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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
[x] EXCHANGE ACT OF 1934
For the quarterly period ended September 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
-------------- ---------------
Commission file number
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CYCO.NET, INC.
(Exact name of small business issuer as specified in its charter)
<TABLE>
<S> <C>
Nevada
(State or other jurisdiction of incorporation or 13-3389415
organization) (IRS Employer Identification No.)
</TABLE>
4201 G. Yale Boulevard, NE, Albuquerque, New Mexico
(Address of principal executive offices)
(505) 344-9643
(Issuer's telephone number)
600 Central Avenue, SW, Albuquerque, NM 87102
(Former name, former address and former fiscal year, if changed since last
report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
<PAGE> 2
Check whether the registrant filed all documents and reports required to be
filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
Not Applicable
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: 20,890,419 shares of common stock.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [ x]
Indicate by mark whether the registrant (1) has filed all 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 filing requirements for the past 90 days.
Yes [ ] No [x]
INDEX
Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet September 30, 2000
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis or Plan Of Operation
Part II - Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
Cyconet, Inc. and Subsidiary
Consolidated Balance Sheet
September 30, 2000
(Unaudited)
<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash $ 47,517
Accounts receivable 129,759
Other receivables 37,072
Inventory 5,920
---------------
Total Current Assets 220,268
---------------
Property and equipment, net 640
Other assets 25,700
---------------
$ 246,608
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 199,603
Note payable 10,000
---------------
Total Current Liabilities 209,603
---------------
Stockholders' equity
Common stock, $0.001 par value,
30,000,000 shares authorized,
20,360,419 issued and outstanding 20,916
Additional paid in capital 240,889
Accumulated deficit (224,800)
---------------
Total stockholders' equity 37,005
---------------
$ 246,608
===============
</TABLE>
<PAGE> 4
Cyconet, Inc. and Subsidiary
Consolidated Statements of Operations
For the Three Months and Nine Months Ended Septembar 30, 1999 and 2000
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
------------------------------ ------------------------------
1999 2000 1999 2000
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenue $ -- $ 783,092 $ -- $ 1,435,121
Operating expenses:
Cost of sales -- 681,458 -- 1,259,549
General and administrative expenses 78,099 144,222 104,737 234,438
------------- ------------- ------------- -------------
78,099 825,680 104,737 1,493,987
(Loss) from operations (78,099) (42,588) (104,737) (58,866)
Other income (expense)
Realized (loss) on marketable securities -- (25,492) -- (25,492)
------------- ------------- ------------- -------------
Net (loss) (78,099) (68,080) (104,737) (84,358)
Other comprehensive income:
Unrealized gain on available for sale securities -- 20,312 -- 4,688
------------- ------------- ------------- -------------
Comprehensive (loss) $ (78,099) $ (47,768) $ (104,737) $ (79,670)
============= ============= ============= =============
Per share information:
Weighted average shares outstanding - basic and fully diluted 19,337,086 20,816,752 16,621,700 20,409,120
============= ============= ============= =============
Net (loss) per share - basic and fully diluted $ (0.00) $ (0.00)) $ (0.01)0) $ (0.00)1)
============= ============= ============= =============
</TABLE>
<PAGE> 5
Cyconet, Inc. and Subsidiary
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 1999 and 2000
(Unaudited)
<TABLE>
<CAPTION>
1999 2000
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<S> <C> <C>
Cash flows from operating activities:
Net cash (used in) operating activities $ (69,036) $ (46,088)
------------ ------------
Cash flows from investing activities:
Net cash provided by investing activities -- 23,868
------------ ------------
Cash flows from financing activities:
Net cash provided by financing activities 69,500 59,000
------------ ------------
Net increase in cash 464 36,780
Beginning - cash balance -- 10,737
------------ ------------
Ending - cash balance $ 464 $ 47,517
============ ============
</TABLE>
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Cyco.Net has been focusing on maximizing the number of hits or visitors per day.
As more visitors visit Cyco.Net, the Company is positioning itself to take
advantage of the audience it is attracting. Currently, through its E-Commerce
websites, abbakisomkes.com and cycocigs.com, it is attracting many customers for
the sale of cigarettes. These Customers are potential customers for a plethora
of products and services that will be provided by the site, its owned companies,
affiliates and advisors. Cyco.Net is continuing with its 12 month focus to tend
to sales growth and gain additional traffic to its e-commerce sites by:
o locating appropriate facilities in which to conduct shipping of product.
o Launching an affiliate program to build traffic to its e-commerce sites.
o Advertising through print ads, e-newsletters and e-mails to target
markets.
o Continue funding efforts
o Maintain and add features to the Cyco.net site, i.e. location cameras
providing live feed from worldwide locations of interest.
o Pursue advertising contracts from major tobacco and spirit manufacturers.
o Hire additional employees as needed. The hiring of 1-2 employees is
projected in the next 12 months.
Financial Condition
For the third quarter of the year 2000, Cycocigs.com and Aabakismokes have
produced the following revenue from the sale of cigarettes:
<TABLE>
<CAPTION>
Cost of Goods Revenue Gross Margin
<S> <C> <C> <C>
July 2000 219,953. 234,302 14,349
August 2000 244,479 264,964 20,485
September 2000 262,294 283,789 21,495
</TABLE>
The company has repaid the note to Francisco Urrea in the amount of $18,000.00.
On August 9, 2000, the company entered into an extension of the agreement with
the May Davis Trust whereby the Commitment period was extended to 24 months from
the original 12 months. The Line of Credit Agreement now will expire in August
2001.
<PAGE> 7
Liquidity
Liquidity is an ongoing concern of the Company. The Company is continuing to
seek funds from private placements until such time as the Company becomes
re-listed on the OTC BB, at which time funds will become available from the May
Davis Trust pursuant to the Line of Credit Agreement.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not Applicable
ITEM 2. CHANGES IN SECURITIES.
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable
ITEM 5. OTHER INFORMATION.
On September 15, 2000, the Company issued 6000 shares of its 0.001 par
value common stock to John J. Barnaba Jr. for Electrician Services rendered.
On September 15, 2000, the Company issued 50,000 shares of its 0.001
par value common stock to Doug Fenton at $.10 per share. Total funds received
$5,000. Share price of this private placement was arbitrarily determined.
Cyco.net entered into an agreement with Ryan S. Diederich of ProSoft
Inc. for Cyco.Net to acquire the domain name http://www.krwtobacco.com/. The
effective date of the purchase was August 1, 2000. The terms of the agreement
provide that payment for the domain name shall be 250,000 shares of Cyco.net
stock. The stock issued is restricted pursuant to the provisions of SEC Rule
144.
Cyco.Net has moved it's principal location to 4201 G. Yale Boulevard,
N.E., Albuquerque, New Mexico 87107. The effective date of the lease is
August 1, 2000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Exhibit 99 May Davis Extension Agreement
<PAGE> 8
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.
CYCO.NET, Inc.
(Registrant)
Date January 4, 2001 /s/ RICHARD A. URREA
------------------------------- -------------------------------------
Richard A. Urrea, President
Date January 4, 2001 /s/ DANIEL URREA
------------------------------- -------------------------------------
Daniel Urrea, Chief Financial Officer
*Print the name and title of each signing officer under his signature.
http://www.sec.gov/smbus/forms/10qsb.htm
Last update: 06/07/2000
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
99 May Davis Extension Agreement
</TABLE>
