Amendment No. 1
Form 10-QSB/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE PERIOD ENDED OCTOBER 31, 1997
or
[ ] 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 000-29518
SHOPPING.COM
------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0733679
---------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
2101 EAST COAST HIGHWAY, CORONA DEL MAR, CA 92625
- ------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(714) 640-4393
---------------------------
(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes ..X.. No .....
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.
Class Outstanding at January 9, 1998
----- ------------------------------
Common Stock 4,002,000
Transitional Small Business Disclosure Format
(Check One): Yes ..... No ..X..
Exhibit Index on Page 11
-1-
<PAGE>
Amendment No. 1 to Quarterly Report on Form 10-QSB
For the Quarterly Period Ended October 31, 1997
Part I, Item 1 and Part II, Item 6 of the Shopping.com Quarterly Report on
Form 10-QSB for the quarterly period ended October 31,1997 have been amended to
reflect the one-for-two stock consolidation effective November 25, 1997 in the
share and per share data.
Item Page
- ---- ----
PART I. FINANCIAL INFORMATION
1. FINANCIAL STATEMENTS 3
Balance Sheet at October 31, 1997 3
Statements of Operation for the three and nine months
ended October 31, 1997 and 1996 4
Statements of Cash Flows for the nine months ended
October 31, 1997 and 1996 5
Notes to Financial Statements 6
PART II. OTHER INFORMATION
6. Exhibits and Reports on Form 8-K 9
Signature 10
Exhibit Index 11
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SHOPPING.COM
BALANCE SHEET
As of October 31, 1997
(unaudited)
October 31
1997
----------
ASSETS
Current assets
Cash $ 166,192
Accounts/advances receivable 174,747
Prepaid expenses 263,672
-----------
Total Current assets 604,611
Furniture and equipment, net 1,401,552
Purchased Software 750,000
Loan origination fees 168,639
Deferred offering costs 57,226
Other assets 105,814
-----------
Total assets $ 3,087,842
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes Payable $ 1,960,000
Current portion of capital lease obligation 10,152
Accounts payable 1,009,176
Other accrued liabilities 11,268
-----------
Total current liabilities 2,990,596
Capital lease obligation, net of current portion 74,200
-----------
Total liabilities 3,064,796
-----------
Commitments
Shareholders' equity
Preferred stock, Series A convertible, no
par value, 1,500,000 shares authorized,
750,000 shares issued and outstanding 300,000
Preferred stock, Series B convertible, no
par value, 4,000,000 shares authorized,
536,500 shares issued and outstanding 1,489,781
Common stock, no par value, 8,000,000
shares authorized, 1,415,500 shares
issued and outstanding 829,050
Accumulated deficit during development stage (2,595,785)
-----------
Total shareholders' equity 23,046
-----------
Total liabilities and shareholders' equity $ 3,087,842
===========
-3-
<PAGE>
SHOPPING.COM
STATEMENTS OF OPERATIONS
Nine Months Ended Three Months Ended
October 31 October 31
97 96 97 96
----------- ----------- ----------- -----------
Net Sales $ 376,822 $ -- $ 321,281 $ --
Cost of Sales 357,246 -- 306,738 --
----------- ----------- ----------- -----------
Gross Profit 19,576 -- 14,543 --
Operating Expenses 2,370,315 79,391 1,300,107 9,000
----------- ----------- ----------- -----------
Loss from Operations (2,350,738) (79,391) (1,285,564) (9,000)
Other Expenses
Interest Expense 43,349 -- 36,811 --
----------- ----------- ----------- -----------
Total Other
Expenses 43,349 -- 36,811 --
----------- ----------- ----------- -----------
Net Loss $ 2,394,088) $ (79,391) $(1,322,375) $ (9,000)
=========== =========== =========== ===========
Net Loss Per Share $ (0.70) $ (0.02) $ (0.39) $ (0.00)
=========== =========== =========== ===========
Weighted Average
Shares Outstanding 3,404,794 3,404,794 3,404,794 3,404,794
=========== =========== =========== ===========
-4-
<PAGE>
SHOPPING.COM
STATEMENTS OF CASH FLOWS
For the Nine Months Ended October 31, 1997 and 1996
(unaudited)
Nine Months Nine Months
Ended Ended
October 31 October 31
1997 1996
---------- ----------
Cash flows from operating activities
Net loss $(2,394,088) $ (79,391)
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation of furniture and equipment 71,622 903
Amortization of loan origination fees 65,361 --
Expense recognized from Issuing common
stock below market value 6,000 --
Issuance of Common Stock to pay expenses 48,000 --
(Increase) in prepaid expenses (263,672) --
(Increase) in other assets (101,858) --
(Increase) in accounts/advances receivable (174,747) --
Increase in accounts payable 973,191 --
Decrease in other accrued liabilities (20,577) --
----------- -----------
Net cash used in operating activities (1,790,768) (78,488)
----------- -----------
Cash flows from investing activities
Purchase of furniture and equipment (1,370,816) (13,411)
----------- -----------
Net cash used in investing activities (1,370,816) (13,411)
=========== ===========
Cash flows from financing activities
Payments on note payable-related party (50,000) --
Issuance of notes payable 1,960,000 --
Payment of loan origination fees (234,000) --
Payments on Capital Lease (5,842) --
Proceeds from the issuance of preferred
stock, Series A 200,000 --
Proceeds from the issuance of preferred
stock, Series B 1,489,781 --
Payment of offering costs (57,226) --
Proceeds from the issuance of common stock 25,000 --
Capital Contribution -- 91,899
----------- -----------
Net cash provided by financing activities 3,327,713 91,899
----------- -----------
Net increase in cash 166,129 --
Cash, beginning of period 63 --
----------- -----------
Cash, end of period $ 166,192 $ --
=========== ===========
-5-
<PAGE>
SHOPPING.COM
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1: GENERAL
As contemplated by the Securities and Exchange Commission under Item 310(b) of
Regulation S-B, the accompanying financial statements and footnotes have been
condensed and therefore do not contain all disclosures required by generally
accepted accounting principles. The interim financial data are unaudited;
however, in the opinion of Shopping.com (the "Company" or "Shopping.com"), the
interim data include all adjustments, consisting only of normal recurring
adjustments, necessary for a fair statement of the results for the interim
periods. Results for interim periods are not necessarily indicative of those to
be expected for the full year.
NOTE 2: FURNITURE AND EQUIPMENT
Furniture and equipment consist of the following:
October 31, 1997
----------------
Computer Hardware $ 814,077
Computer Software 417,480
Furniture & equipment 195,555
Leasehold improvements 47,338
----------
$1,474,450
Less: Accumulated depreciation 72,898
----------
$1,401,552
==========
NOTE 3: ADVANCES - OFFICERS/STOCKHOLDERS
During the third quarter of 1997, an officer was advanced a total of $48,595
from the Company. In January 1998, the officer repaid the Company for the
advance.
-6-
<PAGE>
NOTE 4: STOCKHOLDERS EQUITY
REVERSE STOCK SPLIT
On November 25, 1997, the effective date of the Company's initial public
offering, the Company effected a one-for-two reverse stock split. All share and
per share data have been retroactively restated to reflect the stock split.
ISSUANCE OF COMMON STOCK
In September 1997, En Pointe granted the Company a license to En Pointe's
proprietary EPIC Software for five years in exchange for 125,000 shares of the
Company's Common Stock valued at $6.00 per share. The Company has agreed to pay
an annual maintenance and upgrade fee of $100,000. The initial annual fee is to
be paid concurrent with the funding of the $600,000 subordinated notes.
In December 1997, the Company issued 1,300,000 shares of common stock raising
$10,289,000 of net proceeds to the Company in the Company's initial public
offering.
ISSUANCE OF SERIES B PREFERRED STOCK
In August 1997, the Company sold 8,333 shares of its Series B Preferred Stock in
a private placement at a price of $3.00 per share to Ms. Webster, the Company's
Chief Financial Officer and Secretary. In connection therewith, Ms. Webster was
issued five year warrants to purchase 4,166 shares of Common Stock with an
exercise price of $3.00 per share as well as registration rights providing for
one demand and unlimited piggyback registration rights.
Also in August 1997, 193,167 shares of Series B Preferred Stock were issued. In
connection therewith, five year warrants were issued to purchase 96,583 shares
(including those issued to Ms. Webster) of Common Stock with an exercise price
of $3.00 per share as well as registration rights providing for one demand and
unlimited piggyback registration rights.
NOTE 5: PROMISSORY NOTES
On September 15, 1997, En Pointe made an investment in the Company by purchasing
$600,000 of subordinated notes. In connection therewith, the Company issued
199,800 warrants to purchase the Company's Common Stock at $4.50 per share. As a
result of these warrants being issued with an exercise price less than the fair
market value of similar warrants, the Company will recognize additional
financing cost of $299,700 over the nine month term of this subordinated note
with the unauthorized portion at the closing of the IPO being expensed
immediately.
-7-
<PAGE>
This Company has issued $1,750,000 of Promissory Notes, which have a due date of
nine months from the date of issuance or on the closing of the initial public
offering, whichever is earlier. The Promissory Notes are unsecured, subordinated
and carry an interest rate of 10% per annum.
In the private placement of the Promissory Notes, warrants to purchase 330
shares of Common Stock were issued for each $1,000 principal of a Promissory
Note, which warrants are exercisable until May 31, 2002 at an exercise price of
$6.00 per share of Common Stock.
Following the Company's initial public offering, all of the Company's
outstanding Promissory Notes were paid in full.
-8-
<PAGE>
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27.1 Financial Data Schedule<F1>
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
October 31, 1997. However, on January 22, 1998 a report on
Form 8-K dated January 12, 1998 (the "January Report") was
filed with the Securities and Exchange Commission. Pursuant to
Item 5 of Form 8-K, the January Report announced an 18-month
agreement with ATHome Corporation, a high speed interactive
services provider via its @Home Network. No financial
statements were included with the January Report. On February
17, 1998, an additional report on Form 8-K dated February 10,
1998 (the "February Report") was filed with the Securities and
Exchange Commission. Pursuant to Item 5 of Form 8-K, the
February Report announced a two year agreement with En Pointe,
a national provider of information technology and services, to
use En Pointe's sales network to sell business and office
products directly to companies and a three year agreement with
Profit Pro, Inc., a provider of cataloging software, to use
Profit Pro, Inc.'s cataloging software which will look up auto
parts on the Shopping.com's website. No financial statements
were included with the February Report.
[FN]
<F1> This exhibit is being filed electronically in the electronic format
specified by EDGAR.
-9-
<PAGE>
SIGNATURE
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Shopping.com
Date: March 4, 1998 By /s/ Kristine E. Webster
--------------------------------
Kristine E. Webster
Sr. Vice President, Chief Financial
Officer and Treasurer
-10-
<PAGE>
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
- --------------------------------------------------------------------------------
27.1 Financial Data Schedule<F1> 12
[FN]
<F1> This exhibit is being filed electronically in the electronic format
specified by EDGAR.
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1998
<PERIOD-END> OCT-31-1997
<CASH> 166,192
<SECURITIES> 0
<RECEIVABLES> 174,747
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 604,611
<PP&E> 1,474,450
<DEPRECIATION> 72,898
<TOTAL-ASSETS> 3,087,842
<CURRENT-LIABILITIES> 2,990,596
<BONDS> 0
0
0
<COMMON> 829,050
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,087,842
<SALES> 376,822
<TOTAL-REVENUES> 376,822
<CGS> 357,246
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,370,325
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 43,349
<INCOME-PRETAX> (2,394,088)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,394,088)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,394,088)
<EPS-PRIMARY> (0.70)
<EPS-DILUTED> (0.70)
</TABLE>
