UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended: December 31, 1998
[ ] 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: 000-24001
JVWEB, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 76-0552098
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
5444 Westheimer, Suite 2080, Houston, Texas 77056
(Address of principal executive officer) (Zip Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_No __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Check whether the registrant 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
The number of shares of common stock, $0.01 par value, outstanding as
December 31, 1998: 7,974,160 shares
Transitional Small Business Disclosure Format (check one): Yes No X_
<PAGE>
JVWEB, INC.
PERIOD ENDED DECEMBER 31, 1998
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Condensed financial statements of JVWeb, Inc.:
<S> <C>
Balance sheet as of December 31, 1998 3
Income statements for the three and six months ended December 31,
1998 and period from October 28, 1997 (Date of Inception)
through December 31, 1997 and from October 28, 1997 (Date of
Inception) to December 31, 1998 4
Statement of stockholders' equity for the period from October
28, 1997 (Date of Inception) through December 31, 1998 5
Statements of cash flows for the nine months ended December
30, 1998 and period from October 28, 1997 (Date of
Inception) through December 31, 1997 and period from
October 28, 1997 (Date of Inception) to December
31, 1998 6
Notes to financial statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
And Results of Operations 9
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 10
Item 6. Exhibits and Reports on Form 8-K.
10
(a)Exhibits
SIGNATURE 10
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<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
JVWeb, Inc.
(A Development Stage Company)
Balance Sheet
As of December 31, 1998
Unaudited
ASSETS
<TABLE>
<S> <C>
Cash $ 505
Inventory 8,946
Prepaid legal expenses 4,300
Total Current Assets 13,751
Office equipment and furniture (net of $969
accumulated depreciation) 3,421
-----
Total Assets $ 17,172
=========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 19,437
Notes payable to related parties 102,500
---------
Total Liabilities 121,937
Preferred stock, $0.01 par, 10,000,000
shares authorized, no shares issued or
outstanding -
Common stock, $0.01 par, 50,000,000 shares
authorized, 7,974,160 shares issued and
outstanding 79,742
Paid-in capital 295,595
Accumulated deficit during
the development stage (480,102)
--------
Total Stockholders' Equity (104,765)
--------
Total Liabilities & Stockholders' Equity $ 17,172
=========
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<PAGE>
JVWeb, Inc.
(A Development Stage Company)
Income Statements
For the Three and Six Months Ended December 31, 1998,
October 28, 1997 (Date of Inception) to December 31, 1997,
and the Period From October 28, 1997 (Date of Inception)
to December 31, 1998
Unaudited
<TABLE>
<CAPTION>
3 Months 6 Months Inception Inception
Ended Ended Through Through
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1998 1997 1998
<S> <C> <C> <C> <C>
REVENUES $ 167 $ 190
COST OF SALES 48
---- ---
Gross Margin 167 142
EXPENSES
General & administrative $ 125,762 $ 305,043 42,828 479,381
Depreciation 244 439 969
--------- --------- ---------- --------
126,006 305,482 42,828 480,350
--------- --------- ---------- ---------
Operating (Loss) (126,006) (305,482) ( 42,661) (480,208)
INTEREST INCOME 106
---------- ---------- ----------- ---------
Net deficit accumulated
during the development
stage $(126,006) $(305,482) $( 42,661) $(480,102)
========= ========= ========== =========
NET LOSS PER COMMON SHARE $( .02) $( .04) $( .01) $( .07)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 7,894,160 7,497,080 6,200,000 6,968,832
</TABLE>
<PAGE>
JVWeb, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
Period from October 28, 1997 (Date of Inception)
Through December 31, 1998
<TABLE>
<CAPTION>
Deficit
During the
Common Stock Paid-in Development
Shares Amount Capital Stage Totals
<S> <C> <C> <C> <C> <C>
Shares issued at
inception to founding
shareholder for cash 6,200,000 $ 62,000 $ 7,516 $ 69,516
Shares issued:
for cash 700,000 7,000 48,000 55,000
for services 200,000 2,000 58,000 60,000
deposit on purchase
of subsidiary 70,000 700 129,300 130,000
Returnable shares (130,000) (130,000)
Net (deficit) $(174,620) (174,620)
---------- ------- --------- ---------- ----------
Balances, June 30,
1998 (Audited) 7,170,000 71,700 112,816 (174,620) 9,896
---------- --------- --------- --------- ---------
Shares issued:
for cash 620,240 6,202 116,976 123,178
for services 358,860 3,589 66,454 70,043
Shares returned from
subsidiary purchase
deposit ( 70,000) ( 700) 700
Fractional shares issued 45,060 451 ( 451)
Shares repurchased from
founding shareholder ( 150,000) ( 1,500) ( 900) ( 2,400)
Net deficit (305,482) (305,482)
--------- --------- --------- --------- ---------
Balance, December 31,
1998 (Unaudited) 7,974,160 $ 79,742 $ 295,595 $(480,102) $(104,765)
========== ========= ========= ========= =========
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<PAGE>
JVWeb, Inc.
(A Development Stage Company)
Statements of Cash Flows
For the Six Months Ended December
31, 1998, Period from October 28, 1997(Date of
Inception)to December 31, 1997,
and the period from October 28, 1997 (Date of Inception)
to December 31, 1998
Unaudited
<TABLE>
<CAPTION>
6 Months Inception Inception
Ended Through Through
December 31, December 31, December 31,
1998 1997 1998
<S> <C> <C> <C>
CASH FLOWS FROM OPERATIONS
Net deficit $( 305,482) $( 42,661) $( 480,102)
Adjustments to reconcile net
deficit to cash provided
from operating activities
Depreciation 439 969
Common stock issued for
services 70,043 130,043
Write off of deposits on
purchase of subsidiary 55,000 55,000
Net changes in:
Employee advance 2,550
Inventory ( 3,641) ( 8,946)
Prepaid legal expenses 15,200 ( 4,300)
Accounts payable 11,956 19,437
---------- ----------
NET CASH USED BY OPERATING
ACTIVITIES ( 153,935) ( 42,661) ( 287,899)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of office equipment
and furniture ( 4,390)
Deposit on purchase of subsidiary ( 30,000) ( 55,000)
---------- ----------- ----------
NET CASH USED BY INVESTING
ACTIVITIES ( 30,000) ( 59,390)
---------- ----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Notes payable to founding
shareholder 64,500 833 102,500
Reduction of note payable ( 1,250)
Issuance of common stock 120,778 69,516 245,294
---------- ----------- ----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 184,028 70,349 347,794
---------- ----------- ----------
NET INCREASE (DECREASE) IN CASH 93 28,688 505
CASH BEGINNING 412
---------- ----------- -----------
CASH ENDING $ 505 $ 28,688 $ 505
========== =========== ==========
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<PAGE>
JVWeb, Inc.
NOTES TO FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of JVWeb, Inc., a Texas
corporation ("Company"), have been prepared in accordance with generally
accepted accounting principles and the rules of the Securities and Exchange
Commission ("SEC"), and should be read in conjunction with the audited financial
statements and notes thereto contained in the Company's latest Annual Report
filed with the SEC on From 10-KSB. In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be expected for
the full year. Notes to the financial statements which would substantially
duplicate the disclosure contained in the audited financial statements for the
most recent fiscal year ended June 30, 1998, as reported in Form 10-KSB, have
been omitted.
NOTE B - DEPOSIT FORFEITURE
The Company entered into an agreement on July 31, 1998 to acquire a financial
publication known as "Wall Street Whispers" from Time Financial Services, Inc.
("Seller") for $140,000. As of December 31, 1998 $55,000 had been paid for this
purchase. Due to stock market volatility and Company concerns about overall
financing, the Company agreed to terminate the purchase obligation, and Seller
was permitted to retain the $55,000. Consequently, the Company has recorded a
loss on this acquisition attempt.
NOTE C - CONSULTING AGREEMENT
The Company entered into an agreement with a consultant on October 1, 1998. The
Company agreed to issue 120,000 options at $0.50 per share as compensation for 2
years of consulting services.
<PAGE>
NOTE D - STOCK OPTIONS
As permitted under Statement of Financial Accounting Standards (ASFAS) No. 123
(Accounting for Stock-Based Compensation), the Company has continued to apply
Accounting Principles Board (AAPB) Opinion No. 25 (Accounting for Stock Issued
to Employees) and related interpretations. Accordingly, no compensation expense
has been recognized for the stock options. The Company has granted options
pursuant to its stock option plan. Grants are made at management's discretion,
and are compensation for services. At December 31, 1998 a total of 4,161,250
options were outstanding and exercisable with the following exercise prices:
3,756,250 at $0.10
285,000 at $0.25
120,000 at $0.50
Options that have been granted and are outstanding expire in 5 years from date
of grant, and are 100% exercisable at date of grant.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
SUMMARY
In general, JVWeb is structured to pursue two main business activities: 1) the
joint venturing of Brands that have strong on-line commerce potential, and 2)
the building of a strong fee for service division to deepen our capabilities. In
this past quarter, management refined its focus on building a strong fee for
service division. A significant percentage of the resources of the company were
devoted to developing a well-defined marketing campaign around very specific
consulting services that emphasized the strengths of the company. At the present
time, JVWEb has no significant contracts signed as a result of these efforts.
Management anticipates seeing the benefits of this effort in the quarter ending
March 31, 1999.
We have established three profit centers within our fee for service division.
The first is a web-hosting service, based in Phoenix, Arizona. The second is the
web development capabilities of Lernout & Hauspie that we market in the U.S. The
third is the strategic internet services consulting that is the core expertise
of JVWEb.
Among the resources that have been established to initiate the marketing of a
fee for service division are the previously announced web-hosting facility
(co-located with GTE), as well as the offices being established in New York and
San Francisco. The company continues to build on its relationship with Lernout &
Hauspie (L&H). Management, for example, is exploring opportunities to leverage
the capabilities of L&H in the U.S., while offering its web-hosting and other
services to L&H in Europe. We are hopeful that these efforts will produce
significant revenue growth for us. However, at this time, we have not signed any
significant contracts as a result of these efforts.
INCOME STATEMENT
Revenue. Management had previously announced its first web-hosting customer at
the end of this quarter. Revenue for web-hosting will initiate in January, 1999,
and we are hopeful it will grow as new customers are added. Management also is
hopeful consulting revenue will initiate in the quarter ending March 31, 1999.
General and Administrative Expenses. Out of the total G&A expenditures for the
quarter, 44%, or $55,000 was due to the write-off of accumulated expenditures
related to the aborted acquisition of Wall Street Whispers. Management is
continuing to have discussions with the owners of Whispers for a joint marketing
relationship around the Whispers newsletter, however, no agreement has been
reached at this time on that possibility.
A material percentage of the remaining G&A expenditures represented travel and
organizational costs associated with the establishment of a presence in New York
and California, as well as the pursuit of development with L&H in their Ipswich
(London) office. Additional expenditures were incurred in establishing the web
hosting capability in Phoenix, Arizona.
Remaining G&A expenditures were related to the costs of being a public company,
including the associated costs of maintaining a fully reporting status with the
S.E.C.
BALANCE SHEET
Cash. The principal shareholder and related parties, continue to fund the
minimal operations of the company on an as-needed basis.
Inventory. Inventory of $8,946 represents merchandise related to the Dadandme
and Frogletz product lines. Management continues to explore relationships and
joint venture opportunities that will support a marketing campaign to build
these on-line brands. At this time, no such talks are in serious discussion
stages.
Accounts Payable. As of February 15, 1999, a majority of the costs, which were
associated with the establishment of JVWeb as a public company, have been paid.
Notes Payable to Related Parties. We anticipate paying off these notes in 1999.
<PAGE>
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
For services rendered (and agreed to be rendered in a written contract) having a
value determined to be $24,000, the Company agreed to issue over the next two
years to a person providing services to the Company options to purchase an
aggregate of 120,000 shares of the Company's common stock at an exercise price
of $.50 per share. This issuance is claimed to be exempt pursuant to Regulation
D under the Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed with this Quarterly Report or
are incorporated herein by reference:
Exhibit
Number Description
27 Financial Data Schedule
(b) Reports on Form 8-K
The Registrant filed a Current Report on Form 8-K dated
November 6, 1998 reporting on the termination of the
acquisition of Wall Street Whispers.
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
JVWEB, INC.
(Registrant)
By: /s/Greg J. Micek
Greg J. Micek, President
(Principal Executive Officer, Principal
Financial Officer and Principal
Accounting Officer)
Dated: February 12, 1999
EXHIBITS INDEX
Exhibit
Number Description
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The financial data schedule contains summary information extracted from Part I
of Form 10-QSB for the quarterly period ended December 31, 1998 and is qualified
in its entirety by reference to such financial statments.
</LEGEND>
<CIK> 0001051902
<NAME> JVWeb, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> OCT-1-1998
<PERIOD-END> DEC-31-1998
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<CASH> 505
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<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 8946
<CURRENT-ASSETS> 13751
<PP&E> 4390
<DEPRECIATION> 969
<TOTAL-ASSETS> 17172
<CURRENT-LIABILITIES> 121937
<BONDS> 0
0
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<COMMON> 79742
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<TOTAL-LIABILITY-AND-EQUITY> 17172
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</TABLE>
