U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: March 31, 1999
Commission File Number: 000-23485
RETAIL HIGHWAY.COM, INC.
(Exact name of small business issuer as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
98-0177646
(IRS Employer Identification No.)
430 PENINSULA AVENUE, SUITE ONE
SAN MATEO, CALIFORNIA
(Address of principal executive offices)
94401
(Zip Code)
(650) 685-9926
(Issuer's Telephone Number)
25 CAVELL AVE.
TORONTO, ONTARIO, CANADA M4K 1L5
(Former address)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days: Yes
__X__ No ____.
The number of shares of the registrant's only class of common stock issued and
outstanding, as of March 31, 1999, was 5,000,000 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements for the nine month period
ended March 31, 1999, are attached hereto.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with
the Financial Statements and notes thereto included herein. In connection with,
and because it desires to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, the Company cautions readers
regarding certain forward looking statements in the following discussion and
elsewhere in this report and in any other statement made by, or on the behalf of
the Company, whether or not in future filings with the Securities and Exchange
Commission. Forward looking statements are statements not based on historical
information and which relate to future operations, strategies, financial results
or other developments. Forward looking statements are necessarily based upon
estimates and assumptions that are inherently subject to significant business,
economic and competitive uncertainties and contingencies, many of which are
beyond the Company's control and many of which, with respect to future business
decisions, are subject to change. These uncertainties and contingencies can
affect actual results and could cause actual results to differ materially from
those expressed in any forward looking statements made by, or on behalf of, the
Company. The Company disclaims any obligation to update forward looking
statements.
OVERVIEW
The Company was incorporated on February 17, 1993 under the
name "LBF Corporation" pursuant to the laws of the State of Nevada to engage in
any lawful corporate purpose. In December 1997, the Company filed a registration
statement with the US Securities and Exchange Commission on Form 10-SB,
registering its common stock under the Securities Exchange Act of 1934, as
amended (the "34 Act"). The Company's intention at that time was to seek to
acquire assets or shares of an entity actively engaged in business which
generated revenues or provided a business opportunity, in exchange for its
securities. In effect, this filing caused the Company to be a full "reporting
company" under the 34 Act.
Effective June 19, 1998, the Company acquired certain patent
application rights (the "Assets") from FES Innovations, Inc., a British
Columbia, Canada corporation ("FES"). The relevant terms of the transaction
provided for the Company to (i) undertake a "forward split" of its common stock,
whereby 10 shares of common
2
<PAGE>
stock were issued in exchange for each share of common stock issued and
outstanding, in order to establish the number of issued and outstanding common
shares of the Company at Closing to be 5,000,000 shares; and (ii) issue to FES
and its assigns an aggregate of 12,500,000 "restricted" common shares (post
split), representing approximately 71.4% of the Company's outstanding common
stock.
Effective as of March 31, 1999, the Company and FES entered
into a Rescission Agreement, whereby the Company and FES agreed to rescind the
FES acquisition, and FES tendered back to the Company's treasury an aggregate of
12,500,000 "restricted" common shares issued pursuant to the acquisition. FES
also agreed to repay certain balances incurred by the Company applicable to the
rescission and other related activities.
PLAN OF OPERATION
The Company generated no revenues during the nine month period
ending March 31, 1999. Management of the Company anticipates that the Company
will not generate any significant revenues until the Company implements its new
business plan. While no assurances can be so provided, as of the date of this
report, it is not anticipated that the Company will commence generating revenues
until completion of its proposed web site as detailed below.
The Company's new business plan relates to an asset
acquisition undertaken by the Company subsequent to March 31, 1999. On March 31,
1999, the Company entered into a letter of intent with Mr. Michael Levine,
Toronto, Canada ("Levine"), whereby the Company agreed, in principle, to acquire
certain assets owned by Levine, including an electronic commerce web site and
the rights to business and domain names, including "Shopshopshopping.com",
"Retailhighway.com" and "Greatestmallonearth.com" (the "Assets").
In exchange for the Assets, the Company agreed to issue 2,500,000 shares of its
common stock equal to ownership of approximately 33% of its outstanding shares,
in exchange for all of the Assets. The acquisition was successfully consummated
effective April 17, 1999, and the Company changed its name to "Retail
Highway.com, Inc."
The Company's new business plan is to establish an "Internet
shopping portal" by providing personalized, intuitive, interactive shopping
features combined with entertainment, community news and information services.
Management intends to utilize the latest Internet technologies to support
multi-vendor shopping carts, powerful search capabilities, streaming multimedia
entertainment and personalized content. The graphic design and navigation
features of the proposed site are expected to provide a clean and simple user
friendly interface free of cluttered displays and information overload. Revenues
are expected to be derived from the sales of advertising and a percentage of
sales from its vendor partners.
3
<PAGE>
The Company is currently accepting bids from among what
management believes are the best web site builders and Internet hosting
companies currently in existence, which web site will be constructed in
accordance with the Company's technical specifications. While no assurances can
be provided, management estimates that a final contract will be completed in
this regard on or before June 1, 1999, with the web site becoming fully
functional on or before October 15, 1999.
As of the date of this report, management has initiated
discussions with several major retailers in order to establish their interest in
becoming a member of the Company's "mall" concept. To the best knowledge of
management, there are no other virtual malls which possess the brand name
"bricks and mortars" retailers. Most of the virtual malls simply offer
hyperlinks to a retailer's web site. The Company, through its web site, expects
to be able to provide Internet shoppers access to a collection of what
management perceives as the best retailers in the world, fast access to the
products which consumers want to purchase and a responsive customer service
environment. In order to draw shoppers to the Company's web site, the Company
will implement an aggressive combination of marketing strategies, including both
standard advertising, Internet solutions and mass media.
LIQUIDITY AND CAPITAL RESOURCES
During the nine month period ended March 31, 1999, the Company
incurred losses of ($87,512) as a result of its incurring ongoing research and
development costs related to attempting to implement its prior business plan of
developing, production and marketing of a heat exchange unit, and other general
and administrative expenses.
The Company presently has no liquid financial resources to
allow it to implement its proposed business plan. In this regard, management has
commenced a private offering of the Company's common stock pursuant to both
Regulation S and Regulation D. Management intends to raise up to $1.5 million in
aggregate gross proceeds by selling shares of common stock at an offering price
of $.75 per share. As of the date of this report, the Company has accepted
subscriptions aggregating $980,000 from these offerings.
Because the Company is not currently required to pay rent or
salaries to any of its officers or directors, management believes that the
Company has sufficient funds to continue operations through the foreseeable
future. It is anticipated that current management, who assumed their positions
with the Company subsequent to March 31, 1999, will begin receiving nominal
salaries in the near future. It is further anticipated that the Company will
continue to incur expenses without corresponding revenues for at least the next
6-12 months.
4
<PAGE>
The Company's securities are currently not liquid. There are
no market makers in the Company's securities. However, it is anticipated that
the Company will file an application to list its common stock for trading on the
OTC Bulletin Board once it successfully closes its private placement offering
described herein. However, there can be no assurances that the Company's common
stock will be approved for trading.
INFLATION
Although management expects that the operations of the Company
will be influenced by general economic conditions once the Company commences
generating revenues, the Company does not believe that inflation had a material
effect on the results of operations during the nine month period ended March 31,
1999.
YEAR 2000 DISCLOSURE
Many existing computer programs use only two digits to
identify a year in the date field. These programs were designed and developed
without considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create erroneous results by
or at the Year 2000. As a result, many companies will be required to undertake
major projects to address the Year 2000 issue. The Company presently owns no
computer equipment. It anticipates utilizing outside contractors for the bulk of
its computer work. These proposed consultants have advised the Company that they
have made all necessary revisions to their software to avoid any potential
problems arising in the year 2000.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
In April 1999, the Company's shareholders approved an
amendment to the Company's articles of incorporation, changing the name of the
Company to "Retail Highway.com, Inc."
ITEM 5. OTHER INFORMATION -
Effective April 17, 1999, the Company consummated an asset
acquisition wherein the Company acquired certain assets from Michael Levine
("Levine") of Toronto, Canada, including an electronic commerce web site and the
rights to business and domain names, including "Shopshopshopping.com,"
"Retailhighway.com" and
5
<PAGE>
"Greatestmall on earth.com." in exchange for the issuance of 2,500,000 shares of
its common stock to Levine and his assigns equal to ownership of approximately
33% of its outstanding shares.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K -
(a) Exhibits
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the
three month period ended March 31, 1999.
6
<PAGE>
<TABLE>
RETAIL HIGHWAY.COM, INC.
(f/k/a International Fuel Solutions, Inc.)
(A Development Stage Company)
Balance Sheet
- -----------------------------------------------------------------------------
<CAPTION>
Unaudited Audited
March 31, June 30,
1999 1998
--------- -----------
<S> <C> <C>
ASSETS
Current Assets - Cash $ 0 $ 20,150
Property & Equipment 0 0
Other Assets-Patent Application Costs 0 10,130
--------- -----------
TOTAL ASSETS $ 0 $ 30,280
========= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES - Accounts Payable
Current Liabilities
Current Portion-Note Payable $ 0 $ 25,000
Current Portion-Note payable
Related Party 0 20,338
Bank Overdraft 4 0
Accounts Payable Trade 1,499 10,705
Accrued Interest Payable 0 0
--------- -----------
Total Current Liabilities $ 1,503 $ 56,043
Long-Term Liabilities 0 0
--------- -----------
TOTAL LIABILITIES $ 1,503 $ 56,043
SHAREHOLDERS' EQUITY
Preferred Stock, $.001 Par Value;
25,000,000 Shares Authorized,
No Shares Issued and Outstanding 0 0
Common Stock, $.001 Par Value;
50,000,000 Shares Authorized,
5,000,000 Issued and Outstanding $ 5,000 $ 17,500
Additional Paid In Capital 168,926 44,654
Deficit Accumulated During
the Development Stage (175,429) (87,917)
--------- -----------
TOTAL SHAREHOLDERS' EQUITY $ (1,503) $ (25,763)
--------- -----------
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $ 0 $ 30,280
========= ===========
The Accompanying Notes Are An Integral Part of These Unaudited Financial
Statements.
</TABLE>
7
<PAGE>
<TABLE>
RETAIL HIGHWAY. COM, INC.
(fka International Fuel Solutions, Inc.)
(A Development Stage Company)
Unaudited Statement of Operations
- -----------------------------------------------------------------------------
<CAPTION>
For the For the
Three Months Three Months
Ended Ended
March March
31, 1999 31, 1998
------------ ------------
<S> <C> <C>
Revenue $ 0 $ 0
------------ ------------
Expenses
Consulting $ 0 $ 0
Depreciation 0 0
Dues, Licenses, & Fees (217) 0
Legal and Accounting 536 0
Office 865 0
Rent 0 0
Research & Development 10,129 0
Stock Transfer 1,158 0
Telephone 0 0
Travel 0 0
------------ ------------
Total Expenses $ 12,471 $ 0
------------ ------------
Net (Loss) Before
Other Expenses $ (12,471) $ 0
Other (Expenses) - Interest (39) 0
------------ ------------
Net (Loss $ (12,510) $ 0
============ ============
Basic (Loss) Per
Common Share $ ($0.00) $ ($0.00)
============ ===========
Weighted Average Common
Shares Outstanding 5,000,000 5,000,000
============ ===========
The Accompanying Notes Are An Integral Part of These Unaudited Financial
Statements.
</TABLE>
8
<PAGE>
<TABLE>
RETAIL HIGHWAY. COM, INC.
(fka International Fuel Solutions, Inc.)
(A Development Stage Company)
Unaudited Statement of Operations
- -----------------------------------------------------------------------------
<CAPTION>
For the For the
Nine Months Nine Months
Ended Ended
March March
31, 1999 31, 1998
------------ ------------
<S> <C> <C>
Revenue $ 0 $ 0
------------ ------------
Expenses
Consulting $ 14,727 $ 0
Depreciation 39 0
Dues, Licenses & Fees 4,919 0
Legal and Accounting 31,437 0
Office 2,909 0
Rent 426 0
Research & Development 20,688 0
Stock Transfer 1,632 0
Telephone 749 0
Travel 8,091 0
------------ ------------
Total Expenses $ 85,617 $ 0
------------ ------------
Net (Loss) Before
Other Expenses $ (85,617) $ 0
Other (Expenses) - Interest (1,895) 0
------------ ------------
Net (Loss $ (87,512) $ 0
============ ============
Basic (Loss) Per
Common Share $ ($0.02) $ ($0.00)
============ ===========
Weighted Average Common
Shares Outstanding 5,000,000 5,000,000
============ ===========
The Accompanying Notes Are An Integral Part of These Unaudited Financial
Statements.
</TABLE>
9
<PAGE>
<TABLE>
RETAIL HIGHWAY.COM, INC.
(fka International Fuel Solutions, Inc.)
(A Development Stage Company)
Unaudited Statement of Cash Flow
- -----------------------------------------------------------------------------
<CAPTION>
February
For the For the 17, 1993
Nine Months Nine Months (Inception)
Ended Ended Thru
March 31, March 31, March 31,
1999 1998 1999
------------ ------------ --------------
<S> <C> <C> <C>
Cash Flows From
Operating Activities:
Net (Loss) $ (87,512) $ 0 $ (175,429)
Stock Issued for Services/
Assets 0 0 52,154
Expenses Paid by Share-
holder on Behalf of Company 77,300 0 122,508
Depreciation 39 39
Increase (Decrease) in
Accounts Payable (9,206) 0 1,499
Increase in (Decrease) in
Accrued Interest 0 0 0
------------ ------------ -------------
Net Cash Flows
From Operations (19,379) 0 771
------------ ------------ -------------
Cash Flows From
Investing Activities:
Purchase of Patent 0 0 0
Purchase of Equipment (775) 0 (775)
------------ ------------ -------------
Net Cash Flows Provided
By Investing (775) 0 (775)
------------ ------------ -------------
Cash Flows From
Financing Activities:
Payments Made on Debt (15,000) 0 (15,000)
Loans Paid by Shareholder
on Behalf of Company (31,667) 0 (31,667)
Monies Received From
Loan Advances 46,667 0 46,667
------------ ------------ -------------
Net Cash Flows Provided
By Financing 0 0 0
------------ ------------ -------------
Net Increase (Decrease) in Cash (20,154) 0 (4)
Cash At Beginning of Period 20,150 0 0
------------ ------------ -------------
Cash At End of Period $ (4) $ 0 $ (4)
============ ============ =============
10
<PAGE>
<CAPTION>
February
For the For the 17, 1993
Nine Months Nine Months (Inception)
Ended Ended Thru
March 31, March 31, March 31,
1999 1998 1999
------------ ------------ --------------
<S> <C> <C> <C>
Supplementary Disclosure of
Cash Flow Information:
Noncash Financing Activities:
Stock Issued For Cash
Advances And Services $ 0 $ 0 $ 510
=========== =========== =============
Stock Issued for
Acquisition of Patents
and Related Costs $ 0 $ 0 $ 52,144
=========== =========== =============
Expenses & Notes Assumed
and Paid by Shareholder $ 112,547 $ 0 $ 142,885
=========== =========== =============
Equipment Received by
Shareholder for Payment $ 775 $ 0 $ 775
=========== =========== =============
The Accompanying Notes Are An Integral Part of These Unaudited Financial
Statements.
</TABLE>
11
<PAGE>
<TABLE>
RETAIL HIGHWAY.COM, INC.
(fka International Fuel Solutions, Inc.)
(A Development Stage Company)
Statement of Shareholders' Equity
- -------------------------------------------------------------------------------
<CAPTION>
Deficit
Capital Accumulated
Number of Paid In During the
Shares Common Excess Of Development
Common Stock Stock Par Value Stage Total
------------ ------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Balance at
February 17, 1993 0 $ 0 $ 0 $ 0 $ 0
Issuance of Common Stock:
May, 1993 For Cash
Advances Made on
Behalf of the Company
and Services at
$.0002 Per Share 1,500,000 1,500 (1,200) 0 300
Net (Loss) (300) (300)
------------ ------- ---------- ---------- ---------
Balance at
June 30, 1993 & 1994 1,500,000 1,500 (1,200) (300) 0
Issuance of Common Stock:
October 1995 For
Cash Advances Made on
Behalf of the Company
and Services at
$.00006 Per Share 3,500,000 3,500 (3,290) 0 210
Net (Loss) (210) (210)
------------ ------- ---------- ---------- ---------
Balance at
June 30, 1995 5,000,000 5,000 (4,490) (510) 0
Expenses Paid By
Shareholders on
Behalf of the Company 10,000 10,000
Net (Loss) (10,000) (10,000)
------------ ------- ---------- ---------- ---------
Balance at
June 30, 1996 & 1997 5,000,000 5,000 5,510 (10,510) 0
Stock Issued for Patent
and Related Costs
at $.004 Per Share 12,500,000 12,500 39,144 51,644
Net (Loss) (77,407) (77,407)
------------ ------- ---------- ---------- ---------
Balance at
June 30, 1998 17,500,000 17,500 44,654 (87,917) (25,763)
12
<PAGE>
<CAPTION>
Deficit
Capital Accumulated
Number of Paid In During the
Shares Common Excess Of Development
Common Stock Stock Par Value Stage Total
------------ ------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Expenses Paid by
Shareholders on
Behalf of the Company (77,407) (77,407)
March 31, 1999
Rescission of
Acquisition Entered
into in June 1998 (12,500,000) (12,500) (12,500)
Net (Loss) (87,512) (87,512)
------------ ------- ---------- ---------- ---------
Unaudited Balance at
March 31, 1999 5,000,000 $ 5,000 $ 168,926 $ (175,429) $ (1,503)
============ ======= ========== ========== =========
The Accompanying Notes Are An Integral Part of These Unaudited Financial
Statements.
</TABLE>
13
<PAGE>
INTERNATIONAL FUEL SOLUTIONS, INC.
Notes to Unaudited Financial Statements
For the Nine Month Period Ended March 31, 1999
Note 1 - Unaudited Financial Information
The unaudited financial information included for the three month and nine month
interim period ended March 31, 1999 were taken from the books and records
without audit. However, such information reflects all adjustments (consisting
only of normal recurring adjustments, which are of the opinion of management,
necessary to reflect properly the results of interim periods presented). The
results of operations for the nine month period ended March 31, 1999, are not
necessarily indicative of the results expected for the fiscal year ended June
30, 1999.
Note 2 - Financial Statements
Management has elected to omit substantially all footnotes relating to the
condensed financial statements of the Company included in the report. For a
complete set of footnotes, reference is made to the Company's Annual Report on
Form 10-KSB for the year ended June 30, 1998 as filed with the Securities and
Exchange Commission and the audited financial statements included therein.
Note 3 - Rescission of Prior Acquisition
On March 31, 1999, the Company entered into a rescission agreement with FES
Innovations, Inc. ("FES"), a privately held British Columbia, Canada
corporation, whereby the Company and FES did agree to rescind the previous asset
acquisition agreement entered into between the aforesaid parties in June 1998.
As part of the terms of this rescission, FES and its assignees did agree to
tender back into the Company's treasury an aggregate of 12,500,000 "restricted"
common shares, representing 71.4% of the Company's then outstanding common
stock. FES also agreed to repay certain balances incurred by the Company
applicable to the rescission and other related activities of the Company.
Reference is made to the Company's Report on Form 8-K dated March 31, 1999.
Note 4 - Subsequent Events
Effective April 17, 1999, the Company acquired certain assets owned by Michael
Levine. The Company issued 2,500,000 shares of its common stock equal to
ownership of approximately 33% of its issued and outstanding shares. Reference
is made to the Company's Report on Form 8-K dated April 17, 1999.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
RETAIL HIGHWAY.COM, INC.
(Registrant)
Dated: May 14, 1999
By: s/Michael Levine
-----------------------------------
Michael Levine,
President and Secretary
15
<PAGE>
INTERNATIONAL FUEL SOLUTIONS, INC.
EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-QSB
FOR THE QUARTER ENDED DECEMBER 31, 1998
EXHIBITS Page No.
EX-27 Financial Data Schedule.....................................17
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORAMTION
EXTRACTED FROM THE UNAUDITED FINANCIAL SATEMENTS FOR THE
FISCAL QUARTER ENDED MARCH 31, 1999, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> MAR-31-1999
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 1,503
<BONDS> 0
0
0
<COMMON> 5,000
<OTHER-SE> (6,503)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,471
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39
<INCOME-PRETAX> (12,510)
<INCOME-TAX> 0
<INCOME-CONTINUING> (12,510)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,510)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
