UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Amendment No. 1)
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended: March 31, 2000
[ ] 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
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(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
of March 31, 2000: 11,940,057 shares
Transitional Small Business Disclosure Format (check one): Yes No X_
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JVWEB, INC.
QUARTER ENDED MARCH 31, 2000
INDEX
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PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Condensed financial statements of JVWeb, Inc.:
<S> <C> <C>
Balance sheet as of March 31, 2000 3
Income statements for the three and nine months ended March
31, 2000 and 1999 4
Statements of cash flows for the six months ended
March 31, 2000 and 1999 5
Notes to financial statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition And Results of Operations 7
PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds 9
Item 6. Exhibits and Reports on Form 8-K. 9
(a)Exhibits
SIGNATURE 9
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
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JVWeb, Inc.
Balance Sheet
As of March 31, 2000
ASSETS
<S> <C>
Cash $ 73,346
Accounts receivable 32,147
Note receivable 53,334
Prepaid professional 227,156
----------
Total Current Assets 385,983
Office equipment and furniture (net of
$3,004 accumulated depreciation) 4,328
Linksxpress.com, Inc. investment 60,000
Linksxpress.co.uk, Inc. 265,000
Investment in AMP3 100,000
Investment in Crosspointe 300,000
Investment in Great Records 227,000
Investment in Sweepstakes
462,500
Total Assets $1,804,811
==========
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 58,040
Accrued interest 22,538
Accrued expenses 3,279
Notes payable to related parties
507,802
Total Liabilities 591,659
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Common stock, $0.01 par, 50,000,000 shares
authorized, 11,940,057 shares issued and
outstanding 119,401
Paid-in capital 3,252,394
Retined Earnings (2,150,643)
----------
Total Stockholders' Equity 1,213,152
Total Liabilities & Stockholders' Equity $1,804,811
==========
3
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JVWeb, Inc.
Income Statements
For the Three and Nine Months Ended March 31, 2000 and 1999
3 Months 9 Months 3 Months 9 Months
Ended Ended Ended Ended
Mar. 31, Mar. 31, Mar. 31, Mar. 31,
2000 2000 1999 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
REVENUES $ 46,071 $ 124,722 $16,315
COST OF SALES 57,048 97,507
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Gross Margin ( 10,977) 27,215 16,315
EXPENSES
General & administrative 221,070 797,291 $ 252,244 $ 572,230
Provision for contingent
collections 54,860
Depreciation 865 1,304 366 805
--------- ----------------- --------- ----------------
221,935 853,455 252,610 573,035
--------- ---------------- ----------------- -----------------
Operating (Loss) (232,912) (826,240) (252,610) (556,720)
INTEREST INCOME 1,020 3,020
-
INTEREST EXPENSE ( 6,654) ( 15,596) ( 2,618) ( 3,990)
--------- --------- --------- --------- -
NET LOSS $(238,546) $(838,816) $(255,228) $(560,710)
========= ========= ========= =========
NET LOSS PER COMMON SHARE $( .02) $( .08) $( .03) $( .07)
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 10,780,057 9,985,557 8,283,135 7,771,429
4
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JVWeb, Inc.
Statements of Cash Flows
For the Nine Months Ended March 31, 2000 and 1999
9 Months 9 Months
Ended Ended
March 31, March 31,
2000 1999
--------- -----------
CASH FLOWS FROM OPERATIONS
<S> <C> <C>
Net deficit $(838,816) $(560,710)
Adjustments to reconcile net
deficit to cash provided
from operating activities
Depreciation 1,304 805
Common stock issued for
services 594,783 266,303
Changes in:
Accounts receivable ( 32,147)
Write off of deposits on
purchase of subsidiary 55,000
Net changes in:
Employee advance 2,550
Equipment ( 2,942)
Inventory ( 3,641)
Prepaid legal expenses (149,319) 19,280
Accounts payable 26,105 28,377
--------- ---------
NET CASH USED BY OPERATING
ACTIVITIES (401,032) (192,036)
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CASH FLOWS FROM INVESTING ACTIVITIES
Deposit on purchase of subsidiary ( 30,000)
---------
CASH FLOWS FROM FINANCING ACTIVITIES
Change in notes payable to founding
shareholder 346,165 90,950
Payments on note payable ( 54,510)
Proceeds from notes payable 20,000
Issuance of common stock 120,000 135,778
--------- ---------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 431,655 226,728
--------- ---------
NET INCREASE (DECREASE) IN CASH 30,623 4,692
CASH BEGINNING 42,723 412
--------- ---------
CASH ENDING $ 73,346 $ 5,104
========= =========
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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 Form 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, 1999, as reported in Form 10-KSB, have been omitted.
NOTE B - ACQUISITION OF LINKSXPRESS.COM, INC.
On September 15, 1999, the Company acquired 500,000 shares or 8% of the
outstanding stock of Linksxpress.com, Inc. in exchange for 150,000 shares of
Company stock, valued at current market price of $.40 per share.
NOTE C - ACQUISITION OF LINKSXPRESS.CO.UK
On December 21, 1999, the Company acquired 350,000 shares or 45% of the
outstanding stock of Linksxpress.co.uk, Inc. in exchange for 500,000 shares of
company stock, valued at current market value of $.53 per share.
NOTE D - ACQUISITION OF CROSSPOINTE
On January 17, 2000, the Company acquired 300,000 shares or approximately 7.5%
of the outstanding stock of Crosspointe, Inc. in exchange for 300,000 shares of
company stock, valued at current market value of $1.00 per share.
NOTE E - ACQUISITION OF GREAT RECORDS
On January 21, 2000, the Company acquired 150,000 shares or 50% of the
outstanding stock of Great Records, Inc., a previously wholly-owned subsidiary
of Crosspointe, Inc., in exchange for 227,000 shares of company stock valued at
current market value of $1.00 per share.
NOTE F - ACQUISITION OF SWEEPSTAKES ENTERTAINMENT CORPORATION
On March 23, 2000, the Company issued 150,000 shares of Company stock valued at
current market value of $1.25 per share in exchange for a 10% interest in
Sweepstakes Entertainment Corporation ("Sweepstakes"). The Company has an option
to purchase the assets of Sweepstakes. The purchase price for an additional
47.3% will be another 500,000 shares of the Company. An additional 800,000
shares will be issuable when certain performance standards are met.
6
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MANAGEMENT DISCUSSION AND ANALYSIS
OVERVIEW
The JVWeb business model to joint venture with existing companies to bring their
brands on line requires a thorough understanding as to how the JVWeb financial
statements can best be analyzed. Specifically, out of our four revenue centers
that are evolving (see below), the buying and selling of our joint venture
interests represents the most difficult to analyze. This is due to the nature of
these interests, as joint ventures, are often only able to be reported at cost
when JVWeb owns less than a fifty percent interest. Therefore, as our financial
statements are analyzed, we recommend some weight be given to the balance sheet
reporting of the increase in value of our varied holdings, as well as revenue,
as an indication of our financial performance.
REVENUE MODEL
JVWeb is refining its revenue model into four distinct categories:
1. Joint ventures. As we have been announcing over the last year, we have
entered into a number of joint ventures. Our strategy has been to
target the establishment of ventures that feed off of each other, and
represent an "internet eco-system", as a self-supporting network of
e-commerce ventures. A more complete discussion of these various
ventures and how they inter-relate is outlined below. We would like to
emphasize that we see our core capability as creating on-line
strategies that work. Therefore, we anticipate that our pace of
developing on-line ventures will accelerate and we will be aggressively
selling these ventures to major companies in search of on-line
strategies that can work for them. Revenue Status: The status of the
individual ventures is reported below.
2. Fee for Service. As we had announced recently, we have made a significant
investment in a sales campaign to generate service revenue in the areas of web
hosting, web development, and internet strategy consulting. To showcase our
internet strategy capabilities, we feature our creation of our varied joint
ventures, as well as the targeted strategies represented by
www.crisis-communications.com, and www.webdisasterrecovery.com. In this
campaign, we are making contact with hundreds of companies each month. We are
presently one month into the campaign, and are now at the stage of establishing
first appointments. We have noted already, however, that fully one half of the
companies we are contacting, in the Houston Gulf Coast area, have not yet even
developed a website! Therefore, we feel a strong market continues to exist for
web development services. As we have a long-term commitment to this campaign, we
are confident this revenue center will be a robust contributor to our revenue
stream. Revenue Status: We are already generating a minimum of $10,000 in
monthly revenue from this division, primarily from providing service to our
joint venture partners. We feel we are on track to meet our goal of having this
division generating a minimum of $30,000 in monthly revenue in the near term.
3. Integrated Sponsorships. JVWeb has made a core commitment to provide content
programming as a specific value add to its various joint ventures. This is
presently manifested in the two properties, www.ihomeline.com (and its companion
site, www.ihomeline.co.uk), a radio and internet talk show centered on home
remodeling, and our suite of media assets revolving around the sweepstakes
industry. We have determined that our resources can best be deployed in
developing programming that can be distributed in multiple channels, including
radio, the internet, print, and (ultimately) video. As a result, we are building
an inventory of advertising space that is available in the form of "integrated
sponsorships" to national advertisers. More than just banner ads on a website,
these integrated sponsorships allow the advertiser to reach its audience through
a variety of mediums, often as content imbedded in the programming. This, we
feel , offers superior value to the advertiser. We expect this inventory to grow
dramatically over the next twelve months, as we build our programming and its
corresponding distribution through the multiple channels as mentioned above.
Revenue Status: We have met 20% of our internal goal of generating $30,000 in
monthly revenue by this time. Although this is disappointing, we have also
expanded our inventory of sponsorship ad space available to over $120,000, which
far exceeds our goal of $60,000. Further, the Sweepstakes assets is expected to
double this again, to an additional $120,000 in ad inventory, by mid-summer. We
are adding a second sales person to handle this increase of inventory. As a
result, we anticipate rapid actual revenue growth in this area.
4. Commerce. The ultimate goal is to generate commerce. JVWeb's view is that
commerce is to be generated through a blend of traditional and on-line
strategies. In that regard, we are presently concentrating our efforts in the
following areas of commerce:
a. On-line subscriptions. Whether driven by sponsors paying for
exposure, or subscribers paying for content, our present
ventures, specifically, 1) a suite of media assets centered on
the sweepstakes industry, and 2) a financial newsletter, are
well-suited for this application of commerce. Revenue Status:
We will be launching the two on-line subscription products
mentioned above in June. We expect, within three months of
start-up, the two newsletters combined will be generating a
minimum of $50,000 in monthly revenue.
b. Sale of merchandise. Through both www.ihomeline.com, and
our soon to be re-launched www.dadandme.com, we have branded
merchandise that can be sold. Revenue Status: We are
presently lining up retail partners for these two product
lines, and do not yet have a timetable for revenue generation.
c. Projects in process. We are actively engaged in developing,
with partners, additional commerce opportunities that we
feel will succeed in profitably generating revenue through
commerce.
SPECIFIC VENTURES
The following ventures are all actively being developed:
1. Ihomeline, Inc.: This project encompasses both ihomeline.com, and the
recently announced ihomeline.co.uk. JVWeb owns a 50% interest in
ihomeline.com. It presently owns a 100% interest in ihomeline.co.uk,
although it is contemplating contributing 50% into ihomeline.com, and
is planning on bringing in 2Cs, its London-based strategic partner for
the remaining 50%. Ihomeline is an integration of a radio talk show,
that is syndicated nationwide, and a how-to website. JVWeb' value-add
is in overall business management of the venture. We are presently
syndicating a two minute version of the talk show, as a vignette, to
over 300 radio stations nationwide. This is a primary component of our
ad inventory referenced above in our integrated sponsorship package.
2. Linksxpress, Inc.: This project encompasses www.linksxpress.com,
in which JVWeb owns an 8% interest, and www.linksxpress.co.uk,
in which JVWeb owns a 38% interest. Linksxpress is an e-commerce
shopping mall, with unique navigation features. JVWeb's value add
is in providing strategies to drive traffic to the site, such as the
sweepstakes and ihomeline programming ventures.
3. Icrosspointe, Inc.: This project encompasses Icrosspointe.net, Inc.,
in which JVWeb owns an 8% interest, and Great Records, Inc., in which
JVWeb owns a 50% interest. Icrosspointe is a Christian-based on-line
community. JVWeb's value add is in providing strategies to drive
traffic to the site, as well as co-venturing on projects into that
community, such as www.dadandme.com, and e-charitable funding
strategies, based on a JVWeb on-line model, www.holyfamilyshrine.org.
Great Records, Inc. is a full-service record label, using the internet
as a means of distributing the music. JVWeb's value add is in the
on-line strategy for the venture, and overall business management
support.
4. The National Sweepstakes Show, Inc.: JVWeb owns 58% of this entity,
which includes a suite of media assets revolving around the sweepstakes
industry. The assets include a newspaper supplement, Sweepstakes News,
which is scheduled to debut this fall, a radio program, in which a demo
can be heard at www.nationalsweepstakesshow.com, and an additional
website, www.sweepstakesnews.com, which will be an on-line subscription
based newsletter. JVWeb's value add is in overall business management
of the project. This acquisition is a critical component of our overall
strategy, in that it will be a primary solution to the question of how
we will drive traffic to our various sites.
5. On-line Financial Newsletter: We have just completed the acquisition of
a 60% interest in a suite of on-line financial newsletters. Through
these newsletters we will be showcasing other public companies, who
will pay the venture a fee for such activities. We will also be
offering our other services, such as web hosting, web development and
strategic internet consulting services to these companies.
6. Amp3, Inc. JVWeb has a 4.5% interest in this on-line music portal.
We have no update on the status of this investment at this time.
7. Wholly-Owned Ventures: In addition to the above, we have, in inventory
a number of domain names that are in various stages of development into
operational websites. These projects involve strategies that JVWeb has
created and is prepared to implement as the right combination of
partners are brought together. The most current project involves a
suite of family-related sites, including www.dadandme.com (a
re-launch), www.momandme.net, and www.familylifestyles.com.
Our accounting policy has been to present the above investments at the
conservative cost basis. Management feels that the ventures above, as a
group, represent values materially greater than that represented on the
balance sheet.
INCOME STATEMENT
1. Revenue: Gross revenues for the quarter primarily reflect the emergence
of our fee-for-service division. The source of those revenues was
mainly derived from web development and consulting services performed
on behalf of our joint ventures
2. Cost of Operations: Our cost of operations for the quarter, $221,070,
represents a 20% reduction in costs from the same period in the prior
year. This reflects the efforts made to more efficiently streamline our
operations towards the production of immediate revenue, with a
corresponding reduction in research and development expenditures.
BALANCE SHEET
1. Current Assets. The prepaid professional fees of $227,000 reflects two
substantial commitments made to sales. The first is the sales program
to support the growth of our fee for service division, and the second
is a campaign associated with our ihomeline joint venture.
2. Investments. As stated above, we conservatively report all of our
investments in our joint ventures at cost.
3. Liabilities. The accounts payable of $58,000 reflect primarily
commitments we are making on behalf of ihomeline, Inc.
8
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PART II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
On January 17, 2000, the Company exchanged 300,000 shares of the Company's
common stock for 300,000 shares of common stock of CrossPointe Net, Inc. This
issuance is claimed to be exempt pursuant to Regulation D under the Act.
On May 12, 1998, the Company's Registration Statement on Form SB-2 (Commission
File No. 333-43379) was declared effective by the U.S. Securities and Exchange
Commission. The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998 contained a detail discussion of the securities registered by
this Registration Statement. This discussion remains true and correct as of the
end of the quarter ended March 30, 2000 except in certain regards discussed in
the remainder of this paragraph. First, the Common Stock and the Company's Class
A Warrants ("Class A Warrants") have commenced trading. In addition, 110,240
Class A Warrants have been exercised, and proceeds from such exercises in the
aggregate amount of $110,240 have been received by the Company. All such
proceeds have been used for general corporate purposes and were paid to persons
other than directors and officers of the Company and persons owning more than
10% of any class of equity securities of the Company. Moreover, the Company
believes that LS Capital Corporation has sold material numbers (if not all) of
the shares of Common Stock and Class A Warrants previously owned by it.
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
NONE
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: October 18, 2000
9
