<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
--- OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission File No. 000-26799
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UBRANDIT.COM
--------------
(Exact name of registrant as specified in its charter)
Nevada 87-0381646
------ ----------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
12626 High Bluff Drive, Suite 200, San Diego, CA.
-------------------------------------------------
(Address of principal executive offices)
92130
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(Zip Code)
(858) 350-9566
----------------
(Registrant's telephone number,
including area code)
N/A
---
(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 at least the past 90 days.
YES _X_ NO __
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at January 31, 2000
----- -------------------------------
Common Stock $0.001 par value 11,738,333
<PAGE>
UBRANDIT.COM
INDEX
Page
----
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements
Consolidated Balance Sheets at September 30, 1999 (restated) and
December 31, 1999 (unaudited) 3
Consolidated Statement of Operations for the Three Months Ended
December 31, 1998 (unaudited) and the Three Months Ended
December 31, 1999 (unaudited) 4
Consolidated Statements of Cash Flows for the Three Months Ended
December 31, 1998 (unaudited) and the Three Months Ended
(unaudited) 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 3. Quantitative and Qualitative Disclosure About Market Risk 9
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities and Use of Proceeds 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
Index to Exhibits 11
CAUTIONARY NOTE ON FORWARD LOOKING STATEMENTS
This Quarterly Report contains certain forward-looking statements that
involve risks and uncertainties. These forward-looking statements are not
historical facts but rather are based on current expectations, estimates and
projections about our industry, our beliefs and assumptions. We use words such
as "anticipates," "expects," "intends," "plans," "believes," "seeks,"
"estimates" and variations of these words and similar expressions to identify
forward-looking statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and other factors,
some of which are beyond our control, are difficult to predict and could cause
actual results to differ materially from those expressed or forecasted in the
forward-looking statements. You should not place undue reliance on these
forward-looking statements included or otherwise incorporated in this Quarterly
Report, which reflect our management's view only on the date of filing of this
report. We undertake no obligation to update these statements to reflect events
or circumstances that occur after the filing date of this Quarterly Report or to
reflect the occurrence of unanticipated events.
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
---------------------
<TABLE>
Ubrandit.com and subsidiary
Consolidated Balance Sheets
<CAPTION>
September 30, December 31,
1999 1999
(restated) (unaudited)
-------------- --------------
ASSETS
<S> <C> <C>
Current assets
Cash $ 5,613,922 $ 5,299,534
Accounts receivable 7,290 8,200
Subscription receivable 51,000 -
Prepaid expenses 20,750 4,016
Deposits 11,872 11,872
-------------- --------------
Total current assets 5,704,834 5,323,622
Other assets:
Property and equipment - net of
accumulated depreciation 150,567 158,583
Core technology - net of accumulated
amortization 456,790 433,040
Goodwill - net of accumulated amortization 594,354 561,993
Organizational costs - net of accumulated
amortization 1,110 1,040
-------------- --------------
$ 6,907,655 $ 6,478,278
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 45,581 $ 18,369
Accrued expenses 19,324 17,800
Current portion of leases payable 5,129 5,275
Payroll taxes payable 7,607 7,250
-------------- --------------
Total current liabilities 77,641 48,694
Other liabilities:
Leases payable, net of current portion 8,859 7,484
Stockholders' equity
Common stock, $0.001 par value,
25,000,000 shares authorized;
11,783,333 shares issued and
outstanding 11,738 11,738
Additional paid in capital 7,857,262 7,857,262
Accumulated deficit (1,047,845) (1,446,900)
-------------- --------------
Total stockholders' equity 6,821,155 6,422,100
-------------- --------------
$ 6,907,655 $ 6,478,278
============== ==============
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
Ubrandit.com and subsidiary
Consolidated Statements of Operations
Three months Three months
ended ended
December 31, December 31,
1998 1999
(unaudited) (unaudited)
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Revenue $ - $ 32,711
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Expenses:
Direct operating - 167,925
Sales, general and administrative - 261,468
Depreciation and amortization 60 68,613
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Total operating expenses 60 498,006
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Operating (loss) (60) (465,295)
Other income (expense):
Interest income - 66,623
Interest expense - (383)
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- 66,240
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Net (loss) $ (60) $ (399,055)
============= =============
Per share information:
Weighted average shares
outstanding - basic and diluted 777,041 11,738,333
============= =============
Net (loss) per common share - basic
and diluted $ (0.00) $ (0.03)
============= =============
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
Ubrandit.com and subsidiary
Consolidated Statements of Cash Flows
Three months Three months
ended ended
December 31, December 31,
1998 1999
(unaudited) (unaudited)
------------ ------------
Cash flows from operating activities:
Net (loss) $ (60) $ (399,055)
------------ ------------
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 60 68,613
Changes in assets and liabilities:
(Increase) in accounts receivable - (910)
Decrease in subscription receivable - 51,000
Decrease in prepaid expenses 387 16,734
Decrease in deferred offering costs 3,000
(Decrease) in accounts payable - (27,211)
(Decrease) in accrued expenses - (1,524)
(Decrease) in payroll taxes payable - (357)
------------ ------------
Total adjustments 3,447 106,345
------------ ------------
Net cash provided by (used in) operating
activities 3,387 (292,710)
------------ ------------
Cash flows from investing activities:
Purchase of fixed assets - (20,449)
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Net cash (used in) investing activities - (20,449)
------------ ------------
Cash flows from financing activities:
Repayments of capital lease obligations - (1,229)
Net proceeds from issuance of common
stock, net of issuance costs 38,400 -
------------ ------------
Net cash provided by (used in)
financing activities 38,400 (1,229)
------------ ------------
Net increase (decrease) in cash 41,787 (314,388)
Cash, beginning 2,400 5,613,922
------------ ------------
Cash, ending $ 44,187 $ 5,299,534
============ ============
Supplemental cash flow information:
Cash paid for interest $ - $ 383
=========== ===========
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
Ubrandit.com and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
Note 1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements,
which include the accounts of Ubrandit.com and subsidiary (the
"Company"), have been prepared in accordance with generally accepted
accounting principles for interim financial information. Pursuant to
the rules of the Securities and Exchange Commission they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion
of management, all adjustments, consisting only of normal recurring
accruals considered necessary for a fair presentation, have been
included in the accompanying unaudited financial statements. All
significant intercompany transactions and balances have been eliminated
in consolidation. Operating results for the three months ended December
31, 1999 and 1998 are not necessarily indicative of the results that
may be expected for the full year ending September 30, 2000. For
further information, refer to the consolidated financial statements and
notes therto, included in the Company's Transition Report on Form 10-K
for the nine months ended September 30, 1999.
Note 2. COMPREHENSIVE INCOME
The Company follows Statement of Financial Accounting Standards No.
130, "Reporting Comprehensive Income" ("SFAS No. 130"). SFAS No. 130
establishes standards for reporting and display of comprehensive income
and its components in the financial statements. For both periods
presented, there were no differences between reported net income and
comprehensive income.
-6-
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operations.
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RECENT EVENTS
In September of 1999, the Ubrandit.com (the "Company") launched its
branding affiliate program ("Branding Affiliate Program") in conjunction with
the launch of JungleJeff.com, the Company's large e-commerce site. Under its
Branding Affiliate Program, the Company has established over 3,000 sites through
the date of filing of this Quarterly Report. The Company's Branding Affiliate
Program provides its Branding Affiliates with the ability to customize, certain
of the Company's destination Web sites with the Branding Affiliates respective
name, logo, color scheme, and return navigation. A key component of the Branding
Affiliate program is to make the content provided by the Company "transparent,"
meaning that the end-customer is not exposed to the Ubrandit.com brand. This
allows the Branding Affiliate to offer its customer-base new web services with
out losing customers to a third-party content provider.
Branding templates for Stockstudy.com, the Company's financial
information site, are undergoing beta testing by selected sites. It is expected
that beta testing will be complete by the end of the first calendar quarter of
2000 and that Stockstudy.com will join the Company's e-commerce site
(JungleJeff.com) as the second brandable template available through the Branding
Affiliate Program.
Recently the Company completed the formation of Ubrandit ISP, a wholly
owned subsidiary of the Company formed to provide the Company's brandable
Internet access service. Ubrandit ISP is undergoing beta testing. The Company
expects that the Ubrandit ISP will be available to customers by the end of the
first quarter of calendar 2000.
The Company recently filed a listing application with the American
Stock Exchange ("AMEX") for listing its Common Stock on AMEX. The Company is
unable to provide any assurance or guarantee that the Company's Common Stock
will be approved for listing on AMEX. In connection with the filing of its
listing application, the Company filed a Registration Statement on Form 8-A
under the Securities Exchange Act of 1934, as amended.
THREE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO THREE MONTHS ENDED
DECEMBER 31, 1998
Our Company's management believes that a comparison of the Company's
results of operations for the three-month period ended December 31, 1999 to
those for the three-month period ended December 31, 1998 is not meaningful, as
the Company did not commence operations under its present business strategy
until after the Company's acquisition of its principal subsidiary, Global
Investors Guide, in March 1999.
Consolidated revenue for the three months ended December 31, 1999 was
$32,711, as compared to no revenue for the three-month period ended December 31,
1998. Approximately 64% of the revenue for the three months ended December 31,
1999 was generated from newly commenced sales on the Jungle Jeff Web site and
the remaining portion was generated by renting mailing lists.
Direct operating expenses were $167,925 for the three months ended
December 31, 1999, as compared to no such expenses for the three-month period
ended December 31, 1998. The direct operating expenses incurred during the three
months ended December 31, 1999 included $141,000 of payroll costs associated
with the development of Web sites, $26,000 of costs associated with the purchase
of data feeds and other costs associated with JungleJeff.com, and miscellaneous
operating expenses of $1,000.
-7-
<PAGE>
The Company had no sales, general and administrative expenses for the
three months ended December 31, 1998, as compared to sales, general and
administrative expenses of $261,468 for the three months ended December 31,
1999. The increase was due primarily to the following factors: increased
research and development costs of $16,000, administrative payroll of $21,000,
accounting and legal fees associated with filings with the Securities and
Exchange Commission $78,000, rent expense of $32,000, business fees of $4,000,
expense of $41,000 to facilitate fair and timely dissemination of press
releases, office expense of $37,000, Internet service providers expense of
$14,000 and travel expenses of $18,000.
For the three months ended December 31, 1999, depreciation and
amortization costs were $68,613, as compared to depreciation and amortization
costs of $60 for the period ended December 31, 1998. The increase almost
entirely was due to amortization of core technology and goodwill recorded from
the acquisition of Global Investors Guide on March 11, 1999, and depreciation of
certain fixed assets.
In sum, revenue less operating expenses resulted in an operating loss
of $465,295 for the three months ended December 31, 1999, as compared to an
operating loss of $60 for the period ended December 31, 1998.
Interest expense for the three months ended December 31, 1999 was $383,
as compared to no such expense for the quarterly period ended December 31, 1998.
This expense related to the convertible debt recorded from the acquisition of
Global Investors Guide on March 11, 1999, and the interest on the capital lease
obligation.
Interest income was $66,623 for the three months ended December 31,
1999, as compared to no interest income for the period ended December 31, 1998.
The interest income was generated through interest earned during the three
months ended December 31, 1999 on cash balances received from the sale of equity
securities.
LIQUIDITY AND CAPITAL RESOURCES
At present, the Company is generating revenue only on a limited basis.
The Company's main source of funds has been the sale of the Company's equity
securities in private and offshore transactions. Through the date of the filing
of this Quarterly Report, the Company has issued 9,412,333 shares of its Common
Stock for approximately $6,382,659, including proceed generated through its most
recent offering and after deduction of offering expenses. In connection with the
acquisition of Global Investors Guide, the Company exchanged 1,826,000 shares of
its Common Stock for all the outstanding shares of Global Investors Guide and
recorded $262,000 in compensation expense. The Company also converted $264,251
of debt into 500,000 shares, which were issued to two creditors of the Company.
The Company had $5,299,534 in cash at December 31, 1999, the date of its
unaudited financial statements for the first quarter of this fiscal year. Since
June 30, 1999, the Company has raised approximately $4,446,999 in cash, less
offering expenses of $35,540, through the sale of Common Stock in offshore
transactions pursuant to the exemption from registration available under
Regulation S of the Securities Act of 1933, as amended. The Company currently is
using these funds mainly to develop and market the Company's destination Web
sites and its co-branding and private label technology and to fund certain
ongoing general and administrative expenses plus consulting expense with the
total of such expenses.
The Company generates revenue on a limited basis from its e-commerce
destination site JungleJeff.com and its branded book, music and video store Web
sites. The Company expects to generate material revenue from operations
following the anticipated successful roll-out of the Company's marketing
campaign during the 2000 fiscal year. Further, if the Company realizes revenue
from branding, advertising, sponsorship fees, and custom programming, said
revenue will be subject to all of the risks of a new enterprise in a very
competitive industry and may not yield any profit for the Company.
-8-
<PAGE>
The Company expects that its present cash reserves are sufficient to
finance its operating capital requirements at projected rates for a period of 33
months following the filing date of this Quarterly Report. Thereafter, the
Company will depend on operating revenue to finance its continuing operations.
If revenue from operations is insufficient to support expenses, the Company will
be required to secure additional sources of equity or debt financing to satisfy
its capital needs. The Company has no commitment for any such additional capital
and may be unable to raise the additional capital necessary to support its
operations.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
---------------------------------------------------------
The Company does not own financial instruments that are subject to
market risk.
-9-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
None.
Item 2. Changes in Securities and Use of Proceeds.
-----------------------------------------
None.
Item 3. Defaults upon Senior Securities.
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
None.
Item 5. Other Information.
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
Reference is made to the Exhibit Index. The Company filed one report on
Form 8-K during the quarter. This report was filed on December 28, 1999
and indicated a change in the Company's fiscal year end to September
30, 1999.
-10-
<PAGE>
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.
Registrant:
UBRANDIT.COM
Dated: February 14, 2000 By /s/ Jeff Phillips
-------------------------
Jeff Phillips
President, CEO, Chairman
Dated: February 14, 2000 By /s/ Roger C. Royce
-------------------------
Roger C. Royce
Chief Operating Officer
Dated: February 14, 2000 By /s/ Mark Cullivan
-------------------------
Mark Cullivan
Vice President Operations
EXHIBIT INDEX
Exhibit
No. Description of Exhibits
- ------- -----------------------
2.1 Agreement and Plan of Reorganization for the Acquisition of all of the
Outstanding Shares of Common Stock of Global Investors Guide by
Ubrandit.com (1)
3.1 Ubrandit.com Articles of Incorporation and amendments (1)
3.2 Ubrandit.com By-laws (1)
3.3 Registrant's Restated Bylaws (2)
4.1 Specimen of Common Stock Certificate (2)
10.1 1999 Stock Option and Incentive Plan (1)
10.2 Form of Incentive Stock Option Agreement (1)
10.3 Form of Non-Statutory Stock Option Agreement (1)
10.4 Information Distribution Agreement with S&P Comstock dated as of
January 16, 1998 (1)
10.5 Database License Agreement with Baker & Taylor, Inc. dated as of
January 1, 1999 (1)
10.6 Computer Software License Agreement with Townsend Analytics, dated
April 21, 1998 (1)
10.7 License Agreement with Muze Inc. [undated] (1)
11.1 Statement of Computation of per share earnings (reference is made to
the Statement of Operations included in the Financial Statements filed
herewith)
-11-
<PAGE>
21.1 Subsidiary of Registrant Global Investment Guide, Inc. Articles of
Incorporation (1)
21.2 Subsidiary of Registrant Global Investment Guide, Inc. By-laws (1)
27.1 Financial Data Schedule *
- ------------------
* Filed herewith.
(1) Previously filed with the Securities and Exchange Commission on the
Company's Registration Statement on Form 10.
(2) Previously filed with the Securities and Exchange Commission on the
Company's Registration Statement on Form 8-A.
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
UBRANDIT.COM'S QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED DECEMBER 31,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> SEP-30-1999 SEP-30-2000
<PERIOD-START> OCT-31-1998 OCT-01-1999
<PERIOD-END> DEC-31-1998 DEC-31-1999
<CASH> 5,613,922 5,299,534
<SECURITIES> 0 0
<RECEIVABLES> 7,290 8,200
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 5,704,834 5,323,622
<PP&E> 150,567 158,583
<DEPRECIATION> (38,580) (51,013)
<TOTAL-ASSETS> 6,907,655 6,478,278
<CURRENT-LIABILITIES> 77,641 48,695
<BONDS> 0 0
0 0
0 0
<COMMON> 11,738 11,738
<OTHER-SE> 6,809,417 6,410,362
<TOTAL-LIABILITY-AND-EQUITY> 6,907,655 6,478,279
<SALES> 0 0
<TOTAL-REVENUES> 0 32,711
<CGS> 0 0
<TOTAL-COSTS> 60 498,006
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 383
<INCOME-PRETAX> (60) (399,055)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (60) (399,055)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (60) (399,055)
<EPS-BASIC> 0.00 (0.03)
<EPS-DILUTED> 0.00 (0.03)
</TABLE>
