U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K\A 1
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 1999
DRIVINGAMERICA.COM, INC.
------------------------
(Exact name of registrant as specified in its charter)
MATHY CORPORATION
-----------------
(Former Name of Registrant)
COLORADO
--------
(Current state of incorporation)
0-24447 84-1463449
------- ----------
(Commission File No.) (IRS Employer
Identification No.)
18004 Skypark Circle, Suite 170
Irvine, CA 92614
---------- -----
(Address of principal executive offices) (Zip code)
2851 S. Parker Road
Suite 720
Aurora, Colorado 80014
-----------------------
(Former principal address)
Registrant's telephone number, including area code: (949) 263-8890
<PAGE>
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On May 24, 1999, Kish, Leake & Associates, P.C., the Registrant's
independent accountant for the Registrant's two most recent fiscal years,
resigned. The Registrant's financial statements for the last two years prepared
by Kish, Leake & Associates, P.C., contained a going concern opinion.
Also on May 24, 1999, the Registrant engaged the accounting firm of
Hollander, Lumer & Co., independent public accountants, to audit the
Registrant's fiscal year ended December 31, 1999, as well as future financial
statements, to replace the firm of Kish, Leake & Associates, P.C., which was the
principal independent public accountant as reported in the Registrant's Form
10-KSB for the fiscal year ended March 31, 1999, as filed with the Securities &
Exchange Commission. This change in independent accountants was approved by the
Board of Directors of the Registrant.
There were no disagreements within the last two fiscal years and subsequent
periods with Kish, Leake & Associates, P.C., on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope of
procedure, which disagreement(s), if not resolved to the satisfaction of Kish,
Leake & Associates, P.C., would have caused that firm to make reference in
connection with its reports to the subject matter of the disagreement(s) or any
reportable events.
The Registrant has requested that Kish, Leake & Associates, P.C., furnish
it with a letter addressed to the Commission stating whether it agrees with the
above statements. A copy of such letter, dated May 24, 1999, has been previously
filed with the SEC as Exhibit 16.1 to the original Form 8-K, which this report
is intended to amend.
ITEM 7(A) AND 7(B). FINANCIAL STATEMENTS AND PRO FORMA FINANCIAL
STATEMENTS
The audited financial statements for the Cooper Memphis Group, Inc.
("CMG"), the predecessor to the Company, for the fiscal year ended December 31,
1998, along with the unaudited financial statements of CMG for the three month
period ended March 31, 1999 are included herewith.
ITEM 8. CHANGE IN FISCAL YEAR
As part of the "reverse merger" between the Company and the Cooper Memphis
Group, Inc., current management has elected to change the Company's fiscal year
from March 31 to December 31.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DRIVINGAMERICA.COM, INC.
By:\s\ Charles M. Davis
-------------------------
Charles M. Davis,
President
Dated: July 6, 1999
<PAGE>
DRIVINGAMERICA.COM, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
<PAGE>
DRIVINGAMERICA.COM, INC.
INDEX TO FINANCIAL STATEMENTS
Report of Independent Auditors F-1
Balance Sheets as of December 31, 1998 and 1997 F-2
Statements of Operations for the years
ended December 31, 1998 and 1997 F-3
Statements of Stockholders' Deficiency for the
years ended December 31, 1998 and 1997 F-4
Statements of Cash Flows for the years
ended December 31, 1998 and 1997 F-5
Notes to Financial Statements F-6
<PAGE>
HOLLANDER, LUMER & CO. LLP
Certified Public Accountants
15260 Ventura Boulevard, Suite 940
Sherman Oaks, California 91403
Telephone (818) 789-5113
Fax (818) 789-0484
E-Mail: [email protected]
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of DrivingAmerica.com, Inc.
We have audited the accompanying balance sheets of DrivingAmerica.com, Inc. as
of December 31, 1998 and 1997 and the related statements of operations,
stockholders' deficiency, and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of DrivingAmerica.com, Inc. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as going concern. As discussed in Note 1 to the financial
statements, there is a substantial doubt about the ability of the Company to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
s/Hollander, Lumer & Co. LLP
HOLLANDER, LUMER & CO. LLP
June 9, 1999
F-1
<PAGE>
<TABLE>
DRIVINGAMERICA.COM, INC.
BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
<CAPTION>
1998 1997
----------- ---------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ - $ 5,254
Accounts receivable 28,911 52,779
----------- ---------
TOTAL CURRENT ASSETS 28,911 58,033
PROPERTY AND EQUIPMENT, Net 9,439 12,888
----------- ---------
$ 38,350 $ 70,921
=========== =========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Bank overdraft $ 6,672 $ -
Accounts payable 166,261 69,310
Loans payable 30,167 167,314
----------- ---------
TOTAL CURRENT LIABILITIES 203,100 236,624
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIENCY
Preferred stock, $.001 par value;
authorized - 25,000,000 shares;
issued and outstanding - none - -
Common stock, $.001 par value;
authorized - 100,000,000 shares;
issued and outstanding - 12,500,000 shares 12,500 12,500
Additional paid-in capital 434,228 (7,500)
Due from officer (95,918) (11,956)
Accumulated deficit (515,560) (158,747)
----------- ---------
TOTAL STOCKHOLDERS' DEFICIENCY (164,750) (165,703)
----------- ---------
$ 38,350 $ 70,921
=========== =========
See accompanying Notes to Financial Statements.
</TABLE>
F-2
<PAGE>
<TABLE>
DRIVINGAMERICA.COM, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1998 AND 1997
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
REVENUE $ 353,765 $ 906,804
OPERATING EXPENSES
Selling, general and administrative 661,251 851,340
Depreciation 9,027 8,745
----------- -----------
TOTAL OPERATING EXPENSES 670,278 860,085
----------- -----------
INCOME (LOSS) FROM OPERATIONS (316,513) 46,719
OTHER INCOME (EXPENSES)
Interest expense (40,300) (26,706)
Gain on sale of trademark - 235,000
----------- -----------
TOTAL OTHER INCOME (EXPENSES) (40,300) 208,294
----------- -----------
NET INCOME (LOSS) $ (356,813) $ 255,013
=========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 12,500,000 12,500,000
=========== ===========
BASIC EARNINGS (LOSS) PER SHARE $ (0.03) $ 0.02
=========== ===========
See accompanying Notes to Financial Statements.
</TABLE>
F-3
<PAGE>
<TABLE>
DRIVINGAMERICA.COM, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIENCY
YEARS ENDED DECEMBER 31, 1998 AND 1997
<CAPTION>
Common Stock Additional Due to
--------------- Paid-in (from) Accumulated
Shares Amount Capital Officer Deficit Total
------ ------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1997 10,000 $12,500 $ (7,500) $ 34,605 $(413,760) $(374,155)
Increase in due from officer (46,561) (46,561)
Net income 255,013 255,013
------ ------- -------- -------- --------- ---------
Balance, December 31, 1997 10,000 12,500 (7,500) (11,956) (158,747) (165,703)
Increase in due from officer (83,962) (83,962)
Debt contributed to capital 441,728 441,728
Net loss (356,813) (356,813)
------ ------- -------- -------- --------- ---------
Balance, December 31, 1998 10,000 $12,500 $434,228 $(95,918) $(515,560) $(164,750)
====== ======= ======== ======== ========= =========
See accompanying Notes to Financial Statements.
</TABLE>
F-4
<PAGE>
<TABLE>
DRIVINGAMERICA.COM, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (356,813) $ 255,013
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation 9,027 8,745
Gain on sale of trademark - (235,000)
Changes in operating assets and liabilities:
Accounts receivable 23,868 (52,779)
Accrued interest on loans payable 2,860 8,069
Accounts payable 96,951 61,001
NET CASH PROVIDED BY (USED IN) ----------- -----------
OPERATING ACTIVITIES (224,107) 45,049
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment (5,578) (4,654)
Due from officer, net (83,962) (46,561)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (89,540) (51,216)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft 6,672 -
Proceeds from loans payable 301,721 5,347
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 308,393 5,347
----------- -----------
NET INCREASE (DECREASE) IN CASH (5,254) (819)
CASH, BEGINNING OF PERIOD 5,254 6,073
----------- -----------
CASH, END OF PERIOD $ - $ 5,254
=========== ===========
CASH PAID FOR:
Interest $ 16,873 $ 13,290
Income taxes $ - $ -
NON-CASH INVESTING AND FINANCING ACTIVITIES:
During 1997, the Company settled a loan payable of
$235,000 by transferring a trademark to the lender.
During 1998, loan payable of $441,728 was contributed
to capital of the Company.
See accompanying Notes to Financial Statements.
</TABLE>
F-5
<PAGE>
DRIVINGAMERICA.COM, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Description of Business. The Cooper Memphis Group, Inc. (the "Company" or "CMG")
was incorporated in California on January 27, 1995. The Company is also doing
business as Automotive Consumer Services. The Company is a successor to the
business of Automotive Consumer Services, Inc., a Pennsylvania corporation. The
Company is a marketer of automobile database information. The database is
comprised of new vehicle information, including specifications and dealer
vehicle costs, which are sold to consumers in the form of printed vehicle
reports. This creates another database of consumer information that the Company
is marketing to several automobile manufacturers, local dealers and affinity
groups. The Company intends to expand operations into other services related to
the acquisition of an automobile. It is also in the process of developing and
enhancing its Internet Web site called DrivingAmerica.com to offer auto-related
financial services. The Web site is registered by Arcane Communications, Inc.
("Arcane"), an affiliated company. Upon completion of the Company's current
private placement, the registration will be transferred to the Company.
Basis of Presentation. Effective May 7, 1999, pursuant to a definitive
agreement, Mathy Corporation, a non-operating public shell corporation, acquired
all issued and outstanding stock of CMG, resulting in the stockholders and
management of CMG having actual and effective control of Mathy Corporation, the
surviving corporation. Mathy Corporation changed its name to DrivingAmerica.com,
Inc. For accounting purposes, the transaction has been treated as an acquisition
of Mathy Corporation by CMG and as a recapitalization of CMG. The historical
financial statements prior to the acquisition become those of CMG even though
they are labeled as those of DrivingAmerica.com, Inc. ("DrivingAmerica"). In a
recapitalization, historical stockholders' equity (deficiency) of CMG prior to
the merger is retroactively restated for the equivalent number of shares
received in the merger after giving effect to any difference in par value of
DrivingAmerica and CMG's stock with an offset to paid-in capital. Retained
earnings (accumulated deficit) of CMG is carried forward after the acquisition.
Operations prior to the merger are those of CMG. Basic earnings (loss) per share
prior to the merger are restated to reflect the number of equivalent shares
received by CMG.
Going Concern. The Company had a net loss of $356,813 for the year ended
December 31, 1998. As of December 31, 1998, the Company had a working capital
deficiency of $174,189 and stockholders' deficiency of $164,750. The Company's
ability to continue as going concern is primarily dependent on its ability to
raise financing. The Company is currently arranging financing of $3,500,000 from
private placement of its stock to obtain additional funds so that the Company
can meet its obligations and sustain its development activities. No assurance
can be given that the private placement will be successful. The Company's major
stockholders agreed to fund the maintenance cash flow requirements of the
Company through December 31, 1999 or until the Company raises the necessary
financing from private placement.
The Company's significant operating loss and significant capital requirement
raise substantial doubt about the Company's ability to continue as a going
concern. The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and liabilities in
the normal course of business. The financial statements do not include any
adjustments relating to the recoverability of the recorded assets or the
classification of the liabilities that might be necessary should the Company be
unable to continue as a going concern.
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Cash Equivalents. The Company considers all highly liquid investments purchased
with an original maturity of three months or less to be cash equivalents.
F-6
<PAGE>
DRIVINGAMERICA.COM, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Product Development Costs. Product development costs include expenses incurred
by the Company to develop, enhance, manage, monitor and operate the Company's
Web site. Product development costs are expensed as incurred.
Revenue Recognition. The Company recognizes revenue upon delivery of the printed
vehicle reports to the consumers. It also recognizes revenue from the sale of
consumer database based on contracts and delivery of the database.
Major Customers. One customer accounted for 48% of revenue for the year ended
December 31, 1998. Two customers accounted for 17% and 52% of revenue for the
year ended December 31, 1997.
Fair Value of Financial Instruments. The Company's financial instruments consist
of accounts receivable, accounts payable and loans payable. The fair values of
the Company's financial instruments approximate the carrying value of the
instruments.
Property and Equipment. Property and equipment are stated at cost. Depreciation
is computed using the straight-line method over estimated useful lives ranging
from 3 to 5 years.
Income Taxes. The Company utilizes the asset and liability method for income
taxes. Under this method, deferred tax assets and liabilities are recognized for
the future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases and operating loss and tax credit carryforwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.
Basic and Diluted Loss Per Share. Effective December 31, 1997, the Company
adopted Statement of Financial Accounting Standards No. 128, "Earnings Per
Share", which established simplified standards for computing and presenting
earnings per share information. Basic loss per common share is based upon the
net loss applicable to common shares after preferred dividend requirements and
upon the weighted average number of common shares outstanding during the period.
Diluted loss per common share adjusts for the effect of convertible securities,
stock options and warrants only in the periods presented in which such effect
would have been dilutive.
Recent Accounting Pronouncements. In March 1998, the American Institute of
Certified Public Accountants issued Statement of Position 98-1 ("SOP 98-
1"),"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use." This standard requires companies to capitalize qualifying
computer software costs which are incurred during the application development
stage and amortize them over the software's estimated useful life. SOP 98-1 is
effective for fiscal years beginning after December 15, 1998. The Company is
currently evaluating the impact of SOP 98-1 on its financial statements and
related disclosures.
2. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
1998 1997
---------- ----------
Furniture and equipment $ 6,706 $ 1,128
Computers 28,216 28,216
---------- ----------
34,922 28,216
Less accumulated depreciation 25,483 16,456
---------- ----------
$ 9,439 $ 12,888
========== ==========
F-7
<PAGE>
DRIVINGAMERICA.COM, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
3. LOANS PAYABLE
Loans payable consisted of the following:
<TABLE>
<CAPTION>
1998 1997
---------- -----------
<S> <C> <C>
Short-term cash advances from individuals, payable on
demand with 10% interest. During 1998, $101,590 balance
of one loand was contributed to capital. $ 30,167 (a) $ 85,128
Short-term cash advances from an advertising agency,
controlled by a stockholder of the Company. This advance
was contributed to capital during 1998. - 82,186
---------- ----------
$ 30,167 $ 167,314
========== ==========
</TABLE>
(a). The lender is claiming that CMG committed to him a 5% equity position in
CMG. If the lender pursues this claim, Charles M. Davis, the Company's President
and principal stockholder, agreed to indemnify the Company from all costs and
shares arising from this claim.
4. RELATED PARTY TRANSACTIONS
Due from officer consisted of expenses of Charles M. Davis paid by CMG on his
behalf, net of amounts advanced by him to CMG. At December 31, 1998 and 1997,
due from officer had an outstanding balance of $95,918 and $11,956,
respectively. Such amounts were shown as reduction from stockholders' equity in
the accompanying balance sheets.
Mr. Davis also agreed to indemnify the Company for payroll taxes, interest and
penalties if certain travel and other expenses are disallowed for tax purposes
and deemed personal expenses of Mr. Davis.
During 1997, Mr. Davis was paid nominal salaries. During 1998, Mr. Davis
provided services to CMG and at no cost to CMG.
During 1997 and 1998, Arcane received revenue and paid expenses on behalf of CMG
of $2,902 and $148,145, and $189,801 and $263,971, respectively. CMG funded the
bank accounts of Arcane in amounts required to pay CMG's expenses.
5. COMMITMENTS AND CONTINGENCIES
Operating Lease - The Company leases its office with lease term expiring on
September 30, 1999. The basic annual rent is $38,657 payable at $3,221 per
month. Future minimum lease payments as of December 31, 1998 total $28,989 for
the year ended December 31, 1999.
Rent expense charged to operations was $50,583 in 1998 and $33,020 in 1997.
Employment Agreement - At December 31, 1998, the Company had no employment
agreement. However, the Company's Chief Operating Officer ("COO") has an
employment agreement dated September 23, 1998 with the Company's lender that is
majority owned by a Company's stockholder, which provides that the COO will
perform his duties at the Company.
F-8
<PAGE>
DRIVINGAMERICA.COM, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
The agreement provides for a monthly compensation of $8,000 per month for the
period October 1, 1998 to December 31, 1998 and $9,000 per month for the period
January 1, 1999 to December 31, 1999. All payroll expenses and benefits of the
COO are being reimbursed by the Company to the lender. The agreement also
provides that the COO will receive a 10% equity interest in CMG which will vest
25% on January 1, 1999, 25% on January 1, 2000, 25% on January 1, 2001 and 25%
on January 1, 2002. No compensation expense was recognized for this interest
because the fair value of the shares at that time was not material. The
agreement calls for a 90-day notice of termination and additional 90 days of
severance pay with benefits paid by the lender. On April 15, 1999, the lender
terminated this agreement. The Company and the COO are currently negotiating the
terms of the COO's termination. Mr. Davis agreed to transfer his shares of the
Company's common stock up to 2.5% of shares received by CMG's stockholders from
the merger to the COO upon settlement of the COO's termination.
6. STOCKHOLDERS' DEFICIENCY
As described under Basis of Presentation in Note 1, the historical stockholders'
equity (deficiency) of CMG prior to the merger is retroactively restated for the
equivalent number of shares received in the merger after giving effect to any
difference in par value of DrivingAmerica and CMG's stock with an offset to
paid-in capital. CMG's had 2,000,000 shares of common stock outstanding at time
of merger, which was exchanged to 11,250,000 shares of common stock of
DrivingAmerica. Prior to the merger, DrivingAmerica had 1,250,000 shares of
common stock outstanding. Total issued and outstanding shares of common stock
immediately after the merger is 12,500,000.
One of CMG's lenders, controlled by a stockholder of the Company, contributed
the balance of its loans in the amount of $340,138 at December 31, 1998 to the
capital of CMG.
One of CMG's lenders contributed the balance of its loans in the amount of
$101,590 at December 31, 1998 to the capital of CMG. Mr. Davis agreed to
transfer 3% of shares of common stock received by CMG's stockholders from the
merger to this lender.
7. INCOME TAXES
At December 31, 1998 and 1997, deferred tax assets were composed primarily of
the following:
1998 1997
----------- -----------
Net operating loss carryforwards $ 169,000 $ 27,000
Less valuation allowance 169,000 27,000
----------- -----------
Net deferred tax assets $ - $ -
=========== ===========
At December 31, 1998, the Company has federal net operating loss carryforwards
of $424,000 that expire through 2018. In assessing the realizability of deferred
tax assets, management considers whether it is more likely than not that some
portion or all of the deferred tax assets will not be realized. The amount that
the Company can utilize from its federal and state net operating loss
carryforwards will be subject to annual limitations due to change of ownership.
The ultimate realization of deferred tax assets is dependent upon the generation
of future taxable income. Management believes that a valuation allowance equal
to deferred tax assets is necessary at December 31, 1998 and 1997.
F-9
<PAGE>
DRIVINGAMERICA.COM, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
8. GAIN ON SALE OF TRADEMARK
Pursuant to a Mutual Release and Contract Settlement Agreement dated September
15, 1997 between the Company and a creditor, the Company transferred all its
rights to the following trademarks and service marks: AutoTrac, AutoTracs,
AutoTrack, AutoTracks and any similar marks. The creditor agreed to cancel its
contract and a promissory note in the amount of $235,000. Such amount is shown
as other income in the accompanying statements of operations.
9. SUBSEQUENT EVENT
Pursuant to an Agreement dated June 9, 1999, the Company agreed to acquire the
remaining interest in the Web site, DrivingAmerica.com, from Aaron Block for (a)
$150,000 in cash from the proceeds of the private placement of the Company's
stock and (b) $125,000 in 125,000 shares of the Company's common stock. These
shares will have the same registration rights as the private placement shares.
F-10
<PAGE>
<TABLE>
DRIVINGAMERICA.COM, INC.
BALANCE SHEETS (UNAUDITED)
MARCH 31, 1999 AND 1998
<CAPTION>
1999 1998
----------------- ----------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ - $ -
Accounts receivable 44,440 31,478
----------------- ----------------
TOTAL CURRENT ASSETS 44,440 31,478
PROPERTY AND EQUIPMENT, Net 8,506 10,632
----------------- ----------------
$ 52,946 $ 42,110
================= ================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
Bank overdraft $ 6,173 $ 6,924
Accounts payable 210,150 69,310
Loans payable 45,927 175,460
----------------- ----------------
TOTAL CURRENT LIABILITIES 262,250 251,694
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIENCY
Preferred stock, $.001 par value;
authorized - 25,000,000 shares;
issued and outstanding - none - -
Common stock, $.001 par value;
authorized - 100,000,000 shares;
issued and outstanding -
12,500,000 shares 12,500 12,500
Additional paid-in capital 519,508 (7,500)
Due from officer (111,065) (23,174)
Accumulated deficit (630,247) (191,410)
----------------- ----------------
TOTAL STOCKHOLDERS' DEFICIENCY (209,304) (209,584)
----------------- ----------------
$ 52,946 $ 42,110
================= ================
See accompanying Notes to Financial Statements.
F-1
</TABLE>
<PAGE>
<TABLE>
DRIVINGAMERICA.COM, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
1999 1998
----------------- ----------------
<S> <C> <C>
REVENUE $ 69,158 $ 106,746
OPERATING EXPENSES 181,613 134,966
----------------- ----------------
INCOME (LOSS) FROM OPERATIONS (112,455) (28,220)
OTHER INCOME (EXPENSES) (2,2 32) (4,443)
----------------- ----------------
NET INCOME (LOSS) $ (114,687) $ (32,663)
================= ================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 12,500,000 12,500,000
================= ================
BASIC EARNINGS (LOSS) PER SHARE $ (0.01) $ (0.00)
================= ================
See accompanying Notes to Financial Statements.
F-2
</TABLE>
<PAGE>
<TABLE>
DRIVINGAMERICA.COM, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
<CAPTION>
1999 1998
----------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (114,687) $ (32,663)
Adjustments to reconcile net income
(loss) to net cash used
in operating activities:
Depreciation 933 2,256
Changes in operating assets and liabilities:
Accounts receivable (15,529) 21,301
Accounts payable 43,889 -
----------------- ----------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (85,394) (9,106)
----------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Due from officer, net (15,147) (11,218)
----------------- ----------------
NET CASH USED IN INVESTING ACTIVITIES (15,147) (11,218)
----------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Bank overdraft (499) 6,924
Proceeds from loans payable - contributed to capital 85,280 -
Proceeds from loans payable 15,760 8,146
----------------- ----------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 100,541 15,070
----------------- ----------------
NET INCREASE (DECREASE) IN CASH - (5,254)
CASH, BEGINNING OF PERIOD - 5,254
----------------- ----------------
CASH, END OF PERIOD $ - $ -
================= ================
See accompanying Notes to Financial Statements.
F-3
</TABLE>
<PAGE>
DRIVINGAMERICA.COM, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999 AND 1998
1. BASIS OF PRESENTATION
The interim financial statements presented have been prepared by
DrivingAmerica.com, Inc. (the "Company") without audit and, in the
opinion of the management, reflect all adjustments of a normal
recurring nature necessary for a fair statement of (a) the results of
operations for the three months ended March 31, 1999 and 1998, (b) the
financial position at March 31, 1999 and 1998, and (c) the cash flows
for the three months ended March 31, 1999 and 1998. Interim results are
not necessarily indicative of results for a full year.
The financial statements and notes are condensed and do not contain
certain information included in the annual financial statements and
notes of the Company. The financial statements and notes included
herein should be read in conjunction with the audited financial
statements and notes for the years ended December 31, 1998 and 1997.
2. STOCKHOLDERS' DEFICIENCY
During the quarter ended March 31, 1999, a stockholder of the Company
contributed its loans of $85,280 to the capital of the Company.
F-4
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998, AND THE
UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 1999.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> YEAR 3-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-END> DEC-31-1998 MAR-31-1999
<CASH> 0 0
<SECURITIES> 0 0
<RECEIVABLES> 28,911 44,440
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 28,911 44,440
<PP&E> 9,439 8,506
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 38,350 52,946
<CURRENT-LIABILITIES> 203,100 262,250
<BONDS> 0 0
0 0
0 0
<COMMON> 12,500 12,500
<OTHER-SE> (177,250) (221,804)
<TOTAL-LIABILITY-AND-EQUITY> 38,350 52,946
<SALES> 353,765 69,158
<TOTAL-REVENUES> 353,765 69,158
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 670,278 181,613
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (40,300) (2,232)
<INCOME-PRETAX> (356,813) (114,687)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (356,813) (114,687)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (356,813) (114,687)
<EPS-BASIC> (0.03) (0.01)
<EPS-DILUTED> 0 0
</TABLE>
