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U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter ended December 31, 1999
Commission file no. 0-25359
C Me Run Corp.
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(Name of Small Business Issuer in its Charter)
Delaware 65-0877745
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5501 Lakeview Drive, Kirkland, WA 98033
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (425) 889-0111
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.001 par value per share
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(Title of class)
Indicate by 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
As of December 31, 1999, there were twenty-nine (29) holders of record
of the Company's common stock and 1,400,000 shares of voting stock of the
registrant issued and outstanding.
THE PURPOSE OF THIS AMENDMENT TO REGISTRANT'S QUARTERLY REPORT ON
FORM-10QSB IS TO AMEND CERTAIN DISCLOSURES IN ITEM 2.
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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
The following discussion should be read in conjunction with the Condensed
Financial Statements and Notes thereto appearing elsewhere in this report.
Overview
The Company was organized on March 16, 1995, under the laws of the State of
Florida, having the stated purpose of engaging in any lawful activities. The
Company was formed with the contemplated purpose to sell chocolate malts,
flavoring and related products. The business concept and plan was based upon
information obtained by the incorporator several years before while working for
an unrelated company with the same concept and business plan. The incorporator
and sole shareholder was unable to obtain the cooperation and assistance of
workers and investors to implement the proposed plan. The primary area of sales
was to be in Florida, but was never brought to the development stage. After
development of a business plan and efforts to develop the business failed, all
efforts were abandoned in 1996. At that time, the Company was unable to obtain
the necessary supply contracts for its product line, was unable to obtain the
necessary financing, therefore was unable to operate. Since its inception, the
Company has conducted minimal business operations except for organizational and
capital raising activities. The Company has not realized any revenues since its
inception due to the fact that its former executive, Mr. Dervaes had been
primarily engaged in organizational and promotional activities on behalf of the
Company. As a result, from inception through December 31, 1999, the Company had
$0.00 revenue. Total Company operations and operating expenses as of December
31, 1999 were $33,500.
The Company never engaged in an active trade or business throughout the
period from 1996 until just recently. The Company charter was suspended
(subject to reinstatement) by the State of Florida in 1996 for inactivity and
failure to pay annual fees and costs. Its active status was reinstated on
December 1, 1998, upon payment of all past due fees and costs. On December 1,
1998, the Company also determined it should become active in seeking potential
operating businesses and business opportunities with the intent to acquire or
merge with such businesses. The Company then began to consider and investigate
potential business opportunities. Its principal business purpose was to locate
and consummate a merger or acquisition with a private entity. The Company was
considered a development stage company and, due to its status as a "shell"
corporation, management planned to investigate, research and, if justified,
potentially acquire or merge with one or more businesses or business
opportunities.
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On January 5, 2000, the Company completed its reincorporation to Delaware
by means of a merger with its wholly owned subsidiary, Fundae Acquisition
Corporation with Fundae Acquisition Corporation being the surviving entity. In
the merger, holders of cmerun, inc. common stock received five shares of common
stock of Fundae Acquisition Corporation for each share of the Company's common
stock they held on January 5, 2000. Any resulting fractional Fundae Acquisition
Corporation common stock interests were rounded up to the next highest number of
whole shares.
Employees
As of December 31, 1999, the Company did not have any employees and had
no plans for retaining employees until such time as the Company successfully
acquired or merged with an operating business.
Industry Segments
No information is presented regarding industry segments. As of December
31, 1999, the Company is presently a development stage company.
Financial Condition, Capital Resources and Liquidity
At September 30, 1999, the Company had assets totaling $62.00 and an
accumulated deficit of ($33,438.00) attributable to accrued legal expenses,
organization expenses and professional fees. Since the Company's inception, it
has received $20,000.00 in cash contributed as consideration for the issuance
of shares of Common Stock.
As of December 31, 1999, the Company had no assets and an accumulated
deficit of ($33,500) attributable to accrued legal expenses and professional
fees.
Net Operating Losses
The Company has net operating loss carry-forwards of $33,500.00 expiring
in 2019. The Company may not be able to utilize such carry-forwards as the
Company has no history of profitable operations.
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Subsequent Events
On December 2, 1999, C Me Run Corp., C Me Run (Alberta) Ltd. and CMERUN
Acquisition Corp. entered into an Acquisition Agreement whereby C Me Run Corp.,
directly or indirectly through its wholly owned subsidiary CMERUN Acquisition
Corp., would acquire all 2,650,000 common shares issued and outstanding of C Me
Run (Alberta) Ltd. and any outstanding options at the time of conversion.
On November 8, 1999 C Me Run Corp. sold 1,000 shares of Common Stock at a
price of $1.00.
On January 12, 2000, C Me Run Corp. sold 2,000,000 shares of Series A
Convertible Preferred Stock at a price of $.50 per share. In conjunction with
this sale, the Company issued a Warrant to purchase 1,000,000 shares of common
stock at a price of $1.00 per share.
On January 28, 2000, C Me Run Corp. sold 2,333,333 shares of Series B
Convertible Preferred Stock at a price of $3.00 per share. In conjunction with
this sale, the Company issued Warrants to purchase 1,800,000 shares of common
stock at a price of $2.50 per share.
Mergers
On January 31, 2000 an agreement and plan of merger was signed between
Fundae Acquisition Corporation, Fundae Merger Sub, Inc. and C Me Run Corp. C Me
Run Corp. merged with Fundae Merger Sub, Inc. and became a wholly owned
subsidiary of Fundae Acquisition Corporation. Subsequently, on the same date, C
Me Run Corp. merged with Fundae Acquisition Corporation, with C Me Run Corp.
being the surviving entity. As part of these transactions, all shareholders of C
Me Run Corp. exchanged each type of securities held in C Me Run Corp. for an
equivalent number of securities of the same type in Fundae Acquisition
Corporation. All shares of Fundae Merger Sub, Inc. were also exchanged on a one
for one basis for the shares of Fundae Acquisition Corporation. At the
completion of this transaction, the Company had 7,334,333 shares issued and
outstanding.
C Me Run Corp. is an emerging company in the Application Service Provision
("ASP") industry. C Me Run Corp. intends to enable the
consumer to access brand name software programs via the Internet in a very cost
effective manner by partnering with Internet Service Providers, Web Portals,
telecommunications companies and hardware manufactures.
Management Changes
The Company has made recent changes to its management team. Following is
certain background information on key members of C Me Run Corp.'s management
team.
Cameron Chell is Chairman and co-founder of C Me Run Corp. Mr. Chell was
previously Founder, Chairman and CEO of FutureLink Corp., one of the first ASPs,
and the Founding President of the ASP Industry Consortium. Mr. Chell's has
experience founding, developing and financing high-tech corporations. Mr. Chell
is also the founder, Chairman and CEO of Chell.com, a strategy laboratory
established to incubate companies based on new technologies, and is Chairman of
VC Advantage Fund, a $30 million investment fund focusing on the e-business
sector. Mr. Chell is also co-founder of JAWS Technologies Inc., a provider of
encryption software, where he served as vice president of technology. Prior to
this, Mr. Chell has been a principal in several businesses, and Mr. Chell placed
fourth in the Canadian Olympic Trials for the decathlon in 1992.
James S. Lovie is incoming Chief Executive Officer of C Me Run Corp. Mr. Lovie
is former President and CEO of Bell Distribution Inc. ("BDI"), a Canadian-based
integrated services retail organization in telecommunications for the Bell
Family of Products. At Bell, he provided management and strategic direction in
the creation and execution of the company's distribution and retail operations.
Prior to leaving BDI, Mr. Lovie was Senior Vice-President - Sales, Marketing and
Distribution for Bell Mobility and previously held the position of
Vice-President - Western Region. Earlier in his career, he was Vice President
of Integrated Customer Services at Xerox Canada.
Dave Myers is incoming President and Chief Operating Officer of C Me Run Corp.
Mr. Myers is joining the company from Compaq Computer Corporation, where he
directed and developed strategic relationships with leading North American ASPs.
His management experience includes the start-up of Ziff-Davis' Timesharing
Division and Digital Equipment's Internet Outsourcing Practice. While at
Deloitte Touche and Digital Equipment, Mr. Myers provided business process and
information technology strategy consulting to clients such as Mobil Oil, Melon
Bank, First Chicago,
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Baxter Healthcare and NASA. Mr. Myers holds Bachelors and Masters degrees in
Engineering and Business from Cornell University.
Warren Talbot is a co-founder, outgoing President and the incoming Vice
President - Business Development for C Me Run Corp. Mr. Talbot brings extensive
software pricing, licensing, and contract development experience to the
organization. Prior to joining C Me Run, Mr. Talbot worked for Microsoft Corp.,
where he developed the pricing and licensing strategy and program offering for
the ASP market. During his employment with Microsoft, Mr. Talbot worked closely
with leading ASPs to help them understand the market and their unique licensing
requirements. The Commercial Licensing Program was developed to meet the needs
of the ASP market for all Microsoft software. Prior to joining Microsoft, Mr.
Talbot worked for Software Spectrum, which is Microsoft's largest reseller of
software licenses. He holds a Bachelor of Business Administration from Texas
A&M University.
Colin Curwen is Vice President, Sales for C Me Run Corp. Mr. Curwen joins C Me
Run Corp. from FutureLink Corp., where he was one of the original employees.
Serving as FutureLink's Director of Sales and Director of Channel Sales,
Mr. Curwen assisted in the development of FutureLink's business-to-business
product, sales and service strategies. Prior to FutureLink, Mr. Curwen was the
Southern Alberta Education Sales Director for WestWorld Computers Ltd., an
Authorized Reseller and Education Sales Organization for Apple Computer Inc.,
and founder of Cool Shoes Consulting, a sales and marketing consultancy for the
hospitality and retail industry.
Blair Layton joins C Me Run Corp. as interim Vice President, Finance. Mr. Layton
is Chief Financial Officer of Chell.com and has also served six years as a
controller of one of Canada's largest private directional drilling companies.
Mr. Layton's Chartered Accountant experience also includes three years as
auditor for Price Waterhouse.
Risk Factors
Solvency of the Company. The Company has incurred significant losses. The
Company is subject to a lawsuit as described under "Legal Proceedings". The
Company may require additional financing in order to carry on its business.
There can be no assurance that such financing will be available or, if
available, will be upon terms satisfactory to the Company.
Dependence on Key Personnel. The success of the Company is highly dependent on
the efforts and abilities of its directors, officers and employees. The
unexpected loss or departure of any of the Company's key directors, officers or
employees could be detrimental to the future operations of the Company. The
success of the Company's business will depend, in part, upon its ability to
attract and retain qualified personnel, as they are needed. There can be no
assurance that The Company will be able to engage the services of such
personnel or retain its current personnel.
Dividends and Cash Flow. The Company has a limited history and currently does
not have any operating business. The Corporation has no present intention to
pay dividends to the holders of its Common Shares.
Risks Related to Possible Acquisitions. The Company may expand its operations
through the acquisition of additional businesses. There can be no assurance
that the Company will be able to identify, acquire or profitably manage
additional businesses or successfully integrate any acquired businesses into
the Company without substantial expenses, delays or other operational or
financial problems. Further, acquisitions may involve a number of special
risks or effects, including diversion of management's attention, failure to
retain key acquired personnel, unanticipated events or circumstances, legal
liabilities and amortization of acquired intangible assets and other one-time
or ongoing acquisition related expenses, some or all of which could have a
material adverse effect on the Company business, operating results and
financial condition. Client satisfaction or performance problems of a single
acquired firm could have a material adverse impact on the reputation of the
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Company as a whole. In addition, there can be no assurance that the acquired
businesses, if any, will achieve anticipated revenues and earnings. The failure
of the Company to arrange its acquisition strategy successfully could have a
material adverse effect upon the Company's business, operating results and
financial condition.
Limited Trading History of The Company Common Shares; Stock Price Volatility.
The market price of the Company's Common Shares could continue to fluctuate
substantially due to a variety of factors, including quarterly fluctuations in
results of operations, adverse circumstances affecting the introduction of
market acceptance of new products and services offered by the Company,
announcements of new products and services by competitors, changes in the
information technology environment, changes in earnings estimates by analysts,
changes in accounting principles, sales of the Company's Common Shares by
existing holders, loss of key personnel and other factors. The market price for
the Company's Common Shares may also be affected by the Company's ability to
meet analysts' expectations, and any failure to meet such expectations, even if
minor, could have a material adverse effect on the market price of the Company's
Common Shares. In addition, the stock market is subject to extreme price and
volume fluctuations. This volatility has had a significant effect on the market
prices of securities issued by many companies for reasons unrelated to the
operating performance of these companies. In the past, following periods of
volatility in the market price of a company's securities, securities class
action litigation has often been instituted against such a company. Any such
litigation instigated against the Company could result in substantial costs and
a diversion of management's attention and resources, which could have a material
adverse effect upon the Company's business, operating results and financial
condition.
Creditworthiness of Clients. The value of the Company's computer equipment,
software, and intellectual property thereto may depend on the credit and
financial stability of the Company's customers. The Company's projected income
would be adversely affected if a significant number of customers were unable to
meet their obligations to the Company or if the Company were unable to continue
to collect its accounts receivables. In the event of default by customers, the
Company may experience delays in enforcing its rights as a vendor and may incur
substantial costs in protecting its investment.
Start-Up Company. The business of the Company should be considered highly
speculative due to its present stage of development. The Company does not have
a history of earnings nor has it sufficiently diversified such that it can
mitigate the risks associated with its planned activities. The Company has
limited cash and other assets and a limited business history. Securityholders
must rely solely upon the ability, expertise, judgement, discretion, integrity
and good faith of the Company's management in all aspects of the development
and implementation of the Company's business strategy.
Speculative Nature of Computer Business. The acquisition and management of
computer services may result in a failure to produce income or revenue.
Moreover, the industry is subject to significant risk factors including changes
in general economic conditions, competition from other properties, the failure
of customers to meet their obligations and other operating costs.
Competition. The market for information technology services is very competitive
because of a large number of competitors and the rapidly changing environment.
Many of the competitors may have significantly greater financial, technical and
marketing resources and greater name recognition than C Me Run
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Corp. There can be no assurances that the Company will compete successfully
with its existing competitors or with any new competitors.
Tradename. While the Company is attempting to qualify, under a trademark, its
name throughout the U.S., significant issues may be present as to the ability to
widely use the name in connection with the products or services to be rendered
by the Company.
Rapid Technological Change; Dependence on New Solutions. The Company's success
will depend in part on its ability to develop information technology solutions
that keep pace with continuing changes in information technology, evolving
industry standards and changing client preferences. There can be no assurance
that the Company will be successful in adequately addressing these developments
on a timely basis or that, if these developments are addressed, the Company will
be successful in the marketplace. In addition, there can be no assurance that
products or technologies developed by others will not render the Company's
services uncompetitive or obsolete. The Company's failure to address these
developments could have a material adverse effect on the Company's business,
operating results and financial conditions.
Attraction and Retention of Employees. The Company's business involves the
delivery of professional services and is labor-intensive. The Company's success
depends in large part upon its ability to attract, develop, motivate and retain
highly skilled technical employees. Qualified technical employees are in great
demand and are likely to remain a limited resource for the foreseeable future.
There can be no assurance that the Company will be able to attract and retain
sufficient numbers of highly skilled technical employees in the future. The
Company has historically experienced turnover rates which it believes are
consistent with industry norms. An increase in this rate could have a material
adverse effect on the Company's business, operating results and financial
condition, including its ability to secure and complete engagements.
Dividends. Since incorporation, the Company has not paid any dividends on its
outstanding the Company's Common Shares and has no present intention to pay
dividends thereon.
Possible Volatility of Securities Prices. The Stock market has from time to
time experienced significant price and volume fluctuations that may be
unrelated to the operating performance of any particular company. The market
prices of the securities of many publicly-traded companies in the computer
industry have in the past been and can be expected in the future to be
especially volatile. Factors such as the Company's operating results,
announcements by the Company or its competitors concerning technological
innovations, new products or systems may have a significant impact on the
market price of the Company's securities.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things
as future capital expenditures (including the amount and nature thereof),
finding suitable merger or acquisition candidates, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements. These statements are based on certain assumptions and analyses
made by the Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances.
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However, whether actual results or developments will conform with the Company's
expectations and predictions is subject to a number of risks and uncertainties,
general economic market and business conditions; the business opportunities (or
lack thereof) that may be presented to and pursued by the Company; changes in
laws or regulation; and other factors, most of which are beyond the control of
the Company. Consequently, all of the forward-looking statements made in this
Form 10-QSB are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or
operations. The Company assumes no obligations to update any such
forward-looking statements.
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SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
C ME RUN CORP.
Date: March 20, 2000 BY: /s/ David Myers
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David Myers
President
