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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000
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TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number 600-27097
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GLOBALNETCARE, INC.
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(Exact name of small business issuer as specified in its charter)
FLORIDA 980215778
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
SUITE 204, 65 BRUNSWICK, DOLLARD DES ORMAUX, QUEBEC, CANADA H9B 2N4
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(Address of principal executive offices)
(514) 421-2294
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(Issuer's telephone number)
SUITE 950 - 2000 MCGILL COLLEGE, MONTREAL, QUEBEC, CANADA H3A 3H3
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(Former name, former address and former fiscal year, if changed since last
report)
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
16,283,127 common shares issued and outstanding as of April 28, 2000
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Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
GlobalNetCare, Inc.'s (the "Company") financial statements are stated in United
States Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles.
The financial statements are attached to this Quarterly Report (see Part II,
Item 6).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
GENERAL
The Company currently offers health and medical information via its information
website, GlobalNetCare.com (the "Website"). The Website consists of several
"Virtual Medical Centers" that provide health care professionals and people
seeking information with an easy-to-use, interactive experience designed to
address their subjects of concern and to create individual virtual medical
records.
Despite the efforts of the Company's management, the Website did not attract the
number of users or advertisers the Company anticipated, and accordingly did not
generate the revenue required for the continued operation and maintenance of the
Website. The Website has not been updated since October, 1999. The anticipated
plans and operation of the Company, as described in its Form 10-SB (amended)
have not and will not be achieved or further pursued further by the Company.
Due to its inability to generate sufficient revenues to continue operations, the
Company has decided to seek and identify a different line of business. To date,
the Company has not effected a change of business, and continues to operate the
Website on a scaled down basis.
LETTER OF INTENT - BUSINESSWAY COMPUTER CENTRE INC. AND COR-BIT PERIPHERALS INC.
On March 31, 2000, the Company signed a Letter of Intent, pursuant to which it
agreed to acquire (the "Acquisition") all of the issued and outstanding shares
of BusinessWay Computer Centre Inc. ("BusinessWay") and Cor-bit Peripherals Inc.
("Cor-bit"), both of which are private companies incorporated under the laws of
the province of Quebec. Cor-bit is a manufacturer of computers, and has
developed internet software including a new business-to-business model, data
base search software, and an access-based inventory management software link.
Cor-bit is the exclusive supplier of computers to the BusinessWay franchise
operations. BusinessWay operates a website "www.businessway.com" (the
<PAGE>
"BusinessWay Website"), which will exist as a multiple e-business site and will
incorporate the operations of Cor-bit, as well as market the Cor-bit line of
computers. The principals of BusinessWay will retain BusinessWay's franchise
retail operations, and as a result, the retail operations will not form part of
the Acquisition.
Pursuant to the terms of the Letter of Intent, the Company's wholly-owned
subsidiary, 3739007 Canada Ltd., will issue 40,000,000 exchangeable preferred
shares in consideration of all of the issued and outstanding shares of
BusinessWay and Cor-bit. Each exchangeable preferred share will be convertible,
at no additional consideration, into one common share of the Company. Closing
of the Acquisition is subject to a number of conditions, including:
- - a satisfactory due diligence review of the business and affairs of
BusinesWay and Cor-bit by the Company;
- - a satisfactory due diligence review of the Company by each of BusinessWay
and Cor-bit ; and
- - preparation and execution of formal documentation in connection with the
Acquisition.
Business Opportunities Generally
In the event that the Acquisition is not completed, the Company will continue to
seek, investigate, and if such investigations warrant, acquire an interest in
one or more other business opportunities presented to it by persons or firms
desiring the perceived advantages of a publicly held corporation. Other than
the Acquisition, the Company has no plan, proposal, agreement, understanding, or
arrangement to acquire or merge with any specific business or company, and the
Company has not identified any specific business or company for investigation
and evaluation. The Company will not restrict its search to any specific
business, industry, or geographical location, and may participate in business
ventures of virtually any kind or nature. Discussion of the proposed business
under this caption and throughout this Quarterly Report is purposefully general
and is not meant to restrict the Company's virtually unlimited discretion to
search for and enter into a business combination. The Company may seek a
business combination with a firm which only recently commenced operations, or a
developing company in need of additional funds to expand into new products or
markets or seeking to develop a new product or service, or an established
business which may be experiencing financial or operating difficulties and needs
additional capital which is perceived to be easier to raise by a public company.
In some instances, a business opportunity may involve acquiring or merging with
a corporation which does not need substantial additional cash but which desires
to establish a public trading market for its common stock. The Company may
purchase assets and establish wholly-owned subsidiaries in various businesses or
purchase existing businesses as subsidiaries.
Selecting a business opportunity will be complex and extremely risky. Because
of general economic conditions, rapid technological advances being made in some
industries, and shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly-traded corporation. Such
perceived benefits of a publicly traded corporation may include:
- - facilitating or improving the terms on which additional equity financing
may be sought;
- - providing liquidity for the principals of a business;
- - creating a means for providing incentive stock options or similar benefits
to key employees; or
- - providing liquidity (subject to restrictions of applicable statutes) for
all shareholders.
Potentially available business opportunities and/or business combination may
occur in many different industries and at various stages of development, all of
which will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex.
Management believes that the Company may be able to benefit from the use of
"leverage" to acquire a target company. Leveraging a transaction involves
acquiring a business while incurring significant indebtedness for a large
percentage of the purchase price of that business. Through leveraged
transactions, the Company would be required to use less of its available funds
<PAGE>
to acquire a target company and, therefore, could commit those funds to the
operations of the business, to combinations with other target companies, or to
other activities. The borrowing involved in a leveraged transaction will
ordinarily be secured by the assets of the acquired business. If that business
is not able to generate sufficient revenues to make payments on the debt
incurred by the Company to acquire that business, the lender would be able to
exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that the Company must commit to
acquire a business, may correspondingly increase the risk of loss to the
Company.
No assurance can be given as to the terms or availability of financing for any
acquisition of a business opportunity or business combination by the Company.
During periods when interest rates are relatively high, the benefits of
leveraging are not as great as during periods of lower interest rates, because
the investment in the business held on a leveraged basis will only be profitable
if it generates sufficient revenues to cover the related debt and other costs of
the financing. Lenders from which the Company may obtain funds for purposes of
a leveraged buy-out may impose restrictions on the future borrowing,
distribution, and operating policies of the Company. It is not possible at this
time to predict the restrictions, if any, which lenders may impose, or the
impact thereof on the Company.
The Company has insufficient capital with which to provide the owners of
businesses significant cash or other assets. Management believes the Company
will offer owners of businesses the opportunity to acquire a controlling
ownership interest in a public company at a substantially lower cost than is
required to conduct an initial public offering. The owners of the businesses
will, however, incur significant post-merger or acquisition registration costs
in the event they wish to register a portion of their common shares for
subsequent sale. The Company will also incur significant legal and accounting
costs in connection with the acquisition of a business opportunity or business
combination, including the costs of preparing post-effective amendments, Form
8-Ks, agreements, and related reports and documents. Nevertheless, the officers
and directors of the Company have not conducted market research and are not
aware of statistical data which would support the perceived benefits of a merger
or acquisition transaction for the owners of a businesses. The Company does not
intend to make any loans to any prospective merger or acquisition candidates or
to unaffiliated third parties.
The Company will not restrict its search for any specific kind of firms, but may
acquire a venture which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate life. It is
impossible to predict at this time the status of any business in which the
Company may become engaged, in that such business may need to seek additional
capital, may desire to have its common shares publicly traded, or may seek other
perceived advantages which the Company may offer. However, the Company does not
intend to obtain funds in one or more private placements to finance the
operation of any acquired business opportunity until such time as the Company
has successfully consummated such a merger or acquisition.
Sources of Opportunities
In the event that the Acquisition is not successful, the Company will seek a
potential business opportunity from all known sources, but will rely principally
on personal contacts of its officers and directors, as well as indirect
associations between them and other business and professional people. It is not
presently anticipated that the Company will engage professional firms
specializing in business acquisitions or reorganizations. Management may not be
especially experienced in matters relating to the new business of the Company,
and will therefore rely upon their own efforts and, to a much lesser extent, the
efforts of the Company's shareholders, in accomplishing the business purposes of
the Company. It is not anticipated that any outside consultants or advisors,
other than the Company's legal counsel and accountants, will be utilized by the
Company to effectuate its business purposes described herein. However, if the
Company does retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective merger/acquisition
candidate, as the Company has no cash assets with which to pay such obligation.
There have been no discussions, understandings, contracts or agreements with any
outside consultants and none are anticipated in the future. In the past, the
Company's management has never used outside consultants or advisors in
connection with a merger or acquisition. As is customary in the industry, the
Company may pay a finder's fee for the location of an appropriate business
opportunity or business combination. If any such fee is paid, it will be
approved by the Company's Board of Directors and will be in accordance with the
industry standards. Such fees are customarily between 1% and 5% of the size of
the transaction, based upon a sliding scale of the amount involved. Such fees
are typically in the range of 5% on a $1,000,000 transaction rateably down to 1%
in a $4,000,000 transaction. Management has adopted a policy that such a
<PAGE>
finder's fee could, in certain circumstances, be paid to any employee, officer,
director or 5% shareholder of the Company, if such person plays a material role
in bringing a transaction to the Company.
The Company will not have sufficient funds to undertake any significant
development, marketing, and manufacturing of any products which may be acquired
instead of the acquisition of a business opportunity or business combination.
Accordingly, if it acquires the rights to a product, rather than entering into a
merger or acquisition, it most likely would need to seek debt or equity
financing or obtain funding from third parties, in exchange for which the
Company would probably be required to give up a substantial portion of its
interest in any acquired product. There is no assurance that the Company will
be able either to obtain additional financing or to interest third parties in
providing funding for the further development, marketing and manufacturing of
any products acquired.
Evaluation of Opportunities
The analysis of any new business opportunity will be undertaken by or under the
supervision of the officers and directors of the Company. In the event that the
Acquisition is not successful, management intends to concentrate on identifying
prospective business opportunities which may be brought to its attention through
present associations with management. In analyzing prospective business
opportunities, management will consider, among other factors, such matters as:
- - the available technical, financial and managerial resources;
- - working capital and other financial requirements;
- - history of operation, if any;
- - prospects for the future;
- - present and expected competition;
- - the quality and experience of management services which may be available
and the depth of that management;
- - the potential for further research, development or exploration;
- - specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of the Company;
- - the potential for growth or expansion;
- - the potential for profit;
- - the perceived public recognition or acceptance of products, services or
trades; and
- - name identification.
Management will meet personally with management and key personnel of the firm
sponsoring the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be
obtained.
Opportunities in which the Company may participate will present certain risks,
many of which cannot be identified adequately prior to selecting a specific
opportunity. The Company's shareholders must, therefore, depend on management
<PAGE>
to identify and evaluate such risks. Promoters of some opportunities may have
been unable to develop a going concern or may present a business in its
development stage (in that it has not generated significant revenues from its
principal business activities prior to the Company's participation). Even after
the Company's participation, there is a risk that the combined enterprise may
not become a going concern or advance beyond the development stage. Other
opportunities may involve new and untested products, processes, or market
strategies which may not succeed. Such risks will be assumed by the Company
and, therefore, its shareholders.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and other
instruments will require substantial management time and attention as well as
substantial costs for accountants, attorneys, and others. If a decision is made
not to participate in a specific business opportunity the costs incurred in the
related investigation would not be recoverable. Furthermore, even if an
agreement is reached for the participation in a specific business opportunity,
the failure to consummate that transaction may result in the loss by the Company
of the related costs incurred. There is the additional risk that the Company
will not find a suitable target. Management does not believe the Company will
generate revenue without finding and completing the acquisition of a suitable
business opportunity or a transaction with a suitable target company. If no such
business opportunity target is found, therefore, no return on an investment in
the Company will be realized, and there will not, most likely, be a market for
the Company's common shares.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture,
franchise, or licensing agreement with another corporation or entity. It may
also purchase stock or assets of an existing business. Once a transaction is
complete, it is possible that the present management and shareholders of the
Company will not be in control of the Company. In addition, a majority or all
of the Company's officers and directors may, as part of the terms of the
transaction, resign and be replaced by new officers and directors without a vote
of the Company's shareholders.
It is anticipated that securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable federal and
state securities laws. In some circumstances, however, as a negotiated element
of this transaction, the Company may agree to register such securities either at
the time the transaction is consummated, under certain conditions, or at a
specified time thereafter. The issuance of substantial additional securities
and their potential sale into any trading market which may develop in the
Company's common shares may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so called "tax free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code of 1986, as amended (the
"Code"). In order to obtain tax free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more of the
voting stock of the surviving entity. In such event, the shareholders of the
Company, would retain less than 20% of the issued and outstanding common shares
of the surviving entity, which could result in significant dilution in the
equity of such shareholders.
As part of the Company's investigation, officers and directors of the Company
may:
- - meet personally with management and key personnel;
- - visit and inspect material facilities;
- - obtain independent analysis or verification of certain information
provided;
- - check references of management and key personnel, and
- - take other reasonable investigative measures, to the extent of the
Company's limited financial resources and management expertise.
<PAGE>
The manner in which the Company participates in an opportunity with a target
company will depend on the nature of the opportunity, the respective needs and
desires of the Company and other parties, the management of the opportunity, and
the relative negotiating strength of the Company and such other management.
With respect to any mergers or acquisitions, negotiations with target company
management will be expected to focus on the percentage of the Company which the
target company's shareholders would acquire in exchange for their shareholdings
in the target company. Depending upon, among other things, the target company's
assets and liabilities, the Company's shareholders will, in all likelihood, hold
a lesser percentage ownership interest in the Company following any merger or
acquisition. The percentage ownership may be subject to significant reduction in
the event the Company acquires a target company with substantial assets. Any
merger or acquisition effected by the Company can be expected to have a
significant dilutive effect on the percentage of shares held by the Company's
then shareholders.
Management has advanced, and in the event that the Acquisition is not
successful, will continue to advance, funds which shall be used by the Company
in identifying and pursuing agreements with target companies. Management
anticipates that these funds will be repaid from the proceeds of any agreement
with the target company, and that any such agreement may, in fact, be contingent
upon there payment of those funds.
Cash Requirements
The Company anticipates that upon completion of the Acquisition, it will require
funds in the amount of $1,000,000 through March 31, 2001, and as a result,
will need to raise additional funds. In the event that the Acquisition is
not successful, the Company does not anticipate that it will require additional
funds over the next 12 months.
Product Research and Development
Until the Acquisition is complete, the Company is unable to determine the type
of product research and development that it may perform over the next 12 months
ending March 31, 2001. If the Acquisition is not successful, the Company will
not likely perform any product research and development as it searches for a new
business opportunity.
Purchases or Sales (Plant or Equipment)
At this time, the Company does not anticipate that it will purchase or sell a
plant or any significant equipment over the next 12 months.
Changes in Employees
Upon completion of the Acquisition, the Company expects that it will assume some
or all of the employees of both BusinessWay and Cor-bit. In the event that the
Acquisition is not successful, the Company does not anticipate a change in its
current number of employees.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
During the quarter ended March 31, 2000, there were no new legal proceedings
commenced against the Company or to which the Company was a party. During the
quarter ended March 31, 2000, there were no material developments in the legal
proceedings which were described in the Company's Form 10-KSB filed on March 31,
2000.
ITEM 2. CHANGES IN SECURITIES.
Recent Sales of Unregistered Securities
On February 7, 2000, the Company sold a total of 1,114,998 common shares at a
price of US$0.40 per common share, for aggregate gross proceeds of $445,999.20
to the following persons/entities, relying on Regulation S and/or Section 4(6)
of the Securities Act of 1933, as applicable:
<PAGE>
SUBSCRIBER PURCHASE AMOUNT NUMBER OF SHARES PURCHASED
========== ================ =============================
Bill Manolakos $65,333.20 163,333
Univalor $226,666.00 566,665
Grimbsy Trading Ltd. $50,000.00 125,000
Jimmy D. Foussekis $104,000.00 260,000
==================== =========== =======
The price per common share of US$0.40 was based on the average trading price for
the 10 trading days prior, less a discount of approximately 10%.
On March , 2000, the Company sold a total of 310,000 common shares, at a price
of US$0.50, for aggregate gross proceeds of US$155,000 to Jimmy Foussekis,
relying on Regulation S of the Securities Act of 1933.
The price per common share of US$0.50 was based on the average trading price for
the 10 trading days prior, less a discount of approximately 10%.
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.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Reports of Form 8-K
On March 29, 2000, the Company filed a current report on Form 8-K announcing
that it had engaged KPMG LLP as its independent accountants to audit its
financial statements. On April 6, 2000, the Company filed a Form 8-K/A with
respect to the change in its independent accountants. The Company's Board of
Directors approved the change of accountants to KPMG LLP on March 22, 2000.
During the Company's two most recent fiscal years, and any subsequent interim
periods preceding the change in accountants, there were no disagreements with
Councilor, Buchanan & Mitchell, P.C. on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope procedure. The
report on the financial statements prepared by Councilor, Buchanan & Mitchell,
P.C. for either of the last two years did not contain an adverse opinion or a
disclaimer of opinion, nor was it qualified or modified as to uncertainty, audit
scope or accounting principals. The decision to change accountants was based on
the appointment of new directors to the Company's Board of Directors. Councilor,
Buchanan & Mitchell, P.C. provided the Company with a letter addressed to the
SEC stating that he agreed with the statements made in the Form 8-K/A. The
Company has engaged the firm of KPMG LLP as of February 22, 2000. KPMG LLP was
not consulted on any matter relating to accounting principles to a specific
transaction, either completed or proposed or the type of audit opinion that
might be rendered on the Company's financial statements.
<PAGE>
Following the end of the quarter, on April 5, 2000, the Company filed a current
report on Form 8-K announcing the resignation of David Mulder as a director of
the Company, and the appointment of Harvey Lalach as a director of the Company.
On April 12, 2000, the Company filed a current report on Form 8-K announcing the
resignation of George Tsoukas as a director and the Chief Executive Officer of
the Company.
Financial Statements Filed as a Part of the Quarterly Report
The Company's unaudited financial statements include:
Consolidated Balance Sheet as of March 31, 2000
Consolidated Statements of Operations for the three months ended March 31,
1999 and 2000
Consolidated Statements of Cash Flows for the three months ended March 31,
1999 and 2000
Notes to Consolidated Financial Statements.
<PAGE>
Consolidated Financial Statements of
(Unaudited)
GLOBALNETCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
Three-month period ended March 31, 2000 and 1999 and
period from inception to March 31, 2000
<PAGE>
GLOBALNETCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
Consolidated Financial Statements
(Unaudited)
Three-month period ended March 31, 2000 and 1999
and period from inception to March 31, 2000
FINANCIAL STATEMENTS
Consolidated Balance Sheets 1
Consolidated Statements of Operations 2
Consolidated Statements of Cash Flows 3
Notes to Consolidated Financial Statements 4
<PAGE>
<TABLE>
<CAPTION>
GLOBALNETCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
Consolidated Balance Sheets
(Unaudited)
March 31, 2000, with comparative figures as at December 31, 1999
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March 31, December 31,
2000 1999
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<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . $ 5,228 $ 4,284
Sales tax receivable. . . . . . . . . . . . . . . 30,335 25,656
Prepaid . . . . . . . . . . . . . . . . . . . . . 4,811 386
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40,374 30,326
Property and equipment. . . . . . . . . . . . . . 44,020 51,537
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$ 84,394 $ 81,863
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Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . $ 46,957 $ 46,476
Payroll deductions payable. . . . . . . . . . . . 75,908 101,782
Accrued liabilities . . . . . . . . . . . . . . . 30,049 41,596
Advances from a director, without interest and
no specific repayment terms . . . . . . . . . . . 37,971 451,891
- -----------------------------------------------------------------------------
190,885 641,745
Stockholders' equity:
Share capital (note 2). . . . . . . . . . . . . . 3,560 2,135
Additional paid-in capital. . . . . . . . . . . . 2,914,014 2,314,440
Accumulated other comprehensive income. . . . . . (2,362) (2,881)
Deficit accumulated during the development stage. (3,021,703) (2,873,576)
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(106,491) (559,882)
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$ 84,394 $ 81,863
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</TABLE>
See accompanying note to consolidated financial statements.
On behalf of the Board:
/s/ Patrick Power
- ------------------
Director
/s/ Harvey Lalach
- -------------------
Director
<PAGE>
<TABLE>
<CAPTION>
GLOBALNETCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
Consolidated Statements of Operations
(Unaudited)
Three-month period ended March 31, 2000 and 1999 and period from inception to
March 31, 2000
December 31, 1999
- -------------------------------------------------------------------------------
Three-month Three-month From
period ended period ended inception to
March 31, March 31, March 31,
2000 1999 2000
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues - interest. . . . . . . . . . $ - $ 144 $ 865
General and administrative expenses:
Commissions, wages and subcontractors. 57,865 183,363 1,967,954
Compensation cost. . . . . . . . . . . - - 246,400
Professional fees. . . . . . . . . . . 29,044 5,110 197,674
Depreciation . . . . . . . . . . . . . 7,300 6,300 147,481
Rent and parking . . . . . . . . . . . 25,127 21,740 153,214
License fees . . . . . . . . . . . . . - - 67,925
Office . . . . . . . . . . . . . . . . 3,749 5,597 68,917
Advertising and promotion. . . . . . . 3,792 2,004 50,573
Communications . . . . . . . . . . . . 13,669 11,607 46,277
Travel . . . . . . . . . . . . . . . . 4,349 9,291 34,782
Taxes, insurance and licenses. . . . . 3,096 - 17,037
Interest and bank charges. . . . . . . 136 845 12,489
Subscriptions and memberships. . . . . - 2,393 3,974
Registration fees. . . . . . . . . . . - 650 5,825
Maintenance and repairs. . . . . . . . - - 2,045
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148,127 248,900 3,022,567
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Net loss . . . . . . . . . . . . . . . $ 148,127 $ 248,756 $3,021,702
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Net loss per share - basic and diluted $ 0.01 $ 0.02
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Weighted average number
of shares outstanding. . . . . . . . . 15,423,128 13,100,000
- ----------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
GLOBALNETCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
Consolidated Statements of Cash Flows
(Unaudited)
Three-month period ended March 31, 2000 and 1999 and period from inception to March
31, 2000
December 31, 1999
- ------------------------------------------------------------------------------------
Three-month Three-month From
period ended period ended inception to
March 31, March 31, March 31,
2000 1999 2000
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss . . . . . . . . . . . . . . . . . . . $(148,127) $(248,756) $(3,021,702)
Adjustments for items not involving cash:
Depreciation . . . . . . . . . . . . . . . . . 7,300 6,300 147,481
Employees, subcontractors and
license fees compensated by
issuance of shares . . . . . . . . . . . . . . - - 1,205,675
Compensation cost. . . . . . . . . . . . . . . - - 246,100
Change in operating assets and liabilities:
Sales tax receivable . . . . . . . . . . . . . (4,679) (18,935) (30,335)
Deposit on computer equipment. . . . . . . . . - (15,420) -
Prepaid. . . . . . . . . . . . . . . . . . . . (4,425) 22,466 (4,811)
Accounts payable and accrued liabilities . . . (36,940) 10,555 152,914
- ------------------------------------------------------------------------------------
(186,871) (243,790) (1,304,678)
Cash flows from financing activities:
Bank indebtedness. . . . . . . . . . . . . . . - 51,310 -
Proceeds from issuance of common shares. . . . - - 864,500
Proceeds from advances from a director . . . . 187,508 20,681 638,970
- ------------------------------------------------------------------------------------
187,508 71,991 1,503,470
Cash flows from investing activities:
Additions to property and equipment. . . . . . - (61,078) (191,718)
Effect of exchange rate changes on cash. . . . 307 - (1,846)
- ------------------------------------------------------------------------------------
Net (decrease) increase in cash and
cash equivalents . . . . . . . . . . . . . . . 944 (232,877) 5,228
Cash and cash equivalents, beginning of period 4,284 232,877 -
- ------------------------------------------------------------------------------------
Cash and cash equivalents, end of period . . . $ 5,228 $ - $ 5,228
- ------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
- 4 -
GLOBALNETCARE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
Notes to Consolidated Financial Statements
Three-month period ended March 31, 2000 and 1999 and period from inception to
March 31, 2000
1. ORGANIZATION AND BUSINESS ACTIVITIES:
The Corporation 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. The Corporation
did not have any activity before 1998 and, accordingly, commencement of the
development stage is considered to be at the beginning of 1998.
On July 21, 1998, the State of Florida approved the Corporation'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 Corporation changed its name to C.N.W of Orlando Inc. and
on December 28, 1998 changed to GlobalNetCare, Inc.
On February 3, 1998, the Corporation incorporated its wholly-owned subsidiary,
3423336 Canada Ltd., a Canadian company, to develop medical web sites. However,
the anticipated plans and operations of the Corporation have not and will not be
achieved or further pursued. Due to its inability to generate sufficient
revenues to continue operations, the Corporation has decided to pursue a
different line of business which has not been determined yet. The Corporation
continues to operate the website on a scaled down basis. As the Corporation has
not commenced principal operations for accounting purposes, it is considered to
be a development stage enterprise.
The Corporation's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Corporation has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Corporation to
continue as a going concern. It is management's plan to seek additional capital
in connection with any business opportunities including business combination.
2. SHARE CAPITAL:
During the three-month period ended March 31, 2000, the Corporation issued
1,424,998 common shares in connection with the conversion of advances from a
director into equity.
<PAGE>
Exhibits Required by Item 601 of Regulation S-B
(3) Articles of Incorporation and By-laws:
3.1 Articles of Amendment effective January 14, 1999 (incorporated by
reference from the Company's Form 10-SB (amended), filed October 19, 1999)
3.2 Articles of Amendment effective July 21, 1998 (incorporated by
reference from the Company's Form 10-SB (amended), filed October 19, 1999)
3.3 Articles of Incorporation effective October 30, 1980 (incorporated
by reference from the Company's Form 10-SB (amended), filed October 19, 1999)
3.4 By-laws effective October 30, 1980 (incorporated by reference from
the Company's Form 10-SB (amended), filed October 19, 1999)
(21) Name of Subsidiary
21.1 3423336 Canada Ltd. (incorporated under the federal laws of Canada
on February 3, 1998)
21.2 3739007 Canada Ltd. (incorporated under the federal laws of Canada
on April 4, 2000)
(27) Financial Data Schedule
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GLOBALNETCARE, INC.
By: /s/ Patrick Power
Patrick Power, President/Director
Date: May 12, 2000
By: /s/ Harvey Lalach
Harvey Lalach, C.O.O./Director
Date: May 12, 2000
By: /s/ Nick Pedafronimos
Nick Pedafronimos, Director
Date: May 12, 2000
21.1 3423336 Canada Ltd. (incorporated under the federal laws of Canada
on February 3, 1998)
21.2 3739007 Canada Ltd. (incorporated under the federal laws of Canada
on April 4, 2000)
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
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<PP&E> 44020
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0
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