UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 000-27097
GLOBALNETCARE, INC.
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(Exact name of registrant as specified in its charter)
FLORIDA (Pending)
- ------- --------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Suite 950 - 2000 McGill College, Montreal, Quebec, Canada
- -----------------------------------------------------------------
H3A 3A3
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(Address of principal executive offices)
(Zip Code)
(877) 288 4909
--------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
State the number of shares outstanding of each of the Registrant's classes of
common equity, as of the latest practicable date:
As of November 30, 1999, there were 13,858,129 shares of the Registrant's
Common Shares issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1: Financial Statements
DISCLOSURE
TO: THE SHAREHOLDERS OF
GLOBALNETCARE, INC.
It is the opinion of management that the interim financial statements ended
September 30, 1999, include all adjustments necessary in order to make the
financial statements not misleading.
Montreal, Quebec /s/ Nick Pedafronimos
- -------------------- --------------------------
December 2, 1999 Director of the Company
<PAGE>
GLOBALNETCARE, INC.
MONTREAL, QUEBEC
QUARTERLY FINANCIAL REPORT
--------------------------
(CONSOLIDATED FINANCIAL STATEMENTS)
(UNAUDITED - SEE DISCLOSURE)
AS AT SEPTEMBER 30, 1999
(WITH COMPARATIVE FIGURES FOR SEPTEMBER 30, 1998)
<PAGE>
TABLE OF CONTENTS
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PAGE
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DISCLOSURE 1
BALANCE SHEET 2
STATEMENT OF OPERATIONS AND DEFICIT 3
STATEMENT OF CHANGES IN FINANCIAL POSITION 4
NOTES TO THE FINANCIAL STATEMENTS 5 - 7
<PAGE>
<TABLE>
<CAPTION>
GLOBALNETCARE, INC.
BALANCE SHEET
-------------
(UNAUDITED - SEE DISCLOSURE)
AS AT SEPTEMBER 30, 1999
(WITH COMPARATIVE FIGURES FOR SEPTEMBER 30, 1998)
ASSETS
- --------------------------------------------------------------
SEPTEMBER SEPTEMBER
1999 1998
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,528 $ -
Sales Taxes Receivable . . . . . . . . . . . . . . . . . . 53,885 -
Prepaid Rent . . . . . . . . . . . . . . . . . . . . . . . - -
Deposit on Computer Equipment. . . . . . . . . . . . . . . 263 -
----------- -----------
83,676 -
----------- -----------
CAPITAL ASSETS, At Cost Less Accumulated Amortization (Note 3) 166,688 -
----------- -----------
$ 250,364 $ -
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- --------------------------------------------------------------
CURRENT LIABILITIES
Accounts Payable . . . . . . . . . . . . . . . . . . . . . $ 104,161 $ 2,332
----------- -----------
ADVANCES FROM A DIRECTOR, Without Interest . . . . . . . . . . 242,554 -
----------- -----------
SHAREHOLDERS' EQUITY
Capital Stock (Note 4) . . . . . . . . . . . . . . . . . . 864,507 1,000
Accumulated Foreign Currency Translation Adjustment. . . . 19,197 -
Deficit. . . . . . . . . . . . . . . . . . . . . . . . . . (980,055) (3,332)
----------- -----------
(96,351) (2,332)
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</TABLE>
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<TABLE>
<CAPTION>
GLOBALNETCARE, INC
STATEMENT OF OPERATIONS AND DEFICIT
-----------------------------------
(UNAUDITED - SEE DISCLOSURE)
FOR THE NINE (9) MONTHS ENDED SEPTEMBER 30, 1999
(WITH COMPARATIVE FIGURES FOR SEPTEMBER 30, 1998)
(9 MONTHS) (9 MONTHS)
SEPTEMBER 1999 SEPTEMBER 1998
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<S> <C> <C>
INTEREST INCOME. . . . . . . . . . . . . $ 608 $ -
---------------- ------
OPERATING EXPENSES
Commissions, Contracts, and Wages. . 615,088 2,332
Rent and Parking . . . . . . . . . . 77,972 -
Communications . . . . . . . . . . . 29,951 -
Professional Fees. . . . . . . . . . 70,001 -
Registration Fees. . . . . . . . . . 1,374 -
Advertising and Promotion. . . . . . 26,268 -
Office Expenses. . . . . . . . . . . 22,652 -
Maintenance and Repairs. . . . . . . 733 -
Subscriptions and Memberships. . . . 3,275 -
Travel Expenses. . . . . . . . . . . 28,796 -
Taxes and Licenses . . . . . . . . . 12,555 -
Amortization . . . . . . . . . . . . 27,741 -
---------------- ------
916,406 2,332
FINANCIAL EXPENSES
Interest and Bank Charges. . . . . . 1,792 -
---------------- ------
918,198 2,332
---------------- ------
NET INCOME (LOSS). . . . . . . . . . . . (917,590) 2,332
INCOME (DEFICIT), Beginning of the Year. (62,465) 1,000
---------------- ------
INCOME (DEFICIT), End of the Year. . . . $ (980,055) $3,332
================ ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GLOBALNETCARE, INC.
STATEMENT OF CASH FLOWS
-----------------------
(UNAUDITED -- DISCLOSURE)
FOR THE NINE (9) MONTHS ENDED SEPTEMBER 30, 1999
(WITH COMPARATIVE FIGURES FOR SEPTEMBER 30, 1998)
(9 MONTHS) (9 MONTHS)
SEPTEMBER 1999 SEPTEMBER 1998
------------------------------------
<S> <C> <C>
CASH FROM OPERATING ACTIVITIES
Net Income (Loss) $(986,879) $(2,332)
Add: Amortization 40,959 -
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(945,920) (2,332)
Net Change In Non-Cash Items 290,235 2,332
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(655,685) -
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CASH FROM INVESTING ACTIVITIES
Purchase of Equipment and Furniture (197,491) -
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CASH FROM FINANCING ACTIVITIES
Issuance of Capital 863,507 -
Accumulated Foreign Currency 19,197 -
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882,704 -
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INCREASE (DECREASE) IN CASH 29,528 -
CASH, Beginning of the Period - -
---------- --------
CASH, End of the Period $29,528 $-
========== ========
</TABLE>
<PAGE>
GLOBALNETCARE, INC.
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
(UNAUDITED - SEE DISCLOSURE)
FOR THE NINE (9) MONTHS ENDED SEPTEMBER 30, 1999
(WITH COMPARATIVE FIGURES FOR SEPTEMBER 30, 1998)
1. HISTORY AND ORGANIZATION
--------------------------
The Company was organized on October 30, 1980, under the laws of the State
of Florida as C.N.W. Corp. On February 1, 1981, the Corporation issued 1,000
shares of its $1 par value common stock for services of $1,000.
On July 21, 1998, the State of Florida approved the Company's restated Articles
of Incorporation, which increased its capitalization from 1,000 common shares to
50,000,000 common shares. The par value was changed from $1 to $0.001.
On July 21, 1998, the Company changed its name to C.N.W. of Orlando Inc. and on
December 28, 1998, changed to GlobalNetCare, Inc.
2. ACCOUNTING POLICIES
--------------------
CONSOLIDATION
-------------
The consolidated financial statements include the accounts of the company
and its wholly-owned subsidiary, 3423336 Canada Ltd. All inter-company balances
and transactions have been eliminated on consolidation.
TRANSLATION OF FOREIGN CURRENCIES
------------------------------------
The components of the consolidated statements of operations related to its
foreign subsidiary are translated to US dollars using average currency exchange
rates in effect during the period and assets and liabilities are translated at
the exchange rates in effect at the end of the accounting period. Gains and
losses on translation are included in net income, except for the exchange gains
or losses related to investments in self-sustaining foreign operations.
Translation adjustments on self-sustaining foreign operations are included in a
separate component of the shareholders' equity.
DIVIDENDS
- ---------
The Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid since inception.
<PAGE>
GLOBALNETCARE, INC.
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
(UNAUDITED - SEE DISCLOSURE)
FOR THE NINE (9) MONTHS ENDED SEPTEMBER 30, 1999
(WITH COMPARATIVE FIGURES FOR SEPTEMBER 30, 1998)
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<CAPTION>
3. CAPITAL ASSETS
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ACCUMULATED 1999 NET
COST AMORTIZATION BOOK VALUE
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<S> <C> <C> <C>
Furniture and Equipment $ 31,119 $ 4,782 $ 26,337
Computer Equipment. . . 130,852 20,569 110,283
Computer Software . . . 35,520 5,452 30,068
------------- ----------- --------
$ 197,491 $ 30,803 $166,688
============= =========== ========
</TABLE>
<TABLE>
<CAPTION>
4. CAPITAL STOCK
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NUMBER OF STATE VALUE
SHARES (IN U.S.) (IN U.S. DOLLARS)
---------------- -----------------
<S> <C> <C> <C> <C>
Beginning Balance 1,000,000 @ 0.01 1,000
Nov 5 Private Placement #1. . 11,750,000 @ 0.01 117,500
Dec 23 Private Placement #2. . 350,000 @ 0.60 210,000
Mar 24 Private Placement #3. . 82,087 @ 0.2875 236,000
June 4 Private Placement #4 . 115,384 @ 2.60 300,000
Capital Stock of 3423336 Cda Inc.. . . . - 7
---------------- -----------------
13,297,471 864,507
================ =================
</TABLE>
<PAGE>
GLOBALNETCARE, INC.
NOTES TO THE FINANCIAL STATEMENTS
---------------------------------
(UNAUDITED - SEE DISCLOSURE)
FOR THE NINE (9) MONTHS ENDED SEPTEMBER 30, 1999
(WITH COMPARATIVE FIGURES FOR SEPTEMBER 30, 1998)
The Company granted 920,000 employee stock options. The valuation date is July
28, 1999, and the option price per share is $2.00, which is above market value.
The Company has adopted the fair market value of accounting for the employee
stock options. This method requires the Company to record and recognize a
compensation expense in the financial statements for any stock options granted
below the quoted market price. It is the intention of the Company to only grant
employee stock options at market value or higher.
<PAGE>
ITEM 2: Management's Discussion or Plan of Operation
GlobalNetCare continues to develop its unique Medical Expert System in order to
become an important player in e-Health information market. The recent addition
of the Women's Health and Nutrition Virtual Medical Centers makes for five
current operational Virtual Medical Centers. The other three operational
virtual medical centers include Hypertension, Breast Disease and Osteoporosis.
The Company has recently completed two additional Virtual Medical Centers,
Smoking and Health and Beauty, and expects to have those two additional Virtual
Medical Centers online by the end of 1999.
The Company continues to develop its Doctor Directory. Each doctor listed in
the Doctor Directory receives a webpage, link or lead service and other
membership services on a month by month basis. The Doctor Directory in now
operational with over 60 doctors, located worldwide, listed in the Doctor
Directory.
The Company has several physicians (general practitioners) who will go online to
answer short questions posed by GlobalNetCare.com's members. These physicians
will refer users to specialists where appropriate. The Company expects that
this service will become operational by the end of 1999, although there can be
no assurance that this service will become operational as scheduled or at all.
The GlobalNetCare Pharmacy (med-store) is still under development and, pending
successful negotiations through a strategic alliance, is scheduled to become
operational in the first quarter of 2000, although there can be no assurance
that this service will become operational as scheduled or at all. The Company
is also in the process of forming certain alliances with pharmaceutical, medical
and technical supply companies and anticipates that it will also generate
revenue within the Pharmacy by selling banner advertising, through product
sponsorship agreements, and by taking commission on pharmacy products sold
on-line through the online Pharmacy.
The Company intends to implement a Scientific Advisory Committee, a Medical
Policy Committee and an Ethics Committee. The Scientific Advisory Committee
will consist of highly qualified and well respected medical doctors who will
represent each of the Virtual Medical Centers and the teleconference project.
The members of this committee will advise the Board of Directors on the progress
and future plans of the Virtual Medical Centers and consult with other doctors
and surgeons with future projects. The Medical Policy Committee will review the
information in each of the Virtual Medical Centers. The Ethics Committee will
set the policies and ethical guidelines for the information in the Virtual
Medical Centers, the teleconference project and the Doctor Consultations. These
three committees have not been created yet but the Company anticipates creating
these committees by the end of December, 1999, although there can be no
assurance that these committees will be established as scheduled or at all.
The Company also intends to implement a video teleconferencing project and a
distance based training project. The teleconference project is a project where
a team of medical specialists will operate a video teleconference over the
Internet for the purpose of providing specialized diagnosis and treatment
services in connection with various medical and health issues. The distance
based training project is a project geared to train healthcare professionals on
innovative and traditional diagnostic and therapeutic techniques initially for
breast disease and then for other medical issues. The training will consist of
online discussions, text, and question and answer sections. The Company
continues to anticipate that both of these projects will be operational by the
end of the 2000, although there can be no assurance that either of these
services will become operational as schedule or at all.
To date, the Company has not hired the sales and marketing managers or expended
any money on advertising as anticipated in the Company's Form 10-SB for the
fiscal period ending December 31, 1998.
The Company's cash requirements for the 12 months ending August 31, 2000 are
estimated at $6,180,000. The budgeted expenditures of $6,180,000 consist of
$1,400,000 for print advertising, $650,000 for Internet advertising, $280,000
for promotions, $700,000 for hardware, software and facilities, $2,150,000 on
employee salaries, contract salaries and consulting fees and $1,000,000 for fees
in connection with doctor consultations. The cash requirements of $6,180,000
are based on the Company's estimates for operational costs in the 12 months
ended August 31, 2000. At the present time, the Company intends to meet all
cash requirements by conducting private placements of its common shares.
The Company is planning to sell banner advertising on all parts of its website.
There will be several banner advertisements on many pages of the website
including both large and small banner ads. To date, the Company has not yet
sold any banner advertising for use on its website and there is no assurance
that the Company will be able to generate any or significant revenues from the
sale of such banner advertising.
<PAGE>
The Company expects to spend approximately $200,000 between September 1, 1999
and August 31, 2000 for hardware, software and facilities. The Company does not
expect the purchase or sale of plant or significant equipment except as
mentioned above and does not expect significant changes in the number of
employees.
Much of the information included in this Form 10-QSB includes or is based upon
estimates, projections or other "forward-looking statements". While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect the Company's current judgment regarding the
direction of its business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions, or other
future performance suggested herein. The Company undertakes no obligation to
update forward-looking statements to reflect events or circumstances occurring
after the date of such statements.
Such estimates, projections or other "forward-looking statements" involve
various risks and uncertainties, some of which are outlined below. The Company
cautions the readers that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other "forward-looking statements". Readers should carefully consider the
following factors, as well as the risk factors outlined in the Company's Form
10-SB for the fiscal period ended December 31, 1998, in evaluating the Company,
its business and any investment in the Company. A copy of the Company's Form
10-SB can be obtained from the Securities and Exchange Commission (the "SEC") at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549 or on the SEC's Internet website (http://www.sec.gov). Information on the
operation of the Public Reference Room may be obtained by calling the SEC at
1-800-SEC-0330.
Such risks and uncertainties that could have a negative impact on the Company's
plans, estimates, projections and actual results include: (i) the Company's
limited operating history and its history of losses; (ii) the Company's
immediate and continuing need for additional equity financing to meet its cash
requirements and the possible inability of the Company to attract investors for
its equity securities or otherwise raise adequate funds from any source; (iii)
increased governmental regulation of the healthcare industry; (iv) the possible
inability of the Company to enter into any strategic alliances in connection
with the GlobalNetCare Pharmacy; (v) the possible inability to generate any or
significant revenues to continue its operations; (vi) the possible inability to
attract and retain sufficiently trained and experienced doctors for the online
doctor consultation service, marketing and sales personnel to market the
Company's website and its services, and experienced businesspersons to manage
the continuing operations of the Company; (vii) the possible inability of the
Company to successfully develop, implement and market the video teleconferencing
program and distance based training program due to the failure to attract and
retain adequately trained doctors and other factors and the failure of the
medical community to accept such services or other new projects; and (viii) the
continued reliance on the Internet as a source for healthcare information.
PART II OTHER INFORMATION
ITEM 1: Legal Proceedings
No legal proceedings have been commenced by or against the Company in the
quarter for which this Form 10-Q is filed. There have been no material
developments or new legal proceedings commenced against the Company since the
filing of the Company's Form 10-SB for the fiscal periods ending December 31,
1998 (audited) and June 30, 1999 (unaudited).
<PAGE>
ITEM 2: Changes in Securities and Unregistered Offerings of Securities
The Company did not sell or issue any common shares during the period covered by
this form 10-Q that were not registered under the Securities Act of 1933.
ITEM 3: Defaults Upon Senior Securities
Not Applicable.
ITEM 4: Submission of Matters to a Vote of Security Holders
Not Applicable.
ITEM 5: Other Information
On November 1, 1999, Harvey Lalach was appointed as the Chief Operating Officer
of the Company.
ITEM 6: Exhibits and Reports on Form 8-K
27.01 Financial Data Schedule (EDGAR version only)
No reports on Form 8-K were filed during the quarter for which this Form 10-QSB
is filed.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Dated December 3, 1999
GLOBALNETCARE, INC.
Per: /s/ George Tsoukas Date: December 3, 1999
------------------ ----------------------
Chief Executive Officer
and Director
Per: /s/ Nick Pedafronimos Date: December 3, 1999
--------------------- -----------------------
Director
<PAGE>
PART I FINANCIAL INFORMATION
Item 1: Financial Statements:
Consolidated Balance Sheet as of September 30, 1999
Consolidated Statements of Income for the nine months ended September 30,
1998 and 1999
Consolidated Statement of Cash Flows for the nine months ended September
30, 1998 and 1999
Notes to Consolidated Financial Statements.
Item 2: Management's Discussion and Analysis or Plan of Operation
PART II OTHER INFORMATION
Item 1: Legal Proceedings
Item 2: Changes in Securities and Unregistered Offerings of Securities
Item 3: Default upon Senior Securities
Item 4: Submissions of Matters to a Vote of Security Holders
Item 5: Other Information
Item 6: Exhibits and Reports on Form 8-K
Signatures
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<PERIOD-START> JUL-01-1999
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