<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
Pursuant to section 13 or 15(d) of the
Securities Exchange Act
THINWEB.COM CORPORATION
(Exact name as Specified in its Charter)
<TABLE>
<S> <C> <C>
Delaware 000-25419 522102438
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
</TABLE>
Suite 101, Phase 3, 6 Antares Drive
Ottawa Canada K2E 8A9
(Address of principal executive offices)
613/225-8446
Registrant's telephone number
WARWICK ACQUISITION CORPORATION
1504 R Street, N.W.
Washington, D.C. 20009
Former name and former address
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Actduring the last 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
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date.
Class Outstanding at June 30, 1999
Common Stock, par value $0.0001 17,066,344
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
thinWEB.com Corporation
(A Development Stage Company)
Consolidated Interim Balance Sheet
(Unaudited) As of June 30, 1999
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
June 30 December 31
1999 1998
$ $
<S> <C> <C>
Assets
Current assets
Cash (note 3) 88,585 31,566
Investment tax credits receivable (note 4) 68,527 65,908
Other 31,838 5,784
---------------------------------------
188,950 103,258
Capital assets (notes 4 and 5) 64,853 10,895
Deferred charges 1,981,268 -
Trademarks 679 555
---------------------------------------
2,235,750 114,708
---------------------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 170,344 21,470
Accrued salaries 16,382 89,657
Current portion of long-term debt - 2,957
Loans payable (note 6) 193,614 65,338
Amounts due to shareholders 33,918 21,484
---------------------------------------
414,258 200,906
Long-term debt - 13,754
---------------------------------------
414,258 214,660
---------------------------------------
Commitments (note 7)
Shareholders' Equity
Capital stock (note 8) 1,857 1
Additional paid in capital 7,933,252 -
Share subscriptions receivable (32,896) -
Deferred compensation (375,318) -
Warrants 15,000 -
Foreign currency translation adjustments 73,396 343
Deficit accumulated during the development stage (5,793,799) (100,296)
---------------------------------------
1,821,492 (99,952)
---------------------------------------
2,235,750 114,708
---------------------------------------
</TABLE>
2
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thinWEB.com Corporation
(A Development Stage Company)
Consolidated Interim Statement of Operations and Deficit
(Unaudited)
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Cumulative Three- Period from
April 22, months April 22, Six-months
1998 to ended 1998 to ended
June 30, June 30, June 30, June 30,
1999 1999 1998 1999
$ $ $ $
<S> <C> <C> <C> <C>
Revenue 2,577 1,168 - 1,421
--------------------------------------------------------------------
Expenses
Research and development (note 4) 3,113,117 633,692 12,238 3,069,229
Selling, general and administration 2,532,438 1,134,664 5,130 2,485,564
Interest 141,892 124,325 - 132,870
Amortization 8,929 5,640 102 7,261
--------------------------------------------------------------------
5,796,376 1,898,321 17,470 5,694,924
--------------------------------------------------------------------
Loss for the period (5,793,799) (1,897,153) (17,470) (5,693,503)
Deficit accumulated during the development
stage - Beginning of period - (3,896,646) - (100,296)
--------------------------------------------------------------------
Deficit accumulated during the development
stage - End of period (5,793,799) (5,793,799) (17,470) (5,793,799)
--------------------------------------------------------------------
Loss per share (0.12) (17,470) (0.66)
------------------------------------------------
Weighted average number of shares outstanding
during the period 16,047,904 1 8,562,620
------------------------------------------------
</TABLE>
3
<PAGE>
thinWEB.com Corporation
(A Development Stage Company)
Consolidated Interim Statement of Cash Flows
(Unaudited)
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
<TABLE>
<CAPTION>
Cumulative Period from
April 22, Six months April 22,
1998 to ended 1998 to
June 30, June 30, June 30,
1999 1999 1998
$ $ $
<S> <C> <C> <C>
Cash provided by (used in)
Operating activities
Loss for the period (5,793,799) (5,693,503) (17,470)
Items not affecting cash
Amortization 8,929 7,261 102
Shares issued for employee compensation 4,849,497 4,849,497 -
Shares issued for financing costs 123,915 123,915 -
Shares and warrants issued for services 88,956 88,956 -
Net change in non-cash working capital balances related to operations
Increase in investment tax credits receivable (66,918) - (17,267)
Increase in other current assets (31,348) (25,475) (1,123)
Increase in accounts payable and accrued liabilities 167,821 146,022 864
Increase (decrease) in accrued salaries 15,230 (75,801) 26,751
-----------------------------------------------
(637,717) (579,128) (8,143)
-----------------------------------------------
Financing activities
Proceeds of long-term debt 17,611 - 17,611
Repayments of long-term debt (17,785) (17,140) -
Proceeds of loans payable 257,339 191,000 -
Repayments of loans payable (67,017) (67,017) -
Issue of common shares 575,539 575,538 1
Proceeds from shareholder loans 32,548 11,920 21,446
-----------------------------------------------
798,235 694,301 39,058
-----------------------------------------------
Investing activities
Acquisition of capital assets (72,793) (60,062) -
Acquisition of trademarks (665) (101) -
-----------------------------------------------
(73,458) (60,163) -
-----------------------------------------------
Effect of exchange rate changes in cash 1,525 2,009 (407)
-----------------------------------------------
Increase in cash during the period 88,585 57,019 30,508
Cash - Beginning of period - 31,566 -
-----------------------------------------------
Cash - End of period 88,585 88,585 30,508
===============================================
</TABLE>
4
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thinWEB.com Corporation
Consolidated Interim Statement of Changes of Shareholders' Equity
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Common shares Preferred shares Additional Less
------------------------ ---------------------------- paid in subscriptions
Amount Amount capital receivable
Number $ Number $ $ $
<S> <C> <C> <C> <C> <C> <C>
Shares issued for subscriptions 900,000 90 - - 32,579 (32,668)
Change in foreign currency
translation account - - - - - -
Loss for the period - - - - - -
------------------------------------------------------------------------------------------
Balance - December 31, 1998 900,000 90 - - 32,579 (32,668)
Shares issued for cash 1,505,000 151 - - 585,738 -
Shares issued for compensation 10,401,344 1,040 - - 5,163,150 (51)
Shares issued for financing
costs 4,110,000 411 - - 2,076,800 (27)
Shares issued for a corporate
reorganization 150,000 15 - - 74,985 -
Warrants issued for a corporate
reorganization - - - - - -
Convertible shares issued for a
financing arrangement - - 1,500,000 150 - (150)
Change in foreign currency
translation account - - - - - -
Loss for the period - - - - - -
------------------------------------------------------------------------------------------
Balance - June 30, 1999 17,066,344 1,707 1,500,000 150 7,933,252 (32,896)
==========================================================================================
<CAPTION>
Deficit
Less accumulated Foreign
deferred Warrants during the currency Total Share-
compen- --------------------- Development translation holders
sation Amounts Stage adjustments Equity
$ Number $ $ $ $
<S> <C> <C> <C> <C> <C> <C>
Shares issued for subscriptions - - - - - 1
Change in foreign currency
translation account - - - - 343 343
Loss for the period - - - (100,296) - (100,296)
--------------------------------------------------------------------------------------
Balance - December 31, 1998 - - - (100,296) 343 (99,952)
Shares issued for cash - - - - - 585,889
Shares issued for compensation (375,318) - - - - 4,788,821
Shares issued for financing
costs - - - - - 2,077,184
Shares issued for a corporate
reorganization - - - - - 75,000
Warrants issued for a corporate
reorganization - 50,000 15,000 - - 15,000
Convertible shares issued for a
financing arrangement - - - - - -
Change in foreign currency
translation account - - - - 73,053 73,053
Loss for the period - - - (5,693,503) - (5,693,503)
--------------------------------------------------------------------------------------
Balance - June 30, 1999 (375,318) 50,000 15,000 (5,793,799) 73,396 1,821,492
======================================================================================
<CAPTION>
Compre-
hensive
loss
$
<S> <C>
Shares issued for subscriptions -
Change in foreign currency
translation account 343
Loss for the period (100,296)
-----------
Balance - December 31, 1998 (99,953)
===========
Shares issued for cash -
Shares issued for compensation -
Shares issued for financing
costs -
Shares issued for a corporate
reorganization -
Warrants issued for a corporate
reorganization -
Convertible shares issued for a
financing arrangement -
Change in foreign currency
translation account 73,053
Loss for the period (5,693,503)
-----------
Balance - June 30, 1999 (5,620,450)
===========
</TABLE>
5
<PAGE>
thinWEB.com Corporation
(A Development Stage Company)
Notes to Consolidated Interim Financial Statements
(Unaudited)
June 30, 1999
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
1 Nature of operations and basis of presentation
On May 27, 1999, Thinweb.com Inc. (formerly 3028184 Nova Scotia Limited), a
wholly owned subsidiary of thinWEB.com Corporation (formerly Warwick
Acquisition Corporation), acquired all the outstanding common shares of
ThinWeb Software Incorporated in exchange for 16,916,344 Class "A"
exchangeable, non-voting, participating common shares of Thinweb.com Inc.
Each of these exchangeable shares are exchangeable into common shares of
thinWEB.com Corporation for no additional consideration on or before May
26, 2024. Under the provisions of various agreements between thinWEB.com
Corporation and Thinweb.com Inc., the holders of the exchangeable shares
are entitled to voting, dividend and liquidation rights as if the holder
held the equivalent number of common shares in thin WEB.com Corporation.
thinWEB.com Corporation has issued 16,916,344 common shares to be held in
trust to be issued to the holders of the exchangeable shares upon the
exchange.
Prior to May 27, 1998, Warwick Acquisition Corporation did not have any
operations and had 5,000,000 common shares issued and outstanding. As part
of the transaction, Warwick Acquisition Corporation redeemed and retired
4,850,000 common shares and issued 50,000 warrants for no additional
consideration. The warrants which expire in five years entitle the holder
to acquire up to 50,000 common shares of thinWEB.com Corporation for $1
per share. For accounting purposes, the acquisition has been treated as an
issuance of 150,000 shares and 50,000 warrants by ThinWeb Software
Incorporated for the services related to the corporate reorganization.
These shares and warrants have been attributed a value of $90,000 based on
the value of services received. The historical financial statements prior
to May 27, 1999 are those of ThinWeb Software Incorporated. ThinWeb
Software Incorporated was incorporated on April 22, 1998. Pro forma
financial information giving effect to the acquisition has not been
provided as the transaction is not a business combination.
The company is primarily a software research and development company that
has not yet commenced commercial operations. All of the company's
operations are in Canada. These statements are prepared on a going-concern
basis. There is substantial doubt as to whether or not the company will be
able to continue as a going concern. The ability of the company to continue
as a going-concern is dependent upon it obtaining the necessary financing
to commercialize and market its products and upon future profitable
operations. Like other companies at this stage of development, the company
is subject to numerous risks, including the uncertainty of its chosen
market, its ability to develop its markets and other risks. The company
plans to raise funds through a public offering of its securities; however,
there are no commitments for the public offering and the public offering
has not yet been approved by the Securities and Exchange Commission. There
can be no assurance that the company will be successful in raising the
required capital to finance operations.
6
<PAGE>
thinWEB.com Corporation
(A Development Stage Company)
Notes to Consolidated Interim Financial Statements
(Unaudited)
June 30, 1999
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
2 Accounting policies
a) Financial statement presentation
These consolidated financial statements have been prepared in
accordance with U.S. generally accepted accounting principles and
include the accounts of thinWEB.com Corporation and its wholly owned
subsidiaries.
In the opinion of management, the accompanying financial statements
include all adjustments (consisting of normal recurring items)
considered necessary for a fair presentation of the results of
operations for the interim periods covered and of the financial
condition of the company at the date of interim balance sheet. The
results for the interim periods are not necessarily indicative of the
results for the entire year.
b) Foreign currency translation
The company's currency of measurement is Canadian dollars; however,
the reporting currency is U.S. dollars. The assets and liabilities of
the company are translated into U.S. dollars at period-end exchange
rates, and income and expense items are translated at rates
approximating the average rates of exchange for the period. Gains and
losses from the translation are excluded from the statement of
operations and deficit and are accumulated in the cumulative foreign
currency translation adjustment account.
c) Capital assets and amortization
Amortization of the following capital assets is calculated using the
declining balance method at annual rates which will amortize their
cost over their estimated useful lives. These rates are:
<TABLE>
<S> <C>
Computer hardware 30%
Computer software 100%
Office furniture and equipment 20%
</TABLE>
d) Deferred charges
Deferred charges represent costs of financing and are being charged to
expense over the estimated term of the financing arrangement.
e) Income taxes
The company uses the liability method of accounting for income taxes.
Under this method, current income taxes are recognized for the
estimated income taxes payable for the current year. Future income tax
assets and liabilities are recognized for temporary differences
between the tax and accounting bases of assets and liabilities as well
as for the benefit of losses available to be carried forward to future
years for tax purposes. Future income tax assets are evaluated and if
realization is not considered "more likely than not", a valuation
allowance is provided.
7
<PAGE>
thinWEB.com Corporation
(A Development Stage Company)
Notes to Consolidated Interim Financial Statements
(Unaudited)
June 30, 1999
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
Investment tax credits relating to scientific research and experimental
development expenditures are recorded in the accounts in the fiscal period
the qualifying expenditures are incurred provided there is reasonable
assurance that the tax credit will be realized. Investment tax credits in
connection with research and development activities are accounted for
using the cost reduction method which recognizes the credits as a
reduction of the cost of the related assets or expenditures.
f) Revenue recognition
The company recognizes revenue at the time of delivery of its licensed
software products to customers, provided collectibility of proceeds from
the sale of licensed software is reasonably assured. Currently, all sales
are made from the company's web site. An electronic order form is filled
out on-line by the customer; payment for the order is then received when
the customer provides a credit card number; the product is then downloaded
by the customer. The product is not returnable; therefore, no provision
is required for sales returns.
g) Research and development
Research and development costs are charged to expense when incurred,
unless, in the opinion of management, the technological feasibility of the
product has been established in accordance with Statement of Financial
Accounting Standards (SFAS) 86, in which case the costs are capitalized.
Capitalization of computer software costs ceases when the product is
available for general release. As of June 30, 1999, no computer software
costs have been capitalized.
h) Loss per common share
Loss per common share is calculated using the weighted number of common
shares issued and outstanding during each period. Fully diluted earnings
per share are not presented as the exercise of warrants and options would
be antidilutive.
i) Use of estimates
The presentation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent liabilities at the date of the financial
statements and the reported amounts of revenues and expenditures during
the reported period. Actual results could differ from those reported.
j) Financial instruments
The fair value of the company's cash, subscriptions receivable, investment
tax credits receivable, other current assets, accounts payable and accrued
liabilities, accrued salaries, long-term debt, loans payable and amounts
due to shareholders approximate their carrying values.
8
<PAGE>
thinWEB.com Corporation
(A Development Stage Company)
Notes to Consolidated Interim Financial Statements
(Unaudited)
June 30, 1999
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
k) Recent pronouncements
In 1998, SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities" was issued and is effective for fiscal years commencing after
June 15, 2000. The company will comply with the requirements of SFAS 133
in fiscal year 2000 and does not expect the adoption of SFAS 133 will be
material to the company's results of operations.
In 1998, the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position (SOP) 98-5, "Reporting on the Costs of Start-
up Activities". SOP 98-5 is effective in fiscal years beginning after
December 15, 1998 with earlier adoption permitted. SOP 98-5 requires costs
of start-up activities and organization costs to be expenses as incurred.
The company has complied with the requirements of SOP 98-5.
3 Restrictions on cash
Included in cash is $88,217 held in a trust account by the company's
solicitors, which requires the approval of two shareholders in order to be
released. The cash is to be used to fund certain expenditures within the
next year.
4 Investment tax credits receivable
For small, closely held Canadian corporations, a credit of approximately 40%
of eligible scientific research and experimental development expenditures is
available, refundable in cash if no taxes are owed. For all other Canadian
corporations, the credit is reduced to approximately 20% on a non-refundable
basis, available only against taxes otherwise payable. Eligible scientific
research and experimental development expenditures include direct current and
capital costs and an allowance for overhead in the amount of 65% of specified
salaries and wages.
During the year ended December 31, 1998, investment tax credits in the amount
of $63,862 have been applied to reduce research and development expenditures
and $3,056 have been credited to the cost of capital assets. During the six
months ended June 30, 1998, investment tax credits in the amount of $17,039
have been applied to reduce research and development expenditures.
9
<PAGE>
thinWEB.com Corporation
(A Development Stage Company)
Notes to Consolidated Interim Financial Statements
(Unaudited)
June 30, 1999
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
5 Capital assets
<TABLE>
<CAPTION>
June 30 December 31
1999 1998
------------------------------------------- ---------------
Accumulated
Cost amortization Net Net
$ $ $ $
<S> <C> <C> <C> <C>
Computer hardware 35,529 4,313 31,216 8,705
Computer software 6,894 2,719 4,175 972
Office furniture and equipment 31,228 1,766 29,462 1,218
--------------------------------------------------------------
73,651 8,798 64,853 10,895
--------------------------------------------------------------
</TABLE>
6 Loans payable
<TABLE>
<CAPTION>
June 30 December 31
1999 1998
$ $
<S> <C> <C>
Demand loan, bearing interest at prime, plus 2.5% 50,951 -
Loan payable, authorized amount $255,000, without interest or fixed
terms of repayment ("Credit Facility A") 101,902 -
Loan payable, authorized amount $652,000, bearing interest at the
rate of 12%, without fixed terms of repayment ("Credit Facility B") 40,761 -
Loan repaid during the period ended June 30, 1999 - 65,338
----------------------------------------
193,614 65,338
----------------------------------------
</TABLE>
The lenders may, at their sole option, elect to convert all, or any portion
of the outstanding amount, including interest, of Credit Facility B, into
securities of the company on the same terms and conditions as such securities
are issued pursuant to a major private placement, public offering or other
significant financing event (the "Significant Financing Event"), if any.
Credit Facility A and B become due and payable immediately upon completion of
a Significant Financing Event, subject to the option noted above.
The lenders of Credit Facility B shall have issued to them, for no additional
consideration, share purchase warrants of the company equal in number to the
amount of the facility which has been drawn down, divided by the price of the
company's shares issued pursuant to a Significant Financing Event. These
warrants will be exercisable on the basis of one warrant for one common
share, at a strike price equal to the price at which the
10
<PAGE>
thinWEB.com Corporation
(A Development Stage Company)
Notes to Consolidated Interim Financial Statements
(Unaudited)
June 30, 1999
- --------------------------------------------------------------------------------
(expressed in U.S. dollars)
company shares are issued pursuant to a Significant Financing Event, for a
period of one year from the closing of such event.
In conjunction with the commitment to provide financing, the company issued
4,000,000 shares to the lender of Credit Facility A and B. For accounting
purposes, the issuance of these shares have been treated as financing costs
and have been attributed a value of $2,021,821.
7 Commitments
The minimum annual payments under long-term agreements for premises and
services are as follows:
<TABLE>
<CAPTION>
Premises Services Total
$ $ $
<S> <C> <C> <C>
Year ending June 30, 2000 28,271 14,200 42,471
2001 25,915 - 25,915
</TABLE>
8 Capital stock
Authorized
100,000,000 common shares, of the par value of $0.0001 each
20,000,000 preferred shares, of the par value of $0.0001 each
The preferred shares issued at June 30, 1999 are convertible into common
shares of the company on a share-for-share basis at any time prior to
November 1, 1999, provided the holders were instrumental in arranging
financing for the company of not less than $5,000,000. Starting November 1,
1999, the company may redeem any of the outstanding preferred shares at a
redemption price of $0.0001 per share.
Subscriptions receivable are presented as a reduction from capital stock
unless paid subsequent to the period end.
11
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS:
The registrant is a development stage company for the three and six month
periods ended June 30, 1999. Accordingly, there were insignificant revenues for
the periods covered by the financial statements. During the periods covered the
registrant incurred substantial administrative and development costs. The
primary activity of the registrant was the design, development and testing of
code for the registrant's core technology and for its first two e-commerce
software products, ThinAccess and WebCrumbs. During the three month period ended
June 30, 1999, the registrant finalized its beta testing of ThinAccess and
continued beta testing of WebCrumbs. ThinAccess was launched into the market on
August 9, 1999, and WebCrumbs is expected to be released in the fourth quarter.
During the three month period ended June 30, 1999, the registrant hired a new
President and CEO who was previously a Vice-President (Sales) of a NASDAQ listed
technology company, established its head office in Ottawa, and began hiring
industry experienced sales and marketing staff to begin the process of
commercializing the registrant's technologies and products in preparation for
the market launch noted above.
During the comparable 1998 fiscal period the registrant's funding was primarily
in the form of advances from the principals and "sweat equity" from the
development team. At the end of the first quarter of 1999 the registrant
attracted capital support from private investors who committed $502,500 USD in
equity to begin the process of commercializing the registrant's technologies and
products and attracting the necessary senior personnel. The registrant's
operations in future periods will be dependent upon the availability of adequate
liquid funds for capital expenditures and to meet income deficits associated
with the operational roll-out of its products.
During the three month period ended June 30, 1999 the registrant made the
following financial arrangements:
First, it entered into a loan agreement with E-Capital Management Limited on
behalf of several foreign shareholders who committed, in consideration of
subscribing for 4,000,000 shares for nominal consideration, to provide a two
part credit facility for up to $1,335,000 CDN in bridge financing to the
registrant. One part is an interest free facility of $375,000 CDN to be repaid
from the proceeds of the first significant financing obtained by the registrant.
The other part is an interest bearing facility of up to $960,000 CDN, with
interest at 12% per annum, to be repaid from the proceeds of the first
significant financing obtained by the registrant. At the option of E-Capital all
or any portion of the outstanding amount of the interest bearing credit facility
may be
12
<PAGE>
converted into securities of the registrant at the time of and on the same terms
and conditions as such securities are issued pursuant to a significant financing
event. E-Capital will be issued, for no additional consideration, share
purchase warrants equal to the amount drawn down under the interest bearing
facility divided by the price of the registrant's shares issued pursuant to a
significant financing event, said warrants to be exercisable on the basis of one
warrant for one common share at a strike price equal to the price at which the
registrant's shares are issued pursuant to the significant financing event, good
for one year from the closing date of such transaction.
Second, a $75,000 CDN loan was provided by the Royal Bank of Canada. The loan
bears an interest at the Royal Bank's prime rate for Canadian dollar commercial
loans plus 2.5% per annum and is secured by an assignment of the registrant's
Scientific Research and Experimental Development Expenditure tax credit
receivable from the Government of Canada.
It is estimated that the current financing arrangements will fund the
registrant's operations to the end of October, 1999.
The registrant entered into a corporate reorganization agreement with ThinWeb
Software Incorporated effective May 27, 1999, by which ThinWeb Software
Incorporated became its wholly owned subsidiary. The registrant recently filed a
Registration Statement with the Securities and Exchange Commission for the sale
of 4,000,000 of its common shares to the public and intends to obtain trading
approval for its common stock on the NASD OTC Bulletin Board. The registrant
does not have sufficient capital resources to complete the process of launching
its products beyond October and does not expect to be profitable for at least
one year. The registrant is therefore dependent on raising additional capital
through the public markets to fund its ongoing operations or else finding other
funding means.
There can be no assurance that the registrant will become a public issuer or
that it will be able to access the needed capital resources within the time
frames and on the terms required for the registrant to continue its operations.
The registrant's products, while promising, have just been introduced to the
market. There can be no assurance that these products will win acceptance among
prospective purchasers. The market for e-commerce solutions is highly
competitive; products of a similar nature sold by other software companies may
prove to be superior in performance, better marketed or less expensive,
resulting in marketing failure for the registrant.
The current enthusiasm for the Internet and e-commerce among businesses,
consumers and investors may not continue and the demand for e-commerce software
products could be less than anticipated, resulting in a significant set back to
the registrant's marketing and financing initiatives.
Both the registrant and its wholly owned operating subsidiary, ThinWeb Software
Incorporated, were incorporated during the comparable three month period of
fiscal 1998 and had either no or minimal operations during that period.
Therefore, no meaningful comparison can be made for the operating results of the
registrant between the two subject periods, nor between the first six months of
13
<PAGE>
fiscal 1998 and the first six months of fiscal 1999.
PART II OTHER INFORMATION
Items 1 through 5.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None.
(b) Reports on Form 8-K
Form 8-K filed May 27, 1999 as file no. 000-25419.
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.
THINWEB.COM CORPORATION
By: /s/ Gary T. Hannah
Chief Executive Officer
By: /s/ George R. Fraser
Chief Financial Officer
By: /s/ C. James Enman
Corporate Secretary
Dated August 20, 1999
14
