U.S. 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 the quarterly period ended June 30, 2000.
....Transition report under section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from _________ to
_________.
Commission File No: 0-23869
isolver.com, inc.
(Name of small business in its charter)
Colorado 84-1434320
(State or other (IRS Employer Id. No.)
jurisdiction of Incorporation)
5001 Spring Valley Road, Suite 200, East Tower
Dallas, Texas 75244
(Address of Principal Office) Zip Code
Issuer's telephone number: (818) 787-9990
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities 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. Yes ..X.. No ....
Applicable only to issuers involved in bankruptcy proceedings during
the past five years.
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes ...
No ...
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date. At 6/30/00 the
following shares of common were outstanding: Common Stock, no
par value, 31,053,000 shares.
Transitional Small Business Disclosure
Format (Check one):
Yes ..... No ..X..
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS
(a) The unaudited financial statements of registrant as of and for the
quarter ending June 30, 2000 and for the period from inception
through June 30, 2000, follow. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to a
fair statement of the results for the interim period presented.
isolver.com, inc.
(A Development Stage Company)
FINANCIAL STATEMENTS
Quarter Ended June 30, 2000
Index to Financial Statements: [C]
Balance Sheet 5
Statement of Operations 7
Statements of Cash Flows 11
Notes to Financial Statements 13
isolver.com, inc.
(A Development Stage Company)
BALANCE SHEET
June 30, 2000
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 36,359
Prepaid expenses 7,831
Total Current Assets 44,190
Property Plant and Equipment
Equipment, net 2,760
Computers & Software, net 19,624
Leasehold Improvements, net 1,610
23,994
TOTAL ASSETS 68,184
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable 491,147
Current portion of obligations
under capital leases 13,629
Accounts payable 6,253
Total Current Liabilities 511,029
Noncurrent Liabilities
Obligations under capital leases 9,185
Total noncurrent Liabilities 9,185
STOCKHOLDERS' EQUITY
Preferred stock, no par value
10,000,000 shares authorized;
no shares issued and outstanding -
Common stock, no par value;
100,000,000 shares authorized;
31,053,000 shares issued and
outstanding 689,500
Additional paid-in capital 301,703
Deficit accumulated during the
development stage (993,233)
Less: Note receivable-exercise of options (450,000)
(452,030)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 68,184
</TABLE>
The accompanying notes are an integral part of these financial statements.
isolver.com, inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Page 1 of 2
<TABLE>
<CAPTION>
Period For the three
April 8, 1999 months ended
(inception), to June 30,
June 30, 2000 2000 1999
<S> <C> <C> <C>
REVENUE $ - $ - $ -
EXPENSES
Advertising 5,242 868 -
Application fees, licenses
and permits 4,913 30 2,319
Contract Labor 114,234 - 15,250
Depreciation & Amortization 6,276 - -
Insurance 1,816 500 -
Interest 25,897 - -
Office expense 53,245 18,288 1,541
Payroll Taxes 24,103 - 3,502
Professional Fees 57,190 9,950 18,227
Rent 56,372 12,257 -
Salaries - office 134,561 - 16,331
Salaries - officer 176,909 21,380 14,541
Software development costs 326,396 157,323 29,107
Travel 6,079 500 2,362
Total expenses 993,233 221,096 103,180
NET LOSS (993,233) (221,096) (103,180)
Accumulated deficit:
Balance, beginning of period - (772,137) (3,656)
Balance, end of period $(993,233) $(993,233) $(106,836)
NET LOSS PER SHARE -
BASIC (0.03) (0.01) (NIL)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 30,219,962 30,985,418 26,535,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
isolver.com, inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Page 2 of 2
<TABLE>
<CAPTION>
For the six
months ended
June 30,
2000 1999
<S> <C> <C>
REVENUE $ - $ -
EXPENSES
Advertising 868 -
Application fees, licenses
and permits 1,051 2,319
Contract Labor 41,000 15,250
Depreciation & Amortization 5,623 -
Insurance 500 -
Interest 20,504 -
Office expense 31,555 5,197
Payroll Taxes 6,173 3,502
Professional Fees 16,258 18,227
Rent 22,793 -
Salaries - office 23,122 16,331
Salaries - officer 68,576 14,541
Software development costs 165,923 29,107
Travel 1,372 2,362
Total expenses 405,318 106,836
NET LOSS (405,318) (106,836)
Accumulated deficit:
Balance, beginning of period (587,915) -
Balance, end of period $(993,233) $(106,836)
NET LOSS PER SHARE -
BASIC (0.01) (NIL)
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 30,542,654 26,535,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
isolver.com, inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period For the six
April 8, 1999 months ended
(inception), to June 30,
June 30, 2000 2000 1999
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(993,233) $(405,318) $(106,836)
Adjustments to reconcile net loss to
net cash flows from operating activities:
Depreciation 6,726 5,623 -
Stock issued for services 4,500 4,500 -
Decrease (increase) in prepaids (7,831) 125 (9,271)
Increase in deposits - 3,780 (4,285)
Decrease in accounts receivable - 971 -
Increase in accounts payable 6,253 3,166 11,238
Net cash flows from
operating activities (984,035) (387,153) (109,154)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property
and equipment (7,456) - -
Property held under
capital leases (22,814) - -
Net cash flows from investing
activities (30,270) _ -
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in capital leases payable 22,814 - -
Increase in notes payable 491,147 183,754 50,000
Issuance of common stock and capital
contributions 536,703 228,800 92,000
Net cash flows from
financing activities 1,050,664 412,554 142,000
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 36,359 25,401 32,846
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD _ 10,958 -
CASH AND CASH EQUIVALENTS,
END OF PERIOD $36,359 $36,359 $32,846
</TABLE>
The accompanying notes are an integral part of these financial statements.
isolver.com, inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
1. Management's Representation of Interim Financial Information.
The accompanying financial statements have been prepared by
isolver.com, inc. without audit pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted as allowed by such rules and regulations, and
management believes that the disclosures are adequate to make the
information presented not misleading. These financial statements
include all of the adjustments which, in the opinion of management,
are necessary to a fair presentation of financial position and results of
operations. All such adjustments are of a normal business
development nature.
2. Changes in Stockholders' Equity.
For the quarter ended June 30, 2000, the Company issued 750,000
shares of its no par value common stock at $0.33 per share less $0.03
per share underwriter's commission, for a net of $0.30 per share, or
$225,000.
2. Related Party Transactions
E-Com Investments, L.L.C., ("E-Com") is a principal shareholder of
the Company. E-Com is providing funding for the Company's
activities. For the six months ended June 30, 2000, E-Com
contributed $25,000 additional funds to the Company in the form of a
loan.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
isolver.com, inc., a Colorado corporation, ("the Company") was
incorporated under the laws of the State of Colorado on September
19, 1997. On April 21, 1999, isolver.com, inc., a Nevada
corporation (the "Subsidiary") underwent a business combination with
the Company pursuant to a closing under a Share Exchange and Plan
of Reorganization Agreement. The transaction was accounted for as a
reverse merger acquisition whereby Subsidiary is the accounting
acquirer. The Subsidiary is a wholly owned subsidiary of the
Company, and all of the Company's business is expected to be
conducted through the Subsidiary. On August 9, 1999, Amended
Articles of Incorporation were filed with the Colorado Secretary of
State which changed the Company's name to isolver.com, inc.
The Subsidiary is a development stage Internet commerce business.
Its main focus is network development, Web-based solutions, Web
software and e-commerce. Through the first round of funding, the
Subsidiary has nearly completed the product development for its base
product, the Universal Cart System, and has approximately 3 months
to complete several modules that will be integrated with the Universal
Cart system to create the Presto System. Each of the modules being
created will be integrated into the existing Universal Cart system and
will be capable of being licensed and used as individual products.
With the first round of funding, the Subsidiary has set up an office of
operations in a 6000 square foot facility located on the second and
third floor at 5910 Lemona Avenue, Van Nuys, California 91411.
This facility currently hosts all the employees of the Subsidiary.
The Subsidiary's office is currently being renovated to meet the
standards of functionality and security that the Subsidiary will need to
provide an appropriate environment for its employees and technology.
Construction is expected to be completed by August, 2000.
In the anticipation of growth, the Subsidiary has leased both the
second and third floor. It is currently sub-leasing the second floor to
Ludwig Too, Inc on a three-month term lease. The second floor will
continue to be leased in three month increments until the Subsidiary
begin its expansion program.
The primary product of the Subsidiary, the Universal Cart system,
allows a consumer to make multiple purchases from different websites
while only transmitting payment information once. The Subsidiary has
the proprietary rights to all of the products of the Subsidiary, and
patent papers have been filed for the Universal Cart system (1999)
and Contact Manager (1998).
As the Subsidiary is nearing the completion of its product and office
development, they have begun pursuing other investors for the second
round of funding to complete the deployment and establishment
portion of its business plan. The Subsidiary was notified by Gary
Kornman, Agent for E-Com Investments LLC in April, 2000 that its
primary investor and shareholder E-com Investments would no longer
be offering loans or any other types of cash infusion to the
Subsidiary.
The subsidiary has commenced the process for bridge financing while
it pursues a second round of funding. As part of the bridge financing ,
during the quarter ended June 30, 2000, the Company authorized the
sale of 750,000 shares of the Company's common stock to Kelly
Kellner at $.33 a share for $250,000.
During the quarter ending June 30, 2000, the Subsidiary incurred
operating expenses of approximately $70,000 per month. It is
currently working on reducing expenses in an effort to lower its
operating expenses to approximately $40,000 per month, while it
continues to pursue a second round of financing. There are no plans
to layoff any personnel to achieve the goal.
With the second round of funding the subsidiary will complete its
network development and integrated security system. Once this is
done it will commence the execution of its contracts to generate a
revenue stream.
isolver's products are as follow:
1. Universal Cart Technology (UCT)
2. Online Contact Manger
3. Web Site Builder
1) Universal Cart Technology (UCT):
The UCT evolved from an increasing demand by users to simplify the
on-line shopping experience and to have more security against the
fraudulent use of credit cards. It allows a user to set up an
EZ-Chargeit account once and then use it at any web site that uses
Universal Cart Technology. Shoppers can modify their accounts at
their convenience, by changing or adding information or even deleting
the account.
To provide additional security against fraudulent use of credit card
information, the UCT utilizes a secure method:
- All sensitive information is secured with a Secure Socket Layer
encryption connection to secure the transferring data.
- The consumer's information is encrypted in the UCT database
using JAWS 4096-bit encryption and their unique user name and
password.
UCT Benefits
All parties involved in the on-line shopping process benefit greatly
from using the UCT:
a) Consumers' benefits:
- Repetitive information (such as credit card information and
delivery addresses) can be saved for future use and does not have to
be keyed in for every on-line purchase.
- Multiple delivery addresses can be saved for future use.
- UCT provides encryption security during the transfer and
storage of information.
- Consumers can track past purchases to find specific items
purchased in their account history
b) Merchants' benefits:
- Merchants with existing e-commerce sites can incorporate the
UCT's checkout feature with minimal changes.
- A "Purchase Statement" that has the order information
- Orders to be filled can be accessed directly on-line through the
management module.
- Shipping details can be entered by the merchant, which in turn
will enable consumers to track shipping in real time, thus reducing
customer service calls.
c) Financial Institutions' benefits:
- The reduction of fraudulent use of credit cards will reduce the
risks taken by financial institutions.
- Expanding services globally can be achieved with minimal risk
if the merchant never receives the credit card information.
2. Online Contact Manager:
The contact manager is a daily planner and personal management
program that is a Web-based application. None of the popular
personal management programs currently available are web-based.
The result is that if a person is not at a specific computer, schedule
and address book information will not be available. The Contact
Manager is accessible from any computer connected to the Internet.
The ease of use and open platform accessibility makes the Contact
Manager appealing to people who are not stationed at a specific
computer for any length of time.
The Contact Manager provides mobility without being isolated from
personal information. The current version of the Contact Manager will
be used as a "loss-leader" to gain market awareness of the Isolver
products.
The Online Contact Manager has the following features:
Calendar: Contact Manager can schedule meetings and important dates
similar to a daily schedule planner.
Address book: Users can maintain a full address book in the Contact
Manager. Finding a particular name in the personalized address book
can be done in any particular field.
Email: Users can send and receive email through the Contact Manager
using a web browser. Mail can be sent to any number of recipients.
CC (carbon copy) and BCC (blind carbon copy) are standard features.
Paging: Contact Manager also provides a linked interface that allows
the paging of any person who has a pager account with AT&T,
PageNet or Skytel.
Bulletin board: Users can create bulletin boards that can be shared
with other users or groups of users of the Contact Manager system.
This feature is particularly appealing to families with teenagers that
need to stay in touch with each other. This could replace the "message
on the refrigerator" with a posting on a private bulletin board. The
bulletin board can be accessed from work, home, school or college.
A basic version of the Contact Manager will be made available for
free to the users. Advertising space on the pages will be the source of
income.
Future Development of Online Contact Manager: A more advanced
version with modern back-end systems is being developed and will be
made available for a small fee.
3. Web Site Builder:
Web Builder is a template based web site builder that allows a person
without any programming knowledge to easily construct a web page in
a minimal amount of time. Users have a choice of color, background
features and pictures from a standard library. Users can also upload
their own pictures. Changes are made by the user and do not require
any involvement from isolver support staff. Changes are effective
immediately and do not have any implied cost for isolver.
Future Development of Web Builder: A more advanced version with
modern back-end systems are being developed and will be made
available for a small fee.
In conjunction with the Contact Manager the current version of Web
Builder will be used as a "loss-leader" to gain market awareness of
the Isolver products.
Results of Operations
The Company received no revenues during this period.
Research and Development
The Subsidiary is planning to use four to five independent contractors
for software development.
Need for Additional Financing
The Company remains in the development stage, and since inception,
the Company's principal shareholder, E-Com Investments, L.L.C.,
contributed additional capital to the Company of $297,903 and has
made loans to the Company in a total amount of $438,429, including
accrued interest of $14,479. The Company has also received net
proceeds of $250,000 from the private placement sale of 750,000
shares at a price of $0.33 per share. Consequently, the Company's
balance sheet for the quarter ended June 30, 2000, reflects a current
asset value of $10,769 and a total asset value of $41,355.
The Company currently does not have sufficient assets or capital
resources to pay its on-going expenses while it continues to develop
its Internet commerce business through its Subsidiary, and it may seek
to raise additional capital through the sale of securities. The
Company currently has no agreements in place with its shareholders
or other persons to pay expenses on its behalf.
The Subsidiary expects to earn revenue from software licensing, sales
transaction processing, and network consulting and setup. The
Company will require additional capital in order to meet its cash
needs for the next year, but as opportunities for licensing the products
of the Subsidiary increase, the Subsidiary expects to earn revenue as
follows:
Universal Cart Technology (UCT):
Every time a vendor signs up for a Merchant Account, the Subsidiary
receives $200 for the acquisition of the client from Card Service
International. The Subsidiary will charge a fee of $50.00 per vendor
per year, payable annually in advance. Plus processing fees of $0.10 -
$0.50 per transaction. ($200 + $50 = $250 per merchant enrolled to
the program).
Online Contact Manager:
Online Contact Manager has an enrollment fee of $5 per month. If a
user exceeds 20 faxes per month, charges of $.25 per fax for the
remainder of the month would be imposed.
Web Site Builder:
Additional pages beyond the initial set-up of three are billed at $2.00
per page per month. If a customer wishes to have a customized web
site above and beyond what is capable from the Subsidiary's web site
builder, the customer may negotiate an hourly rate in a range that is
preset for the type of work that is requested.
No specific commitments to provide additional funds have been made
by management or other stockholders. The Company is currently
pursuing additional funds and is working on several agreements that
will involve the issuance of additional securities. Accordingly, there
can be no assurance that any additional funds will be available to the
Company to allow it to cover its expenses.
The Company may also seek to compensate providers of services by
issuance's of stock in lieu of cash.
The Subsidiary will continue to actively pursue additional research
and development, as is necessary in a high technology industry.
The Company is not expected to purchase any significant equipment,
until it achieves its second round of funding. When it is beneficial to
the Company, it may enter into a lease agreement to defer the large
up front cost associated with purchasing a large volume of equipment.
u
The Company currently has no full-time and no part-time employees.
The Subsidiary currently has six full-time employees and three
contract laborers. In addition, during the next twelve months, the
Subsidiary plans to add between two and ten full time employees to
serve as programmers and server/network support.
CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE
HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. Except for historical
matters, the matters discussed in the Management Discussion and
Analysis portions of this Form 10-QSB are forward-looking statements
based on current expectations, and involve risks and uncertainties.
Forward-looking statements include, but are not limited to, statements
relating to the effort to seek business opportunities, the need for
additional financing, the possibility of generating revenue from
operations, and the like.
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE
(b) There have been no reports on Form 8-K for the quarter
ending June 30, 2000.
Signatures
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.
isolver.com, inc.
(Registrant)
/s/_______________________________
Gina M. Setlin-Fard, President
Date: August 14, 2000
