $ 18,887
Cost of Sales 0 3,001 523 4,047 15,091
- ----- --- ----- ------
Gross Margin 0 665 5 719 3,796
Expenses
Advertising 464 607 849
Amortization 492 984 1,584
Consulting fees 4,500 3,195 5,500 16,915 11,196
Equipment rental 962 2,273 2,339
Depreciation 1,321 1,346 2,642 2,594 7,927
Licenses and taxes 145 145 140 370
Office help 1,591 3,748 1,591 9,752 12,432
Office supplies 384 2,149 585 3,787 3,676
Postage 81 131 510 754
Travel, meals and entertainment 54 954 54 1,286 2,679
Rent, utilities and telephone 248 180 248 928 3,591
Organization and start up costs 15,318 41,674
Compensation due stock issuance 1,254,500
Total expenses 8,324 14,341 26,083 39,776 1,343,571
----- ------ ------ ------ ---------
(Loss) from operations (8,324) (13,676) (26,078) (39,057) (1,339,775)
Other income (expense)
Interest 50 50
Nondeductible penalties 716 716 882
State tax expense 800 1,600 800 3,200
--- ----- --- -----
Total other expense 1,516 2,316 850 4,132
----- ----- --- -----
Net loss $ (9,840) $ (13,676) $ (28,394) $ (39,907) $(1,343,907)
============= ============ ============ ============ ===========
Loss per share of common stock $ (0.0004) $ (0.0005) $ (0.0010) $ (0.0015) $ (0.0490)
============= ============ ============ ============ ===========
Weighted average of shares outstanding $ 27,157,000 $ 25,741,031 $ 27,157,000 $ 25,741,031 $27,157,000
============= ============ ============ ============ ===========
</TABLE>
See accompanying notes and accountant's review report
3
<PAGE>
HOME WEB, INCORPORATED
(A Development Stage Company)
STATEMENT OF SHAREHOLDERS' EQUITY
June 30, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Common stock During
------------ Paid in Development
Shares Amount Capital Stage Total
------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C>
Balance,
December 31, 1998 27,497,000 $ 27,497 $ 1,347,003 $ (1,315,513) $ 58,987
Common stock issued 10,000 10 490 500
Net loss for the period
ended June 30, 1999 (28,394) (28,394)
---------- --------- ----------- ------- -------
27,507,000 $ 27,507 $ 1,347,493 $ (1,343,907) $ 31,093
========== ========= =========== ============ =========
</TABLE>
See accompanying notes and accountant's review report
4
<PAGE>
HOME WEB, INCORPORATED
(A Development Stage Company)
STATEMENT OF CASH FLOWS-INDIRECT METHOD
For the three months and six months ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
June 30, 1999
Cash flows
Accumulated
Three months ended Six months ended During
Development
1999 1998 1999 1998 Stage
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (9,840) $ (13,676) $ (28,394) $ (39,907) $ (1,343,907)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 1,321 1,838 2,642 3,578 9,511
Stock issued for services 1,254,500
Expensing of organization costs 2,366 2,366
Attorney fees for stock 500 500
Increase in accounts receivable (1,500) (1,566) (1,450)
Increase in current liabilities 8,440 5,500 22,792 10,099 23,592
----- ----- ------ ------ ------
NET CASH PROVIDED BY OPERATING ACTIVITIES (79) (7,788) (94) (27,796) (54,888)
INVESTING ACTIVITIES
Increase in other assets 11,000 11,000 14,960
Purchase of equipment 3,596 32,055 50,149
----- ----- ------- ------ ------
NET CASH USED IN INVESTING ACTIVITIES 14,596 43,055 65,109
FINANCING ACTIVITIES
Sale of common stock 24,000 73,300 120,000
------ ------ -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (79) 1,616 (94) 2,449 3
Cash and cash equivalents at the beginning of
the period 82 1,100 97 267 0
-- ----- -- --- -
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD $ 3 $ 2,716 $ 3 $ 2,716 $ 3
========= ========== ========== ========== ============
</TABLE>
See accompanying notes and accountant's review report
5
<PAGE>
HOME WEB, INCORPORATED
(A DEVELOPMENT STAGE COMPANY)
Summary of Significant Accounting Policies
June 30, 1999
Development Stage Company
- -------------------------
Home Web, Inc. (the "Company") is a development stage company as defined in the
Financial Accounting Standards Board No. 7. The Company is devoting
substantially all of its present efforts in securing and establishing a new
business, and although planned principal operations have commenced, substantial
revenues have yet to be realized.
Use of estimates
- ----------------
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results could differ from these estimates.
Cash equivalents
- ----------------
For the purpose of the statement of cash flows, the company considers all highly
liquid debt instruments purchased with the original maturity of three months or
less to be cash equivalents.
Organization and business Start Up and Amortization
- ---------------------------------------------------
Organization costs were expensed during the period ending March 31, 1999 in
accordance with SOP 98-5. Management made the election to expense the costs for
years beginning January 1, 1999.
Income Taxes
- ------------
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and tax basis
of assets and liabilities for financial and income tax reporting. The deferred
tax assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settle. Deferred taxes are also recognized for
operating losses that are available to offset future taxable income and tax
credits that are available to offset future federal income taxes.
Common Stock
- ------------
Common stock is at .001 par value with 50,000,000 shares authorized, 27,507,000
outstanding as of June 30, 1999.
Stock Options
- -------------
Stock that is issued for services rendered is recorded at the fair value of the
stock in the year that the stock is given and recorded as an expense in the same
year.
Material Adjustments
- --------------------
Management represents that all material adjustments to the financial statements
have been made.
<PAGE>
HOME WEB, INCORPORATED
(A Development Stage Company)
Notes to Financial Statements
June 30, 1999
Note A:Background
- -----------------
The Company was incorporated under the laws of the State of Nevada on
September 15,1995. The principal activities of the Company, from the beginning
of the development stage, have been organizational matters and the sale of
stock. The Company was formed to sell wholesale gourmet and specialty cheese on
the Internet. During the period ending June 30, 1999 the Company had sales and
incurred expenses against those sales, but the activity was immaterial for the
purposes of SFAS No. 7.
Note B:Related Party Transactions
- ---------------------------------
There were no material related party transactions for the three month
period ending June 30, 1999.
For the six month period ending June 30, 1998 the Company paid to Monterey
Ventures a total of $ 9,341 for overhead expenses such as office help and
computer equipment. Monterey Ventures has a management contract with the Company
and is a shareholder in the Company.
During the period of June 30, 1998 the Company paid one of its founders $
500 for consulting services to the Company.
Note C:Income taxes
- -------------------
The benefit for income taxes from operations consisted of the following
components: current tax benefit of $ 4,259 for June 30, 1999 and $ 5,986 as of
June 30, 1998 resulting from a net loss before income taxes, and deferred tax
expenses of $ 4,259 and $ 5,986 respectively resulting from a valuation
allowance recorded against the deferred tax asset resulting from net operating
losses. Net operating loss carryforward will expire in 2013.
The valuation allowance will be evaluated at the end of each year,
considering positive and negative evidence about whether the asset will be
realized. At the time, the allowance will either be increased or reduced;
reduction would result in the complete elimination of the allowance if positive
evidence indicates that the value of the deferred tax asset is no longer
required.
<PAGE>
HOME WEB, INCORPORATED
(A Development Stage Company)
Notes to Financial Statements
June 30, 1999
NOTE C:Public stock offering
- ----------------------------
During the periods ending March 31, 1999 and 1998, pursuant to an exemption
under Rule 504 of Regulation D of the Securities Act of 1933, as amended (the
Act), the Company sold solely to accredited and/or sophisticated investors, its
common stock. The only transaction during the period of June 30, 1999 was 10,000
shares of stock issued to the corporate counsel in exchange for legal services
to the corporation.
During the period of June 30, 1998 there were various transactions to
twenty three different accredited and/or sophisticated investors. Total proceeds
from these transactions were $ 73,300.
Note D:Stock options
- --------------------
It was also voted upon at the organizational meeting during 1997 to grant
options to officers of the corporation and MVI, an affiliated company along with
one of the employees of MVI. The options can be exercised at $.001. The options
to be exercised are 1,250,000 and have no expiration date. These options are
considered compensatory and the expense was recognized in the prior year.
During the period ended June 30, 1998 MVI exercised its stock options as
did one of the founders and a key employee of MVI. Two of the remaining founders
did not exercise their options during the year.
There were no options exercised during the three-month period ending June
30, 1999.
Note E:Property, equipment and depreciation
- -------------------------------------------
Property and equipment are recorded at cost. Maintenance and repairs are
expensed as incurred; major renewals and betterments are capitalized. When items
of property and equipment are sold or retired, the related costs and accumulated
depreciation are removed from the accounts and any gain or loss is included in
income.
Depreciation expense for the period ending June 30, 1999 and 1998 was
$2,642 and $ 2,594 respectively.
<PAGE>
HOME WEB, INCORPORATED
(A Development Stage Company)
Notes to Financial Statements
June 30, 1999
NOTE F:Major customer
- ---------------------
The Company had a purchase commitment to purchase the Company's merchandise
from a non-affiliated company. This customer is also to take physical possession
of the Company's major assets and use those assets in the ordinary course of its
business. Terms are discussed more fully in Note G.
NOTE G:Going concern
- --------------------
As of June 30, 1999, the Company had net losses from operating activities
which raise substantial doubt about its ability to continue as a going concern.
The Company is in the process of raising initial working capital through a
public offering of its common stock, which is expected to provide liquidity
until operations become profitable. The Company has obtained a commitment for up
to $ 150,000 from a significant shareholder, Monterey Ventures, Inc for funding
over the next twelve months. The funds would be paid distributed in increments
per requests from the Company on an "as needed" basis. Under the agreement, the
Company can repay the borrowed funds in increments as the Company receives
payment from its' customers. Also in the credit agreement is any funds needed
for longer than twelve months would be considered long term debt. This type of
funding, if needed, would be structured for a twenty four or thirty-six month
payoff not to exceed $ 25,000 in requests in the first year of operations.
The Company has signed an agreement with Internet Food Company to purchase
its' products. Internet Food Company has already penetrated the hotel and gift
basket market and has further developed a web site to market its goods. The two
companies are in the process of identifying specific products that Home Web.
Inc. would supply wholesale.
The Company's ability to continue as a going concern is dependent upon a
successful public offering and ultimately achieving profitable operations. There
is no assurance that the Company will be successful in its efforts to raise
additional proceeds or achieve profitable operations. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
When used in this discussion, the words "believes", "anticipates",
"expects" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties,
which would, could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to republish revised forward- looking statements to
reflect events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events. Readers are also urged to carefully review
and consider the various disclosures made by the Company which attempt to advise
interested parties of the factors which affect the Company's business, in this
report, as well as the Company's periodic reports on Forms 10-K, 10Q and 8-K
filed with the Securities and Exchange Commission.
Overview
- --------
Home Web plans to penetrate the gourmet/specialty foods market and to
maximize sales by wholesaling products to gourmet food stores, small grocery
chain stores and hotels. The product is currently sold through California
Season's company-owned retail stores, catalog and direct mail order, as well as
business and corporate sales programs.
The gourmet and specialty food industry has a history of growth. The
national revenue for the gourmet and specialty food industry exceeded
thirty-three billion dollars in 1996, according to a report published in the
November 1996 issue of Gourmet Foods Magazine, published by the National
Association of Specialty Foods Trade, Inc., and based upon information obtained
from "Pak Facts," a New York resource company. Home Web is taking advantage of
this market by wholesaling and distributing varieties of handmade Monterey Jack
Cheese.
<PAGE>
The Company selected Monterey, California as its location because it was
the original home of Monterey Jack cheese. David Jacks of Monterey first
produced and marketed Monterey Jack cheese in 1882. This cheese is the only
native California cheese and one of only two cheeses native to the United
States. The Monterey Cheese Company is the only company offering handmade
Monterey Jack cheese made in Monterey, California.
The Company outsources the production of its cheese products to Sonoma
Cheese Factory ("Sonoma"). Sonoma is one of the oldest hand-rolled cheese
processing plants in California and is one of only two such plants still in
existence. Due to the quality of the cheeses produced by Sonoma and the fact
that it is difficult to duplicate hand-rolled cheeses, the Company will continue
to outsource its products for the foreseeable future. There is no written
agreement between Sonoma and the Company; instead, the Company purchases the
product from Sonoma on a cash-on-delivery basis. Sonoma ships the cheese without
labels, which the Company puts on upon delivery. If Sonoma is unable to satisfy
the Company's supply requirements, a back-up supply source is available. This is
a manufacturing wholesale, retail cheese company in Sonoma doing business as
Sonoma Foods, Inc.
From May 1997, the Company has been a development stage company
specializing in a variety of hand-made Monterey Jack cheeses. The Company
selected the product line and the method of marketing to use and made many basic
decisions regarding the amount of products to be offered, the colors of the
packaging and other details. Test marketing has also been done on a limited
basis. The Company is satisfied with its test market results on the cheese
products and will now be expanding sales efforts. The Company will also proceed
with a plan to expand its wholesale line, as outlined below, and is seeking
candidates for manufacturing, distribution and promotion of its products. No
retail activities will be entered into by the Company; rather, Home Web will
continue to source products and sell them wholesale.
By the end of fiscal 1999, the Company plans to have successfully
introduced two new product lines and labels to the gourmet food market. The
Company feels it is the proper time to bring new gourmet "niche" food products,
because the cheese line is now fully developed and ready for marketing. Carmel
Valley Farms and Salinas Valley Farms will be the two new gourmet food lines and
labels. Carmel Valley will feature wine jellies and jams and Salinas Valley will
feature artichoke products, salsa, spices, hot sauce and pasta sauce. The
marketing will be directed towards companies located in tourist areas or which
sell to tourists through local outlets. The Company will also private label
items as requested by its customers. The Company's management anticipates that
wine jellies will do exceptionally well in wineries that have gift shops. The
Company expects to have at least some of these new products available by
September 30, 1999. This will allow the Company to participate in the Food and
Beverage Show in San Francisco, California, in November 1999 and to be prepared
for the holiday food ordering season in October and November.
The Company signed a Purchasing Agreement with Internet Food Company, Inc.
("Internet Food Company") on May 6, 1999. According to the terms of this
agreement, the Company will sell a variety of cheeses and gourmet food products
to Internet Food Company and will advertise on its web site. Home Web will also
develop special private label products for Internet Food Company.
<PAGE>
There are no minimum purchase requirements in this contract and no
guarantees that any products will be purchased.
Product
- -------
Home Web, under the label "Monterey Jack Cheese," currently offers twelve
varieties of creamy, handmade cheeses in three pound wheels, one pound wheels,
nine ounce wedges and three ounce wedges. The varieties of cheese include
hand-rolled, original Monterey Jack, Dry Jack, Caraway, Pesto, Hot Pepper Jack,
Habanero Jack, Garlic Jack, Lite Jack, Cheddar, Chili Cheddar, Vidalia Onion
Jack and Teleme.
The Company's own research has shown that there is a niche demand for its
products because the cheeses are from Monterey and are of handmade quality. The
cheeses have been market-tested by the Company indicating consumer acceptance.
Current vendors offering these cheeses to the public include the California
Seasons chain of three retail stores, the California Seasons' catalog, several
luxury hotels in the Monterey and Big Sur area, a number of Monterey convention
groups, a distributor in Idaho, a chain of five upscale gourmet food markets in
the Los Angeles area, the Monterey Peninsula Airport Gift Shop, a Carmel Valley,
California store and several more retail stores.
Results of Operations
- ---------------------
The Company had revenues of $0 for the three-month period ending June 30,
1999 compared to $3,666 for the three-month period ending June 30, 1998. To
date, the Company has not relied on any revenues for funding its activities and
it does not expect to receive significant revenues from operation in the
immediate future.
For the three-month period ending June 30,1999, the Company's general and
administrative expenses decreased from $8,324 compared to $14,341 for the
corresponding period in 1998. The 1999 amount decrease is due to the lack of
sales in 1999 compared to the corresponding period in 1998.
The Company's net loss was $9,840, for the second quarter of 1999 compared
to a net loss of $13,676 for the corresponding period in 1998. This decrease was
primarily due to the difference in revenue between the two periods.
Liquidity and Capital Resources
- -------------------------------
As of June 30, 1999, the Company's cash balance was $3, compared to $0 as
of June 30, 1998.
The Company's future funding requirements will depend on numerous factors.
These factors include the Company's ability to sell sufficient quantities of its
products to become profitable and the Company's ability to compete against other
better capitalized corporations who offer alternative or similar products.
<PAGE>
Due to the "start up" nature of the Company's business, the Company expects
to incur losses as it expands its business. While the Company has enough cash to
fund its early stage expansion plans, the Company may choose to raise additional
funds through private or public equity investment in order to expand the range
and scope of its business operations. Even if the Company does not have an
immediate need for additional cash, it may seek access to the public equity
markets if and when conditions are favorable. There is no assurance that such
additional funds will be available for the Company to finance its operations on
acceptable terms, if at all.
In order to implement the strategic plan and meet the Company's anticipated
working capital needs, the Company estimates that it will require $150,000 in
capital ($125,000 for short-term financing and $25,000 for Salinas Valley and
Carmel Valley product development). The short-term financing would include
accounts receivable. The Company has a commitment for funding from Monterey
Ventures, Inc. ("MVI") for up to $150,000 to implement the Company's current
plans. MVI will supply short-term and long-term capital financing, which would
be for product development expenses. These funds will be distributed in
increments per requests from Home.Web, Inc. to Monterey Ventures, Inc. on an "as
needed" basis. This agreement to fund has been added as an exhibit to the
previously filed Form10SB. The funds will be used for purchasing product on COD
shipments, such as a large order of cheese, or prepaying if the product is drop
shipped to the customer. It is anticipated that revenues will be generated
during the holiday season in October and November of 1999 and the requirements
for funds from Monterey Ventures, Inc. will be minimal. Under the agreement with
Monterey Ventures, Inc., the Company can repay the borrowed funds as payment is
received from customers. This accommodation is a short term line of credit. This
type of funding, if needed, could be structured for a payoff not to exceed
$25,000 in requests in the first year of operations and would be used for
equipment or product purchases or research and development. The Company will
only be charged interest on any funds used at commercially competitive rates.
Because the products are outsourced, the need for capital will be modest. The
general cost would be in the graphic design for labeling and financing accounts
receivable. Any additional expenses, such as legal and accounting costs, will be
paid through this credit accommodation until the Company's revenues are able to
cover these expenses.
Home Web does not plan to conduct any offering of securities until it has
established its sales history. The only circumstances under which the Company
may conduct an offering sooner is if an opportunity arises to expand the Company
by acquiring a business with established product sales and distribution.
Additional potential sources of funds if the Company requires additional income
include factor agreements, lease agreements for equipment, to reduce costs and
private financing from major shareholders.
<PAGE>
PART II -- OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
None
ITEM 2 CHANGES IN SECURITIES
None
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 6 OTHER INFORMATION
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURE PAGE
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
HOME.WEB, INC.
/S/ Dennis Davis
-------------------------
Dennis Davis
President
Dated: August 30, 1999
<PAGE>
HAWKINS ACCOUNTING
CERTIFIED PUBLIC ACCOUNTANT 341 MAIN STREET SALINAS CA 93901
(831) 759-1694 FAX (831) 759-1699
August 17, 1999
CONSENT OF INDEPENDENT AUDITOR
As the independent auditor for Home.Web, Incorporated, I hereby consent to the
incorporation by reference in this Form 10-QSB and amendments thereto. These
statements cover the period for June 30, 1999 and 1998 (report date of August
26, 1999).
/s/ Hawkins Accounting
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 3
<SECURITIES> 0
<RECEIVABLES> 1,450
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,453
<PP&E> 42,222
<DEPRECIATION> 0
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0
0
<COMMON> 27,507
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<INCOME-TAX> 800
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<CHANGES> 0
<NET-INCOME> (9,840)
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<EPS-DILUTED> 0.000
</TABLE>
