SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the year ended December 31, 1999Commission File No. 000-24927
CLASSIFIED ONLINE.COM
(FORMERLY FUJI ELECTROCELL CORPORATION)
(Exact name of registrant as specified in its charter)
Nevada 33-0199082
(State of organization) (I.R.S. Employer Identification No.)
5104 Oleander Ave., Fort Pierce, FL 34954
(Address of principal executive offices)
Registrant's telephone number, including area code (561) 337-4065
Securities registered under Section 12(g) of the Exchange Act:
Common stock, $0.001 par value
per share
Preferred stock, $0.01 par
value per share
Check whether the issuer (1) filed all reports required to be
file by Section 13 or 15(d) of the Exchange Act during the past
12 months and (2) has been subject to such filing requirements
for the past 90 days. Yes X
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B not contained in this form, and no
disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendments to this Form 10-KSB. [ X ]
Issuer's Revenue during the year ended December 31, 1999: $202
Aggregate market value of the voting and non-voting common equity
held by non-affiliates based on the price of N/A per share (the
selling or average bid and asked price) as of April 11, 2000:
$4,063,043.70
DOCUMENTS INCORPORATED BY REFERENCE:
The Company's form 10-SB/A, filed on May 10, 1999, and the
exhibits attached thereto, are incorporated by reference. The
Company also incorporates by reference Forms 8-K that were filed
on May 27, 1999, June 3, 1999,August 10, 1999, August 11, 1999,
and December 22, 1999; and Forms 8-K/A that were filed on
September 14, 1999, October 8, 1999 and November 15, 1999.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Background
Classified OnLine.com (the "Company") is a Nevada corporation
formed on September 11, 1981 as "Controlled Combustion Corp." Its
original purpose was to design, develop, and build a pyrolitic
plant. The Company's name was changed to Fuji Electrocell
Corporation on June 25, 1986 in connection with the company
receiving an assignment of the right to market the Fuji brand of
batteries in the United States. On June 25, 1986, the Company
also amended its Articles of Incorporation to increase the
authorized capital stock to 50,000,000 Shares from 50,000 and to
authorize the issuance of 20,000,000 shares of preferred stock
with a par value of $0.01 per share. The Company again changed
its name on June 21, 1999 to Classified OnLine.com (see "Exchange
Agreement" below). The Company's principal place of business is
located at 5104 Oleander Ave., Fort Pierce, FL 34954.
In March, 1999, the Company issued a total of 5,500,000 shares of
common stock. Of this amount, 3,500,000 was given to Mr. Michael
J. Lates, who replaced Steven Hocke as director of the Company.
Mr. Lates was appointed as Vice President and charged with
investigating Internet-type businesses as potential opportunities
for the Company. Mr. James Blake was given 1,000,000 shares for
his work as the Company's treasurer, and Mr. Steve Tierney, the
Company's outside legal counsel, was given 1,000,000 shares in
payment of his legal services on behalf of the Company. On May
26, 1999, the Company's board approved a 1:20 reverse stock
split. This was done for the purpose of reducing the number of
common shares outstanding, thereby allowing the Company to issue
additional shares, if necessary, in the event of a business
combination.
Exhange Agreement
On June 21, 1999, the Company completed an exchange agreement
with a company then known as ClassifiedOnLine.Com. The company
had developed an internet web-site providing users the ability to
list classified advertisements on the internet. The web-site
allows users to search and place the ads by category of item and
by geographical location. The web-site address is
http://www.classifiedonline.com. (see Plan of Operation; "Item
6") Under the terms of the exchange agreement, each of the
8,084,711 shares outstanding in ClassifiedOnLine.Com was
exchanged for one share of the Company's common stock. Upon
completion, there were 10,000,369 shares of the Company's voting
stock outstanding, each with the same rights and privileges as
the shares of the Company prior to the exchange. Upon completion
of this exchange, the Company changed its name to Classified
OnLine.Com. The company previously known as ClassifiedOnLine.Com
changed its name to WantToBuyOnline.Com and is now a wholly-owned
subsidiary of the Company. WantToBuyOnline.Com has had no
operations. Shareholders of the Company before the exchange
agreement now own 80.84% of the issued and outstanding shares.
On January 24, 2000, the Company formed a new wholly-owned
subsidiary called SafeVenture.com. SafeVenture.com was
incorporated under the laws of the State of Nevada for the
purpose of designing, developing, and marketing an internet-based
escrow transaction service.
The Company's business is subject to the following risk factors:
RELIANCE ON KEY PERSONNEL. The Company places particular reliance
on certain key advisors, directors, and the president, whose
involvement would be considered material to the Company.
COMPETITION. The Company is an insignificant participant among
firms which engage in providing comprehensive classified
advertising on the Internet. There are many established companies
which have significantly greater financial resources, technical
expertise and experience than the Company. In view of the
Company's limited financial resources and management
availability, the Company will continue to be at significant
competitive disadvantage vis-a-vis the Company's competitors.
FUTURE FINANCING. The future success of the Company may depend on
financing.
REGULATION. Although the Company will be subject to regulation
under the Securities Exchange Act of 1934, management believes
the Company will not be subject to regulation under the
Investment Company Act of 1940, insofar as the Company will not
be engaged in the business of investing or trading in securities.
The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the
Company under the Investment Company Act of 1940 and,
consequently, any violation of such Act would subject the Company
to material adverse consequences. The Company does not at present
have any governmental permits, licenses or the like.
LIMITED OPERATING HISTORY. The Company has not generated any
revenues since its inception and has a limited operating history.
There can be no assurances that the Company will operate at a
profit. There can be no assurances that the growth strategies
identified by management will be successful, or, if they are
successful, that they will have a positive effect on the earnings
of the Company.
SPECULATIVE NATURE OF COMPANY'S PROPOSED OPERATIONS. The success
of the Company's operations may be dependent upon management
together with numerous other factors beyond the Company's
control.
ITEM 2. DESCRIPTION OF PROPERTY.
The Company has the use of a limited amount of office space from
its President, Richard J. Oldfield. The Company pays its own
charges for long distance telephone calls and other secretarial,
photocopying, and similar expenses. The Company also leases
certain equipment for its internet operations. In May 1999, the
Company signed an agreement to lease computer equipement. Under
the terms of the agreement, the computer equipment is to be
leased for 36 months at $1,057.80 per month. In June 1999, the
Company also signed an addendum to the original lease agreement,
in which the Company will pay an additional $71.80 per month for
a period of 34 months commencing in July 1999.
ITEM 3. LEGAL PROCEEDINGS
The Company and its directors have instituted action for a
declaratory judgment concerning a contract with Leann Gibbs, an
individual resident in Ontario, Canada. The Complaint was filed
in the Nineteenth Judicial Circuit Court, in and for St. Lucie
County, Florida, as Case No. 98-736CA03. Ms. Gibbs and the
Company had entered into a contract pursuant to which she would
transfer to the Company her interest in a number of mica mines,
in exchange for stock in the Company. The Company was to then
pursue a business in mining the mica and selling the raw material
to companies that would process it. The agreement with Ms. Gibbs
was never consummated, and the parties, after much discussion,
agreed to withdraw from the agreement. The Company has instituted
the action to declare the agreement void, simply to protect
itself from a later breach of contract action.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No such matters were submitted during the fourth quarter of 1999.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Under the terms of the exchange agreement (see "Item 1"), each of
the 8,084,711 shares outstanding in WantToBuy Online.Com
(formerly ClassifiedOnLine.Com) was exchanged for one share of
the Company's common stock. Upon completion, there were
10,000,369 shares of the Company's voting stock outstanding, each
with the same rights and privileges as the shares of the Company
prior to the exchange. Subsequent to the exchange agreement,
7,128 shares of undocumented shares were reissued for exchange
for no consideration, resulting in the 10,007,497 currently
issued and outstanding.
Common Stock
The Company's Articles of Incorporation authorizes the issuance
of 50,000,000 shares of Common Stock, $0.001 par value per share,
of which 10,007,497 are issued and outstanding. The shares are
non-assessable, without pre-emptive rights, and do not carry
cumulative voting rights. Holders of common shares are entitled
to one vote for each share on all matters to be voted on by the
stockholders. The shares are fully paid, non-assessable, without
pre-emptive rights, and do not carry cumulative voting rights.
Holders of common shares are entitled to share ratably in
dividends, if any, as may be declared by the Company from time-to-
time, from funds legally available. In the event of a
liquidation, dissolution, or winding up of the Company, the
holders of shares of common stock are entitled to share on a pro-
rata basis all assets remaining after payment in full of all
liabilities.
As of March 21, 2000, the Company had 10,007,497 shares issued
and outstanding, of which 8,835,203 shares are restricted
pursuant to Rule 144, promulgated under the Securities Act and
are subject to resale restrictions and, unless registered under
the Securities Act or exempted under another provision of the
Securities Act, will be ineligible for sale in the public market.
Sales may be made after two years from their acquisition in
accordance with Rule 144. There are also 4,000,000 shares of
common stock available to the president and vice-president
through stock options (see "Items 10 & 11"). There are
approximately 560 shareholders of the common stock. The stock is
traded on the OTCBB under the symbol CLOL.
Preferred Stock
The Company's Articles of Incorporation authorizes the issuance
of 20,000,000 shares of preferred stock, $0.01 par value per
share. The Company's Board of Directors has the authority,
without action by the shareholders, to issue all or any portion
of the authorized preferred stock in one or more series and to
determine the voting rights, preferences as to dividends and
liquidation, conversion rights, and other rights of such series.
The preferred stock, if and when issued, may carry rights
superior to those of common stock; however no preferred stock may
be issued with rights equal or senior to the preferred stock
without the consent of a majority of the holders of then-
outstanding preferred stock.
The Company considers it desirable to have preferred stock
available to provide increased flexibility in structuring
possible futureacquisitions and financings, and in meeting
corporate needs which may arise. If opportunities arise that
would make the issuance of preferred stock desirable, either
through public offering or private placements, the provisions for
preferred stock in the Company's Certificate of Incorporation
would avoid the possible delay and expense of a shareholder's
meeting, except as may be required by law or regulatory
authorities. Issuance of the preferred stock could result,
however, in a series of securities outstanding that will have
certain preferences with respect to dividends and liquidation
over the common stock which would result in dilution of the
income per share and net book value of the common stock. Issuance
of additional common stock pursuant to any conversion right which
may be attached to the terms of any series of preferred stock may
also result in dilution of the net income per share and the net
book value of the common stock.
The issuance of preferred stock could have the effect of making
it more difficult for a third party to acquire a majority of the
outstanding voting stock of the Company. Further, certain
provisions of Nevada law could delay or make more difficult
amerger, tender offer, or proxy contest involving the Company.
While such provisions are intended to enable the Board of
Directors to maximize shareholder value, they may have the effect
of discouraging takeovers which could be in the best interests of
certain shareholders. There is no assurance that such provisions
will not have an adverse effect on the market value of the
Company's stock in the future.
Dividends
The Registrant has not paid any dividends to date, and has no
plans to do so in the immediate future.
Recent Sales of Unregistered Securities.
During 1999, the president transferred 208,000 of his shares to
outside consultants in exchange for consulting, bookkeeping and
legal services, which has been valued at $103,450.
In November 1999, the vice-president contributed 50,000 shares of
his common stock to the Company's treasury. Subsequently, 3,700
shares of stock were reissued to an outside consultant in
exchange for services rendered, which was valued at $3,237.
The Company has not issued or sold any unregistered securities in
the previous three years, other than the March, 1999, issuance of
5,500,000 shares as discussed in Item 1 above.
ITEM 6. MANAGEMENT'S PLAN OF OPERATION
NOTE REGARDING PROJECTIONS 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 Registration Statement, other than 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
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of Operation
The Company plans to build and maintain one of the most
comprehensive online classified databases available online. Cash
requirements will be met by advances from the Officers and
Directors or through a private placement of the Company's common
stock.
The newly designed, interactive website will provide users with
an easy and hassle-free way to buy and sell from each other
online, allowing viewers to enjoy a user-friendly marketplace to
conduct person-to-person e-commerce. Visitors to
http://www.ClassifiedOnline.com will experience several brand new
interactive classified areas including: Transportation,
Employment, Real Estate, Merchandise, Services, Personals, and
Collectables.
Further, a new section to ClassifiedOnline.com will provide an
expanded venue to local community newspapers, opening their
classified sections to viewers around the globe, and making those
advertisements available to all users. Bringing the "small town
papers" to the world will be a major part of
ClassifiedOnline.com's new business strategy, combined with
online partnerships, for auto, real estate, personal ads,
employment and merchandise listings. This innovative touch will
provide locally focused news and information to all visitors of
ClassifiedOnline.com
A full corporate profile for ClassifiedOnLine.com (OTCBB: CLOL -
news) may be found at http://www.SmallcapNewswire.com.
Year 2000 Compliance
The Company is aware of the issues associated with the
programming code in existing computer systems as the year 2000
approaches. Computer programs that have time sensitive software
may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or
miscalculations causing disruption of normal business activities.
The Company has verified that they will use only certified "Year
2000" compatible software for all of the company's computing
requirements. The company believes that the "Year 2000" issue
will not pose significant operational problems and will not
materially affect future financial results.
Employees
The Company's only employees at the present time are its officers
and directors, who will devote as much time as the Board of
Directors determine is necessary to carry out the affairs of the
Company. As the Company becomes operational during the year 2000,
it will be necessary to hire additional employees The exact
number of employees will be determined based upon the size of
operations.
ITEM 7. FINANCIAL STATEMENTS.
Since Classified OnLine.Com was a dormant company, financial
information is presented as if ClassifiedOnLine.Com was the
acquiring company the financial statements and notes to the
financial statements have been prepared, accordingly. The
financial statements and supplemental data required by this Item
7 follow the index of financial statements appearing at Item 13
of this Form 10K-SB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Since the exchange has been accounted for as a reverse
acquisition, there has been no change in the accountants of
WantToBuy Online.Com (formerly Classified Online.Com) to
disclose, and Management has had no disagreements with the
findings of its current accountants.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL
PERSONS
The members of the Board of Directors of the Company serve until
the next annual meeting of the stockholders, or until their
successors have been elected. The officers serve at the pleasure
of the Board of Directors.
There are no agreements for any officer or director to resign at
the request of any other person, and none of the officers or
directors named below are acting on behalf of, or at the
direction of, any other person.
Information as to the directors and executive officers of the
Company is as follows:
<TABLE>
<S> <C> <C>
Name/Address Age Position
Richard J. Oldfield 51 President /
3104 Overbrook Dr. Director
Port Saint Lucie, FL
34952
James W. Blake 40 Secretary / Treasurer
9175 Second Ave.
Jacksonville, FL 32208
Michael J. Lates 28 Vice President / Director
523 Greenleaf Meadows
Rochester, NY 14612
</TABLE>
The biographies of Messrs. Oldfield, Blake, and Lates is included
in the Company's Amended Form 10-SB, and is incorporated by
reference to section 5 of that document.
ITEM 10. EXECUTIVE COMPENSATION
No cash compensation of directors or executive officers is paid
or anticipated to be paid by the Company until such a time that
the Company will generate revenue. Compensation of management
will be determined by the board of directors. The current
officers and directors have received stock as sole compensation.
The officers and directors are to devote a reasonable amount of
their time and attention to the Company.
Summary Compensation Table
Annual compensation Long term compensation
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Awards Payout
s
Name and Year Salary Bonu Other Restric Securit LTIP All
Position ($) s Annua ted ies Payout othe
($) l Stock underly s ($) r
Comp. Awards ing Comp
($) ($) options .
/ SARs ($)
(#)
Classified
OnLine.com
(formerly Fuji)
(1)
Michael J. 1999 175,000
Lates, shares
Vice- (2)
President/Direct
or
James Blake, 1999 50,000
Sec./Treas./Dire shares
ctor (2)
ClassifiedOnline
.Com
(currently
WantToBuy)
Richard J. 1999 4,473,6
Oldfield, 21
President/Direct shares
or
Michael J. 1999 1,325,0
Lates, 00
Director shares
Alan Kipnis, 1999 786,090
Secretary/Direct shares
or
James Blake, 1999 450,000
Treasurer/Direct shares
or
</TABLE>
Option /SAR Grant in Last Fiscal Year
Individual Grants
<TABLE>
<S> <C> <C> <C> <C>
Name Number of Percent of total Exercise or base Expiration
securities options / SARs price ($/sh) Date
underlying granted to
options / SARs employees in
Granted (#) last fiscal year
Richard J. 1,000,000 $2.50/sh 6/2002
Oldfield,
President/Directo 1,000,000 $2.00/sh 6/2001
r
Michael J. Lates, 1,000,000 $2.50/sh 6/2002
Vice- 1,000,000 $2.00/sh 6/2001
President/Directo
r
</TABLE>
(1) The compensation table differentiates the compensation
received by the officers and directors from both companies prior
to the acquisition on July 16, 1999.
(2) The shares issued to Michael J. Lates and James Blake from
Classified OnLine.Com (formerly Fuji) are represented as 20:1
reverse split shares.
Mr. Oldfield and Mr. Lates have been granted two options each;
one, which will expire in June 2002, allows each of them to
purchase up to one million (1,000,000) shares of the company's
common stock at a price of $2.50; the other, which will expire in
June 2001, allows each of them to purchase up to one million
(1,000,000) shares each of the company's common stock at a price
of $2.00. These options are granted as compensation for their
work on behalf of the Company.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
The following tables set forth information relating to the
beneficial ownership of the Company's common stock by those
persons holding beneficially more than 5% of the Company's
capital stock, by the Company's directors and executive officers,
and by all of the Company's directors and executive officers as a
group.
a) Security Ownership of Certain Beneficial Owners
<TABLE>
<S> <C> <C> <C>
Title of Name and Address of Amount and Percent of Class
Class Beneficial Owner Nature of
Beneficial
Ownership
Common Alan R. & Sharon A. 944,701 9.44%
Kipnis
20529 Dumont St.
Woodland Hills, CA
91364
Common Richard J. Oldfield 3,825,970 38.23%
1839 SE Port Saint
Lucie Blvd., Port
Saint Lucie, FL 34952
Common Michael J. Lates 1,430,800 14.30%
1839 SE Port Saint
Lucie Blvd., Port
Saint Lucie, FL 34952
</TABLE>
b) Security Ownership of Management
<TABLE>
<S> <C> <C> <C>
Title of Name and Address of Amount and Percent of Class
Class Beneficial Owner Nature of
Beneficial
Ownership
Common Rick Oldfield 3,825,970 38.23%
1839 SE Port Saint Lucie
Blvd., Port Saint Lucie,
FL 34952
Common Michael J. Lates 1,430,800 14.30%
1839 SE Port Saint Lucie
Blvd., Port Saint Lucie,
FL 34952
Common James W. Blake 500,000 5.00%
9175 Second Ave.
Jacksonville, FL 32208
Common All directors and 5,756,770 57.52%
officers as a group (3
individuals)
</TABLE>
Note that Mr. Oldfield and Mr. Lates have been granted two
options each; one, which will expire in June 2002, allows each of
them to purchase up to one million (1,000,000) shares of the
company's common stock at a price of $2.50; the other, which will
expire in June 2001, allows each of them to purchase up to one
million (1,000,000) shares each of the company's common stock at
a price of $2.00. These options are granted as compensation for
their work on behalf of the Company. If these options were
exercised, Mr. Oldfield's ownership would increase to 41.59%,
while Mr. Lates' would increase to 24.49%. In such event, the
ownership of Messrs. Kipnis and Blake would decrease to 6.74%,
and 3.57% respectively, and the officers and directors would own
69.65% of the Company's common stock.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During February 9, 1999 through December 31, 1999, $9,172.00 of
the Company's expenses were funded by Treasure Coast Mortgage, a
mortgage company in which the president is also a principal.
ITEM 13. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
Reports of Independent Auditor, Morgan, Jacoby, Thurn,
Boyle & Associates, P.A. dated April 6, 2000.
Consolidated Balance Sheet as of December 31, 1999
Consolidated Statement of Operations for the period
from February 9, 1999 (inception) through December
31, 1999.
Consolidated Statement of Stockholders' Equity for the
period from February 9, 1999 (inception) through
December 31, 1999.
Consolidated Statement of Cash Flows for the period
from February 9, 1999 (inception) through December
31, 1999.
Notes to Consolidated Financial Statements
Independent Auditors' Report
The Board of Directors
Classified OnLine.Com:
We have audited the accompanying consolidated balance sheet of
Classified OnLine.Com (A Development Stage Enterprise) as of
December 31, 1999 and the related consolidated statements of
operations, stockholders' equity (deficit) and cash flows for the
period from February 9, 1999 (inception) through December 31,
1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit 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 misstatement. 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 audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Classified OnLine.Com as of December 31, 1999, and
the results of its operations and its cash flows for the period
from February 9, 1999 (inception) through December 31, 1999 in
conformity with generally accepted accounting principles.
/s/ Morgan, Jacoby, Thurn, Boyle & Associates, P.A.
Vero Beach, Florida
April 6, 2000
2
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Consolidated Balance Sheet
December 31, 1999
<TABLE>
<S>
<C <C>
>
Assets
Current assets:
Cash and cash equivalents $ 420
Accounts receivable 202
Prepaid expenses 52,185
Total current assets 52,807
Other assets 22,948
$ 75,755
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Accounts payable (note 5) 119,857
Total current liabilities 119,857
Stockholders' equity (deficit) (notes 2 and
3):
Preferred stock, $01 par value, authorized -
20,000,000
shares, none issued and outstanding
Common stock, $.001 par value, authorized 10,007
25,000,000 shares, issued 10,007,497 shares
Additional paid-in capital 365,197
Deficit accumulated during development stage (378,79
3)
(3,589)
Less treasury stock, 46,300 common shares, at (40,513
cost )
Total stockholders' equity (deficit) (44,102
)
Commitments (note 4)
$ 75,755
</TABLE>
See accompanying notes to consolidated financial statements.
3
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Consolidated Statement of Operations
Period from February 9, 1999 (inception)
Through December 31, 1999
<TABLE>
<S> < <C>
C
>
Net sales $ 202
Expenses:
General and administrative 181,233
Consulting and professional 181,743
Equipment rental 10,762
Other 5,257
Total expenses 378,995
Loss before income taxes (378,793
)
-
Income taxes (note 1)
Net loss $ (378,793
)
Basic loss per common share $ (0.04)
Weighted average shares outstanding 9,076,41
6
</TABLE>
See accompanying notes to consolidated financial statements.
4
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Consolidated Statement of Stockholders' Equity (Deficit)
Period from February 9, 1999 (inception)
Through December 31, 1999
<TABLE>
<C> <C>
<S> < <C> <C> <C>
C
>
Treasury Total
Common Additio Accumulat Stock
Stock nal ed
Paid-in Deficit
Capital
Issuance of 8,084,711 $ 8,085 244,609 - - 252,694
shares (note 2)
Reverse acquisition 1,915 (26,605 - - -
of 1,915,658 shares )
of
ClassifiedOnLine.Co
m (notes 1 and 2)
7,128 shares issued 7 (7) - - -
for undocumented
shares (note 2)
Shares transferred by - 103,450 - - 103,450
officer for
services (note 2)
50,000 shares - 43,750 - (43,750) -
contributed to
treasury by officer
(note 2)
3,700 shares reissued - - - 3,237 3,237
from treasury for
services (note 2)
Net loss (378,793) (378,793
- - - )
Balance, December $ 10,007 365,197 (378,793) (40,513) (44,102)
31, 1999
</TABLE>
See accompanying notes to consolidated financial statements.
5
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Consolidated Statement of Cash Flows
Period from February 9, 1999 (inception)
Through December 31, 1999
<TABLE>
<S> < <C>
C
>
Cash flows from operating activities:
Reconciliation of net loss to net cash
provided by operating activities:
Net loss $ (378,7
93)
Adjustments to reconcile net loss to net
cash provided by operating activities:
General, administrative, and consulting 359,38
expenses compensated through the issuance 1
of common stock
Increase in accounts receivable (202)
Increase in prepaid expenses and other (75,13
assets 3)
Increase in accounts payable 95,167
Total adjustments 379,21
3
Net cash provided by operating activities 420
Cash flows from investing activities
Cash flows from financing activities
Net change in cash and cash equivalents 420
Cash and cash equivalents at beginning of
year
Cash and cash equivalents at end of year $ 420
</TABLE>
Supplemental schedule of non-cash investing and financing
activities:
<TABLE>
<S> <C> <C>
Reverse acquisition of ClassifiedOnLine.Com
(notes 1 and 2):
Accounts payable 24,690
Common stock 1,915
Additional paid-in capital (26,60
5)
Issuance of 7,128 shares of undocumented
common stock of ClassifiedOnLine.Com for
no consideration (note 2):
Common stock 7
Additional paid-in capital (7)
Contribution of 50,000 shares of common
stock to treasury by a Company officer
(note 2):
Additional paid-in capital 43,750
Treasury stock (43,75
0)
</TABLE>
See accompanying notes to consolidated financial statements.
6
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
December 31, 1999
(1) Description of Business and Summary of Significant
Accounting Policies
(a)Business
Classified OnLine.Com (the Company), a development stage
enterprise, was organized and incorporated under the
laws of the State of Nevada on February 9, 1999 for the
purpose of designing, developing, and marketing an
internet-based classified advertising web-site. The
Company expects to commence operations during the year
2000.
On July 16, 1999, Classified OnLine.Com (formerly Fuji
Electrocell Corporation) acquired ClassifiedOnLine.Com
in accordance with an exchange agreement approved by the
boards of directors of both companies. Under the terms
of the exchange agreement, each of the 8,084,711 shares
outstanding in the ClassifedOnLine.Com's common stock
were exchanged for one share of Classified OnLine.Com's
common stock. Upon completion of the exchange, there
were 10,000,369 shares of common stock outstanding. As
a result of the exchange, Fuji Electrocell Corporation
changed its name to Classified OnLine.Com and
ClassifiedOnLine.Com changed its name to
WantToBuyOnline.Com, which became a wholly-owned
subsidiary of Classified OnLine.Com.
WantToBuyOnline.Com has had no operations during 1999.
The merged companies will continue ClassifedOnLine.Com's
operations as an internet-based classified advertising
web-site. Since Classified OnLine.Com was a dormant
company, the combined companies will carry forward
ClassifiedOnLine.Com's plan of operations, and
ClassifiedOnLine.Com's shareholders will own 80.84% of
the outstanding common stock of the combined companies,
the exchange has been accounted for as a reverse
acquisition. Accordingly, financial information is
presented as if ClassifiedOnLine.Com was the acquiring
company, and financial information of Classified
OnLine.Com is included from the exchange date. The
historical financial statements prior to July 16, 1999
are those of ClassifiedOnLine.Com. Pro forma
information is not presented since the combination is a
recapitalization rather than a business combination.
As of December 31, 1999, the Company was in the
development stage and had not begun its operations and
had no significant source of revenue. Management
intends to fund future development activities through
funding from its principal stockholders and officers or
through the issuance of capital. The Company's ability
to continue as a going concern is dependent upon the
development of revenue sources sufficient to fund
operations and the Company's ability to issue new
capital.
(b)Cash and Cash Equivalents
The Company considers all highly liquid investments
purchased with a maturity of three months or less to be
cash equivalents.
(Continued)
7
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(c)Other Assets
Prepaid expenses and other noncurrent assets consist of
prepaid professional fees, software costs, and Internet
registration fees, which are amortized to expense over
the period benefited.
(d)Advertising
Advertising costs are charged to operations in the year
incurred. Advertising costs were $14,050 during the
period ended December 31, 1999 and were included in
general and administrative expenses in the accompanying
statement of operations.
(e)Income Taxes
Income taxes are accounted for under the asset and
liability method prescribed by SFAS No. 109. 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.
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 or liabilities of a change in tax
rates is recognized in income in the period that
includes the enactment date.
There was no provision for income taxes during the
period from February 9, 1999 (inception) through
December 31, 1999 due to the operating loss incurred.
There were no temporary differences which would give
rise to deferred taxes, except for the operating loss
carryforward totaling $378,793 generated during the
period (expiring in 2019) which has been valued at zero
due to the uncertainty that any benefit will be realized
in future periods.
(f)Fair Value of Financial Instruments
The estimated fair values of the Company's cash and cash
equivalents and current liabilities approximate the
carrying amount due to the short-term nature of such
financial instruments.
(g)Loss Per Share
Earnings per share is accounted for by using the basic
and diluted earnings per share method prescribed by SFAS
No. 128. Basic loss per share is based on the weighted
average number of shares of common stock outstanding
during the period. Diluted loss per share is based on
shares of common stock and dilutive potential common
stock (stock options) outstanding during the period.
Diluted loss per share was antidilutive due to the net
loss generated by the Company during the period ended
December 31, 1999 and is therefore not reported.
(Continued)
8
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(h)Stock Options
On October 23, 1995, the Financial Accounting Standards
Board (FASB) issued Statement No. 123, Accounting for
Stock-Based Compensation (Statement 123). This
Statement applies to all transactions in which an entity
acquires goods or services by issuing equity instruments
or by incurring liabilities where the payment amounts
are based on the entity's common stock price. The
Statement covers transactions with employees and non-
employees. The Company has adopted Statement 123, which
permits entities (1) to continue to use the Accounting
Principles Board Opinion No. 25 (APB 25) method, or (2)
to adopt the Statement 123 fair value based method.
Once the method is adopted, an entity cannot change the
method and the method selected applies to all of an
entity's compensation plans and transactions. For
entities not adopting the Statement 123 fair value based
method, Statement 123 requires pro forma net income and
earnings per share information as if the fair value
based method had been adopted. Management has
determined that the Company will account for stock-based
compensation under the APB 25 method and will disclose
the pro forma impact of Statement 123.
(i)Use of Estimates
The preparation of the Company's consolidated financial
statements in conformity with generally accepted
accounting principles requires management to make
estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues and expenses
and contingent assets and liabilities. Actual results
could differ from those estimates.
(j)Comprehensive Income
The FASB has issued Statement No. 130, Reporting
Comprehensive Income (Statement 130), which establishes
standards for reporting and display of comprehensive
income and its components in a financial statement
having the same prominence as other consolidated
financial statements. As of December 31, 1999, the
Company had no components considered to be other
comprehensive income.
(k)New Pronouncements
In June 1999, the FASB issued Statement No. 133,
Accounting for Derivative Instruments and Hedging
Activities (Statement 133), which establishes accounting
and reporting standards for derivative instruments and
hedging activities. Statement 133 requires recognizing
derivatives as assets or liabilities at fair value and
defines certain conditions when such derivatives may be
considered hedges. Statement 133 is effective for
fiscal years beginning after June 15, 2000 (2001 for the
Company), as amended by Statement No. 137. As of
December 31, 1999, the Company had no such derivatives.
(Continued)
9
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(2) Capital Stock
The Company's articles of incorporation authorizes 20,000,000
shares of preferred stock to be issued with a $.01 par value.
The board of directors may determine, among other things, the
number of shares constituting a series of preferred stock,
the rate and preference of dividends, if any, whether any
dividends would be cumulative, whether preferred shares may
be redeemed, and if so, the redemption price, and liquidation
preferences. As of December 31, 1999, the Company has not
issued any preferred stock
Upon formation of the Company, 8,084,711 shares of common
stock were issued to several individuals for compensation for
various organizational and consulting services provided to
the Company. The stock was valued at $252,694, which was the
estimated fair value of the stock at the time of issuance and
was the approximate value of services provided to the
Company.
On July 16, 1999, Classified OnLine.Com (formerly Fuji
Electrocell Corporation) acquired the Company in accordance
with an exchange agreement approved by the board of directors
of both companies (see note 1a). The acquisition resulted in
an increase in accounts payable of $24,690, an increase in
common stock of $1,915, and a reduction in additional paid-in
capital of $26,605.
Subsequent to the acquisition noted above, 7,128 of
undocumented shares of Classified OnLine.Com common stock
were presented for exchange for no consideration, resulting
in an increase in common stock and a reduction in additional
paid-in capital in the amount of $7.
During the period ended December 31, 1999, the Company's
president transferred 208,000 shares of his ownership in the
Company's common stock to outside consultants in exchange for
their services. The services, valued at the relative fair
value of $103,450, were reflected as a contribution to
capital and consulting and professional expense in the
accompanying consolidated financial statements.
In November 1999, the Company's vice-president contributed
50,000 shares of his common stock in the Company to treasury.
The stock was reflected as a contribution to capital and an
increase in treasury stock at the fair value of the shares on
the date of transfer, which amounted to $43,750.
Subsequently, 3,700 shares of the stock held in treasury were
reissued to an outside consultant at the fair value of the
services rendered, which amounted to $3,237.
(3) Stock Options
On June 11, 1999, the Company issued options to purchase
shares of common stock to the Company's president and vice-
president. The Company's president and vice-president each
received options to purchase 1,000,000 shares of common stock
at $2.00 per share, expiring June 11, 2001, and options to
purchase 1,000,000 shares of common stock at $2.50 per share,
expiring June 11, 2002. The options may be exercised at any
time during those periods. As of December 31, 1999, none of
the options have been exercised.
As of December 31, 1999, the Company's outstanding stock
options, representing 4,000,000 shares of common stock, have
exercise prices ranging from $2.00 to $2.50, a weighted
average exercise price of $2.25, and a remaining weighted
average contractual life of approximately two years.
(Continued)
10
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
No compensation expense was recorded during the period for
the options issued to the Company's officers, in accordance
with APB 25. Had compensation expense been determined on the
fair value at the date of grant in accordance with the
provisions of Statement 123, the Company's net loss and loss
per share would have remained unchanged. The fair value of
each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following
weighted-average assumptions used for grants in 1999:
dividend yield of 0%; expected volatility of 150%; risk-free
interest rate of 5.45%; and, expected lives of two or three
years, depending on the option period.
(4) Commitments and Contingencies
Leases
The Company leases certain equipment for its internet
operations under operating leases expiring in May 2002.
Future minimum lease payments for such noncancelable leases
as of June 30, 1999 are as follows:
<TABLE>
<S> <C> <C>
2000 $ 13,555
2001 13,555
2002 4,518
Total $ 31,628
</TABLE>
Rent expense under lease agreements totaled $10,762 during
the period from February 9, 1999 (inception) through December
31, 1999.
Legal Matters
The Company is involved in various legal actions arising in
the ordinary course of business. In the opinion of
management, the ultimate disposition of these matters will
not have a material adverse effect on the Company's financial
condition.
(5) Related Party Transactions
During the period from February 9, 1999 (inception) through
December 31, 1999, a portion of the Company's operating
expenses were funded by the Company's president, vice-
president, and certain stockholders. As of December 31,
1999, the Company owed the president, vice-president, and the
stockholders $46,345, $5,000, and $8,639, respectively, for
reimbursement of such expenses.
During the period from February 9, 1999 (inception) through
December 31, 1999, certain expenses were funded by an
affiliate of the Company's president. As of December 31,
1999, the Company owed the affiliate $9,172 for reimbursement
of such expenses.
11
CLASSIFIED ONLINE.COM
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(6) Subsequent Event
On January 24, 2000, the Company formed a new wholly-owned
subsidiary, SafeVenture.com, in the state of Nevada for the
purpose of designing, developing, and marketing an internet-
based escrow transaction service. The Company anticipates
commencing operations during the year 2000.
EXHIBITS
a) 2.1 The exhibits, consisting of the Company's Articles
of Incorporation are attached to the Company's Amended Form 10-
SB, filed on May 10, 1999. These exhibits are incorporated by
reference to that Form.
b) 2.2 The exhibits, consisting of the Company's Bylaws are
attached to the Company's Amended Form 10-SB, filed on May 10,
1999. These exhibits are incorporated by reference to that Form.
c) Financial Data Schedule
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange
Act, the Registrant caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Classified OnLine.com
By: /s/ Richard J. Oldfield
Richard J. Oldfield, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> YEAR OTHER
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999
<PERIOD-END> DEC-31-1999 DEC-31-1999
<CASH> 420 0
<SECURITIES> 0 0
<RECEIVABLES> 202 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 52,807 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 75,755 0
<CURRENT-LIABILITIES> 119,857 0
<BONDS> 0 0
0 0
0 0
<COMMON> 10,007 0
<OTHER-SE> (54,109) 0
<TOTAL-LIABILITY-AND-EQUITY> 75,755 0
<SALES> 0 202
<TOTAL-REVENUES> 0 202
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 0 378,995
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 (378,793)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 (378,793)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 0 (378,793)
<EPS-BASIC> 0 (0.04)
<EPS-DILUTED> 0 0
