U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
<P>
FORM 10-QSB
<P>
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
<P>
For the quarterly period ended September 30, 2000
<P>
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
<P>
For the transition period from to
<P>
Commission File No. 0-26951
<P>
I-INCUBATOR.COM, INC.
(Name of Small Business Issuer in Its Charter)
<TABLE>
<S> <C>
Florida 59-3442557
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
</TABLE>
<P>
1221 Brickell Avenue, Suite 900, Miami, Florida 33131
(Address of Principal Executive Offices) (Zip Code)
<P>
(305) 358-3678
(Issuer's Telephone Number, Including Area Code)
<P>
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.
<P>
Yes No X
<P>
State the number of shares outstanding of each of the
issuer's classes of common equity, as of the latest
practicable date: As of November 17, 2000 the Company had
24,345,859 shares of Common Stock outstanding, $0.0001
par value.
<P>
I-INCUBATOR.COM, INC.
Form 10-QSB Quarterly Report
For the Period Ended September 30, 2000
<TABLE>
<S> <C>
Page
Part I - FINANCIAL INFORMATION
<P>
Item 1. Financial Statements 1
<P>
Unaudited Balance Sheet at September 30, 2000 and
December 31, 1999 for i-Incubator.com, Inc. 2-3
<P>
Unaudited Statements of Operations for the Six and
Three Months ended June 30, 2000 and 1999 and
from Inception (May 5, 1997) through June 30,
2000 for i-Incubator.com, Inc. 4-5
<P>
Unaudited Statement of Cash Flows for the Six and
Nine Months ended June 30, 2000 and 1999 and
from Inception (May 5, 1997) through September 30,
2000 for i-Incubator.com, Inc. 6-7
<P>
Unaudited Statement of Changes in Stockholders
Equity (Deficit) through September 30, 2000 for
i-Incubator.com, Inc. 8-9
<P>
Notes to Interim Financial Statements 10
<P>
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
<P>
PART II - OTHER INFORMATION
<P>
Item 1. Legal Proceedings
<P>
Item 2. Changes in Securities
<P>
Item 3. Defaults Upon Senior Securities
<P>
Item 4. Submission of Matters to a Vote of Security Holders
<P>
Item 5. Other Information
<P>
Signatures
</TABLE>
<P>
PART I - FINANCIAL INFORMATION
<P>
Item 1. Financial Statements
<P>
BASIS OF PRESENTATION
<P>
The accompanying reviewed 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
1999. 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 nine months ended September 30 , 2000 are not
necessarily indicative of results that may be expected for
the year ending December 31, 2000. The financial statements
are presented on the accrual basis.
<P>
I-INCUBATOR.COM, INC.
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
BALANCE SHEET
<P>
ASSETS
<TABLE>
<S> <C> <C>
(UNAUDITED) (AUDITED)
September 30, December 31,
2000 1999
--------------------------------------
CURRENT ASSETS:
<P>
Cash $ 38 $ 15,539
Prepaid expenses 0 5,000
Notes receivable - related party
Accrued interest receivable - related party 0 713
-----------------------------------
TOTAL CURRENT ASSETS $ 38 $ 21,252
===================================
<P>
PROPERTY AND EQUIPMENT
<P>
Property and equipment net of,
less accumulated depreciation of $658 and $0 5,929 0
-----------------------------------
<P>
OTHER ASSETS:
<P>
Organizational costs, net of
Accumulated amortization of $0 and $109 0 0
Investments in unconsolidated
affiliated companies 2,600 4,600
Due from affiliates 83,587 47,100
-----------------------------------
TOTAL OTHER ASSETS 86,187 51,700
-----------------------------------
<P>
TOTAL ASSETS $ 92,154 $ 79,952
===================================
<P>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<P>
CURRENT LIABILITIES:
Non-interest bearing related
party notes payable, net of unamortized
discounts - current portion $ 119,507 $ 237,576
Notes payable - current portion $ 0 $ 95,000
Due to affiliates 29,000 $ 29,000
Note payable - related party 7,100 0
Lease payable - current portion 1,876 0
Cash overdraft 2,330 0
Accounts payable 23,741 5,101
Accrued expenses payable 53,646 15,000
Accrued interest payable 256 2,250
Payroll taxes payable 11,852 1,412
Shareholders' loan 0 700
--------------------------------
Total Current Liabilities 246,978 386,039
<P>
LONG-TERM LIABILITIES
<P>
Non-interest bearing related party
notes payable, non-current portion 112,805
Lease payable, non-current portion 3,572 0
--------------------------------
Total Long-Term Liabilities 3,572 112,805
<P>
STOCKHOLDERS' EQUITY (DEFICIT):
<P>
Common Stock, $.0001 par value,
50,000,000 shares authorized,
24,325,000 shares and 16,580,000 post
Split shares issued and outstanding
respectfully 2,432 1,657
Additional paid-in-capital 894,424 85,643
Deficit accumulated during
the development stage (1,055,252) (513,192)
--------------------------------
Total Stockholders' Equity (Deficit) (158,396) (425,892)
--------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 92,154 $ 72,952
================================
<P>
See accompanying notes.
</TABLE>
I-INCUBATOR.COM, INC. AND SUBSIDIARIES
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENTS OF OPERATIONS
<P>
<TABLE>
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) For the period
For the Nine For the Nine For the Three For the Three From May 5, 1997
Months Ended Months Ended Months Ended Months Ended (Inception) to
09/30/2000 09/30/1999 09/30/2000 09/30/1999 09/30/2000
---------------------------------------------------------------------------
DEVELOPMENT
STAGE REVENUES $ 0 $ 0 $ 0 $ 0 $ 0
DEVELOPMENT STAGE EXPENSES:
<P>
Bank Charges 281 151 47 56 523
Business promotion 5,106 0 0 0 9,267
Consulting fees 374,390 14,500 6,000 0 393,550
Courier 1,370 499 302 192 2,322
Depreciation 658 0 0 0 658
Dues and subscriptions1,275 0 0 0 1,572
Domain names 0 0 0 0 338,581
Interest expense 36,571 0 9,365 0 38,821
Licenses and taxes 8,482 1,057 2,625 0 12,351
Management fees 0 0 0 0 4,000
Office expenses 43,315 9,025 6,242 2,025 62,361
Office supplies 5,205 69 77 0 5,567
Officer salaries 67,110 29,089 9,222 10,758 111,450
On-line services 0 140 0 140 140
Payroll taxes 6,673 2,580 705 823 10,454
Printing 3,040 12 948 0 3,542
Professional fees 84,762 21,875 26,597 11,965 148,314
Stock Related
Services 6,238 0 1,068 0 9,865
Telephone 545 836 125 232 1,974
Transfer agent fees 4,546 927 1,111 927 7,894
Travel 873 0 0 0 1,151
-----------------------------------------------------------------
Total Development
Stage Expenses 650,450 80,760 64,433 27,118 1,164,355
-----------------------------------------------------------------
LOSS BEFORE OTHER
INCOME (EXPENSE) (650,450) (80,760) (64,433) (27,118) (1,164,355)
<P>
OTHER INCOME
(EXPENSES):
<P>
Interest income 378 0 0 0 1,091
Cancellation of
indebtness income 235,132 0 235,132 0 235,132
Bad debt (55,620) 0 (55,620) 0 (55,620)
Loss on investment (52,000) 0 (2,000) 0 (52,000)
Settlement fees (19,500) 0 (19,500) 0 (19,500)
-----------------------------------------------------------------
NET DEVELOPMENT
STAGE LOSS $(542,060) $(80,760) $93,579 $(27,118) $(1,055,252)
=================================================================
<P>
NET LOSS PER SHARE
OF COMMON STOCK
BASIC $ (0.0307) $(0.0063) $0.0047 $(0.0021) $(0.1220)
=================================================================
DILUTED N/A N/A N/A N/A N/A
=================================================================
<P>
WEIGHTED AVERAGE OF
COMMON SHARES
OUTSTANDING 17,635,137 12,731,857 19,711,005 13,080,000 8,647,329
===================================================================
<P>
See accompanying notes.
</TABLE>
I-INCUBATOR.COM, INC. AND SUBSIDIARIES
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENTS OF CASH FLOWS
<P>
INCREASE (DECREASE IN CASH)
<TABLE>
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
(UNAUDITED) (UNAUDITED) For the period
For the Nine For the Nine From May 5, 1997
Months Ended Months Ended (Inception) to
09/30/2000 09/30/1999 09/30/2000
---------------------------------------------------------------------------
OPERATING ACTIVITIES:
<P>
Deficit accumulated
during the development
stage $ (542,080) $ (80,760) $ (1,055,252)
<P>
Adjustments to reconcile
net loss to
net cash used
by operations:
<P>
Amortization of
loan discount 0 0 109
Depreciation 658 0 658
Loss on
investment 52,000 0 52,000
Bad debts 55,620 0 55,620
Purchase of
corporate name 0 0 120,000
Purchase of domain name 0 0 218,581
Common Stock issued for
interest expense 19,056 0 19,756
Common Stock issued for
settlement fees 19,500 0 19,500
Common Stock issued for
Legal services 0 500 500
Common stock issued
for consulting 357,750 500 362,250
Common Stock issued for reimbursement
of office expense 24,000 0 24,000
(Increase) Decrease
in prepaid
expenses 5,000 0 0
(Increase) Decrease
in interest
receivable 713 0 0
Increase (Decrease)
in accrued interest expense (1,994) 0 256
Increase (Decrease)
in accounts
payable 18,640 2,327 23,741
Increase (Decrease)
in payroll taxes
payable 10,440 470 11,852
Increase (Decrease) in
accrued expenses 38,646 (3,930) 53,646
--------------------------------------------------------------------
Net Cash Used by
Operating
Activities (166,155) (80,893) (317,016)
---------------------------------------------------------------------
<P>
INVESTING ACTIVITIES:
<P>
Acquisition of
office equipment (6,587) 0 (6,587)
Investments (50,000) 0 (50,000)
---------------------------------------------------------------------
Net Cash Used for
Investing
Activities (56,587) 0 (56,587)
---------------------------------------------------------------------
<P>
FINANCING ACTIVITIES:
<P>
Proceeds from sale
of common stock 0 53,800 78,800
Proceeds from shareholders' loan 0 0 700
Repayment of
shareholders' loan (700) 0 0
Proceeds from lease
obligations 6,587 0 6,587
Proceeds from notes
payable 289,100 20,000 394,100
Increase in Inter-company receivable-
I-Auction Tech.com, Inc. (50,120) 0 (50,120)
Due from affiliates (36,487) (4,000) (83,587)
Due to affiliates 0 0 29,000
Payments on lease
obligation (1,139) 0 (1,139)
----------------------------------------------------------------------
Net Cash Provided by
Financing
Activities 207,241 69,800 373,641
----------------------------------------------------------------------
<P>
INCREASE (DECREASE)
IN CASH (15,501) (11,093) 38
<P>
CASH, BEGINNING
OF PERIOD 15,539 12,354 0
----------------------------------------------------------------------
CASH, END
OF PERIOD $
======================================================================
<P>
</TABLE>
I-INCUBATOR.COM, INC. AND SUBSIDIARIES
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
STATEMENTS OF CASH FLOWS
<P>
FOR THE NINE ENDED SEPTEMBER 30, 2000 AND FOR THE
<P>
CUMULATIVE PERIOD MAY 5, 1997 (INCEPTION) TO
<P>
SEPTEMBER 30, 1999
<P>
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<P>
During the nine months ended September 30, 2000 and for the
cumulative period May 5, 1997 (inception) to March 31, 2000,
the Company paid $299 interest.
<P>
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES
<P>
The Company entered into the following non-cash
transactions:
<P>
During the quarter ended June 30, 2000, the Company
issued 795,000 shares of restricted common stock in
consideration for consulting and management services.
These shares were valued at $0.45 per share. Total value
of shares were $357,750. (See note 12).
<P>
During the year ended December 31, 1999, the Company
issued 1,500,000 shares of common stock in connection
with a stock for stock exchange agreement with Quentin
Road Productions, Inc. ( a related party) for common
stock of WealthHound.com, Inc. dated December 8, 1999.
The exchange was valued at $1,500. (See note 12).
<P>
During the year ended December 31, 1999, the Company
issued 2,000,000 shares of common stock in connection
with a stock for stock shares and exchange agreement
dated December 31, 1999 with i-Auction.com, Inc. The
exchange was valued at $2,000. (See note 12).
<P>
During the year ended December 31, 1999, the Company
issued 150,000 shares of common stock in consideration
for legal services. This transaction was valued at $500.
(See note 12).
<P>
During the year ended December 31, 1999, the Company
issued 150,000 shares of common stock in consideration of
managerial services to a related party. This transaction
was valued at $500. (See note 12).
<P>
During the period May 5, 1997 (inception) through
December 31, 1998 the Company issued 300,000 shares of
common stock in consideration of management services
provided by the then acting President of the Company,
James Lee. This transaction was valued at $4,000. (See note
12).
On August 9, 2000 the Company issued 300,000 restricted
shares of common stock in consideration for settlement fees
in connection with Onlinefood.com, Inc. This transaction
was valued at $19,500 (see note 12).
<P>
On August 9, 2000 the Company issued 6,281,628 restricted
shares of common stock in satisfaction for various notes
payable and accrued interest due. Total share were valued
at $408,306 (see note 12).
<P>
On August 29, 2000 the Company issued 369,231 restricted
shares of common stock to Atlas Equity Group, Inc., a
related party for reimbursement of office expense. This
transaction was valued at $24,000 (see note 12).(see note
12).
I-INCUBATOR.COM, INC. AND SUBSIDIARIES
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD MAY 5, 1997 (INCEPTION)
THROUGH SEPTEMBER 30, 2000
<TABLE>
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN- DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
---------------------------------------------------------------------
Balance,
May 5, 1997
(inception) 0 $ 0 $ 0 $ 0 $ 0
Restricted Common
Stock issued to
related parties for
consulting fees 300,000 30 3,970 0 4,000
<P>
Restricted Common Stock issued to
related parties 1,125,000 112 14,888 0 15,000
<P>
Common Stock issued to
third parties 750,000 75 9,925 0 10,000
<P>
Deficit accumulated
during the development
stage for the period
May 5, 1997
(inception)through
December 31, 1997 0 0 0 ( 9,747) ( 9,747)
------------------------------------------------------------------------
Balance,
December 31,1997 2,175,000 217 28,783 ( 9,747) 19,253
<P>
Deficit accumulated during the
development stage
for the year ended
December 31, 1998 0 0 0 (11,111) (11,111)
<P>
Balance,
December 31,1998 2,175,000 $ 217 $28,783 $ (20,858) $ 8,142
</TABLE>
<P>
I-INCUBATOR.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD MAY 5, 1997 (INCEPTION)
THROUGH JUNE 30, 2000 (CONT'D)
<TABLE>
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN- DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
-------------------------------------------------------------------
Balance,
December 31,1998 2,175,000 $ 217 $28,783 $ (20,858) $ 8,142
<P>
Restricted Common Stock issued
to related parties-
private offering 9,000,000 900 (600) 0 300
<P>
Restricted Common stock issued
to a related party for
managerial services 150,000 15 485 0 500
<P>
Restricted Common stock issued
for legal services 150,000 15 15 0 500
<P>
Restricted Common stock issued to
related party 15,000 2 498 0 500
<P>
Common stock issued to
third parties 1,590,000 158 52,481 0 53,000
<P>
Restricted Common stock issued to
related parties in connection with
the acquisition of
i-Auction.com, Inc.
2,000,000 200 1,800 0 2,000
Subtotal balance,
forward
15,080,000 $1,507 $ 84,292 $( 20,858) $ 64,942
====================================================================
<P>
</TABLE>
I-INCUBATOR.COM, INC. AND SUBSIDIARIES
A DEVELOPMENT STAGE COMPANY
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD MAY 5, 1997 (INCEPTION)
THROUGH SEPTEMBER 30, 2000 (CONTINUED)
<TABLE>
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN- DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
-----------------------------------------------------------------------
Balance, forward
15,080,000 $ 1,507 $ 84,292 $ (20,858) $ 64,942
<P>
Restricted Common Stock issued
to Quentin Road Productions, Inc.
( a related party) pursuant to a one
for one stock exchange agreement dated
December 1, 1999 for 1,500,000 common
shares of Wealthhound, Inc. ( a related party)
<P>
1,500,000 150 1,350 0 1,500
<P>
Deficit accumulated
during the development
stage for the year
ended December 31, 1999
0 0 0 (492,334) (492,334)
------------------------------------------------------------------------
Balance,
December 31,
1999 16,580,000 $1,657 $ 85,643 $(513,192) $ (425,892)
<P>
Restricted Common
stock issued
for consulting
managerial
services 795,000 80 357,670 0 357,750
<P>
Restricted Common stock issued
in connection with a settlement
agreement with
onlinefood.com, Inc.
300,000 30 19,470 0 19,500
<P>
Restricted Common stock issued
in exchange for notes
payable 6,281,628 628 407,678 0 408,306
-------------------------------------------------------------------------
Subtotal
balance
forward 23,956,628 2,395 870,461 (513,192) 359,664
-------------------------------------------------------------------------
</TABLE>
I-INCUBATOR.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD MAY 5, 1997 (INCEPTION)
THROUGH SEPTEMBER 30, 2000 (CONT'D)
<TABLE>
<S> <C> <C> <C> <C> <C>
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN- DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------------------------------------------------------------------
Balance,
forward 23,956,628 2,395 870,461 (513,192) 359,664
<P>
Restricted common stock
issued in exchange
for office expense -
related party 369,231 37 23,963 0 24,000
<P>
Deficit accumulated
during the development
stage for the nine months
ended September 30, 2000
0 0 0 (542,060) (542,060)
<P>
Balance, September 30,
2000 24,325,859 2,432 894,424 (1,055,252) (158,396)
</TABLE>
<P>
i-INCUBATOR.COM, INC. AND SUBSIDIARIES
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<P>
SEPTEMBER 30, 2000
<P>
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------
<P>
ORGANIZATION
------------
<P>
i-Incubator.com, Inc. ("the Company"), formerly Master
Communications Corp., was incorporated on May 5, 1997 under
the laws of the State of Florida. The Company's primary
objective is to position itself as an internet incubator.
Similar to other incubators, it will provide venture
capital, technical expertise and marketing assistance to
development stage companies. The Company's ticker symbol
changed on December 7, 1999 to "INQU" to better reflect its
name change and direction.
<P>
On November 22, 1999 the Company formed i-RealtyAuction.com,
Inc. ("RealtyAuction"). In connection therewith, it
received 700,000 common shares, representing a 70% ownership
interest. The shares were issued in consideration for
services rendered relating to RealtyAuction's formation.
Global Realty Management Group, Inc. ("Global") (a related
company) was issued 300,000 common shares of RealtyAuction,
representing a 30% interest. The shares were issued in
exchange for $30,000 and 500,000 common shares of Global.
RealtyAuction has the authority to issue 100,000,000 shares
of common stock at .001 par value. RealtyAuction is a
development stage company that has had limited activity.
<P>
On December 1, 1999 the Company entered into a stock
exchange agreement with i-AuctionTech.com, Inc.
("AuctionTech") (see note 12). The agreement provides for
the acquisition of 100% of the outstanding shares of
AuctionTech. In connection therewith, the Company issued
2,000,000 restricted common shares to AuctionTech's
stockholders.
<P>
AuctionTech was incorporated on November 3, 1999 under the
laws of the state of Delaware and has the authority to issue
50,000,000 shares of common stock. AuctionTech intends to
develop internet auction technology. On October 12, 2000
the stockholders agreed to dissolve the Company and filed a
certificate of dissolution with the state of Delaware on
October 27, 2000.
<P>
On December 17, 1998 the Company formed i-Teleco.com, Inc.
("Teleco"), formerly Mastertel Communications Corp., under
the laws of the state of Florida. Teleco has the authority
to issue 50,000,000 shares of common stock and intends to
position itself to take advantage of opportunities available
in the telecommunications industry. Teleco is a development
stage company that has had limited activity.
<P>
On December 23, 1999 the company formed i-Aerobids.com, Inc.
("Aerobids") under the laws of the state of Delaware.
Aerobids has the authority to issue 50,000,000 shares of
common stock and intends to develop an auction website
devoted entirely to aviation related parts and accessories.
Aerobids is a development stage company that has had limited
activity.
<P>
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
------------------------------------------------------
<P>
On December 23, 1999 the Company formed i-CarAuction.com,
Inc. ("CarAuction") under the laws of the state of Delaware.
CarAuction has the authority to issue 50,000,000 shares of
common stock and intends to develop an auction website
devoted entirely to automobiles and related accessories.
CarAuction is a development stage company that has had
limited activity.
<P>
On December 23, 1999 the company formed i-
AntiqueAuction.com, Inc. ("AntiqueAuction") under the laws
of the state of Delaware. AntiqueAuction has the authority
to issue 50,000,000 shares of common stock and intends to
develop an auction website devoted entirely to antiques and
related accessories. AntiqueAuction is a development stage
company that has had limited activity.
<P>
During the quarter ended September 30, 2000 the Company's
stockholders and board of directors agreed that it was in
the Company's best interest to spin-off its remaining
subsidiaries. The Company is actively pursuing acquisition
candidates for its subsidiaries and believes its control in
such subsidiaries is temporary.
<P>
MANAGEMENT DECISION NOT TO CONSOLIDATE
---------------------------------------
<P>
Statement of Financial Accounting Standards ("SFAS") No. 94,
"Consolidation of All Majority Owned Subsidiaries",
encourages the use of consolidated financial statements
between a parent company and its subsidiaries unless:
<P>
a. Control is likely to be temporary,
b. Control does not rest with the majority
owner(s), or
c. Minority stockholders have certain approval
or veto rights that allow them to exercise
significant control over major management
decisions in the ordinary course of business.
<P>
The management of i-Incubator.com intends to spin-off its
subsidiaries and believes that its control is temporary.
Therefore, management believes that separate financial
statements are appropriate and properly reflect current
operating results. Financial statements for the year-end
December 31, 1999 have been re-stated to exclude the
subsidiaries for comparative purposes.
<P>
USE OF ESTIMATES
----------------
<P>
The preparation of financial statements in conformity with
generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosures of
contingent assets and liabilities as of the date of the
financial statements and reporting period. Accordingly,
actual results could differ from those estimates.
<P>
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
------------------------------------------------------
<P>
CASH AND CASH EQUIVALENTS
-------------------------
<P>
For purposes of reporting cash flows, the Company considers
all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
<P>
CARRYING VALUES
----------------
<P>
The Company reviews the carrying values of its long-lived
and identifiable intangible assets for possible impairment.
Whenever events or changes in circumstances indicate that
the carrying amount of assets may not be recoverable, the
Company will reduce the carrying value of the assets and
charge operations in the period the impairment occurs.
<P>
PROPERTY AND EQUIPMENT/DEPRECIATION
------------------------------------
<P>
Property and equipment are recorded at cost. Minor
additions and renewals are expensed in the year incurred.
Major additions and renewals are capitalized and depreciated
over their estimated useful lives. Depreciation is
calculated using the straight-line method. Total
depreciation for the nine months ended September 30, 2000,
was $658.
<P>
INCOME TAXES
------------
<P>
The Company utilizes Statement of Financial Standards SFAS
No. 109, "Accounting for Income Taxes", which requires the
recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been
included in financial statements or tax returns. Under this
method, deferred income taxes are recognized for the tax
consequences in future years of differences between the tax
basis of assets and liabilities and their financial
reporting amounts at each period end based on enacted tax
laws and statutory tax rates applicable to the periods in
which the differences are expected to affect taxable income.
Valuation allowances are established when necessary to
reduce deferred tax assets to the amount expected to be
realized. The accompanying financial statements have no
provisions for deferred tax assets or liabilities because
the deferred tax allowance offsets the deferred tax asset in
its entirety.
<P>
STOCK COMPENSATION
------------------
<P>
The Company has adopted SFAS No. 123 "Accounting for Stock-
Based Compensation." SFAS No. 123 encourages the use of the
fair market method to account for transactions involving
stock base compensation that are entered into fiscal years
beginning after December 15, 1995. Under the fair value
method, the issuance of equity instruments to non-employees
in exchange for goods or services, should be accounted for
based on the fair value of the goods or services received or
the fair value of the income instruments issued, whichever
is more reliably measured.
<P>
NOTE 1 - NATURE OF ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONT'D)
------------------------------------------------------
<P>
NET LOSS PER SHARE
------------------
<P>
The Company has adopted SFAS No. 128 "Earnings Per Share."
Basic loss per share is computed by dividing the loss
available to common stockholders by the weighted-average
number of common shares outstanding. Diluted loss per share
is computed in a manner similar to the basic loss per share,
except that the weighted-average number of shares
outstanding is increased to include all common shares,
including those with the potential to be issued by virtue of
warrants, options, convertible debt and other such
convertible instruments. Diluted earnings per share
contemplates a complete conversion to common shares of all
convertible instruments, only if they are dilutive in nature
with regards to earnings per share. Since the Company has
incurred net losses for all periods, basic loss per share
and diluted loss per share are the same.
<P>
FAIR VALUE OF FINANCIAL INSTRUMENTS
-----------------------------------
<P>
SFAS No. 107 "Disclosures about Fair Value of Financial
Instruments" requires the disclosure of the fair value of
financial instruments. The Company's management, using
available market information and other valuation methods,
has determined the estimated fair value amounts. However,
considerable judgment is required to interpret market data
in developing estimates of fair value. Accordingly, the
estimates presented herein are not necessarily indicative of
the amounts the Company could realize in a current market
exchange.
<P>
NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
-----------------------------------------------------
<P>
In June 1997, the Financial Accounting Standards Board
("FASB") issued SFAS No. 130, "Reporting Comprehensive
Income." This statement requires companies to classify
items of other comprehensive income by their nature in a
financial statement and display the accumulated balance of
other comprehensive income separately from retained earnings
and additional paid-in capital in the equity section of a
statement of financial position. SFAS No. 130 is effective
for financial statements issued for fiscal years beginning
after December 15, 1997. Management believes that SFAS No.
130 has no material effect on the Company's financial
statements.
<P>
In June 1997, FASB issued SFAS No. 131, "Disclosure About
Segments of an Enterprise and Related Information." This
statement establishes additional standards for segment
reporting in financial statements and is effective for
financial statements issued for fiscal years beginning after
December 15, 1997. Management believes that SFAS No. 131
does not have a material effect on the Company's financial
statements.
<P>
NOTE 2 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
(CONT'D)
--------------------------------------------------------
<P>
In April, 1998 the American Institute of Certified Public
Accountants issued Statement of Position No. 98-5,
"Reporting for Costs of Start-Up Activities," ("SOP 98-5").
The Company is required to expense all start-up costs
related to new operations as incurred. In addition, all
start-up costs that were capitalized in the past must be
written off when SOP 98-5 is adopted. The Company's
adoption did not have a material impact on the Company's
financial position or results of operations.
<P>
SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," is effective for financial statements
issued for fiscal years beginning after June 15, 1999. SFAS
No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging
activities. Management does not believe that SFAS No. 133
will have a material effect on its financial position or
results of operations.
<P>
SFAS No. 134, "Accounting for Mortgage-Backed Securities
Retained after the Securitization of Mortgage Loans Held for
Sale by Mortgage Banking Enterprises", is effective for
financial statements issued in the first fiscal quarter
beginning after December 15, 1998. This statement is not
applicable to the Company.
<P>
SFAS No. 135, "Rescission of FASB Statement No. 75 and
Technical Corrections", is effective for financial
statements issued for fiscal years beginning February 1999.
This statement is not applicable to the Company.
<P>
NOTE 3 - DEVELOPMENT STAGE OPERATIONS AND GOING
CONCERN MATTERS
------------------------------------------------------
<P>
The Company's initial activities have been devoted to
developing a business plan, negotiating contracts and
raising capital for future operations and administrative
functions.
<P>
The ability of the Company to achieve its business
objectives is contingent upon its success in raising
additional capital until such time as adequate revenues are
realized from operations.
<P>
The accompanying financial statements have been prepared on
a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal
course of business. As shown in the financial statements,
development stage losses from May 5, 1997 (inception) to
September 30, 2000 amounted to $1,055,252. The Company's
cash flow requirements during this period have been met by
contributions of capital and debt financing. No assurance
can be given that these sources of financing will continue
to be available. If the Company is unable to generate
profits, or unable to obtain additional funds for its
working capital needs, it may have to cease operations.
<P>
The financial statements do not include any adjustments
relating to the recoverability and classification of
liabilities that might be necessary should the Company be
unable to continue
<P>
NOTE 3 - DEVELOPMENT STAGE OPERATIONS AND GOING
CONCERN MATTERS (CONT'D)
------------------------------------------------------
<P>
as a going concern. The Company's continuation as a going
concern is dependent upon its ability to generate sufficient
cash flow to meet its obligations on a timely basis, to
retain additional paid-in capital, and to ultimately attain
profitability.
<P>
NOTE 4 - OTHER ASSETS
-------------------------
<P>
On December 8, 1999 the Company entered into an agreement
with Quentin Road Productions, Inc. ("Quentin"), a related
company, for the exchange of 1,500,000 restricted common
shares of WealthHound that were owned by Quentin for
1,500,000 restricted common shares of the Company's common
shares. The shares acquired in the exchange represent an
approximate 3% interest in WealthHound (see note 12).
<P>
Management intends to distribute its shares in WealthHound.
The company is carrying the investment on the cost method.
Management estimated the value of this transaction by using
available market information and applying discounts that
account for the restricted nature of the shares, lack of
marketability and its low trading volume. However,
considerable judgment is required to interpret market data
in developing fair value. Accordingly, the estimates
presented herein are not necessarily indicative of amounts
the Company could realize in a current market exchange.
<P>
NOTE 5 - DEFERRED INCOME TAXES
-----------------------------------
<P>
As of September 30, 2000 and December 31, 1999, the Company
has a carry-forward loss for income tax purposes of
$1,055,252 and $177,111 that may be offset against future
taxable income. As of December 31, 1999, the Company
incurred $336,081 of expenses for the purchases of various
domain names from related parties. Pursuant to Internal
Revenue Code 267(a)(2) these expenses may not be deducted by
the Company until the related parties recognize the income
and accordingly, have not been included in the carry-forward
loss. The carry-forward loss expires at various years
through 2019. Due to the uncertainty regarding the success
of future operations, management has not recognized any
future income tax benefits that may arise from the
utilization of the loss carry-forward.
<TABLE>
<S> <C> <C>
9/30/00 12/31/99
---------------------------
Deferred tax assets arising
from net operating losses $158,287 $ 26,566
(158,287) $(26,566)
Less valuation allowance
Net Deferred Tax Assets $ 0 $ 0
<P>
</TABLE>
<P>
NOTE 6 - ACCRUED EXPENSES
-----------------------------
<P>
Accrued expenses as of September 30, 2000 and December
31, 1999 are as follows:
<TABLE>
<S> <C> <C>
9/30/00 12/31/99
---------------------------
Accrued accounting fees $ 26,250 $ 15,000
Accrued interest 256 0
Accrued legal fees 27,396 0
<P>
Total accrued fees $ 53,902 $ 15,000
</TABLE>
<P>
NOTE 7 - NOTES PAYABLE
---------------------------
<P>
Notes payable as of September 30, 2000 and December
31, 1999 were as follows:
<TABLE>
<S> <C> <C>
9/30/00 12/31/99
----------------------
Note payable to Titan Corporation
Limited (f/k/a SeaBank Corp.),
12% per annum dated October 15, 1999,
unsecured. Due on demand no later
than February 2, 2000. On August 29,
2000 the note was converted to
restricted shares of the Company's
common stock (see note 12). $ 0 $ 20,000
Accrued Interest 0 992
<P>
Note payable to Titan Corporation
Limited (f/k/a SeaBank Corp.),
12% per annum dated October 5, 1999,
unsecured. Due on demand no later
than April 5, 2000. On August 29,
2000 the note was converted to
restricted shares of the Company's
common stock (see note 12). $ 0 $ 25,000
Accrued Interest 0 687
<P>
Note payable to Titan Corporation
Limited (f/k/a SeaBank Corp.),
12% per annum dated October 15, 1999,
unsecured. Due on demand no later
than April 15, 2000. On August 29,
2000 the note was converted to
restricted shares of the Company's
common stock (see note 12). $ 0 $ 20,000
Accrued Interest 0 506
<P>
Note payable to the Farkas Group,
Inc. (a related party), 12% per
annum dated November 19, 1999,
unsecured. Due on demand no
later than December 19, 2000. 0 1,800
Accrued Interest 0 25
<P>
Non-interest bearing note dated
December 7, 1999 to Rebecca Brock
("Brock") (a related party) in
connection with the acquisition of
a domain name. $10,000 due monthly
for 10 months. The note has been
discounted based on an imputed
interest rate of 10%. 120,000 120,000
Less discount (493) ( 6,255)
<P>
Note payable Atlas Equity Group, Inc.,
(a related party) 12% per annum,
dated June 22, 2000. On August 29,
2000 the note was converted to
restricted shares of the Company's
common stock (see note 12). 0 10,000
Accrued Interest 0 30
<P>
</TABLE>
<P>
i-INCUBATOR.COM, INC. AND SUBSIDIARIES
<P>
(A DEVELOPMENT STAGE COMPANY)
<P>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<P>
SEPTEMBER 30, 2000
<P>
NOTE 7 - NOTES PAYABLE (CONT'D)
------------------------------------
<P>
<TABLE>
<S> <C> <C>
9/30/00 12/31/99
----------------------
Non-interest bearing note dated
December 28, 1999 to Michael D.
Farkas ("Farkas) a related party in
connection with the acquisition of
a domain names. $10,000 due monthly
for 24 months. The note has been
discounted based on an imputed
interest rate of 10%. This note
was cancelled pursuant to an agreement
dated September 1, 2000 (see note 13). 0 250,000
Less discount 0 ( 25,165)
<P>
Note payable to Sharei Chesed
11% per annum, dated December 30, 1999,
unsecured. Due on demand no later
than December 29, 2000. The note
was converted to restricted shares
of the Company's common stock
(see note 12. 0 30,000
Accrued Interest 0 10
<P>
Note payable Atlas 12% per annum,
dated September 7, 2000, unsecured. Due
on demand no later than November 6,
2000. $ 5,000 $ 0
Accrued Interest 230 0
<P>
Note payable Atlas 12% per annum,
dated September 20, 2000, unsecured. Due
on demand no later than November 19,
2000. $ 1,100 $ 0
Accrued Interest 22 0
<P>
NOTE 7 - NOTES PAYABLE (CONT'D)
------------------------------------
<P>
</TABLE>
<TABLE>
<S> <C> <C>
9/30/00 12/31/99
---------------------------
Note payable Atlas 12% per annum,
dated September 28, 2000, unsecured. Due
on demand no later than November 27,
2000. $ 1,000 $ 0
Accrued Interest 4 0
<P>
Current portion- related parties 126,607 237,575
<P>
Current portion - unrelated parties 0 95,000
<P>
Long-term portion - related parties $ 0 $112,805
<P>
Total notes payable 126,607 445,380
<P>
Total Accrued interest 256 2,250
<P>
</TABLE>
<P>
NOTE 8 - DUE FROM/TO AFFILIATES
------------------------------------
<P>
The Company and its affiliates have from time to time,
made advances and/or made payments on behalf its
subsidiaries. These advances are non-interest bearing
and are due on demand.
<P>
NOTE 9 - CAPITAL LEASE NOTE
-------------------------------
The Company is a lessee under a capital lease agreement
for computer equipment from Dell Corp., expiring on
January 16, 2003. The lease agreement calls for 36 equal
monthly payments of $274.58, with a final fixed purchase
price of $1 at the end of the lease. This asset is being
depreciated over its estimated useful life of 5 years.
Depreciation of $658 was included in depreciation expense
for the nine months ended September 30, 2000.
<P>
The future minimum lease payments due under capital lease
is as follows at September 30, 2000 and December 31, 1999:
<P>
NOTE 9 - CAPITAL LEASE NOTE (CONT'D)
-----------------------------------------
<TABLE>
<S> <C> <C>
9/30/00 12/31/99
Total capital lease payable $ 5,448 $ 0
Less: Current portion (1,876) ( 0)
<P>
Total capital lease payable $ 3,572 $ 0
<P>
</TABLE>
The present value of the capital lease payments for the
periods subsequent to September 30, 2000 and December 31,
1999 are as follows:
<TABLE>
<S> <C> <C> <C>
Year 9/30/00 12/31/99
2000 $ 340 $ 0
2001 2,024 0
2002 2,738 0
2003 346 0
-------------------------------
Total capital lease payable $ 5,448 $ 0
</TABLE>
<P>
NOTE 10 - PAYROLL TAXES
---------------------------
<P>
The Company has incurred payroll tax liabilities for the
quarter ended June 30, 2000 and September 30, 2000
totaling $11,852. The Company is currently delinquent
with both its federal and state payroll tax obligation.
<P>
NOTE 11 - COMMITMENTS AND CONTINGENCIES
--------------------------------------------
<P>
On November 24, 1999 the Company agreed to engage Kulat
Communications, Inc., ("Kulat") on a month-to-month basis.
Kulat provides public relations consultation and various
marketing programs. Through September 30, 2000 the Company
has incurred fees of approximately $13,000 in connection
with this arrangement. On October 17, 2000 the Company
issued 15,000 restricted and 5,000 free trading shares
of the Company's common stock in satisfaction of the $13,000
liability. Concurrently, the Company terminated its
agreement with Kulat.
<P>
NOTE 12 - STOCKHOLDERS' EQUITY
----------------------------------
<P>
On November 11, 1999 the Board of Directors approved a 3:1
forward stock split. The statement of changes in
stockholders' equity and the following notes have been
adjusted to give affect to the split. In addition, due to
change in the marital status of certain stockholders,
prior transactions deemed to have been unrelated have
become related party transactions. The statement of
changes in stockholders' equity has been adjusted to affect
these changes.
The Company issued 300,000 common shares to James F. Lee,
former President, and the Company's sole officer and
director, in consideration for management services valued at
$4,000. These individuals are deemed to be founders and\
affiliates of the Company. Concurrently, the Company entered
into a private offering of securities pursuant to regulation
D, Rule 504, promulgated under the Securities Act of 1933.
Common Shares were offered to non-accredited investors for
cash consideration of 1.334 cents per share. 1,125,000
shares were issued to related parties and 750,000 shares
issued to unrelated parties.
<P>
On March 20, 1998 Mr. Lee sold his ownership interest in the
Company to Farkas Group in a private transaction subject to
Section 4(2) of the Securities Act of 1933. Farkas Group is
a privately held company owned by Farkas.
<P>
In January 1999, the Company issued 3,000,000 post-split
common shares each to Farkas Group, Atlas and GSM, all of
which are owned by Farkas and are deemed to be related
parties. These common shares were issued for a cash
consideration of $300.
<P>
In January 1999, the Company issued 150,000 post-split
shares of common stock to Jamee Kalimi (f/k/a Freeman),
President, in consideration for managerial services rendered
valued at $500.
<P>
In January 1999, the Company engaged legal counsel for
services relating to SEC filings and related documentation.
In connection therewith, the Company issued 150,000 post-
split shares of common stock valued at $500, as additional
payment for the services performed.
<P>
In March 1999, the Company entered into a private offering
of securities pursuant to regulation D, Rule 504,
promulgated under the Securities Act of 1933. Common shares
were offered to non-accredited investors for cash
consideration of 33.3 cents per share. 15,000 shares were
issued to Brock and 1,590,000 shares were issued to third
parties.
<P>
On December 1, 1999 the Company entered into a stock
exchange agreement with AuctionTech (see note 1). The
agreement provided for the acquisition of all of the
outstanding shares of AuctionTech. In connection therewith,
the Company issued 2,000,000 restricted common shares to
AuctionTech's stockholders. Management estimated the value
of this transaction to be $2,000.
<P>
NOTE 12 - STOCKHOLDERS' EQUITY (CONT'D)
--------------------------------------------
<P>
On December 8, 1999 the Company entered into a stock
exchange agreement with Quentin to transfer 1,500,000 of
restricted common shares of WealthHound owned by Quentin
for 1,500,000 restricted shares of the Company's common
stock (see note 4). The common shares exchanged represent
approximately 3% interest in WealthHound. Management valued
the estimated the fair market value of this transaction to
be $1,500.
<P>
On July 17, 2000 the Company agreed to issue 795,000
restricted shares of the company's common stock in exchange
for various consulting and management services. The shares
were valued at $0.45 per share. Management estimated the
value of this transaction by using available market
information and applying discounts that account for the
restricted nature of the shares, lack of marketability and
its low trading volume. However, considerable judgment is
required to interpret market data in developing fair value
(see note 1 - Use of Estimates).
<P>
On August 9, 2000 the Company agreed to issue 300,000
restricted shares of the Company's common stock in exchange
for a mutual release and termination of a stock purchase
agreement with OnlineFood.com, Inc. valued at $19,500.
In connection therewith, the Company also agreed to forgive
$50,000 of advances made to OnlineFood.com, Inc.
<P>
On August 29, 2000 the Company converted various promissory
notes and accrued interest owed to Titan Corporation Limited
totaling $72,386 into 1,113,627 restricted shares of the
Company's common stock valued at $0.065 per share. These
shares are restricted in accordance with Rule 144 of the
Securities Act of 1933.
<P>
On August 29, 2000 the Company converted various promissory
notes and accrued interest owed to Atlas, totaling $69,478
into 1,068,888 restricted shares of the Company's common
stock valued at $0.065 per share. These shares are
restricted in accordance with Rule 144 of the Securities
Act of 1933.
<P>
On August 29, 2000 the Company converted a promissory note
and accrued interest owed to Sharei Chesed totaling $32,297
into 496,875 restricted shares of the Company's common stock
valued at $0.065 per share. These shares are restricted in
accordance with Rule 144 of the Securities Act of 1933.
<P>
On August 29, 2000 the Company converted a promissory note
and accrued interest owed to Chasdai Yitzchok totaling
$32,155 into 494,693 restricted shares of the Company's
common stock valued at $0.065 per share. These shares are
restricted in accordance with Rule 144 of the Securities
Act of 1933.
<P>
On August 29, 2000 the Company converted a promissory note
and accrued interest owed to Scott Cohen totaling $52,312
into 804,805 restricted shares of the Company's common stock
valued at $0.065 per share. These shares are restricted in
accordance with Rule 144 of the Securities Act of 1933.
<P>
NOTE 12 - STOCKHOLDERS' EQUITY (CONT'D)
--------------------------------------------
<P>
On August 29, 2000 the Company converted various promissory
notes and accrued interest owed to Romano Limited totaling
$149,678 into 2,302,740 restricted shares of the Company's
common stock valued at $0.065 per share. These shares are
restricted in accordance with Rule 144 of the Securities
Act of 1933.
<P>
On August 29, 2000 the Company cancelled the agreement with
Atlas for office expense reimbursements of $6,000 per month
and total amount accrued of $24,000 as of August 2000, was
converted into 369,231 restricted shares of the Company's
common stock valued at $0.065 per share.
<P>
NOTE 13 - OFFICERS AND BOARD OF DIRECTORS
---------------------------------------------
<P>
EMPLOYMENT AGREEMENT
--------------------
<P>
The Company agreed in principle to an employment agreement
for its President. The term of the agreement is one year,
automatically renewable for a period of one year for each
consecutive year thereafter, unless prior notice is given by
either the Company or Ms. Kalimi 90 days prior to the
expiration of the contract term. Initial compensation will
be at an annual rate of approximately $40,000.
<P>
NOTE 14 - WARRANTS
-----------------------
<P>
During the nine months ended September 30, 2000 the Company
issued 290,930 warrants. The warrants exercise price and
date of expiration are as follows:
<TABLE>
<S> <C> <C> <C> <C>
WARRANT TO PRICE PER
DATE DESCRIPTION SUBSCRIBE SHARE EXPIRES
------------------------------------------------------------------------------
02/02/00 Titan Corporation Ltd. 8,000 $2.50/Share 02/02/02
03/24/00 Romano Limited 120,000 $2.00/Share 03/24/02
04/05/00 Romano Limited 80,000 $2.00/Share 04/05/02
04/05/00 Titan Corporation Ltd. 15,380 $1.25/Share 04/05/02
04/15/00 Titan Corporation Ltd. 35,550 $0.5625/Share 04/15/02
05/01/00 Atlas Equity Group, Inc. 32,000 $0.50/Share 05/01/02
<P>
Total Warrants Issued 290,930
<P>
</TABLE>
<P>
NOTE 14 - WARRANTS (CONT'D)
-------------------------------
<P>
No warrants have been exercised as of September 30, 2000.
The warrants have not been included in the computation of
earnings per share. SFAS No. 128 "Earnings Per Share"
contemplates a complete conversion to common shares of all
convertible instruments, only if they are dilutive in nature
with regards to earnings per share. Since the Company has
incurred net losses for all periods, warrants have not been
included in the weighted average computation of common
shares outstanding (see note 1 - Net Loss Per Share).
<P>
NOTE 15 - RELATED PARTY TRANSACTIONS
-----------------------------------------
<P>
In January 1999, the Company agreed to reimburse Atlas
$1,000 per month (on a month- to-month basis) for operating
and administrative expenses. On November 30, 1999 the
Company agreed to increase the reimbursements to $6,000 per
month, commencing December 1999. On August 29, 2000 this
agreement was cancelled and the total amount accrued of
$24,000 was converted into 369,231 restricted shares of the
Company's common stock.
<P>
The Company paid Farkas Group $5,000 for assisting in
creating a private placement-offering document. Farkas
Group owns 3,300,000 shares of the Company and is deemed to
be a related party.
<P>
The Company engaged Berger and Associates for various
consulting services. Berger & Associates is owned by a
family member of Farkas and is deemed to be a related party.
On December 28, 1999 the Company entered into an agreement
with Farkas. In connection therewith, the Company agreed to
pay $250,000 to Farkas, $10,000 upon the execution of the
agreement and $10,000 per month for a period of 24 months
commencing January 1, 2000. No payments have been made as
of the date of this financial statements. The note was
discounted pursuant to APB 21 "Interest on Receivables and
Payables" which requires the imputation of interest on non-
interest bearing obligations. The imputed interest rate
used for this purpose was 10%.
<P>
Furthermore, on September 1, 2000 the Company entered into
an agreement with Farkas which terminated agreement dated
December 28, 1999 relating to the purchase of various domain
names. The agreement is deemed null and void and both the
Company and Farkas waved their respective rights to any
further obligation. The subsidiaries of the Company agreed
that they shall retained ownership interest in the domain
names and the related liabilities totaling $250,000.
<P>
On December 7, 1999 the Company entered into an agreement
with Brock. In connection therewith, the Company agreed to
pay $120,000 to Brock, $20,000 upon the execution of the
agreement and $10,000 per month for a period of 10 months
commencing January 1, 2000. No payments have been made as
of the date of this financial statement. The note was
discounted on the same basis as the Farkas note. This note
is currently in default.
<P>
NOTE 15 - RELATED PARTY TRANSACTIONS (CONT'D)
-------------------------------------------------
<P>
On December 6, 1999 AuctionTech paid $5,000 to Scott Mager
(a stockholder and related party) for consulting services.
On January 6, 2000 the Company paid Scott Mager, a related
party, $50,000 for consulting services rendered to
AuctionTech (see note 1).
<P>
NOTE 16 - SUBSEQUENT EVENT
------------------------------
<P>
On October 5, 2000 the Company executed a note payable with
Atlas for principal sum of $1,500. The note accrues
interest at a rate of 12% per annum and is due no later than
December 4, 2000.
<P>
On October 17, 2000 the Company agreed to issue 15,000
restricted shares of the Company's common stock in exchange
for various public relations consultation and managerial
programs valued at $13,000 (see note 11).
<P>
On October 17, 2000 the Company executed a note payable with
Atlas for principal sum of $1,500. The note accrues
interest at a rate of 12% per annum and is due no later than
December 16, 2000.
<P>
On October 25, 2000 the Company executed a note payable with
Atlas for principal sum of $11,500. The note accrues
interest at a rate of 10% per annum and is due no later than
December 24, 2000.
<P>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS.
<P>
The following discussion and analysis should by read in
conjunction with the financial statements of the Company
and the accompanying notes appearing subsequently under
the caption "Financial Statements."
<P>
The following discussion and analysis contains forward-
looking statements, which involve risks and
uncertainties. The Company's actual results may differ
significantly from the results, expectations and plans
discussed in these forward-looking statements.
<P>
During the past two years, the Company, has spent
considerable time and capital resources defining and
developing its strategic plan for delivering and
operating on-line sales and auction technology.
<P>
The Company, as discussed in note one of the financial
statements, has formed several subsidiaries all of which
are in the development stage. There has been limited
activity in these subsidiaries to date. The Company has
incurred substantial development stage losses in
connection with developing its web-site and the
acquisition of various domain names, as well as,
developing auction technology and securing portal
agreements. Because of uncertainties surrounding the
development and completion of its auction technology, the
Company anticipates incurring significant development
stage losses in the foreseeable future. The ability of
the Company to achieve its business objectives is
contingent upon its success in raising additional capital
until adequate revenues are realized from operations.
<P>
Quarter Ended September 30, 2000 Compared with nine month
Ended September 30, 1999.
<P>
Development stage expenses during the nine months Ended
September 30, 2000 were significantly greater than during
the comparable period Ended September 30, 1999, increasing
from $80,760 to $650,450 or a 1,260% increase. Development
stage expenses during the quarter ended September 30, 2000
and September 30, 1999 were also significantly greater
increasing from $27,118 to $64,433 or 137% increase.
These increases were in part the result of the addition of
officer's salaries, consulting (including the
compensation expense resulting from shares of the
Company's stock issued to new and on-going management)
professional fees necessitated by operating in a public
environment, the acquisition of Domain names (from
Michael D. Farkas and Rebecca Brock both or which are
related parties to the Company) and an agreement between
the Company and Atlas Equity Group, Inc. (Owned by
Michael D. Farkas, a related party) for shared office and
rent expenses. On-going increases to development stage
expenses are anticipated during Year 2000.
<P>
Liquidity and Capital Resources
<P>
Despite Capital Contributions and both related party and
third party loan commitments, the Company from time to
time experienced, and continues to experience cash flow
shortages that have slowed the Company's growth. During
the nine months Ended September 30, 2000 the consequence of
those cash flow shortages has been an increase of $38,646
in accounts payable and an decrease of $(1,994) in
accrued expenses bringing those figures to $53,646 and
$256 respectively at September 30, 2000 in comparison to
December 31, 1999.
<P>
The Company has primarily financed its activities from
sales of capital stock of the Company and from loans from
related and third parties. A significant portion of the
funds raised from the sale of capital stock has been used
to cover working capital needs such as salaries, office
expense and various consulting fees.
<P>
The Company continues to experience cash flow shortages,
and anticipates this continuing through the foreseeable
future. Management believes that additional funding will
be necessary in order for it to continue as a going
concern.
<P>
The Company is investigating several forms of private
debt and/or equity financing, although there can be no
assurances that the Company will be successful in
procuring such financing or that it will be available on
terms acceptable to the Company.
<P>
The Company had committed itself to pay Michael D. Farkas
(a related party) $250,000 for the acquisition of various
domain names over a period of 24 months commencing in
January, 2000. No payments have been made to date.
The Company has committed itself to pay Rebecca Brock (a
related party) $120,000 for the acquisition of a domain
name over a period of 12 months commencing in January,
2000. On September 1, 2000, the Company, Michael D. Farkas
and the Subsidiaries of the Company signed an agreement in
which the subsidiaries have assumed the obligation to Farkas
for their respective domain names.
<P>
PART II - OTHER INFORMATION
<P>
Item 1. Legal Proceedings. None
<P>
Item 2. Changes in Securities.
<P>
On July 17, 2000, the Company issued 360,000 shares to
Eli Wahrsager for services rendered to the Company. Such
shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On July 17, 2000, the Company issued 250,000 shares to
Eric Seiden for services rendered to the Company. Such
shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On July 17, 2000, the Company issued 100,000 shares to
Rich Whalen for services rendered to the Company. Such
shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On July 17, 2000, the Company issued 50,000 shares to
Joseph Zandstra for services rendered to the Company. Such
shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On July 17, 2000, the Company issued 10,000 shares to
Dave Hicks for services rendered to the Company. Such shares
were issued in reliance on the exemption under Section 4(2)
of the Securities Act of 1933, as amended (the "Act") and
are restricted in accordance with Rule 144 of the Securities
Act of 1933.
<P>
On July 17, 2000, the Company issued 10,000 shares to
Chris Valley for services rendered to the Company. Such
shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On July 17, 2000, the Company issued 10,000 shares to
Sam Ritter for services rendered to the Company. Such
shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On July 17, 2000, the Company issued 5,000 shares to
Ricardo Rodriguez for services rendered to the Company.
Such shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On August 23, 2000, the Company issued 300,000 shares to
Richard Dubnoff pursuant to a Termination Agreement and
Mutual Release between the Company and Onlinefood.com, Inc.
Such shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On September 11, 2000, the Company issued 369,231 shares to
Atlas Equity Group, Inc. for office reimbursement. Such
shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On September 11, 2000, the Company issued 1,068,888 shares
to Atlas Equity Group, Inc. for the conversion of promissory
notes owed by the Company to Atlas Equity Group, Inc. in the
amount of $69,477.75. Such shares were issued in reliance
on the exemption under Section 4(2) of the Securities Act
of 1933, as amended (the "Act") and are restricted in
accordance with Rule 144 of the Securities Act of 1933.
<P>
On September 11, 2000, the Company issued 804,805 shares to
Scot Cohen for the conversion of promissory notes owed by
the Company to Scot Cohen in the amount of $52,132.33. Such
shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On September 11, 2000, the Company issued 2,302,740 shares
to Romano Limited for the conversion of promissory notes
owed by the Company to Romano Limited in the amount of
$149,678.08. Such shares were issued in reliance on the
exemption under Section 4(2) of the Securities Act of 1933,
as amended (the "Act") and are restricted in accordance with
Rule 144 of the Securities Act of 1933.
<P>
On September 11, 2000, the Company issued 1,113,627 shares
to Titan Corporation Limited for the conversion of
promissory notes owed by the Company to Titan Corporation
Limited in the amount of $72,385.75. Such shares were
issued in reliance on the exemption under Section 4(2) of
the Securities Act of 1933, as amended (the "Act") and are
restricted in accordance with Rule 144 of the Securities Act
of 1933.
<P>
On September 11, 2000, the Company issued 496,875 shares to
Sharei Chesed for the conversion of promissory notes owed
by the Company to Sharei Chesed in the amount of $32,296.85.
Such shares were issued in reliance on the exemption under
Section 4(2) of the Securities Act of 1933, as amended
(the "Act") and are restricted in accordance with Rule 144
of the Securities Act of 1933.
<P>
On September 11, 2000, the Company issued 494,693 shares to
Chasdai Yichzok for the conversion of promissory notes owed
by the Company to Chasdai Yichzok in the amount of
$32,155.07. Such shares were issued in reliance on the
exemption under Section 4(2) of the Securities Act of 1933,
as amended (the "Act") and are restricted in accordance with
Rule 144 of the Securities Act of 1933.
<P>
Item 3. Defaults Upon Senior Securities. Not Applicable
<P>
Item 4. Submission of Matters to a Vote of Security
Holders.
<P>
On March 14, 2000, Michael D. Farkas, Matthew Sher and Scott
Mager were appointed to the Board of Directors of the
Company. The Company accepted the resignation of Matthew
Sher from the Board of Directors on August 3, 2000 and
accepted the resignation of Scott Mager from the Board of
Directors on July 18, 2000.
<P>
Item 5. Other Information. None
<P>
Item 6. Exhibits and Reports of Form 8-K. None
<P>
Exhibit 27 - Financial Date Schedule - Electronic Filing
Only
<P>
SIGNATURES
<P>
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 in its behalf by the
undersigned, thereunto duly authorized, on November 17,
2000.
<P>
I-Incubator.com, Inc.
(Registrant)
<P>
Date: November 20, 2000 /s/ Jamee Freeman
--------------------------
Jamee Freeman
Chairman, Chief
Executive Officer,
President, Secretary
and Treasurer
<P>
