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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended 3/31/2000
-----------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
------------- ----------------
Commission file number 000-25735
--------------------------
IQROM Communications, Inc.
------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 88-0370480
- --------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7635 Ashley Park Court, Suite 503V, Orlando, Florida 32835
------------------------------------------------------------------------
(Address of principal executive offices)
( 407 ) 299-2230
-----------------------------
(Issuer's telephone number)
Hiking Adventures, Inc., 114 Magnolia Street,
Suite 400-127, Bellingham, Washington 98225
------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>
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 l2, 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
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
21,653,378
------------------------------------------------------------------
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [x]
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
Hiking Adventures, Inc.
(A Development Stage Company)
Balance Sheet
March 31, 2000
March 31, 2000 December 31, 1999
(UNAUDITED)
Assets
Current Assets
Cash $ 57,665 $ 25,964
Accounts Receivable 5,726 5,726
--------- ---------
Total Current Assets 63,391 31,690
Property and equipment, net 1,050 1,050
Organization costs, net 123 144
--------- ---------
Total Assets $ 64,564 $ 32,884
Liabilities and Stockholder's Equity
Current Liabilities
Accounts Payable $ 1,390 $ 1,390
Accrued Expenses 50,000 0
Notes Payable 100,000 0
--------- ---------
Total Current Liabilities 151,390 1,390
Stockholders Equity
Common Stock, $0.001 par
value, authorized 50,000,000
shares; issued and outstanding,
10,000,000 shares 800 800
Additional Paid-In Capital 44,192 44,192
Deficit accumulated during
Development stage (131,818) (13,498)
--------- ---------
Total Stockholders Equity (86,826) 31,494
Total Liabilities and Stockholders' Equity $ 64,564 $ 32,884
See accompanying notes to financial statements.
<PAGE>
Hiking Adventures, Inc.
(A Development Stage Company)
Statement of Operations
(Unaudited)
For the Three month period ended
--------------------------------
INCOME March 31, 2000 March 31, 1999
- ------ -------------- --------------
Revenue $ 0 $ 0
------------ ------------
Total Income 0 0
EXPENSES
General & administrative 118,299 1,273
Amortization and depreciation 21 96
------------ ------------
Total expenses 118,320 1,369
Net loss ($ 118,320) ($ 1,369)
Net loss per share, basic and diluted ($ 0.01) ($ 0.00)
Weighted average number of
Shares outstanding-basic and diluted 10,000,000 10,000,000
See accompanying notes to financial statements.
<PAGE>
Hiking Adventures, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
March 31, 2000
For the three month period ending
---------------------------------
March 31, 2000 March 31, 1999
-------------- --------------
Cash flows from operating activities:
Net loss ($118,320) ($1,369)
Amortization and depreciation 21 94
Increase in accounts receivable 0 (25,725)
Increase in accrued expenses 50,000 0
--------- ---------
Net cash used in operating activities (68,299) (27,000)
Cash flows from financing activities:
Proceeds from notes payable 100,000 0
--------- ---------
Net cash provided by financing activities 100,000 0
Net increase (or decrease) in cash 31,701 (27,000)
Cash at beginning of period 25,964 27,084
--------- ---------
Cash at end of period $ 57,665 $ 84
See accompanying notes to financial statements
<PAGE>
Hiking Adventures, Inc.
(A Development Stage Company)
Notes to Financial Statements
March 31, 2000
Note 1 - Summary of Significant Accounting Policies.
The accompanying unaudited, consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information in response to the
requirements of Article 10 of Regulation S-X. Accordingly, they do not
contain all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In
the opinion of management, the accompanying unaudited, consolidated
financial statements reflect all adjustments (consisting only of normal
recurring adjustments) considered necessary for a fair presentation of
the Company's financial position as of March 31, 2000, and the results
of its operations and its cash flows for the three months ended March
31, 2000 and 1999. These financial statements should be read in
conjunction with our audited financial statements as of December 31,
1999, including the notes thereto, and the other information included
in our most recent annual report on Form 10-KSB for the year ended
December 31, 1999, which was filed with the Securities and Exchange
Commission, or SEC, on February 11, 2000. The following discussion may
contain forward looking statements which are subject to the risk
factors set forth in "Risks and Uncertainties" as stated in Item 2 of
this Form 10-QSB.
Operating results for the three months ended March 31, 2000
are not necessarily indicative of the operating results that may be
expected for the year ending December 31, 2000. Certain historical
accounts have been restated to conform to the current year
presentation.
The Company was organized October 7, 1996 under the corporate
laws of the State of Nevada, as Hiking Adventures, Inc. (the
"Company"). The Company is primarily a development stage company in
accordance with SFAS #7, and has no material operations. The Company is
in the business of publishing and marketing a collection of hiking
trail guides. The Company also plans to research the feasibility and
marketing appeal of electronically providing hiking information
services to hikers.
On July 7, 1998, the Company successfully completed an offering of its
common stock under Regulation D, Rule 504 of the Securities Act of 1933
for 600,000 common shares of stock at $0.001 per share for $30,000.
The Company has not determined its accounting policies and
procedures, except as follows: 1. The Company uses the accrual method of
accounting. 2. Net loss per share is provided in accordance with Statement of
Financial Accounting Standards No. 128 (SFAS No. 128) "Earnings Per Share".
Basic loss per share is computed by dividing losses available to common
stockholders by the weighted average number of common shares outstanding during
the period. Diluted loss per share reflects per share amounts that would have
resulted if dilutive common stock equivalents had been converted to common
stock. No stock options were available or granted during the periods presented.
Accordingly, basic and diluted loss per share are the same for all periods
presented. 3. Organization costs of $415 are being amortized over a period of
sixty (60) months commencing October 18, 1996. 4. Fixed assets are stated at
cost and are being depreciated over a period of five years using the straight
line method of depreciation.
<PAGE>
5. The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid since inception.
Note 2 - Stock split.
On March 1, 2000, the Company announced that its Board of Directors had
approved a 12.5/1 split of its issued and outstanding shares of common
stock. Shareholders of record as of March 2, 2000 participated in this
split. All share and per share figures have been adjusted to reflect
this split.
Note 3 - Acquisition of DXP New Media Services, Inc.
On March 17, 2000, the Company announced that it had entered into a
letter of intent to acquire all of the outstanding shares of DXP New
Media Services, Inc., ("DXP") and its wholly-owned subsidiary IQROM
Limited. Under the terms of the letter of intent, the Company would
exchange 12,800,625 shares of its common stock for all of the issued
and outstanding shares of DXP.
Note 4 - Private placement of shares
On March 17, 2000, the Company announced a $7,500,000 private placement
of 1,000,000 units at $7.50 per unit. Each unit consists of one common
share and one-half of a share purchase warrant. Each whole warrant will
entitle the holder to purchase one additional common share at $7.50 if
exercised in the first year and $10.00 if exercised in the second year.
Note 5 - Subsequent events
On April 5, 2000, the Company announced that in anticipation of the
acquisition of DXP, it had made application to change its name to IQROM
Communications, Inc. effective April 10, 2000. The Company also
announced that its trading symbol on the NASD Bulletin Board system
would change to "IQCO". In addition, the Company's listing on the
Berlin Exchange would also be changed to reflect the new name and
trading symbol, effective April 11, 2000.
On April 27, 2000, the Company announced that it had completed the
acquisition of DXP and its UK subsidiary, IQROM Limited. In addition,
the Company announced it had completed an additional private placement
of 330,000 shares at $7.50 per share, totaling $2,475,000. Also, the
Company stated that it had entered into a long-term licensing agreement
with the owners of the US patent rights for CD-Cards, giving the
Company the exclusive global rights to sell the patented CD-Cards.
Item 2. Management's Discussion and Analysis or Plan of Operation.
NOTE REGARDING PROJECTONS AND FORWARD LOOKING STATEMENTS
This statement includes projections of future results and forward looking
statements as that term is defined in Section 27A of the Securities Act of 1933
as amended (the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). All statements that are included
in this 10-KSB, including statements of historical fact, are forward looking
statements. Although Management believes that the expectations reflected in
these forward looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Important factors could cause
actual results to differ materially from the expectations disclosed in this
statement, including without limitation, in conjunction with those forward
looking statements contained in this statement.
<PAGE>
For the three months ended March 31, 2000, the Company did not receive
any revenue from operations or incur any material costs related to publishing
and marketing hiking trail guides.
The Company incurred approximately $118,000 of expenses during the
period, primarily legal and professional fees related to the Company's
anticipated acquisition of DXP New Media Services, Inc. ("DXP"). Included in the
expenses for the period is a $50,000 accrual for legal and professional services
rendered in the period which are expected to be paid in subsequent periods.
During the next twelve months, management intends to complete its
acquisition of DXP and subsequently engage in the business of selling and
distributing CD-Cards and related products (a CD-Card is a portable CD-ROM in
the shape and size of a rectangular business and/or trading card that can run in
the CD/DVD tray of any computer). The Company plans to discontinue its plans to
publish and market hiking trail guides.
During the period, the Company secured a private placement of 1,000,000
units at $7.50 per unit, each unit consisting of one common share and one-half
of a share purchase warrant. Each whole warrant will entitle the holder to
purchase one additional common share at $7.50 if exercised in the first year and
$10.00 if exercised in the second year. In addition, the Company announced it
had completed an additional private placement of 330,000 shares at $7.50 per
share, totaling $2,475,000. The proceeds of this subscription will be used to
repay debt of DXP and provide working capital for the Company's CD-Card
operations.
<PAGE>
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.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
---------
(a) Exhibits.
Exhibit 27 - Financial Date Schedule
(b) Reports on Form 8-K.
A Report on Form 8-K was filed on March 10, 2000 reporting the
resignations of Gary Vesperman and Timothy Zelenka and the hiring of Eric J.
Boehnke as the new President and John A. Meyer as the new Secretary. Both Mr.
Boehnke and Mr. Meyer were also named directors of the Company.
A Report on Form 8-K was filed on May 5, 2000, after the close of the
quarter ended March 31, 2000, reporting a change in control of the Company which
occurred as of April 20, 2000. Mr. Boehnke and Mr. Meyer resigned from their
offices with the Company and as directors in connection with the change in
control.
<PAGE>
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.
IQROM COMMUNICATIONS, INC.
(Registrant)
Date
---------------------- ----------------------------------
(Signature)
Thomas Gabor Elek, Chief Executive Officer
Date
---------------------- ----------------------------------
(Signature)
Donald Carse, Chief Financial Officer
*Print the name and title of each signing officer under his signature.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 57,665
<SECURITIES> 0
<RECEIVABLES> 5,726
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 63,391
<PP&E> 1,050
<DEPRECIATION> 0
<TOTAL-ASSETS> 64,564
<CURRENT-LIABILITIES> 151,390
<BONDS> 0
0
0
<COMMON> (86,826)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 64,564
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 118,299
<OTHER-EXPENSES> 21
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (118,320)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (118,320)
<EPS-BASIC> (.01)
<EPS-DILUTED> (.01)
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