FORM 10-QSB
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, 1999
AND
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-26699
- --------------------------------------------------------------------------------
Reliant Interactive Media Corp.
formerly Reliant Corporation
- --------------------------------------------------------------------------------
Nevada 87-0411941
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
13535 Feather Sound Drive -Suite 220, Clearwater, Florida 33762
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (727) 299-0020
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 5,885,271
Yes [X] No [ ] (Indicate by check mark whether the Registrant (1) has filed all
reports 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, 1999 the number of shares outstanding of the Registrant's
Common Stock was 5,885,271.
<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 F3Q) for the three months
and nine months ended September 30, 1999, and the year ended December 31, 1998.
These financial reports are supplemented by unaudited financial statements for
the three and six months ended June 30, 1999 (under cover of Exhibit F2Q), and
for the three months ended March 31, 1999 (under cover of Exhibit F1Q).
- --------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------------------
(a) Plan of Operation.
(1) Plan of Operation for the next twelve months.
(i) Cash Requirements and of Need for additional funds, twelve months.
This Company has been a "a development stage company" with only limited
capital resources, and is now in transition as an operating entity with
substantial revenues. It may be necessary for the Company to seek additional
capital over time to optimize the accomplishment its business plan. It is the
judgment of Management that increasing revenues from operations will maintain
this Company in a position of substantial liquidity; however it is forseeable
that the Company will seek additional capital in order to accelerate its growth
and realize its potential more rapidly. This Company is expected to generate
enough sales revenues to satisfy its cash requirements for the next twelve
months, although there is no assurance that this can be achieved. In the last
three quarters, revenues have increased, relieving the urgency for additional
capital from necessary to desirable. It remains desirable for the simple reason
that the more money the company has available, the more projects it can
undertake and the more media and inventory it can buy.
The fact remains that, in all likelihood, unless the Company is successful
in generating continuing investor interest, and in securing additional
investment, or possibly debt-financing arrangements, the business of the
Company, however promising, cannot expand toward its full potential, and may not
achieve the optimum profitability expected. The Company's business plan is
ambitious, and although its products and services enjoy a certain synergy with
each other, the sheer number of projects, each with its own focus and potential
market, will require that Company grow and expand its operations over time. Its
failure to grow in a timely manner would be expected to leave incentive openings
for other competitors to fill. For that reason, the need to grow and expand
operations, it is likely that this Company will pursue additional capital in the
year 2000, notwithstanding that its present capital resources including growing
revenues are sufficient for current operations and modest growth at a
respectable level of profitability.
(ii) Summary of Product Research and Development.
The Company's product development/marketing department is the most vital
component of the Company. Kevin and Tim Harrington, along with Mel Arthur,
actively participate on a daily basis in the ongoing effort to research and
develop new products that may be suited for direct response television marketing
and subsequent marketing through non-infomercial distribution channels. This
group develops new product ideas from a variety of sources, including inventors,
suppliers, trade shows, industry conferences, strategic alliances with
manufacturing and consumer product companies and the Company's ongoing review of
new developments within its targeted product categories. As a result of
management's prominence in the infomercial and retail television industry, it
also receives
2
<PAGE>
unsolicited new product proposals from independent third parties. During the
evaluation phase of product development, the Company evaluates the suitability
of the product for television demonstration and explanation as well as the
anticipated perceived value of the product to consumers, determines whether an
adequate and timely supply of the product can be obtained and analyzes whether
the estimated profitability of the product satisfies the Company's criteria.
The Company is devoting attention to the development and products
specifically targeted at markets outside of North America. The Company will
review its infomercial library on an ongoing basis to select those products
which it believes will be successful in Europe and/or Asia and/or its other
international markets. When a product which was initially sold domestically is
selected for international distribution, the infomercial is dubbed and product
literature is created in the appropriate foreign languages. In addition, a
review of the product's and the infomercial's compliance with the local laws is
completed. The Company's licensed distributor then begins airing the infomercial
internationally. The Company also airs shows and distributes products of other
independent domestic infomercial companies.
The Company obtains the rights to new products created by third parties
through various licensing arrangements generally involving royalties related to
sales of the product. The amount of the royalty is negotiated and generally
depends upon the level of involvement of the third party in the development and
marketing of the product. The Company generally pays the smallest royalty to a
third party that only provides a product concept. A somewhat higher royalty to a
third party that has fully developed and manufactured a product. The Company
also obtains the rights to sell products which have already been developed,
manufactured and marketed through infomercials produced by other companies. In
such cases, the Company generally pays a higher royalty rate to the third party
because of the relatively small amount of the Company's resources required to
develop the product. The Company generally seeks exclusive worldwide rights to
all products in all means of distribution. In some cases, the Company does not
obtain all marketing and distribution rights, but seeks to receive a royalty on
sales made by the licensor pursuant to the rights retained by the licensor.
(iii) Expected purchase or sale of plant and significant equipment.
None.
(iv) Expected significant change in the number of employees. Not
known.
(b) Discussion and Analysis of Financial Condition and Results of Operations.
In 1998, the company closed the year with a loss, with minimal revenues, in
pre-launch development mode, but these results are not deemed to reflect true
business operations. In 1998, the company had significant expenses that resulted
in a loss for the year. Management believes that revenues will continue to
increase in fourth quarter of 1999, but to achieve the continued growth of the
Company's business, advertising, promotional and production expenses will remain
significant. While the upside potential from successful infomercial marketing is
tremendous, the risk of failure is always present. Some of the projects may
fail, or all may fail. If some are successful, the success may offset the losses
from others significantly or may not. Accordingly, there can be no assurance
that substantial profitability will be sustained in the next twelve months.
Development Stage/Going Concern. There are two material thresholds in the
transition of this Company, from Development Stage to Going Concern. The first
is the commencement of limited operations, during 1998, and the first quarter of
1999. The second is the achievement of substantial revenues and the dawn of
profitability, corresponding to the second quarter of 1999. While the
Harringtons began some limited operations in 1998, their two companies were not
acquired as subsidiaries until August of that year. The Harringtons honored
certain non-compete agreements, with HSN Direct, a division of Home Shopping
Network, which expired in December of 1998. During the interim period, the
Harringtons located, developed and prepared for production and rollout of
various
3
<PAGE>
products. For that reason, full-fledged operations were not launched until April
of 1999. While the affairs of the Company improved consistently, from 1998, the
second quarter of 1999 was the first profitable quarter, and is the first
quarter of unlimited operations. For these reasons, management refers to this
Company as in its Development Stage for 1998, and for the first quarter of 1999,
and as an operating company and a going concern during the second quarter of
1999.
Revenues are Increasing. There were no revenues in 1997. Sales in 1998 were
$120,234, which was $60,118 for the first half, and $60,116, for the second
half. Corresponding amounts for the first quarter, second and third quarters of
1999, were $352,483, $3,135,013 and $5,918,342, respectively. The significance
of these figures is not only that revenues have increased exponentially, due to
operations, but that the Company has achieved profitability during the second
quarter, the three months ended June 30, 1999, and has sustained it for the
three months ended September 30, 1999.
1998 operations have been characterized as limited. They consisted of the
sale of cigarette lighters and the marketing of a single non-infomercial
television show. In 1998, Gross Margins, after cost of goods sold, was only 45%;
whereas,that margin has been stable between 85% to 86% of Gross Sales, for the
first half of 1999. This improvement is largely due to the difference between
limited operations, and the economy and efficiency of unlimited operations,
beginning in April of 1999. It is also attributable to the marketing of
different products from those currently offered by the Company.
Interest Income and Expense reflected on the Company's financial statements
refer to the company's ownership of a certificate of deposit, pledged against a
loan. The interest income from the CD is shown. The interest expense for the
loan is shown.
Loss on Impairment of goodwill, of $750,000, refers to the issuance of
1,500,000 shares of common stock during the first quarter of 1999, at $0.50 per
share, below market value. This treatment was recommended by the Company's
Independent Auditor. While this item increases the loss for the nine months
ended September 30, 1999, it has no effect upon the second and third quarter
profitable results from operations.
Operating Expenses would be expected to increase with increasing
operations. Expenses in 1998 were attributable to the marketing of different
products than those which form the core of the Company's current business. In
general, expenses have decreased as a percentage of sales.
<TABLE>
<CAPTION>
========================================================================================================
General and Administrative Expenses $ Sales % of Sales
- --------------------------------------------------------------- -----------------------------------------
<S> <C> <C> <C>
all of 1998 792,533 120,234 659.16
- --------------------------------------------------------------------------------------------------------
first quarter 1999 337,843 352,483 95.85
- --------------------------------------------------------------------------------------------------------
first half 1999 1,347,827 3,487,490 38.65
- --------------------------------------------------------------------------------------------------------
second quarter 1999 1,010,984 3,135,013 32.25
- --------------------------------------------------------------------------------------------------------
third quarter 1999 1,299,014 5,918,342 21.95
========================================================================================================
</TABLE>
These figures reflect a continuing improvement in this relationship, due to
expanding operations, additional products and customers.
THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK
4
<PAGE>
================================================================================
Research and Development $ Sales % of Sales
- --------------------------------------------------------------------------------
all of 1998 41,449 120,234 34.47
- --------------------------------------------------------------------------------
first quarter 1999 4,754 352,483 1.35
- --------------------------------------------------------------------------------
first half 1999 30,155 3,487,490 0.86
- --------------------------------------------------------------------------------
second quarter 1999 25,401 3,135,013 0.81
- --------------------------------------------------------------------------------
third quarter 1999 10,465 5,918,342 0.18
================================================================================
These figures reflect that Research and Development is trending downward as
a decreasing percentage of sales.
================================================================================
Production and Media Costs $ Sales % of Sales
- --------------------------------------------------------------------------------
all of 1998 -0- 120,234 0.00
- --------------------------------------------------------------------------------
first quarter 1999 355,279 352,483 100.79
- --------------------------------------------------------------------------------
second quarter 1999 1,168,432 3,135,013 37.27
- --------------------------------------------------------------------------------
third quarter 1999 2,778,243 5,918,342 46.94
================================================================================
These expenses were not a factor in 1998, due to the differing nature of
the products marketed. These figures for 1999 reflect an appropriate improvement
in the ratio of these expenses to sales, even as total costs increase with
expanding operations. In the first quarter, production costs were incurred in
advance of sales. The benefit was reflected in the second quarter. The increase
in production and media costs in the third quarter, is modest in comparison to
the increase in sales, and suggests a potential for further improvement in
revenued in the fourth quarter. Of course, there is never any guaranty of future
profitability, as unforeseen events may produce different results from those
reasonably expected.
================================================================================
Marketing $ Sales % of Sales
- --------------------------------------------------------------------------------
all of 1998 339,877 120,234 282.68
- --------------------------------------------------------------------------------
first quarter 1999 202,596 352,483 57.48
- --------------------------------------------------------------------------------
first half 1999 274,995 3,487,490 7.89
- --------------------------------------------------------------------------------
second quarter 1999 72,399 3,135,013 2.31
- --------------------------------------------------------------------------------
third quarter 1999 585,515 5,918,342 9.89
================================================================================
These figures reflect a general overall improvement in the ratio of these
expenses to sales, even as total costs increase with expanding operations. The
increase in marketing expenses, like production and media costs, in the third
quarter, is modest in comparison to the increase in sales, and suggests a
5
<PAGE>
potential for further improvement in fourth quarter revenue. Of course, there is
never any guaranty of future profitability, as unforeseen events may produce
different results from those reasonably expected.
================================================================================
Total Operating Expenses $ Sales % of Sales
- --------------------------------------------------------------------------------
all of 1998 1,228,714 120,234 1,021.94
- --------------------------------------------------------------------------------
first quarter 1999 915,099 352,483 259.62
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first half 1999 3,229,402 3,487,490 92.60
- --------------------------------------------------------------------------------
second quarter 1999 2,314,303 3,135,013 73.82
- --------------------------------------------------------------------------------
third quarter 1999 4,692,066 5,918,342 79.28
================================================================================
This comparison shows that total operating expenses declined sharply from
the first to the second quarter and increased only slightly in the third
quarter, as a percentage of sales, even as total expenses are increasing with
expanded operations. These tables also illustrate the significance of the second
and third profitable operating quarters of 1999.
Profitability, as indicated previously, appeared in the second quarter of
1999.
================================================================================
Operating Income (Loss) $ Sales % of Sales
- --------------------------------------------------------------------------------
all of 1998 (1,134,913) 120,234 (943.92)
- --------------------------------------------------------------------------------
first quarter 1999 (631,147) 352,483 (179.06)
- --------------------------------------------------------------------------------
first half 1999 (256,317) 3,487,490 (7.35)
- --------------------------------------------------------------------------------
second quarter 1999 374,830 3,135,013 11.96
- --------------------------------------------------------------------------------
third quarter 1999 409,004 5,918,342 6.91
================================================================================
The achievement of profitability, in the second quarter, does not guaranty
that the trend to increasing profitability will follow. However, it appears to
management that operations are expanding in an orderly and promising manner, and
that expenses are being managed appropriately. This Company has not yet reached
its full potential, in the opinion of management. It is growing, and growth
involves substantial risks. It must be managed so that the expenses of increased
production do not outpace liquidity.
In this connection it may be useful to maintain a watchful eye on Accounts
Receivable and Inventory, as a percentage of sales:
================================================================================
Accounts Receivable (Net) $ Sales % of Sales
- --------------------------------------------------------------------------------
December 31, 1998 27,342 120,234 22.74
- --------------------------------------------------------------------------------
March 31, 1999 21,448 352,483 6.08
- --------------------------------------------------------------------------------
June 30, 1999 74,313 3,135,013 2.37
- --------------------------------------------------------------------------------
September 30, 1999 104,459 5,918,342 1.77
================================================================================
6
<PAGE>
================================================================================
Inventory $ Sales % of Sales
- --------------------------------------------------------------------------------
December 31, 1998 0 120,234 0.00
- --------------------------------------------------------------------------------
March 31, 1999 265,230 352,483 75.25
- --------------------------------------------------------------------------------
June 30, 1999 1,047,675 3,135,013 33.42
- --------------------------------------------------------------------------------
September 30, 1999 797,686 5,918,342 13.48
================================================================================
While this Company is presently able to manage its present phase of
development, for a indefinite interim, it cannot regard its financial condition
as optimal. Unless events in the future are favorable, both in terms of profit
from operations now being undertaken, and also favorable in attracting investor
interest, the Company may not be able to sustain a stable growth pattern. These
remarks should be understood in context, discussed elsewhere, that increasing
revenues are expected to provide substantially all of the requirements for
continued operations at present levels and for some possible growth. This
company must grow to reach its full potential. For this reason, stability at its
present levels is not considered optimal for long-term growth.
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
This Issuer has filed to Register its common stock under ss.12(g) of the
Securities Exchange Act of 1934. While its Registration is effective for
purposes of invoking its reporting requirements, its Form 10-SB has not cleared
final comments by the Staff of the Securities and Exchange Commission, and is
not yet in its final form. Persons accessing this Company's Form 10-SB filings,
on EDGAR or otherwise, should exercise caution and be aware that certain changes
in the final form may occur.
Item 6. Exhibits and Reports on Form 8-K
None
7
<PAGE>
Exhibit Index
Financial Statements and Documents
Furnished as a part of this Registration Statement
Attached hereto and incorporated herein by this reference are consolidated
unaudited financial statements (under cover of Exhibit F3Q) for the three months
and nine months ended September 30, 1999, and the year ended December 31, 1998.
These financial reports are supplemented by unaudited financial statements for
the three and six months ended June 30, 1999 (under cover of Exhibit F2Q), and
for the three months ended March 31, 1999 (under cover of Exhibit F1Q).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-Q Report for the Quarter ended September 30, 1999 has been signed below
by the following person on behalf of the Registrant and in the capacity and on
the date indicated.
Dated: September 30, 1999.
Reliant Interactive Media Corp
formerly Reliant Corporation
by
/s/ /s/
- --------------------------------- ---------------------------------
Kevin Harrington Tim Harrington
CHAIRMAN AND CEO/DIRECTOR PRESIDENT AND COO/DIRECTOR
/s/ /s/
- --------------------------------- ---------------------------------
Mel Arthur Karl E. Rodriguez
EXECUTIVE VICE SECRETARY/DIRECTOR
PRESIDENT/DIRECTOR
8
<PAGE>
Exhibit F3Q
UN-AUDITED FINANCIAL STATEMENTS
for the three months and nine months ended September 30, 1999
9
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1999 and December 31, 1998
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
September 30, December 31,
1999 1998
----------- -----------
(Unaudited)
CURRENT ASSETS
Cash $ 189,025 $ 122,257
Accounts receivable, net 797,686 --
Inventory 104,459 27,342
Prepaids 100,000 --
Employee advances 9,610 --
----------- -----------
Total Current Assets 1,200,780 149,599
----------- -----------
PROPERTY AND EQUIPMENT
Machinery and equipment 25,925 25,925
Office furniture and equipment 45,292 45,292
----------- -----------
Total Property and Equipment 71,217 71,217
Less Accumulated depreciation (18,286) (10,258)
----------- -----------
Net Property and Equipment 52,931 60,959
----------- -----------
OTHER ASSETS
Deposits -- 12,773
Other assets 20,000 --
Prepaid advertising 1,537,387 85,302
Patent and trademark costs 26,668 26,668
----------- -----------
Total Other Assets 1,584,055 124,743
----------- -----------
TOTAL ASSETS $ 2,837,766 $ 335,301
=========== ===========
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 1,019,575 $ 73,192
Accrued expenses 43,516 5,418
Payable - related parties 96,952 --
Notes payable - related parties, current portion 500,000 --
Notes payable, current portion 40,000 40,000
----------- -----------
Total Current Liabilities 1,700,043 118,610
----------- -----------
LONG-TERM DEBT
Notes payable - related parties 87,500 87,500
----------- -----------
Total Long-Term Debt 87,500 87,500
----------- -----------
TOTAL LIABILITIES 1,787,543 206,110
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock: 50,000,000 shares authorized of $0.001
par value, 5,885,440 and 3,373,570 shares issued
and outstanding, respectively 5,885 3,374
Additional paid-in capital 2,907,974 1,359,985
Accumulated deficit (1,863,636) (1,234,168)
----------- -----------
Total Stockholders' Equity 1,050,223 129,191
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,837,766 $ 335,301
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET SALES $ 5,918,342 $ 31,125 $ 9,405,832 $ 91,243
COST OF GOODS SOLD 817,272 17,223 1,331,677 50,551
----------- ----------- ----------- -----------
GROSS MARGIN 5,101,070 13,902 8,074,155 40,692
----------- ----------- ----------- -----------
OPERATING EXPENSES
Depreciation 2,676 1,657 8,028 4,971
Bad debt expense 948 -- 18,358 --
General and administrative 1,299,014 176,696 2,646,841 508,088
Research and development 10,465 9,621 40,620 30,345
Production and media costs 2,778,243 -- 4,301,954 --
Marketing 585,515 127,211 860,510 203,721
Rent 15,205 10,917 45,157 35,031
----------- ----------- ----------- -----------
Total Operating Expenses 4,692,066 326,102 7,921,468 782,156
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) 409,004 (312,200) 152,687 (741,464)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSES)
Loss on impairment of goodwill -- -- (750,000) --
Interest expense (12,450) (3,159) (32,511) (7,675)
Interest income 261 102 356 102
----------- ----------- ----------- -----------
Total Other Income (Expenses) (12,189) (3,057) (782,155) (7,573)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME
TAXES 396,815 (315,257) (629,468) (749,037)
INCOME TAXES -- -- -- --
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 396,815 $ (315,257) $ (629,468) $ (749,037)
=========== =========== =========== ===========
BASIC INCOME (LOSS) PER SHARE $ 0.07 $ (0.11) $ (0.12) $ (0.30)
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING 5,815,222 2,817,235 5,039,963 2,520,451
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Common Stock Additional
----------------------------- Paid-in Accumulated
Shares Amount Capital Deficit
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1997 2,369,600 $ 2,370 $ 377,719 $ (99,255)
Capital contributions, 1998 -- -- 340,020 --
Common stock issued in recapitalization
of Reliant Corporation and Cigar
Television Network, Inc. 570,400 570 (570) --
Common stock issued for cash at an
average price of $1.56 per share 329,770 330 513,170 --
Common stock issued for services
valued at $1.25 per share 103,800 104 129,646 --
Net loss for the year ended
December 31, 1998 -- -- -- (1,134,913)
----------- ----------- ----------- -----------
Balance, December 31, 1998 3,373,570 3,374 1,359,985 (1,234,168)
Common stock issued for cash at an
average price of $0.81 per share
(unaudited) 848,000 848 689,152 --
Common stock issued for services
valued at $1.15 per share (unaudited) 43,700 43 50,457 --
Fractional shares issued in the reverse
stock split (unaudited) 170 -- -- --
Common stock issued for services
valued at $0.50 per share (unaudited) 100,000 100 49,900 --
Common stock issued for investment
in Tony Little Website at $0.50 per
share (unaudited) 20,000 20 9,980 --
Common stock issued for acquisition
of TPH Marketing, Inc. valued at
$0.50 per share (unaudited) 1,500,000 1,500 748,500 --
Net loss for the nine months ended
September 30, 1999 (unaudited) -- -- -- (629,468)
----------- ----------- ----------- -----------
Balance, September 30, 1999
(unaudited) 5,885,440 $ 5,885 $ 2,907,974 $(1,863,636)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $ 396,815 $ (315,257) $ (629,468) $ (749,037)
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation 2,676 1,657 8,028 4,971
Bad debt 948 -- 18,358 --
Loss on impairment -- -- 750,000 --
Common stock issued for services 50,000 -- 100,500 --
Changes in assets and liabilities:
Accounts receivable 249,041 -- (816,044) --
Prepaids and advances (108,560) -- (109,610) --
Inventory (30,146) -- (77,117) --
Deposits -- 2,909 12,773 12,773
Prepaid expenses (1,085,375) -- (1,452,085) --
Other assets (10,000) -- (10,000) --
Cash overdraft (91,647) -- -- --
Accounts payable 457,600 18,520 946,383 55,100
Accrued expenses (381) -- 38,098 --
----------- ----------- ----------- -----------
Net Cash Used in Operating
Activities (169,029) (292,171) (1,220,184) (676,193)
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Patent and trademark costs -- -- -- (26,668)
----------- ----------- ----------- -----------
Net Cash Used in Investing Activities -- -- -- (26,668)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (payments) from notes payable 358,054 -- 596,952 --
Proceeds from issuance of common
stock -- 95,000 690,000 195,000
Proceeds from additional capital
contribution -- 89,140 -- 340,020
----------- ----------- ----------- -----------
Net Cash Provided by Financing
Activities $ 358,054 $ 184,140 $ 1,286,952 $ 535,020
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 189,025 $(108,031) $ 66,768 $(167,841)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD -- 150,195 122,257 210,005
--------- --------- --------- ---------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 189,025 $ 42,164 $ 189,025 $ 42,164
========= ========= ========= =========
Cash Payments For:
Income taxes $ -- $ -- $ -- $ --
Interest $ 12,450 $ -- $ 32,511 $ --
Non-Cash Financing Activities:
Common stock issued for services $ 50,000 $ -- $ 100,500 $ --
Common stock issued for other assets $ 10,000 $ -- $ 10,000 $ --
Common stock issued for subsidiary $ -- $ -- $ 750,000 $ --
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
September 30, 1999 and December 31, 1998
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at September 30, 1999 and 1998 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 1998 audited
consolidated financial statements. The results of operations for
periods ended September 30, 1999 and 1998 are not necessarily
indicative of the operating results for the full years.
<PAGE>
Exhibit F2Q
UN-AUDITED FINANCIAL STATEMENTS
for the three and six months ended June 30, 1999.
18
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999 and December 31, 1998
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
June 30, December 31,
1999 1998
----------- -----------
(Unaudited)
CURRENT ASSETS
Cash $ -- $ 122,257
Accounts receivable, net 1,047,675 --
Inventory 74,313 27,342
----------- -----------
Total Current Assets 1,121,988 149,599
----------- -----------
PROPERTY AND EQUIPMENT
Machinery and equipment 25,925 25,925
Office furniture and equipment 45,292 45,292
----------- -----------
Total Property and Equipment 71,217 71,217
Less Accumulated depreciation (15,610) (10,258)
----------- -----------
Net Property and Equipment 55,607 60,959
----------- -----------
OTHER ASSETS
Deposits 1,050 12,773
Prepaid advertising 452,012 85,302
Patent and trademark costs 26,668 26,668
----------- -----------
Total Other Assets 479,730 124,743
----------- -----------
TOTAL ASSETS $ 1,657,325 $ 335,301
=========== ===========
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Cash overdraft $ 91,647 $ --
Accounts payable 561,975 73,192
Accrued expenses 43,897 5,418
Payable - related party 38,898 --
Notes payable - related parties, current portion 200,000 --
Notes payable, current portion 40,000 40,000
----------- -----------
Total Current Liabilities 976,417 118,610
----------- -----------
LONG-TERM DEBT
Notes payable - related parties 87,500 87,500
----------- -----------
Total Long-Term Debt 87,500 87,500
----------- -----------
TOTAL LIABILITIES 1,063,917 206,110
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock: 50,000,000 shares authorized of $0.001
par value, 5,765,440 and 3,373,570 shares issued
and outstanding, respectively 5,765 3,374
Additional paid-in capital 2,848,094 1,359,985
Accumulated deficit (2,260,451) (1,234,168)
----------- -----------
Total Stockholders' Equity 593,408 129,191
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,657,325 $ 335,301
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
SALES $ 3,135,013 $ 30,059 $ 3,487,490 $ 60,118
COST OF GOODS SOLD 445,880 16,664 514,405 33,328
----------- ----------- ----------- -----------
GROSS MARGIN 2,689,133 13,395 2,973,085 26,790
----------- ----------- ----------- -----------
OPERATING EXPENSES
Depreciation 2,676 1,657 5,352 3,314
Bad debt expense 17,410 -- 17,410 --
General and administrative 1,010,984 165,696 1,347,827 331,392
Research and development 25,401 10,362 30,155 20,724
Production and media costs 1,168,432 -- 1,523,711 --
Marketing 72,399 38,255 274,995 76,510
Rent 17,001 12,057 29,952 24,114
----------- ----------- ----------- -----------
Total Operating Expenses 2,314,303 228,027 3,229,402 456,054
----------- ----------- ----------- -----------
OPERATING INCOME (LOSS) 374,830 (214,632) (256,317) (429,264)
----------- ----------- ----------- -----------
OTHER INCOME (EXPENSES)
Loss on impairment of goodwill -- -- (750,000) --
Interest expense (14,941) (2,258) (20,061) (4,516)
Interest income 95 -- 95 --
----------- ----------- ----------- -----------
Total Other Income (Expenses) (14,846) (2,258) (769,966) (4,516)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE
INCOME TAXES 359,984 (216,890) (1,026,283) (433,780)
INCOME TAXES -- -- -- --
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 359,984 $ (216,890) $(1,026,283) $ (433,780)
=========== =========== =========== ===========
BASIC INCOME (LOSS) PER SHARE $ 0.06 $ (0.08) $ (0.23) $ (0.15)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
Common Stock Additional
--------------------------- Paid-in Accumulated
Shares Amount Capital Deficit
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1997 2,369,600 $ 2,370 $ 377,719 $ (99,255)
Capital contributions, 1998 -- -- 340,020 --
Common stock issued in recapitalization
of Reliant Corporation and Cigar
Television Network, Inc. 570,400 570 (570) --
Common stock issued for cash at an
average price of $1.56 per share 329,770 330 513,170 --
Common stock issued for services
valued at $1.25 per share 103,800 104 129,646 --
Net loss for the year ended
December 31, 1998 -- -- -- (1,134,913)
----------- ----------- ----------- -----------
Balance, December 31, 1998 3,373,570 3,374 1,359,985 (1,234,168)
Common stock issued for cash at an
average price of $0.81 per share
(unaudited) 848,000 848 689,152 --
Common stock issued for services
valued at $1.15 per share (unaudited) 43,700 43 50,457 --
Fractional shares issued in the reverse
stock split (unaudited) 170 -- -- --
Common stock issued for acquisition
of TPH Marketing, Inc. valued at
$0.50 per share (unaudited) 1,500,000 1,500 748,500 --
Net loss for the six months ended
June 30, 1999 (unaudited) -- -- -- (1,026,283)
----------- ----------- ----------- -----------
Balance, June 30, 1999 (unaudited) 5,765,440 $ 5,765 $ 2,848,094 $(2,260,451)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss) $ 359,984 $ (216,890) $(1,026,283) $ (433,780)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 2,676 1,657 5,352 3,314
Bad debt 17,410 -- 17,410 --
Loss on impairment -- -- 750,000 --
Common stock issued for services 2,750 -- 50,500 --
Changes in assets and liabilities:
Accounts receivable (799,855) -- (1,065,085) --
Prepaids and advances 20,396 -- (1,050) --
Inventory (74,313) -- (46,971) --
Deposits -- 4,932 12,773 9,864
Prepaid expenses (378,647) -- (366,710) --
Cash overdraft 91,647 -- 91,647 --
Accounts payable 410,408 18,290 488,783 36,580
Accrued expenses (321) -- 38,479 --
----------- ----------- ----------- -----------
Net Cash Used in Operating
Activities (347,865) (192,011) (1,051,155) (384,022)
----------- ----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Patent and trademark costs -- (6,885) -- (26,668)
----------- ----------- ----------- -----------
Net Cash Used in Investing Activities -- (6,885) -- (26,668)
----------- ----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (payments) from notes payable (8,279) -- 238,898 --
Proceeds from issuance of common
stock 300,000 100,000 690,000 100,000
Proceeds from additional capital
contribution -- 68,991 -- 250,880
----------- ----------- ----------- -----------
Net Cash Provided by Financing
Activities $ 291,721 $ 168,991 $ 928,898 $ 350,880
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ (56,144) $ (29,905) $ (122,257) $ (59,810)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 56,144 180,100 122,257 210,005
----------- ----------- ----------- -----------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ -- $ 150,195 $ -- $ 150,195
=========== =========== =========== ===========
Cash Payments For:
Income taxes $ -- $ -- $ -- $ --
Interest $ 14,941 $ -- $ 20,061 $ --
Non-Cash Financing Activities:
Common stock issued for services $ 2,750 $ -- $ 50,500 $ --
Common stock issued for subsidiary $ -- $ -- $ 750,000 $ --
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
June 30, 1999 and December 31, 1998
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at June 30, 1999 and 1998 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 1998 audited
consolidated financial statements. The results of operations for
periods ended June 30, 1999 and 1998 are not necessarily indicative of
the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the relation of assets and liquidation of liabilities in
the normal course of business.
The Company has incurred significant losses since inception and has
had no significant operating revenues until 1999. The Company believes
it can meet and exceed its operating expenses through increased sales
in 1999.
<PAGE>
Exhibit F1Q
UN-AUDITED FINANCIAL STATEMENTS
for the three months ended March 31, 1999
27
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1999 and December 31, 1998
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets
ASSETS
March 31, December 31,
1999 1998
--------- ---------
(Unaudited)
CURRENT ASSETS
Cash $ 56,144 $ 122,257
Accounts receivable 265,230 --
Prepaids and advances 21,446 --
Inventory -- 27,342
--------- ---------
Total Current Assets 342,820 149,599
--------- ---------
PROPERTY AND EQUIPMENT
Machinery and equipment 25,925 25,925
Office furniture and equipment 45,292 45,292
--------- ---------
Total Property and Equipment 71,217 71,217
Less Accumulated depreciation (12,934) (10,258)
--------- ---------
Net Property and Equipment 58,283 60,959
--------- ---------
OTHER ASSETS
Deposits -- 12,773
Prepaid advertising 73,365 85,302
Patent and trademark costs 26,668 26,668
--------- ---------
Total Other Assets 100,033 124,743
--------- ---------
TOTAL ASSETS $ 501,136 $ 335,301
========= =========
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
----------- -----------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 151,567 $ 73,192
Accrued expenses 44,218 5,418
Payable - related party 247,177 --
Notes payable - current portion 40,000 40,000
----------- -----------
Total Current Liabilities 482,962 118,610
----------- -----------
LONG-TERM DEBT
Notes payable - shareholders 87,500 87,500
----------- -----------
Total Long-Term Debt 87,500 87,500
----------- -----------
TOTAL LIABILITIES 570,462 206,110
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock: 50,000,000 shares authorized of $0.001
par value, 5,159,940 and 3,373,570 shares issued
and outstanding, respectively 5,160 3,374
Additional paid-in capital 2,545,949 1,359,985
Deficit accumulated during the development stage (2,620,435) (1,234,168)
----------- -----------
Total Stockholders' Equity (Deficit) (69,326) 129,191
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) $ 501,136 $ 335,301
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
From
Inception on
For the Three Months Ended June 15,
March 31, 1995 Through
------------------------------ March 31,
1999 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
SALES $ 352,477 $ 30,059 $ 472,711
COST OF GOODS SOLD 68,525 16,664 135,179
----------- ----------- -----------
GROSS MARGIN 283,952 13,395 337,532
----------- ----------- -----------
OPERATING EXPENSES
Depreciation 2,676 1,657 12,934
General and administrative 692,122 165,696 1,547,098
Research and development 4,754 10,362 46,203
Marketing 202,596 38,255 567,620
Rent 12,951 12,057 69,213
----------- ----------- -----------
Total Operating Expenses 915,099 228,027 2,243,068
----------- ----------- -----------
OPERATING LOSS (631,147) (214,632) (1,905,536)
----------- ----------- -----------
OTHER INCOME (EXPENSES)
Loss on impairment of goodwill (750,000) -- (750,000)
Interest expense (5,120) (2,258) (14,153)
Interest income -- -- 296
Other income -- -- 48,958
----------- ----------- -----------
Total Other Income (Expenses) (755,120) (2,258) (714,899)
----------- ----------- -----------
LOSS BEFORE INCOME TAXES (1,386,267) (216,890) (2,620,435)
INCOME TAXES -- -- --
----------- ----------- -----------
NET LOSS $(1,386,267) $ (216,890) $(2,620,435)
=========== =========== ===========
BASIC LOSS PER SHARE $ (0.38) $ (0.38)
=========== ===========
WEIGHTED AVERAGE NUMBER
OF SHARES 3,625,859 570,400
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Deficit
Additional Accumulated
Common Stock Paid-in During the
----------------------------- Development
Shares Amount Capital Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, June 15, 1995 -- $ -- $ -- $ --
Shares issued to the founders at
inception at $0.0008 per share 2,369,600 2,370 (370) --
Net loss from inception on June 15,
1995 through December 31, 1995 -- -- -- (2,000)
----------- ----------- ----------- -----------
Balance, December 31, 1995 2,369,600 2,370 (370) (2,000)
Capital contributions, 1996 -- -- 34,401 --
Net loss for the year ended
December 31, 1996 -- -- -- (32,329)
----------- ----------- ----------- -----------
Balance, December 31, 1996 2,369,600 2,370 34,031 (34,329)
Capital contributions, 1997 -- -- 343,688 --
Net loss for the year ended
December 31, 1997 -- -- -- (64,926)
----------- ----------- ----------- -----------
Balance, December 31, 1997 2,369,600 2,370 377,719 (99,255)
Capital contributions, 1998 -- -- 340,020 --
Common stock issued in recapitalization
of Reliant Corporation and Cigar
Television Network, Inc. 570,400 570 (570) --
Common stock issued for cash at an
average price of $1.56 per share 329,770 330 513,170 --
Common stock issued for services
valued at $1.25 per share 103,800 104 129,646 --
Net loss for the year ended
December 31, 1998 -- -- -- (1,134,913)
----------- ----------- ----------- -----------
Balance, December 31, 1998 3,373,570 $ 3,374 $ 1,359,985 $(1,234,168)
----------- ----------- ----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity (Deficit) (Continued)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
----------------------------- Paid-in Development
Shares Amount Capital Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1998 3,373,570 $ 3,374 $ 1,359,985 $(1,234,168)
Common stock issued for cash at an
average price of $1.57 per share
(unaudited) 248,000 248 389,752 --
Common stock issued for services
valued at $1.25 per share (unaudited) 38,200 38 47,712 --
Fractional shares issued in the reverse
stock split (unaudited) 170 -- -- --
Common stock issued for acquisition
of TPH Marketing, Inc. valued at
$0.50 per share (unaudited) 1,500,000 1,500 748,500 --
Net loss for the three months ended
March 31, 1999 (unaudited) -- -- -- (1,386,267)
----------- ----------- ----------- -----------
Balance, March 31, 1999 (unaudited) 5,159,940 $ 5,160 $ 2,545,949 $(2,620,435)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
From
For the Inception on
Three Months Ended June 15,
March 31, 1995 Through
------------------------------ March 31,
1999 1998 1999
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(1,386,267) $ (216,890) $(2,620,435)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation 2,676 1,657 12,934
Loss on impairment 750,000 -- 750,000
Common stock issued for services 47,750 -- 177,500
Changes in assets and liabilities:
Accounts receivable (265,230) -- (265,230)
Prepaids and advances (21,446) -- (21,446)
Inventory 27,342 -- --
Deposits 12,773 4,932 --
Prepaid expenses 11,937 -- (73,365)
Accounts payable 78,375 18,290 151,567
Accrued expenses 38,800 -- 44,218
----------- ----------- -----------
Net Cash Used in Operating Activities (703,290) (192,011) (1,844,257)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment -- -- (71,217)
Patent and trademark costs -- (19,783) (26,668)
----------- ----------- -----------
Net Cash Used in Investing Activities -- (19,783) (97,885)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable 247,177 -- 374,677
Proceeds from issuance of common stock 390,000 -- 905,500
Proceeds from additional capital contribution -- 181,889 718,109
----------- ----------- -----------
Net Cash Provided by Financing Activities 637,177 181,889 1,998,286
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (66,113) (29,905) 56,144
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 122,257 210,005 --
----------- ----------- -----------
CASH AND CASH EQUIVALENTS, END
OF PERIOD $ 56,144 $ 180,100 $ 56,144
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
(Unaudited)
<TABLE>
<CAPTION>
From
For the Inception on
Three Months Ended June 15,
March 31, 1995 Through
------------------------ March 31,
1999 1998 1999
-------- --------- --------
<S> <C> <C> <C>
Cash Payments For:
Income taxes $ -- $ -- $ --
Interest $ 5,120 $ -- $ 8,735
Non-Cash Financing Activities:
Common stock issued for services $ 47,750 $ -- $177,500
Common stock issued for subsidiary $750,000 $ -- $750,000
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
(A Development Stage Company)
Notes to the Consolidated Financial Statements
March 31, 1999 and December 31, 1998
NOTE 1 - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared
by the Company without audit. In the opinion of management, all
adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of
operations and cash flows at March 31, 1999 and 1998 and for all
periods presented have been made.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 1998 audited
consolidated financial statements. The results of operations for
periods ended March 31, 1999 and 1998 are not necessarily indicative
of the operating results for the full years.
NOTE 2 - GOING CONCERN
The Company's financial statements are prepared using generally
accepted accounting principles applicable to a going concern which
contemplates the relation of assets and liquidation of liabilities in
the normal course of business. The Company has incurred operating
losses from its inception through December 31, 1998. It has not
established revenues sufficient to cover its operating costs and to
allow it to continue as a going concern. Management believes that
revenues will continue to increase in 1999 allowing the Company to
cover its product development and marketing costs. It is also the
intent of the Company to complete a limited offering of its common
stock in 1999 to help cover its operating expenses. In the interim,
shareholders of the Company have committed to meet its operating
needs.
