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U.S. SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
Commission File Number 0-25433
KwikWeb.com, Inc.
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(Exact name of small business issuer as specified in its charter)
NEVADA 88-0377059
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
374 N. Coast Highway, Suite F-14,
Encinitas, California 92024
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(Address of principal executive offices) (Zip Code)
760-436-5436
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(Issuer's telephone number)
(2155 Newcastle Ave., Cardiff by the Sea, California 92007 (former address)
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
As of November 15, 2000 the Registrant had 4,400,000 shares of its common stock,
par value $0.001, issued and outstanding.
Transitional Small Business Disclosure Format: Yes [ ] No [X]
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
KWIKWEB.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
September 30,
2000
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ASSETS
CURRENT ASSETS:
Cash $ 4,062
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TOTAL CURRENT ASSETS 4,062
EQUIPMENT 7,000
INVESTMENT 25,000
INTERNET DOMAIN NAMES 126,245
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$ 162,307
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 3,003
Due to affiliates 157,000
Shareholder advances 35,000
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TOTAL CURRENT LIABILITIES 195,003
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COMMITMENTS AND CONTINGENCIES -
SHAREHOLDERS' EQUITY:
Common stock 4,400
Additional paid-in capital 861,002
Deficit accumulated during the development stage (898,098)
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TOTAL SHAREHOLDERS' EQUITY (32,696)
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$ 162,307
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The accompanying notes are an integral part of these financial statements.
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KWIKWEB.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three months ended September 30,
2000 1999
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<S> <C> <C>
EXPENSES:
Research and development $ 4,113 $ 26,511
General and administrative 217,869 17,987
Interest 76 10,000
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TOTAL EXPENSES 222,058 54,498
GAIN ON TRANSFER OF ASSETS TO KWIK COMMERCE 62,769 -
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NET LOSS $ (159,289) $ (54,498)
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BASIC AND DILUTED NET LOSS PER SHARE $ (0.03) $ (0.01)
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BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING 6,022,500 7,313,152
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</TABLE>
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<TABLE>
KWIKWEB.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Cumulative from
Nine months ended September 30, Inception (October 9, 1997)
2000 1999 to September 30, 2000
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<S> <C> <C> <C>
EXPENSES:
Research and development $ 103,425 $ 88,400 $ 266,051
General and administrative 422,237 58,375 684,651
Interest 165 10,000 10,165
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TOTAL EXPENSES 525,827 156,775 960,867
GAIN ON TRANSFER OF ASSETS TO
KWIK COMMERCE 62,769 - 68,719
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NET LOSS $ (463,058) $ (156,775) $ (892,148)
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BASIC AND DILUTED NET LOSS PER SHARE $ (0.05) $ (0.02)
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BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING 8,599,927 6,442,527
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</TABLE>
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<TABLE>
KWIKWEB.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Cumulative from
Nine months ended September 30, Inception (October 9, 1997)
2000 1999 to September 30, 2000
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<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(463,058) $(156,775) $(892,148)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation and amortization - 2,901 6,468
Issuance of common shares for services 146,720 - 146,720
Gain on transfer of assets (62,769) - (62,769)
Contributed capital - salary 10,000 26,650 98,682
Decrease (increase) in prepaid expenses 6,371 (3,919) (14,013)
Decrease (increase) in deposits - (700) -
Increase in other assets (126,245) - (126,245)
Increase (decrease) in accounts payable (3,897) (9,137) 3,003
Decrease in accrued liabilities 8,045 (25,000) -
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Net cash used by operating activities (484,833) (165,980) (840,302)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (7,000) (9,712) (36,636)
Investment in Minority Business Alliance (25,000) - (25,000)
Loans to shareholder - (2,499) -
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Net cash used by investing activities (32,000) (12,211) (61,636)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Shareholder advances 35,000 20,000 35,000
Affiliate advances 157,000 - 157,000
Transfer of notes payable to affiliate 94,000 - 94,000
Common stock issued for cash - 500,000 620,000
Subscription receivable - 77,600 -
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Net cash provided by financing activities 286,000 597,600 906,000
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Net (decrease) increase in cash (230,833) 419,409 4,062
CASH, BEGINNING OF PERIOD 234,895 24,286 -
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CASH, END OF PERIOD $ 4,062 $ 443,695 $ 4,062
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</TABLE>
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
(UNAUDITED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Organization
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KwikWeb.com, Inc., a Nevada corporation, was formed on October 9, 1997 to
develop residential financial anaylsis software for real estate brokers.
In 1999 the Company began the development of proprietary software that
allows on-line users to easily create and build their own customized
websites using a user friendly "point and click" format. In June 2000, the
Company formed Internet Properties Development, Inc., a wholly owned
subsidiary, to pursue the development and incubation of emerging
Internet-based business. In August, 2000, the Company completed a
reorganization whereby it transferred its website design and management
business to Kwik Commerce, Inc. in exchange for a 2,500,000 shares of Kwik
Commerce common stock and the cancellation of 6,000,000 common shares
previously held by Ric Kaestner and Alex Tsakiris. The Company has not
commenced planned principal operations and, therefore, is considered to be
in the development stage.
Principles of consolidation
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The accompanying consolidated financial statements include the accounts of
KwikWeb.com, Inc. and its wholly owned subsidiaries Kwik Web, Inc.,
Wireless Properties Development and Internet Properties Development, Inc.
(collectively, the "Company"). All significant intercompany transactions
and balances have been eliminated in consolidation.
Common stock
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During the quarter ended September 30, 2000, the Company issued 490,000
shares of common stock to directors and unrelated third party consultants
for services rendered. These stock issuances were valued at market,
generally determined by the low bid quotations.
Interim periods
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The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions of Form 10-QSB and do not
include all of the information required by generally accepted accounting
principles for complete financial statements. In the opinion of the
Company's management, all necessary adjustments (consisting of normal
recurring adjustments) for a fair presentation have been included.
Operating results for the three and nine month periods ended September 30,
2000, are not necessarily indicative of results for any future period.
These statements should be read in conjunction with the consolidated
financial statements and notes thereto for the six months ended December
31, 1999 included in the Company's Form 10-KSB.
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2. SUBSEQUENT EVENTS
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In September 2000, the Company signed a letter of intent to merge with
i-Titan Communications Networks, Inc., a private Florida company.
In October 2000, the Company received loans from affiliates of $20,000.
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ITEM 2. PLAN OF OPERATION
We were formed in October 1997 under the name G.P. Properties, Inc.
From 1998 until August 1999, we were engaged in the business of developing
residential financial analysis software for real estate brokers. In August 1999,
we completed a series of transactions pursuant to which we discontinued all
operations regarding the development of financial analysis software. At the same
time, we acquired all of the outstanding capital shares of KwikWeb, Inc., a
California corporation, or KwikWeb California, which was engaged in the business
of developing software applications for the creation of internet websites, from
Richard Kaestner and Alex Tsakiris in exchange for 6,000,000 shares of our
common stock.
In June 2000, we formed Internet Properties Development, Inc. as our
wholly-owned subsidiary to pursue the development and incubation of emerging
internet-based business, and going forward we intend to focus on the development
and expansion of our internet incubator business. In connection with our
decision to focus on its internet incubator business, in August 2000, we
completed a reorganization pursuant to which Kwik Commerce, Inc., or Kwik
Commerce, a corporation controlled by Messrs. Kaestner and Tsakiris, acquired
from us certain assets relating to our website design division and assumed
certain liabilities of ours related to our website design division. In exchange
therefore, (1) Kwik Commerce issued to us 2,500,000 shares of its common stock,
(2) Kwik Commerce granted us an option to purchase an additional 1,000,000
shares of its common stock at $0.20 per share, and (3) the 6,000,000 shares of
our common stock issued to Messrs. Kaestner and Tsakiris in connection with the
August 1999 acquisition of KwikWeb, Inc. were cancelled.
In September, 2000, we entered into a non-binding letter of intent with
i-Titan Communications Networks, Inc., or i-Titan, to effect a reorganization
pursuant to a share-for-share exchange whereby each of the holders of the
capital stock of i-Titan would exchange all of their shares of capital stock for
shares of our capital stock. The reorganization is subject to execution and
delivery of definitive agreements between us and i-Titan with respect to the
transactions contemplated by the letter of intent, and compliance with all
requirements of federal and state securities laws, of the SEC and of all other
governmental authorities.
PLAN OF OPERATION
Our operations to date have consisted of the development and subsequent
sale of our web design and management business, the development, launch and
implementation of our internet incubator business, and the identification of
potential incubator candidates. To date, we have has not generated any revenue
from our operations. Over the next 12 months, we intend to continue the
development and expansion of our internet incubator business by identifying,
developing and launching emerging growth internet-based businesses.
We have incurred operating losses since our inception and, as of
September 30, 2000, had an accumulated net loss of $892,148. We have not
generated any revenues to date, and we expect to incur operating losses until
such time as we can conduct our operations in a profitable manner. We are unable
to predict when we will be able to generate profits from operations, and there
can be no guarantees that we will be able to do so.
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LIQUIDITY AND FINANCIAL CONDITION
Since our inception, we have has financed our operations primarily
through sales of our equity securities and advances from stockholders and
affiliates. Through September 30, 2000, we had raised approximately $620,000
from the sale of our common stock and approximately $192,000 from advances from
stockholders and affiliates. At November 30, 2000, we had a working capital
deficit of approximately $191,000, and a total shareholders' deficit of
approximately $33,000. We believe that we will require at least an additional
$400,000 in order to fund our operations over the next 12 months. We expect to
fund our capital requirements over the next 12 months through the sale of our
securities and additional advances from stockholders and affiliates, but there
can be no assurance that we will be able to do so. The report of our independent
accountants for the six month transitional period ended December 31, 1999 states
that due to the absence of operating revenues and our limited capital resources,
there is doubt about our ability to continue as a going concern.
SAFE HARBOR
This report contains various forward-looking statements that are based
on our beliefs as well as assumptions made by and information currently
available to us. When used in this report, the words "believe," "expect,"
"anticipate," "estimate" and similar expressions are intended to identify
forward-looking statements. Such statements are subject to certain risks,
uncertainties and assumptions referred to herein, including, without limitation,
the early stage nature of our operations and the risks and uncertainties
concerning the market acceptance of our services and products; technological
changes; increased competition; and general economic conditions. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated, or projected. We caution potential investors not to
place undue reliance on any such forward-looking statements, all of which speak
only as of the date made.
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PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In July 2000, we granted an option to purchase 200,000 shares of our
common stock at a price of $0.25 per share to our president, Matthew Hayes. The
grant of this option was exempt from registration under the Securities Act of
1933 pursuant to Section 4(2) thereof and there was no underwriter involved in
the transaction. As of the date of this report, other than this option, we have
no stock options outstanding.
In August 2000, in connection with the transaction described in Item 5
below and the related termination of their employment agreements, we cancelled
an aggregate of 6,000,000 shares of our common stock that had been held by
Richard Kaestner and Alex Tsakiris, each of whom are former officers and
directors of ours.
In August 2000, we issued 10,000 shares of our common stock to a
consultant as a compensatory stock grant.
In August 2000, we issued 300,000 shares of our common stock to one of
our directors as a compensatory stock grant for consulting services.
In September 2000, we issued 30,000 shares of our common stock to a
consultant as a compensatory stock grant.
In September 2000, we issued 50,000 shares of our common stock to each
of our directors, for a total of 150,000 shares, as a compensatory stock grant.
ITEM 5. OTHER INFORMATION
In June 2000, Matthew Hayes, H. Page Howe and Jeffrey Stevens were
elected to our Board of Directors. In August 2000 (i) Richard Kaestner and Alex
Tsakiris resigned as officers and directors, and (ii) Matthew Hayes was elected
as our president and H. Page Howe was elected as our chairman.
In August 2000, we completed a reorganization pursuant to which Kwik
Commerce, Inc., or Kwik Commerce, a corporation controlled by Messrs. Kaestner
and Tsakiris, acquired from us certain assets relating to our website design
division and assumed certain liabilities of ours related to our website design
division. In exchange therefore, (1) Kwik Commerce issued to us 2,500,000 shares
of its common stock, (2) Kwik Commerce granted us an option to purchase an
additional 1,000,000 shares of its common stock at $0.20 per share, and (3) the
6,000,000 shares of our common stock issued to Messrs. Kaestner and Tsakiris in
connection with the August 1999 acquisition of KwikWeb, Inc. were cancelled.
Effective upon the sale of assets to Kwik Commerce, Messrs. Kaestner and
Tsakiris resigned as officers and directors of the Company.
We, through our then newly-formed Internet Properties Development, Inc.
subsidiary, have agreed to purchase certain internet domain names and related
assets from Site HQ, Inc., Internet Properties Development, LLC and H. Page
Howe, an individual, for an aggregate purchase price of approximately $125,000.
H. Page Howe, who is one of our directors and our chairman, is an affiliate of
Site HQ, Inc. and Internet Properties Development, LLC.
In September, 2000, we entered into a non-binding letter of intent with
i-Titan Communications Networks, Inc., or i-Titan, to effect a reorganization
pursuant to a share-for-share exchange whereby each of the holders of the
capital stock of i-Titan would exchange all of their shares of capital stock for
shares of our capital stock. The reorganization is subject to execution and
delivery of definitive agreements between us and i-Titan with respect to the
transactions contemplated by the letter of intent, and compliance with all
requirements of federal and state securities laws, of the SEC and of all other
governmental authorities.
ITEM 6. EXHIBITS AND REPORTS ON FROM 8-K.
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None.
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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.
KWIKWEB.COM, INC.
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(Registrant)
Dated: November 20, 2000 By /S/ Matthew Hayes
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Matthew Hayes
President
