--------------------------------------------------------------------------------
Roy Spectorman
PRESIDENT
300 Mercer Street, Suite 26J, New York NY 10003
(Name and Address of Person Authorized to Receive Notices
and Communications on Behalf of the Person Filing Statement)
--------------------------------------------------------------------------------
WITH A COPY TO:
KARL E. RODRIGUEZ, ESQ
24843 Del Prado, #318
Dana Point, CA 92629
(949) 248-9561
fax (949) 248-1688
--------------------------------------------------------------------------------
FORM 10-Q-SB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 2000
Commission File Number: 0-25891
MARKETCENTRAL.NET CORP
formerly, ALL AMERICAN CONSULTANT AIRCRAFT, INC.
formerly, GREAT AMERICAN LEASING, INC.
Texas 76-0270330
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
300 Mercer Street, Suite 26J, New York NY 10003
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 979-0805
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 4,291,669
Yes [X] No [] (Indicate by check mark whether the Registrant (1) has filed
all report required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.)
As of September 30, 2000, the number of shares outstanding of the Registrant's
Common Stock was 4,291,669
1
<PAGE>
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Attached hereto and incorporated herein by this reference are consolidated
unaudited financial statements (under cover of Exhibit FQ2-00) for the nine
months ended September 30, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(A) PLAN OF OPERATION THE NEXT TWELVE MONTHS. The MarketCentral.net website
has received numerous industry awards for valuable content, superior web site
design and excellent navigational features including the Snap.com Editors
Designation. The site is designed to appeal to an upscale audience of investors
and consumers looking for financial information, investment products and related
services.
(1) CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS.
As anticipated we have exhausted our present cash before the end of calendar
year 2000. We require a level of funding necessary for aggressive site promotion
and expansion and growth of the business of about $6,500,000 to be achieved by
a combination of a second round of bridge financing and a significant secondary
offering to the public. We have operated to date with one of the lowest
burn-rates possible for a public corporation and have developed our properties
and traffic with limited funds. However additional funding is required to become
and remain competitive with other financial websites, chiefly to attract
advertisers, upgrade our website and user services and to increase the total
number of transactions on the website, in both financial services and through
our SuperMall. We have completed a major revision and expansion of our initial
business plan. We are developing our second bridge financing pursuant to
Regulation D, Rule 506. Our plan is for this second bridge of about $500,000 to
prepare the way for our intended major secondary offering. We have mentioned the
development of an expanded and up-dated business plan with the assistance of
Focus Partners, LTD. It contemplates a minimum secondary funding of $6 million.
We have previously reported a previous funding arrangement with Meridian
Mercantile. We have arrived at a supplemental arrangement with Meridian for a
minimum monthly funding of $13,000, commencing October 2000, for 12 months. We
believe that this interim funding will enhance our attractiveness for, and the
likelihood of successful realization of our substantial secondary funding
requirements, and our positioning for synergistic acquisitions.
If successful, this level of funding will provide ample cash to meet the
requirements of the business for expansion, growth and aggressive site
promotion. However, there is no assurance to be given that this additional
financing will be completed. It is foreseeable that we may not succeed in
achieving our objectives, in a timely manner or at all. Moreover, issuance of
additional shares would have the effect of dilution and reduction of our per
share earnings. It must be mentioned that if we are unable to fulfill our
objectives we may be unable to continue as a going concern.
(2) SUMMARY OF PRODUCT RESEARCH AND DEVELOPMENT. MarketCentral.net
Corp.'s on-line shopping mall, called the Market Mall, can be promoted as a
separate site and is unique in the content and entertainment provided.
(3) EXPECTED PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT.
MarketCentral.net Corp. intends to build an internet based store to sell its own
proprietary products and services. Beyond the proprietary newsletter and other
investment products, we will sell novelty items, gift items and other specialty
items as they become available. The store will be available for co-branding
through other sites throughout the internet. There is no assurance that we will
be successful in any of these endeavors. We have no other plans for the purchase
or sale of a significant business plant, or equipment.
2
<PAGE>
(4) EXPECTED SIGNIFICANT CHANGE IN THE NUMBER OF EMPLOYEES. None at this
time. It is forseeable over time that employees will be needed. The number of
employees that may be needed in the next twelve months is speculative only at
this time.
(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
(1) FINANCIAL CONDITION. Our small business financial condition is
precarious but promising, in the opinion of management.
Our Consolidated Balance sheet for September 30, 2000 and 1999, shows
changes due mainly to certain non-recurring items, such as a loan receivable
which did not recur, and amounts due from related party, which did not recur.
Our accrued expenses have increased, and our cash has diminished.
Balance Sheet . . . . . . 9/30/00 9/30/99
----------------------------------------------
Cash. . . . . . . . . . . $ (1,850) $ -
Accounts Receivable . . . 626 -
Loan Receivable . . . . . - 15,000
Subscription Receivable . - 207,630
Prepaid Expenses. . . . . - 9,000
Software Development Cost 56,397 105,726
Total Assets. . . . . . . 55,173 337,356
==============================================
Accounts Payable. . . . . 62,934 57,223
==============================================
Accrued Expenses Payable. 35,160 -
Note Payable. . . . . . . 84,231 71,859
Other Current Liabilities 54,629 =
Due to Related Party. . . - 27,808
----------------------------------------------
Total Liabilities . . . . 236,954 156,890
(2) RESULTS OF OPERATIONS. We have had limited significant operations to
date. We have some modest revenues from advertising contracts and affiliate site
arrangements. We are not presently operating at or near a profitable level.
Profitability will require aggressive site promotion and growth of site-services
offered to users. There is no assurance that we will ever operate at or near a
profitable level.
We first compare the three months and nine months ended September 30, 2000
and 1999. We next compare each of the past three quarters (and nine months) with
each other and the year ended December 31, 1999.
the remainder of this page left intentionally blank
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
THIRD QUARTER Inception
Comparisons . March 25,
1998
To
Operations July 1 to Sept 30 Jan 1 to Sept 30 Sept 30,
2000 1999 2000 1999 2000
-----------------------------------------------------------------------------------------------------
Revenues: . . . . . . . . . $ 1,441 $ 6,283 $ 9,856 $ 11,296 $ 24,829
Total Revenues . . . . . . 1,441 6,283 9,856 11,296 24,829
General and Administrative. (94,612) (90,136) (423,633) (267,317) (2,847,693)
Total Expenses . . . . . . (94,612) (90,136) (423,633) (267,317) (2,847,693)
=====================================================================================================
Net (Loss). . . . . . . . . (93,171) (83,853) (413,777) (256,021) (2,822,864)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
THREE QUARTER
COMPARISONS
Operations Quarters 2000 1999
3rd 2nd 1st 9 Months One Year
--------------------------------------------------------------------------------------------
Revenues: . . . . . . . . . $ 1,441 $ 4,541 $ 3,874 $ 9,856 $ 14,973
Total Revenues . . . . . . 1,441 4,541 3,874 9,856 14,973
General and Administrative. (94,612) (235,126) (93,893) (423,633) (736,867)
Total Expenses . . . . . . (94,612) (235,126) (93,893) (423,633) (736,867)
============================================================================================
Net (Loss). . . . . . . . . (93,171) (230,585) (90,019) (413,777) (721,894)
</TABLE>
Revenues are lower due to changing parameters for selling advertising on
financial websites. Our initial advertising revenues were based on selling to
companies on an individual basis, which market is now dominated by advertising
agencies that require higher levels of traffic. In addition rates are
substantially lower and competitive this year due to the weak stock market,
greater sophistication among advertisers and the proliferation of financial
websites. However, we are prepared to increase traffic levels sufficiently to
attract all major advertisers, after completion of a secondary financing. We are
also changing our direction to develop strategic alliances for transactional
income in financial services, such as mortgages, car loans, bill paying
services, stock transactions and other key financial services, to lower our
dependence on advertising revenues as an income source.
Stanford-Keene, a mergers and acquisitions consultant after our secondary
financing is completed to develop strong alliances with leading financial
service partners for the future. We believe that revenues will improve in our
shopping mall after a redesign and selection by us of an e-commerce specialist,
also following completion of secondary financing. Additional promotion of our
shopping mall at http://www.mallstores.com will also add to the potential
revenues, in the opinion of management.
Second quarter expenses beyond the normal pattern of our first and third
quarters reflect the issuance of shares (charged as expenses for services) to
Market Pathways, a public relation firm hired by us, and to our Webmaster, John
5
<PAGE>
Romano Jr., Joan Lappin, a consultant, and to our attorney Karl Rodriguez. All
of these mentioned shares have been issued to cover existing commitments either
for outstanding bills or as an incentive to perform services for us. These
expenses did not reflect a use of cash. Additional second quarter expenses
included payments to Focus Partners to develop a business plan for our future
progress, and non-recurring legal and professional expenses.
Losses incurred since inception are not deemed extraordinary by management.
The funding for these development stage losses were the funding provided by
Meridian Mercantile, previously reported in earlier filings. During this period
our enjoyment of modest revenues was to be expected and is regarded as normal by
management.
(3) POSSIBLE ACQUISITION TARGET. Negotiations for the acquisition of an
on-line trading site have been cancelled, pending full implementation of our
Company's business plan.
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None
ITEM 2. CHANGE IN SECURITIES. None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS. None
ITEM 5. OTHER INFORMATION. We have engaged a new Independent Auditor to review
and comment on our next Annual Report, and to assist management in preparing
other current reports. There has been no dispute of any kind or sort with any
auditor on any subject. The new and prospective Auditing firm is Rogoff &
Company, p.c., 275 Madison Ave, New York NY 10016-1101. (212) 557-5666. The
decision to change accountants was recommended or approved by the board of
directors. The former accountant neither resigned or declined to stand for
election. The former accountant's report on the financial statements for either
of the past two years contained no adverse opinion or disclaimer of opinion, nor
was modified as to uncertainty, audit scope or accounting principles. During the
two most recent fiscal years and later interim period through the termination of
the client-auditor relationship, there were no disagreements of the type
described under Item 304(a)(1)(iv)(A) of Regulation S-B.
ITEM 6. REPORTS ON FORM 8-K. None
EXHIBITS. Exhibit FQ2-00 Financial Statements (Un-Audited), for the three
months and nine months ended September 30, 2000.
The Remainder of this Page is Intentionally left Blank
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-QSB Report for the Quarter ended September 30, 2000, has been signed
below by the following person on behalf of the Registrant and in the capacity
and on the date indicated.
MARKETCENTRAL.NET CORP.
formerly, ALL AMERICAN CONSULTANT AIRCRAFT, INC.
formerly, GREAT AMERICAN LEASING, INC.
by
Dated: November 10, 2000
/s/Roy Spectorman /s/Jerry Kaplan
Roy Spectorman Jerry Kaplan
president/director director
7
<PAGE>
--------------------------------------------------------------------------------
EXHIBIT FQ2-00
UN-AUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
8
<PAGE>
MarketCentral.net Corp.
(A DEVELOPMENT STAGE COMPANY)
Consolidated Financial Statements
September 30, 2000 and 1999
9
<PAGE>
MarketCentral.net Corp.
(A DEVELOPMENT STAGE COMPANY)
September, 2000 and 1999
Table of Contents
Page
Independent Accountant's Review Report 11
Balance Sheets 12
Statement of Operations 13
Statement of Cash Flows 14
Statement of Changes in Stockholders' Equity 15
Notes to Financial Statements 16
10
<PAGE>
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Stockholders of
MarketCentral.net Corp.
We have reviewed the accompanying consolidated balance sheets of
MarketCentral.net Corp. and subsidiary as of September 30, 2000 and 1999, and
the related consolidated statement of operations, of stockholders' equity
(deficit) and of cash flows for the nine months then ended, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. All information included in
these financial statements is the representation of the management of
MarketCentral. net Corp.
A review consists principally of inquiries of company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
/s/Rogoff & Company
Rogoff & Company
Date: October 31, 2000
11
<PAGE>
MarketCentral.net Corp.
and Subsidiary
(A DEVELOPMENT STAGE COMPANY)
Consolidated Balance Sheets
As of September 30, 2000 and 1999
ASSETS
September 30,
2000 1999
--------------------------------------------------------------------------
CURRENT ASSETS
Cash $ (1,850) $ 0
Accounts receivable 626 0
Loan receivable 0 15,000
Subscription receivable 0 207,630
Prepaid expenses 0 9,000
--------------------------------------------------------------------------
Total current assets (1,224) 231,630
==========================================================================
OTHER ASSETS
Software development costs,
net of accumulated amortization
of $30,367 and $8,676 56,397 105,726
--------------------------------------------------------------------------
TOTAL ASSETS $ 55,173 $ 337,356
==========================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------
CURRENT LIABILITIES
Accounts payable $ 62,934 $ 57,223
Accrued expenses payable 35,160 0
Note payable 84,231 71,859
Other current liabilities 54,629 0
Due to related party 0 27,808
--------------------------------------------------------------------------
Total current liabilities 236,954 156,890
--------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Common stock, $0.0001 par value;
100,000,000 shares authorized;
4,291,669 and 4,083,914 issued and
outstanding in 2000 and 1999, respectively 430 409
Paid in capital 2,640,653 2,123,224
Deficit accumulated during the
development stage (2,822,864) (1,943,167)
--------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 55,173 $ 337,356
==========================================================================
See accountants's review report and notes to consolidated financial statements.
12
<PAGE>
MarketCentral.net Corp.
and Subsidiary
(A DEVELOPMENT STAGE COMPANY)
Consolidated Statements of Operations
For Nine Months Ended September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
For the Period
Nine Month Three Month From Inception
Period Ended Period Ended (Dec 28, 1998)
September 30, September 30, to September 30,
2000 1999 2000 1999 2000
--------------------------------------------------------------------------------------------------------
Revenue: . . . . . . . . . 9,856 11,296 1,441 6,283 24,829
Operating Expense:
General and administration
expense. . . . . . . . . . 423,633 267,317 94,612 90,136 2,847,693
--------------------------------------------------------------------------------------------------------
Net Loss . . . . . . . . . ($413,777) ($256,021) ($93,171) ($83,853) ($2,822,864)
========================================================================================================
Net Loss Per share . . . . (0.09) (0.06) (0.02) (0.02) 0.00
========================================================================================================
Weight aveage shares
outstanding. . . . . . . . 4,291,669 3,764,362 4,228,147 3,764,362 0
========================================================================================================
</TABLE>
See accountants's review report and notes to consolidated financial statements.
13
<PAGE>
MarketCentral.net Corp.
and Subsidiary
(A DEVELOPMENT STAGE COMPANY)
Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
For the For the Period
Nine Month Three Month From Inception
Period Ended Period Ended (Dec 28, 1988)
September 30, September 30, to September 30,
2000 1999 2000 1999 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss. . . . . . . . . . . . . . . ($413,777) ($256,021) ($93,173) ($83,854) ($2,822,864)
Depreciation and amortization-
Website Cost. . . . . . . . . . . . . 13,016 13,015 4,340 4,338 30,367
Shares issue for services . . . . . . 216,934 0 41,698 0 2,144,484
(Increase) decrease in accounts
receivable. . . . . . . . . . . . . . 0 0 0 0 (626)
Prepaid expenses. . . . . . . . . . . 0 (9,000) 0 (9,000) 0
Increase (decrease) in accounts
payable . . . . . . . . . . . . . . . (40,804) 57,223 (7,615) (26,286) 62,934
Increase (decrease) in accrued
expenses. . . . . . . . . . . . . . . 18,064 0 16,434 0 35,161
-------------- ---------------- ----------------- ---------- ------------
Net Cash provided (used) by
operating activities. . . . . . . . . (206,567) (194,783) (38,316) (114,801) (550,544)
CASH FLOWS FROM INVESTING ACTIVITIES:
(Increase) decrease in loan
receivable. . . . . . . . . . . . . . 0 (15,000) 0 (5,000) 0
Website development cost. . . . . . . 0 (31,977) 0 (11,415) 0
Net cash provided by investing
activities. . . . . . . . . . . . . . 0 (46,977) 0 (6,415) 0
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable . . . . . 0 18,381 0 (1,871) 30,753
Issuances of common stock . . . . . . 12 209 2 10 322,941
Additional paid in capital. . . . . . 0 195,362 0 150,405 0
Proceeds from related party . . . . . 0 27,808 0 (31,562) 0
Decrease subscription receivable. . . 195,000 0 35,000 0 195,000
Net Cash provided by financing
activities. . . . . . . . . . . . . . 160,010 241,760 35,002 116,982 548,694
-------------- ---------------- ----------------- ---------- ------------
Net Increase (decrease) in cash . . . (11,555) 0 (3,314) (4,234) (1,850)
Cash, beginning of period . . . . . . 9,705 0 1,464 4,234 0
-------------- ---------------- ----------------- ---------- ------------
Cash, end of period . . . . . . . . . ($1,850) $ 0 ($1,850) $ 0 ($1,850)
============== ================ ================= ========== ============
</TABLE>
See accountants's review report and notes to consolidated financial statements.
14
<PAGE>
MarketCentral.net Corp.
and Subsidiary
(A DEVELOPMENT STAGE COMPANY)
Consolidated Statement of Stockholder's Equity
For the Period From Inception (December 28, 1988)
To September 30, 2000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Deficit
Accumulated
Common Stock Paid In During the
Shares Amount Capital Development Stage
-------------------------------------------------------------------------------------------
Balance at Beginning of Development
Stage-December 28, 1988. . . . . . . 0 $ 0 $ 0 $ 0
Shares issued for organizational
costs. . . . . . . . . . . . . . . . 180,000 18 982 0
Net Loss December 31, 1988-1996. . . 0 0 0 (1,000)
----------- ------- ---------- -------------------
Balance, December 31, 1996 . . . . . 180,000 18 982 (1,000)
April 8 1997-issued at $1.00
per share. . . . . . . . . . . . . . 1,000,000 10 99,990 0
Net Loss December 31, 1997 . . . . . 0 0 0 (87,886)
----------- ------- ---------- -------------------
Balance, Decembre 31, 1997 . . . . . 280,000 28 100,972 (88,886)
May 22, 1998-issued at $1.00
per share. . . . . . . . . . . . . . 2,900 1 2,899 0
July 1, 1998-issued at $.10
per share. . . . . . . . . . . . . . 84,000 8 8,392 0
Shares issued for cash and
services at $1.0 per share . . . . . 1,600,000 160 1,599,840 0
Net Loss December 31, 1998 . . . . . 0 0 0 (1,598,258)
----------- ------- ---------- -------------------
Balance, December 31, 1998 . . . . . 1,966,900 197 1,712,103 (1,687,144)
February 1999 reorganization . . . . 2,025,000 202 33,084 0
Stock issued for professional
services rendered. . . . . . . . . . 36,032 4 54,048 (52)
Stock issued for subscription
stock (issued Sept. 14, 2000). . . . 56,014 6 311,994 0
Stock issued for professional
services rendered. . . . . . . . . . 100,000 10 312,490 0
Net Loss December 31, 1999 . . . . . 0 0 0 (721,894)
----------- ------- ---------- -------------------
Balance as of December 31, 1999. . . 4,183,946 419 2,423,719 (2,409,090)
Net loss March 31, 2000. . . . . . . 0 0 0 (90,018)
----------- ------- ---------- -------------------
Balance as of March 31, 2000 . . . . 4,183,946 $ 419 $2,423,719 ($2,499,108)
Stock issued for Financial
services rendered. . . . . . . . . . 5,000 1 9,999 0
Stock issued for professional
services rendered. . . . . . . . . . 71,000 7 143,493 0
Stock issued for Consultant
services rendered. . . . . . . . . . 10,873 1 21,744 0
----------- ------- ---------- -------------------
Balance as of June 30, 2000. . . . . 4,270,819 $ 428 $2,598,955 ($2,499,108)
Net loss June 30, 2000 . . . . . . . 0 0 0 (230,585)
----------- ------- ---------- -------------------
Balance as of June 30, 2000. . . . . 4,270,819 $ 428 $2,598,955 ($2,729,693)
Stock issued for professional
services rendered. . . . . . . . . . 10,000 1 19,999 0
Stock issued for Consultant
services rendered. . . . . . . . . . 10,850 1 21,699 0
----------- ------- ---------- -------------------
Net loss as of September 30, 2000. . 0 0 0 (93,171)
Balance as of September 30, 2000 . . 4,291,669 $ 430 $2,640,653 ($2,822,864)
=========== ======= ========== ===================
</TABLE>
See accountants's review report and notes to consolidated financial statements.
15
<PAGE>
MarketCentral.net Corp.
(A DEVELOPMENT STAGE COMPANY)
Notes to Consolidated Financial Statements
September 30, 2000
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
MarketCentral.net Corp. (formerly All American Consultant Aircraft,
Inc.) (the "Company") was incorporated in Texas. The Company's primary business
is an internet site featuring investment information and tools available to the
individual investor. The site features state-of-the-art e-commerce.
MarketCentral.net Corp.'s online shopping mall, called the Market Mall is
promoted as a separate site.
Basis of Consolidation
The consolidated financial statements include the accounts of
MarketCentral.net. Corp., (formerly All American Consultant Aircraft, Inc.) and
its wholly-owned subsidiary, MarketCentral.Net Corp. All intercompany
transactions and balances have been eliminated.
Summary of Significant Accounting Policies
Software development costs on the balance sheet represent capitalized
costs of design, configuration, installation and testing of the Company's
website up to its initial implementation. The asset is being amortized to
expense over its estimated useful life of 5 years using the straight line
method.
Ongoing website post-implementation costs of operation, including
training and application maintenance, are charged to expense as incurred.
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.
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus deferred
taxes related primarily to differences between the bases of certain assets and
liabilities for financial and tax reporting. The deferred taxes represent the
future tax return consequences of those differences, which will either be
taxable when the assets and liabilities are recovered or settled.
16
<PAGE>
MarketCentral.Net Corp.
(A DEVELOPMENT STAGE COMPANY
Notes to Consolidated Financial Statements
September 30, 2000
NOTE 2. SERVICES COMPENSATION
In 1999, Intrepid International LTD rendered financial services at a
fair value of $54,048 and was compensated by issuing 36,032 the Company's
restricted common stock.
An additional 100,000 shares of restricted common stock was issued to
a business consultant who rendered services to the Company and was recorded at
fair value. The value of the stock on the issued date (September 14, 1999) was
$3 1/8 per share.
On July 20, 10,850 shares of restricted common stock was issued for
consulting services rendered @ 2 per share, average close discounted by 30%. On
July 19, 10,000 shares of restricted common stock was issued for professional
services rendered @ $2 per share by reference to last trading close date July
17, 2,000 average close discounted by 20%.
On March 10, 2000, 39,000 shares of restricted common stock was issued
for financial services rendered @ $2. per share. On April 12th, 20,000 shares
of restricted common stock was issued for financial and consultant services a@
$2. per share. On May 9th, additional 12,000 shares was issued to compensate
the professional services at the fair market of the invoices amount. On June
7th, 10,873 shares was issued at $2 per share for consultant services. On June
20th, 5,000 shares of restricted common stock was issued @ $2 per share for
financial service rendered. The price is determined accordingly by reference to
the last trading date, June 7, 2000, average close, discounted by 30%. During
the 2nd quarter, 2,000 total additional stocks issued was 47,873 shares.
NOTE. 3 TRANSACTIONS WITH RELATED PARTIES
Subscription Receivable
Meridian Mercantile, Inc. ("Meridian"), an affiliate of the Company,
subscribed for the purchase of 56,014 shares of common stock in consideration of
the sum of $312,000 payable on or before two years from February 5, 1999, with
minimum payment of $13,000 per month over 24 consecutive months. The balance of
this subscription as of June 30, 2000 is paid in full. On September 14, 2,000
56.014 shares were issued.
Note Payable
The Company has assumed a demand loan to one of its stockholders in
the amount of $53,478. The note bears interest at the rate of 7% per annum.
During 1999, an additional $30,753 advance was obtained from the stockholder and
interest was accrued on the entire balance in the amount of $9,147 as of
September 30, 2000.
17
<PAGE>
MarketCentral.Net Corp.
(A DEVELOPMENT STAGE COMPANY)
Notes to Consolidated Financial Statements
September 30, 2000
NOTE 3 TRANSACTIONS WITH RELATED PARTIES - Continued
Management Consultant Fee
The Company utilized a portion of the business, facilities, computers,
telephone and office supplies of New Horizons Asset Management Corp. ("New
Horizons"), 300 Mercer Street, Suite 26-J, New York, New York 10003, and retains
New Horizons as a management consultant. The President and beneficial owner of
New Horizons is also the President of MarketCentral.Net Corp. MarketCentral.net
Corp. has agreed to pay New Horizons Inc. $9,000.00 per month.
MarketCentral.net Corp. has also agreed to remit to New Horizons an additional
payment of $25,000 upon its receipt of funds in an equity or debt financing
transaction.
NOTE 4. STOCK OPTIONS
In February 1999, the Company granted stock options to its key
directors, advisors and consultants to acquire up to total of 400,000 shares of
common stock at an exercise price of $5.00 per share and exercisable for a
period of five years from the date of grant. Additional options to purchase
160,000 shares of restricted common stock for certain consultant services were
granted at an exercise price of $5.00 per share for the 1st 40,000 shares; $7.50
per share for the 2nd 40,000 shares; $10.00 per share for the 3rd 40,000 shares;
$12.50 per share for the last 40,000 shares.
NOTE 5. CAPITAL STOCK
Each share of common stock is entitled to one vote.
NOTE 6. FINANCIAL INSTRUMENTS
Current assets and liabilities are reported at their face amount
which, because of their short-term nature, approximates fair value.
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