<PAGE>
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 March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____ TO ____
Commission File number 0-25389
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ANYOX RESOURCES INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 98-0199128
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
540 N. Tamiami Trail
Sarasota, FL, USA 34236
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(Address of principal executive offices) (Zip Code)
(941) 954-1144
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(Issuer's telephone number)
________________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. Yes X No
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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.
Class Outstanding as of May 1, 2000
------------------------------- -----------------------------
Common Stock, $0.001 per share 20,028,500
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INDEX
<TABLE>
<CAPTION>
Page
Number
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<S> <C>
PART I - FINANCIAL STATEMENTS
Item 1. Financial Statements (unaudited)................................ 3
Consolidated Balance Sheets as at March 31, 2000 and June 30,
1999............................................................ 3
Consolidated Statement of Operations for the three months ended
March 31, 2000 and March 31, 1999 and for the nine months ended
March 31, 2000 and March 31, 1999............................... 5
Consolidated Statement of Cash Flows for the nine months ended
March 31, 2000 and March 31, 1999............................... 6
Notes to the Financial Statements............................... 7
Item 2. Management's Discussion and Analysis............................ 8
Part II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds....................... 10
Item 6. Exhibits and Reports on Form 8-K................................ 10
Signature................................................................ 11
</TABLE>
2
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ANYOX RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, 2000 and June 30, 1999
(Unaudited - Prepared by Management)
ASSETS
<TABLE>
<CAPTION>
March 31,
2000 June 30,
(Unaudited) 1999
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<S> <C> <C>
Current assets:
Cash $1,221,901 $ 1,283
Notes receiveable 3,187,575 -0-
Other current assets 172,490 -0-
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Total current assets 4,581,966 1,283
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Property and equipment at cost, net of accumulated
Depreciation of $29,450 ($0 at 1999) 249,645 -0-
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Other assets:
Goodwill and other intangibles, net of accumulated
Amortization of $31,477 ($0 at 1999) 4,289,278 -0-
Miscellaneous 12,715 -0-
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Total other assets 4,301,993 -0-
Total assets $9,133,604 $ 1,283
========== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
ANYOX RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, 2000 and June 30, 1999
(Unaudited - Prepared by Management)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
March 31,
2000 June 30,
(Unaudited) 1999
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<S> <C> <C>
Current Liabilities:
Accounts payable $ 608,344 $ 5,315
Notes payable to stockholders 500,000 -0-
Current maturities of long term debt and
Obligation under capital lease 14,069 -0-
Other current liabilities 57,823 -0-
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Total current liabilities 1,180,236 5,315
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Long term debt 17,965 -0-
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Stockholders Equity
Common Stock
200,000,000 shares authorized, at $0.001 par value,
shares issued and outstanding 20,028,500 and 10,028,500 20,029 10,029
Capital in excess of par 8,475,981 6,121
Deficit accumulated during the development stage (133,962) (20,182)
Deficit minority interests (422,645) -0-
Less: Treasury shares, 4,000,000 (4,000) -0-
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Total stockholders' equity 7,935,403 (4,032)
Total liabilities and equity $9,133,604 $ 1,283
========== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
ANYOX RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended March 31, 2000 and March 31, 1999 and
The nine months ended March 31, 2000 and March 31, 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------ -------------------------
March 31, March 31,
2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
Expenses 174,810 4,760 183,056 14,314
---------- ---------- ---------- ----------
Net Loss Before
Minority Interests (174,810) (4,760) (183,056) (14,314)
Minority Interests 69,278 -0- 69,278 -0-
---------- ---------- ---------- ----------
Net Loss $ (105,532) $ (4,760) $ (113,778) $ (14,314)
========== ========== ========== ==========
Basic and diluted
loss per share $ (.06) $ (.00) $ (.06) $ (.00)
========== ========== ========== ==========
Shares used in
computation of
basic and diluted
loss per share 16,952,166 10,028,500 12,507,722 10,028,500
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
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ANYOX RESOURCES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOWS
For the nine months ended March 31, 2000 and 1999
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
2000 1999
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (113,778) $(14,314)
Adjustments to reconcile net (loss) to net cash provided by
(used in) operating activities:
Minority interest in net loss of consolidated subsidiary (69,278)
Amortization 6,666
Increase in accounts payable 172,123 2,020
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Net cash (used in) provided by operating activities (4,267) 12,294
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Cash flows used in investing activities:
Mineral claim 0 (1)
Advances made (925,000) -0-
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Net cash used in investing activities (925,000) (1)
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Cash flows from financing activities:
Issuance of common stock 2,169,885 12,850
Capital contribution - expenses (20,000) 1,500
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2,149,885 14,350
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Net Increase in Cash 1,220,618 2,055
Cash at Beginning of Period 1,283 -0-
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CASH AT END OF PERIOD $ 1,221,901 $ 2,055
=========== ========
</TABLE>
SUPPLEMENTAL INFORMATION
NON-CASH FINANCING ACTIVITIES
The Company issued 6,000,000 shares of its common stock at $0.85 per share
through a private placement. At March 31, 2000, the Company had received cash of
$1,912,425 and recorded notes receivable of $3,187,575.
The accompany notes are an integral part of these
unaudited financial statements.
6
<PAGE>
ANYOX RESOURCES, INC
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
(Unaudited - Prepared by Management)
1. ORGANIZATION
The Company was incorporated under the laws of the State of Nevada on July
13, 1998 with the authorized common shares of 200,000,000 shares at $0.001
par value.
Although the Company was organized for the purpose of acquiring and
developing mineral properties, it disposed of its mineral properties and
acquired 57% of Web Partners, Inc. (WPI) during March 2000. WPI, a Florida
Corporation formed in September 1998, is a development-stage company with
its core business focused on the research and development of new web-based
technologies.
Since its inception the Company has completed a series of Regulation D
offerings of 12,028,500 shares of its capital stock for cash. In March 2000
it exchanged 4,000,000 shares of stock for its interest in WPI. In
addition, 4,000,000 shares were returned to treasury in March 2000.
2. BASIS OF PRESENTATION
The accompanying unaudited balance sheets of Anyox Resources Inc.
(the"Company") (a development stage company) at March 31, 2000 and the
unaudited statements of operations and unaudited statements of cash flow
for the three months ended March 31, 2000 and March 31, 1999 and for the
nine months ended March 31, 2000 and March 31, 1999 have been prepared by
the Company's management and they do not include all information and notes
to the financial statements necessary for a complete presentation of the
financial position, results of operations, and cash flows in conformity
with generally accepted accounting principles. In the opinion of
management, all adjustments considered necessary for a fair presentation of
the results of operations and financial position have been included and all
such adjustments are of a normal recurring nature.
Operating results for the quarter ended March 31, 2000, are not necessarily
indicative of the results that can be expected for the year ending June 30,
2000 and include the operations of Web Partners, Inc. ("WPI") from March
15, 2000 (date of acquisition) through March 31, 2000. The Balance Sheet at
March 31, 2000 also reflects the interest of stockholders other than Anyox
Resources, Inc. in the net results of WPI 57% owned by the Company at March
31, 2000.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company and WPI recognize income and expenses based on the accrual
method of accounting. WPI revenue recognition practices will conform to
appropriate software revenue recognition standards.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On December 31, 1999, the Company had a net loss carry forward of $28,428.
At October 25, 1999, WPI had a net loss carry forward of $655,583. As a
result of the March 2000 acquisition of a 57% interest in WPI, a portion of
WPI loss carryforward may be subject to Internal Revenue Code guidelines on
"pre-ownership change" losses.
Loss per Share
Loss per share amounts are computed based on the weighted average number of
shares actually outstanding using the treasury stock method in accordance
with FASB Statement No. 128.
Foreign Currency Translation
Part of the transactions of the Company were completed in Canadian dollars
and have been translated to US dollars as incurred, at the exchange rate in
effect at the time, and therefore, no gain or loss from the translation is
recognized. All WPI transactions have been in US dollars.
7
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Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements
in accordance with generally accepted accounting principles. Those
estimates and assumptions affect the reported amounts of the assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses. Actual results could vary from the
estimates that were assumed in preparing these financial statements.
4. GOING CONCERN
The Company and WPI will need additional working capital to be successful
in its planned activity and therefore continuation of the Company as a
going concern is dependent upon obtaining additional working capital.
Management of the Company and WPI have developed a strategy, which it
believes will accomplish this objective through additional equity funding,
and long term financing, which will enable the Company and WPI to operate
for the coming years. Part of this strategy has been executed in the
February, 2000 $5,100,000 private placement, 100% subscribed and 38% funded
at March 31, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
This Form 10-QSB contains forward-looking statements. The words "anticipate",
"believe", "expect", "plan", "intend", "estimate", "project", "could", "may",
"foresee", and similar expressions identify forward-looking statements that
involve risks and uncertainties. You should not place undue reliance on forward-
looking statements in this Form 10-QSB because of their inherent uncertainty.
The following discussion and analysis should be read in conjunction with the
Financial Statements and Notes thereto and other financial information included
in this Form 10-QSB that involve risks and uncertainties. Actual results could
differ materially from the results discussed in the forward-looking statements.
Plan of Operation -Background
Anyox Resources, Inc (the "Company"), a Nevada corporation, was formed in 1998
and operated as an early development stage company until March, 2000 when it
acquired 57% of Web Partners, Inc. ("WPI"), a Florida corporation. WPI is an
early development stage company which was formed in September 1998 and began
operations in August 1999. WPI's core business is focused on the research and
development of new web-based technologies. WPI also provides creative production
services in connection with developing online 30-second commercial spot
advertisements. Neither business unit has had any revenue to date. The Company
had accumulated approximately $35,000 in deficits prior to the acquisition of
WPI. WPI has accumulated approximately $2,000,000 in deficits through the date
of acquisition. The nature of these deficits is discussed in the results of
operations section below.
WPI's technology toolkit is designed to deliver a complete online advertising
platform. The toolkit is comprised of a 30-second on-line commercial spot
system, called a CyberSpot, and an audience measurement and commercial delivery
verification system, called Delivery Verification Technology ("DVT").
CyberSpots are Web-based interactive multi-media commercial spots which use
WPI's Instant On User Interface ("IOUi") technology which enables the spot to
reach the audience quickly and with minimal disruptions. DVT provides an online
advertising measurement system that verifies audience reach and spot delivery.
WPI intends to generate revenue from licensing fees, creative / production fees
and a technology license-based on a cost-per-play model. WPI plans to produce
and distribute CyberSpot production software that will enable global production
of CyberSpots by advertisers, agencies and web development firms. WPI plans to
license its family of technologies within the U.S., Asia and Europe.
WPI's revenue model currently focuses on four distinct revenue drivers: (1) the
development of CyberSpot ads; (2) the delivery of CyberSpot ads; (3) CyberSpot
enterprise licensing; and (4) DVT licensing.
Each revenue driver has associated variable expenses. Ad production variable
costs are comprised entirely of human resources. A certain number of personnel
are needed to produce and test each ad. DVT variable costs are also comprised
entirely of human resources. The DVT team will be responsible for marketing the
DVT technology and identifying additional applications for the technology. The
CyberSpot per play variable cost is comprised of the fee charged by the ad
delivery strategic partner. Development of the toolkit is the largest expense
item included in the operating expenses. Executive and operational team
salaries and benefits, CyberSpot licensee technical support, legal fees and
advertising also account for a significant portion of the operating expenses.
8
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Results of Operations:
Revenue
The Company was involved in the exploration and development of mineral
properties. Since inception the property has generated no revenue and the
property was never developed because of the lack of financing. The Company's
future revenue stream is based on its 57% owned subsidiary WPI. Through March
31, 2000, WPI has recognized no revenue but does have contracts, orders, and
letters of intent from customers. In addition, WPI is presently producing
commercial spot advertisements that may generate future revenue. Revenue
recognition in the second and third quarters of 2000 and beyond will depend upon
the status of the projects at that time and the applicable revenue recognition
accounting standards.
Expenses
For the nine months ended March 31, 2000, the Company has expended approximately
$15,277 compared to spending of $14,314 for the period July 13, 1998
(inception) through March 31, 1999. During both periods the expenses were
administrative in nature. On an ongoing basis, the Company expects to incur
expenses typical to an OTC Bulletin Board entity, including accounting fees,
legal fees, filing fees and transfer agent fees. The Company has no full time
employees and is managed on a day to day basis with staff from WPI, with WPI
absorbing all personnel and indirect costs.
The enclosed financial statements include expenses of $167,779 of WPI from date
of acquisition on March 15, 2000 through March 31, 2000. That amount has been
further reduced by the 43% minority interest for WPI shareholders other than the
Company. In absolute dollar spending, WPI incurred $2,199,926 during the nine
months ending March 31, 2000. Although WPI was organized in 1998 it did not
start meaningful operations until July 1999. Since that time, some of the major
spending areas have been advertising expenses of $63,906, marketing expenses of
$320,903, and legal, accounting, and other professional consulting fees of
$454,476. Personnel and personnel related costs were $529,145 during that
period.
Liquidity and Capital Resources
The Company and WPI individually financed their operations to date with a series
of Regulation D offerings of their respective shares of capital stock, generally
for cash. The Company's most recent private placement executed during the
quarter ending March 31, 2000 was for 6,000,000 common shares for a total of
$5,100,000. As of March 31, 2000, this private placement was 100% subscribed
and nearly 38% funded, the balance of funding expected to be completed during
the quarter ending June 30, 2000.
WPI most recently raised $500,000 in the form of bridge financing from a WPI
shareholder group. Since March 31, 2000 the notes have become due and
management is discussing the timing of repayment with the shareholder group.
Management expects repayment to take place ratably over the next several weeks
as the balance of the Company's funds is received from the private placement
discussed above. In addition, WPI received approximately $925,000 in cash
advances from the Company during March 2000.
The combined operations had net working capital of $3,401,730 at March 31, 2000.
Included in this amount was cash of $1,221,901 and short-term notes receivable
of $3,187,575, which are expected to be funded during May and early June, 2000.
The current liabilities of $1,180,236 at March 31, 2000 include the $500,000 of
bridge financing mentioned above and accounts payable of $598,011. One portion
of the accounts payable, $400,676 at March 31, 2000, is payable to a WPI
consulting firm founded by a director of the Company. This consulting has been
in the areas typical to a development stage company and has included assistance
with business plan development, pricing models, and intellectual property. These
services were contracted for in the ordinary course of business, prior to the
director being appointed to the Company's board of directors, and management
believes the pricing and terms were as favorable as that which could have been
obtained from an independent third party.
WPI's estimated monthly cash requirements approximate $250,000. This amount may
decrease as revenue is generated. However, like most other development stage
companies, WPI and the Company may not generate cash from operations for a
number of quarters.
Accordingly, the Company is continually searching for sources of additional
financing. The Company has a plan in place to eventually acquire the remaining
43% interest of WPI, continue to pursue venture capital investors, and maximize
its public equity (OTC BB) capital raising capabilities. Although the
competition for funding is strong, the Company believes it has unique,
protectable technology and the public trading vehicle already in place to be
more appealing for potential venture capital investors to execute their
respective exit strategies.
9
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PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On February 4, 2000, the Company commenced a private offering of its common
stock. The offering was a best efforts no minimum offering by the Company of up
to 6,000,000 shares at $0.85 per share, for total maximum proceeds of
$5,100,000. The funds are to be used for working capital. The common stock
being offered has not been registered with or approved by any state securities
agency or the U.S. Securities and Exchange Commission and is being offered and
sold pursuant to Regulation S of the Securities Act of 1933. The offering closed
on March 3, 2000. In accordance with Regulation S, sales were made only to
accredited investors who reside outside of the United States.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
The following exhibit accompanies this Form 10-QSB:
Exhibit No. Description
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27 Financial Data Schedule
(b) REPORTS ON FORM 8-K
The following reports on Form 8-K were filed during the first quarter of
2000:
Anyox Resources Inc. Form 8-K, dated March 3, 2000 and filed with the
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Securities and Exchange Commission on March 21, 2000.
----------------------------------------------------
This report included an Item 4 which disclosed a change in the
Company's certifying accountant. The report also included an Item 5,
Other Events, which disclosed the resignation of the Company's
directors and officers and appointment of new directors and officers.
Item 5 also disclosed the private placement offering of 6,000,000
common shares of the Company discussed under Item 2 above.
Anyox Resources Inc. Form 8-K, dated March 15, 2000 and filed with the
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Securities and Exchange Commission on March 30, 2000.
----------------------------------------------------
This report included an Item 1 which disclosed changes in the control
of the Company resulting from the March 15, 2000, Share Exchange
Agreement. The report also included an Item 2 which disclosed the
acquisition by the Company of 57% of WPI's issued and outstanding
shares as part of the Share Exchange Agreement. In addition, Item 2
contained a description of the business of the Company and an
extensive description of the business and products and services of WPI
along with a discussion of the business plan of WPI. The report also
contained an Item 5 which disclosed the proposed voluntary share
exchange to complete the Company's acquisition of WPI and the
appointment of Mark Burchill as a director of the Company. The report
contained an Item 7 which included the financial statements listed
below in the Amendment No. 1 to the Form 8-K.
Anyox Resources Inc. Amendment No. 1 to Form 8-K, dated March 15, 2000
----------------------------------------------------------------------
and filed with the Securities and Exchange Commission on April 24,
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2000.
----
This report contained a revised Item 7 which included the
following financial statements and pro forma information:
Report of Independent Auditors, dated October 29, 1999;
Balance Sheets as of January 31, 2000 (Unaudited) and October 25,
1999;
Income Statements for the three months ended January 31, 2000
(unaudited) and the period ended October 25, 1999;
Statements of Cash Flows for the three months ended January 31,
2000 (unaudited) and the period ended October 25, 1999;
Statement of Stockholders Equity for the three months ended
January 31, 2000 (unaudited) and the period ended October 25,
1999;
Notes to Financial Statements for the three months ended January
31, 2000 (unaudited) and the period ended October 25, 1999;
Pro Forma Balance Sheet as at December 31 and June 30, 1999
(unaudited);
Pro Forma Income Statements for the six months ended December 31,
1999 and the year ended June 30, 1999 (unaudited).
10
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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.
ANYOX RESOURCES, INC.
Dated: May 12, 2000
By: /s/ Santu Rohatgi
------------------------------------------
Name: Santu Rohatgi
Title: President
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data schedule
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> JUN-30-2000 JUN-30-1999
<PERIOD-START> JAN-01-2000 JUL-01-1999
<PERIOD-END> MAR-31-2000 MAR-31-2000
<CASH> 1,221,901 1,283
<SECURITIES> 0 0
<RECEIVABLES> 3,187,575 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 4,581,966 1,283
<PP&E> 249,645 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 9,133,604 1,283
<CURRENT-LIABILITIES> 1,180,236 5,315
<BONDS> 0 0
0 0
0 0
<COMMON> 20,029 10,029
<OTHER-SE> 7,935,403 (4,032)
<TOTAL-LIABILITY-AND-EQUITY> 9,133,604 1,283
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> (174,810) (183,056)
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> (105,532) (113,778)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (105,532) (113,778)
<EPS-BASIC> (.06) (.06)
<EPS-DILUTED> (.06) (.06)
</TABLE>
