SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10QSB/A
Quarterly Report under Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended Commission File Number
----------------- ----------------------
June 30, 2000 000-28711
MIND2MARKET, INC.
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(Exact name of registrant as specified in its charter)
Colorado 84-1361341
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(State of incorporation) (I.R.S. Employer
Identification No.)
1625 Abilene Dr., Broomfield, Colorado 80020
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (303) 438-9185
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 the filing
requirements for at least the past 90 days.
Yes X No
----- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
3,381,600 common shares as of June 30, 2000
<PAGE>
<TABLE>
<CAPTION>
Mind2Market, Inc.
(A Development Stage Company)
Unaudited Balance Sheet
Six Months Ending Year Ending
June 30, 2000 December 31, 1999
<S> <C> <C>
ASSETS
Current Assets
Cash $ 262 $ 1,336
Accounts Receivable - -
Inventories 19,911 17,807
Related Party Receivable
--------------- -------------
Total Current Assets 20,173 19,143
Property, Plant & Equipment
Property, Plant & Equipment 42,801 41,270
Less Accumulated Depreciation (19,016) (14,877)
--------------- -------------
Net Property, Plant & Equipment 23,785 26,393
Other Assets
Prepaid loan costs 50,000 50,000
Manufacturing and marketing rights 315,760 312,500
Less accumulated amortization (91,891) (80,730)
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Total Other Assets 273,869 281,770
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TOTAL ASSETS $ 317,827 $ 327,306
=============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 8,217 $ 11,700
Accrued salaries $ 10,569 10,569
Payroll taxes payable 3,552 3,552
Loan from stockholder - -
--------------- -------------
Total Current Liabilities 22,338 25,821
Long Term Liabilities
Stockholder Loans 141,693 130,946
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Total Long Term Liabilities 141,693 130,946
Stockholders' Equity
Preferred stock: authorized 5,000,000 shares $0.10 par value;
none issued
Common stock: authorized 50,000,000 shares $0.0001 par value
3,381,600 issued at December and June 338 338
Paid in Capital 523,617 523,617
Retained Earnings (Deficit) (370,159) (353,416)
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Total Stockholders' Equity 153,796 170,539
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TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 317,827 $ 327,306
=============== =============
</TABLE>
SEE ACCOMPANYING NOTES
F-1
<PAGE>
<TABLE>
<CAPTION>
Mind2Market, Inc.
(A Development Stage Company)
Unaudited Statement of Operations
Six Months Ending June 30 Three Months Ending June 30
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUES
Sales $ 284 $ - $ 13 $ -
--------------- --------------- --------------- ---------------
TOTAL REVENUES 284 - 13 -
COST OF GOODS SOLD
Cost of Sales - - -
--------------- --------------- --------------- ---------------
TOTAL COST OF GOODS SOLD - - - -
Gross Profit 284 - 13 -
OPERATING COSTS
Administrative & Overhead 16,756 17,253 16,655 16,121
--------------- --------------- --------------- ---------------
TOTAL OPERATING COSTS 16,756 17,253 16,655 16,121
OTHER INCOME (EXPENSE)
Interest Income 25
Interest Expense (271) - -
--------------- --------------- --------------- ---------------
TOTAL OTHER INCOME (EXPENSE) (271) 25 - -
NET INCOME (LOSS) $ (16,743) $ (17,228) $ (16,642) $ (16,121)
=============== =============== =============== ===============
Net Loss per Share (0.00) (0.01) (0.00) (0.00)
Weighted Average Common Shares 3,381,600 3,226,600 3,381,600 3,226,600
</TABLE>
SEE ACCOMPANYING NOTES
F-2
<PAGE>
<TABLE>
<CAPTION>
Mind2Market, Inc.
(A Development Stage Company)
UNAUDITED STATEMENT OF CASH FLOWS
Six Months Ended June 30 Three Months Ended June 30
2000 1999 2000 1999
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss $ (16,743) $ (17,228) $ (16,642) $ (16,121)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation 4,140 4,108 4,140 4,108
Amortization 11,161 11,161 11,161 11,161
(Increase) Decrease in current assets (2,104) (3,000) (2,104) (3,000)
Increase (Decrease) in current liabilities (3,484) (29,554) 3,717 (28,392)
(Increase) Decrease in other assets (3,260) (3,260) -
------------- ------------- ------------- --------------
NET CASH PROVIDED (USED) BY (10,290) (34,513) (2,988) (32,244)
OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
(Purchase) Sale of property and equipment (1,531) (380) (1,531) (380)
Increase (Decrease) in notes payable 10,747 13,502 3,498 13,500
------------- ------------- ------------- --------------
NET CASH FLOWS FROM INVESTING ACTIVITIES 9,216 13,122 1,967 13,120
NET CASH FLOWS FROM FINANCING ACTIVITIES
Capital received - 15,000 - 15,000
NET INCREASE (DECREASE) IN CASH (1,074) (6,391) (1,021) (4,124)
CASH AT BEGINNING OF PERIOD 1,336 8,349 1,283 6,082
CASH AT END OF PERIOD $ 262 $ 1,958 $ 262 $ 1,958
============= ============= ============= ==============
</TABLE>
SEE ACCOMPANYING NOTES
F-3
<PAGE>
<TABLE>
<CAPTION>
Mind2Market, Inc.
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
For the Period from December 31, 1998 to June 30, 2000
Additional Accumulated Total
Common Stock Paid-In
Shares Amount Capital Deficit
--------------- -------------- ------------------ -------------- ------------
<S> <C> <C> <C> <C> <C>
Balance - December 31, 1998 3,226,600 $ 323 $ 457,392 (253,558) 204,157
Issue stock for services 125,000 13 51,226 - 51,239
Issue stock for cash 30,000 3 14,997 15,000
Net Loss for year - - - (99,858) (99,858)
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Balance - December 31, 1999 3,381,600 338 523,615 (353,416) 170,537
--------------- -------------- -------------- -------------- ------------
Net Loss for six months (16,743) (16,743)
--------------- -------------- -------------- -------------- ------------
Balance - June 30, 2000 3,381,600 $ 338 $ 523,615 $ (370,159) $ 153,794
=============== ============== ============== ============== ============
</TABLE>
SEE ACCOMPANYING NOTES
F-4
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
NOTE A - DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:
Description of the business
Mind2Market, Inc. ("the Company") was incorporated in Colorado on February
15, 1996 as NELX Marketing, Inc., a wholly owned subsidiary of NELX, Inc., a
publicly owned company. On October 14, 1996, in a corporate divestiture, the
Company was divested from NELX by issuing 600,000 shares of the Company's common
stock to NELX, Inc.'s shareholders.
Subsequent to the divestiture, the Company issued 1,000,000 shares each to
Charles Powell and Ray Williams for cash of $1,000 each, and changed its name to
Mind2Market, Inc. The Company intends to manufacture, market and distribute two
products known as Aerosearch and Aerolink, which are visual distress signal
products and will be marketed principally to the offshore and marine markets
while the Company is in the development stage.
The Company obtained rights to manufacture and market the two products by way of
assignment from NELX. In September, 1995, NELX and Radarfind, Inc., a Colorado
corporation, entered into an agreement whereby Radarfind assigned the exclusive
rights to manufacture and market the products along with an irrevocable option
for NELX to purchase the underlying patents owned by Radarfind for $50,000
subject to the payment by NELX of $150,000 of royalties to Radarfind for
subsequent sales of the products. In lieu of payment of the $50,000 and the
royalties, NELX issued 750,000 shares of its common stock to the shareholders of
Radarfind in exchange for the exclusive manufacturing and marketing rights to
the products. The 750,000 shares of NELX stock were issued as follows: 250,000
shares each to Messrs. Charles Powell and Arthur Mears, each of whom were
officers and 33-1/3% shareholders of Radarfind at the time; and the remaining
250,000 shares were issued to be held in escrow for the other shareholders of
Radarfind. NELX recorded the rights at $187,500, which was the market value of
the NELX stock issued. After incorporating the Company, NELX was unable to raise
sufficient funds to follow through with developing and marketing the products
and in October 1996 transferred the rights to the subsidiary concurrent with the
divestiture.
Effective May 15, 1997, the Company and Radarfind entered into an agreement
which will ultimately transfer the patents for the products referred to above
from Radarfind to Mind2Market, Inc. The Company will assume the obligation to
pay the royalties of $150,000 ($1.00 per unit sold). Effective on May 15, 1997,
the Company issued 250,000 shares of its common stock to be held in escrow for
the benefit of Radarfind's shareholders other than Mr. Powell and Mr. Mears. The
250,000 shares were recorded as additional cost of the manufacturing and
marketing rights in the amount of $125,000 ($.50 per share, which was the price
of shares issued for cash during the period). Upon final payment of the $150,000
in royalties, the NELX shares held in escrow and the Company shares held in
escrow will be distributed to the remaining shareholders of Radarfind, and
Radarfind will be liquidated.
F-4
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
In addition to the royalties to be paid to Radarfind, the Company will pay to
Mr. Mears a royalty of $.25 per unit for the duration of the patents.
ACCOUNTING POLICIES:
Equipment:
Equipment is recorded at cost and depreciated on the straight-line method over
the estimated useful lives.
Manufacturing and marketing rights:
The rights were recorded at cost and are being amortized over the remaining
patent period of 14 years on the straight-line method.
Advertising:
All advertising costs are expensed when incurred.
Prepaid loan costs:
Prepaid loan costs will be amortized at a rate of $1.00 per unit sold.
Use of estimates:
The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Interim financial information:
The unaudited interim financial statements have been prepared on the same basis
as the audited financial statements and, in the opinion of management, include
all adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial information set forth therein in accordance with
generally accepted accounting principles. The interim results are not
necessarily indicative of the results to be expected for any future period.
Revenue Recognition:
Product Sales are sales of products and services, if and where sold. Revenue is
recognized at the time of sale. Accounts Receivable are written off when deemed
uncollectable.
F-5
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
Income taxes:
The Company recognizes deferred tax assets and liabilities based on differences
between the financial reporting and tax bases of assets and liabilities using
the enacted tax rates and laws that are expected to be in effect when the
differences are expected to be recovered. The Company provides a valuation
allowance for deferred tax assets for which it does not consider realization of
such assets to be more likely than not.
Recent accounting pronouncements: In December 1999, the Securities and Exchange
Commission staff released Staff Accounting Bulletin No. 101, Revenue Recognition
in Financial Statements (SAB No. 101), which provides guidance on the
recognition, presentation and disclosure of revenue in financial statements. SAB
No. 101 did not impact the Company's revenue recognition policies.
In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities. As amended by
SFAS No. 137, SFAS No. 133 is effective for all fiscal quarters of all fiscal
years beginning after June 15, 2000. SFAS No. 133 requires that all derivative
instruments be recorded on the balance sheet at their fair value. Changes in the
fair value of derivatives are recorded in each period in current earnings or
other comprehensive income, depending on whether a derivative is designed as
part of a hedge transaction and, if it is, the type of hedge transaction. The
Company has not yet determined the impact of the adoption of SFAS No. 133 on its
financial statements or business practices.
Cash and cash equivalents:
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand and in banks.
F-6
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
NOTE B - LOANS FROM STOCKHOLDERS:
---------------------------------
Loans from stockholders consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 2000
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<S> <C> <C>
Loans from principal stockholders, unsecured,
non-interest bearing,
payable at maturity, January $80,946 $ 91,693
1, 2002
Loans from other stockholders, unsecured, non-interest
bearing,
payable at a rate based on the units of product
sold (see below) 50,000 50,000
--------------- --------------
$130,946 $141,693
=============== ==============
</TABLE>
During April 1998, the Company received loans from five individuals totaling
$50,000 for the purpose of providing funds for production setup of one of the
Company's products. As consideration for the loans, the Company issued 100,000
shares of its common stock to the individuals, and agreed to repay the loans at
a rate of $3.00 per unit of product sold for the first 16,667 units sold, then
the payment will be reduced to $1.00 per unit for the next 50,000 units sold.
The total payments will aggregate $100,000, or twice the original amount of the
loans. The 100,000 shares of stock were valued at $.50 per share (representing
the price at which shares were sold by the Company for cash during the year),
and the resulting $50,000 was recorded as prepaid loan costs.
F-7
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
NOTE C - INCOME TAXES:
The Company did not record any provision for federal and state income taxes
through March 31, 2000. The actual tax expense for each period differs from
"expected" tax expense (computed by applying the statutory U.S. federal
corporate tax rate of 34% to net loss before income taxes) as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Period
From
February
15, 1996
Year ended Six Months Ended (Inception) to
December 31, June 30, June 30,
1999 1998 2000 1999 2000
---- ---- ---- ---- --------------
Computed "expected tax benefit $(33,967) $(22,478) $(5,693) $(586) $(125,854)
Change in valuation allowance for
Deferred tax assets 33,967 22,478 5,693 586 125,854
--------- --------- -------- ------ ----------
Net tax benefit $ - $ - $ - $ - $ -
========= ========= ======== ====== ==========
</TABLE>
At December 31, 1999 and June 30, 2000, deferred income tax assets resulted from
federal and state net operating loss carryforwards in the amounts of $339,316
and $356,059, respectively. These loss carryforwards expire in varying amounts
through 2015. Net deferred tax assets consist of the following:
December 31, June 30,
1999 2000
------------ --------
Net operating loss carryforwards $ 115,367 $ 121,060
Less valuation allowances (115,367) (121,060)
---------- ----------
Net deferred assets $ - $ -
========== ==========
In assessing the realizability of deferred tax assets, the Company considers
whether it is more likely than not that some or all of the deferred tax asset
will not be realized. The Company believes that sufficient uncertainty exists
regarding the realizability of the deferred tax assets such that valuation
allowances equal to the entire balance of the deferred tax assets are necessary.
F-8
<PAGE>
Mind2Market, Inc.
(A Development Stage Company)
Notes to Financial Statements
June 30, 2000
NOTE D - MANAGEMENT'S PLANS:
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company has incurred a net losses from February 15, 1996 (inception) to
March 31, 2000 and incurred a loss of $99,858 for the year ended December 31,
1999. The Company has a working capital deficiency at December 31, 1999 of
$6,678. These conditions raise substantial doubt about its ability to continue
as a going concern. The financial statements do not reflect any adjustments that
might result from the outcome of this uncertainty.
Management is in process of completing a loan in the amount of $250,000 from an
independent party. The proceeds from this loan will be utilized to fund
operating expenses, including general and administrative, marketing, developing
product advertising materials and other expenses necessary to begin selling
products. Management believes this loan will provide sufficient funding to
enable the Company to begin generating revenues within four months. These
anticipated sales will generate cash flows sufficient to enable the Company to
operate for at least the next twelve months.
NOTE E - RELATED PARTY TRANSACTIONS:
The Company has engaged Mountain Share Transfer (a company owned by the wife of
Mr. Powell) to act as stock transfer agent. No compensation has been paid to
Mountain Share Transfer in connection with these services.
The Company has an agreement with Western Innovations (WI), a company owned by a
Director of the Company, under which agreement, WI will procure and store all
components required for assembly, will assemble the product, and package the
units for shipment. WI will also provide shipping and mailing services for the
product. WI will purchase on behalf of the Company all components for the
product up to $1,000,00, to establish an inventory of product for sale. For
these services, the Company will pay actual costs of components plus a fixed fee
of $3.50 per unit for general and administrative services, and 15% of product
cost for overhead and profit.
F-9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The Company has experienced $17,027 in expenses for the six month period in 2000
compared to $17,253 in 1999. The Company had revenues of $284 in 2000 compared
to $25 in 1999. The Company had a loss of $16,743 in 2000 compared to a loss of
$17,228 in 1999. The Company will continue to have losses until adequate income
can be achieved to meet expenses. While the Company is seeking capital sources
for investment, there is no assurance that sources can be found.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a cash balance at the end of the period of $262. The current
liabilities exceed current assets by $2,425. The Company will be forced to
either borrow or make private placements of stock in order to fund operations.
No assurance exists as to the ability to achieve loans or make private
placements of stock.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULT UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Reports on Form 8-K were made for the period for which
this report is filed. None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 15, 2000
MIND2MARKET, INC.
/s/ CHARLES R. POWELL
-----------------------------
CHARLES R. POWELL, President
