UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
October 31, 2000
Commission File Number: 0-26439
KidsToysPlus.com, Inc.
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(Exact name of registrant as specified in its charter)
Nevada, 98-0203927
----------------------- ------------------------
(Place of Incorporation) (IRS Employer ID Number)
1000-355 Burrard Street Vancouver, British Columbia V6C 2G8
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(Address of registrant's principal executive office)
1-877-566-1212
-------------------------------
(Registrant's telephone number)
Indicate by check mark whether the registrant has (1) filed all reports required
to be filed by Section 13 of 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 the past 90 days. Yes X No ___
Number of Shares of Common Stock, $0.001 Par Value,
Outstanding at October 31, 2000:
10,980,884
<PAGE>
KIDSTOYSPLUS.COM, INC.
For the Quarter Ended
October 31, 2000
INDEX TO FORM 10-QSB
Page
----
PART I - FINANCIAL INFORMATION ...............................................1
ITEM 1. FINANCIAL STATEMENTS: ................................................1
Balance Sheets:
- January 31, 2000 and October 31, 2000 ..............................1
Statements of Operations:
- For the Three Months Ended October 31, 2000 ........................2
Statement of Changes in Stockholders' Equity
- For the Period Ended October 31, 2000 ..............................3
Statements of Cash Flow:
- For the Three Months Ended October 31, 2000 ........................4
Notes to Financial Statements ........................................5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS ..................................8
PART II - OTHER INFORMATION .................................................13
ITEM 1. LEGAL PROCEEDINGS ...................................................13
ITEM 2. CHANGES IN SECURITIES ...............................................13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES .....................................13
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS ...................13
ITEM 5. OTHER INFORMATION ...................................................13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K ....................................13
SIGNATURES ..................................................................14
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
BALANCE SHEETS
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
=========================================================================================================
October 31, January 31,
2000 2000
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current
Cash and cash equivalents $ 119,647 $ 11,372
Accounts receivable 14,616 -
Inventory 72,855 -
Prepaid expenses and deposits 16,709 8,017
Due from related parties (Note 4) 47,634 -
--------------- --------------
Total current assets 271,461 19,389
Capital assets 25,290 10,323
--------------- ---------------
Total assets $ 296,751 $ 29,712
=========================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities $ 34,747 $ 56,419
--------------- ---------------
Total current liabilities 34,747 56,419
--------------- ---------------
Stockholders' equity
Common stock (Note 5)
Authorized
25,000,000 shares with a par value of $0.001
Issued and outstanding
10,980,884 shares (January 31, 2000 - 9,968,084) 10,980 9,968
Additional paid-in capital 948,062 239,274
Stock subscriptions receivable - (5,500)
Deficit, accumulated during the development stage (697,038) (270,449)
--------------- ---------------
Total stockholders' equity 262,004 (26,707)
--------------- ---------------
Total liabilities and stockholders' equity $ 296,751 $ 29,712
=========================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
==============================================================================================================================
Cumulative
Amounts
From Period From
February 4, Three Month Three Month Nine Month February 4,
1999 to Period Ended Period Ended Period Ended 1999 to
October 31, October 31, October 31, October 31, October 31,
2000 2000 1999 2000 1999
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
REVENUE
Sales $ 4,333 $ 2,624 $ - $ 4,333 $ -
COST OF SALES 3,595 3,595 - 3,595 -
------------- ------------ ----------- ------------ ----------
738 (971) - 738 -
------------- ------------ ----------- ------------ ----------
EXPENSES
Consulting fees 290,780 46,584 48,390 173,927 85,167
Depreciation 6,507 2,246 86 5,679 86
Entertainment and promotion 13,126 752 1,114 6,892 1,828
Equipment rental 5,128 1,088 - 2,115 -
Investor relations 63,332 35,665 - 60,652 -
Legal and accounting 84,233 15,486 7,923 39,577 26,983
Management fees 2,800 - - - 2,800
Marketing and advertising 13,883 9,247 - 13,883 -
Office and miscellaneous 97,226 20,147 16,265 68,588 24,024
Rent and security 25,930 5,029 3,683 16,672 3,683
Telephone and utilities 23,668 3,753 4,213 14,367 5,524
Transfer agent and filing fees 10,881 3,801 5,338 5,173 5,338
Travel and automobile 35,565 8,805 6,806 20,723 9,205
Web-site design and maintenance 39,304 7,370 7,094 9,277 7,094
------------- ------------ ----------- ------------ ----------
712,363 159,973 100,912 437,525 171,732
------------- ------------ ----------- ------------ ----------
Loss before other item (711,625) (160,944) (100,912) (436,787) (171,732)
OTHER ITEM
Interest 14,587 3,014 1,458 10,198 3,964
------------- ------------ ----------- ------------ ----------
Loss for the period $ (697,038) $ (157,930) $ (99,454) $ (426,589) $ (167,768)
==============================================================================================================================
Basic and diluted loss per share $ (0.01) $ (0.01) $ (0.04) $ (0.02)
==============================================================================================================================
Weighted average number
of shares of common
stock outstanding 10,955,179 9,968,084 10,587,434 8,311,443
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
==============================================================================================================================
Deficit,
Accumulated
Common Shares Additional Stock During the Total
---------------------------- Paid-in Subscriptions Development Stockholders'
Shares Amount Capital Receivable Stage Equity
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, February 4,
1999 - $ - $ - $ - $ - $ -
Shares issued for cash
at $0.001 per share 100,000 100 - - - 100
Shares subscribed for
cash at $0.001 per
share 5,500,000 5,500 - (5,500) - -
Shares issued for cash:
at $0.01 per share 3,960,000 3,960 35,640 - - 39,600
at $0.50 per share 408,084 408 203,634 - - 204,042
Loss for the period - - - - (270,449) (270,449)
----------- ----------- ----------- ----------- ----------- -----------
Balance, January 31,
2000 9,968,084 9,968 239,274 (5,500) (270,449) (26,707)
Shares issued for cash at
$1.25 per share 590,400 590 737,410 - - 738,000
Share issuance costs - - (73,800) - - (73,800)
Stock subscriptions
received - - - 5,500 - 5,500
Shares issued for cash
at $0.10 per share 400,000 400 39,600 - - 40,000
Shares issued for cash
at $0.25 per share 22,400 22 5,578 - - 5,600
Loss for the period - - - - (426,589) (426,589)
----------- ----------- ----------- ----------- ----------- -----------
Balance, October 31,
2000 10,980,884 $ 10,980 $ 948,062 $ - $ (697,038) $ 262,004
==============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Expressed in United States Dollars)
(Unaudited)
<TABLE>
=============================================================================================================================
Cumulative
Amounts
From Period From
February 4, Nine Month February 4,
1999 Period Ended 1999 to
to October 31, October 31, October 31,
2000 2000 1999
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (697,038) $ (426,589) $ (167,768)
Item not affecting cash:
Amortization 6,507 5,679 86
Changes in non-cash working capital items
Increase in accounts receivable (14,616) (14,616) -
Increase in inventory (72,855) (72,855) -
Increase in prepaid expenses and deposits (16,709) (8,692) (18,885)
Increase in due from related parties (47,634) (47,634) (424)
Increase (decrease) in accounts payable and accrued liabilities 34,747 (21,672) 34,316
--------------- --------------- ---------------
Net cash used in operating activities (807,598) (586,379) (152,675)
--------------- --------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital assets acquired (31,797) (20,646) (9,120)
--------------- --------------- ---------------
Net cash used in investing activities (31,797) (20,646) (9,120)
--------------- --------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Stock subscriptions received 5,500 5,500 -
Capital stock issued for cash 1,027,342 783,600 243,742
Share issuance costs (73,800) (73,800) -
--------------- --------------- --------------
Net cash provided by financing activities 959,042 715,300 243,742
--------------- --------------- ---------------
Change in cash and cash equivalents for the period 119,647 108,275 81,947
Cash and cash equivalents, beginning of period - 11,372 -
--------------- --------------- --------------
Cash and cash equivalents, end of period $ 119,647 $ 119,647 $ 81,947
=============================================================================================================================
Cash paid during the period for interest $ - $ - $ -
=============================================================================================================================
Cash paid during the period for income taxes $ - $ - $ -
=============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
OCTOBER 31, 2000
================================================================================
1. HISTORY AND ORGANIZATION OF THE COMPANY
The Company was incorporated on February 4, 1999 under the laws of the
state of Nevada. The Company is considered a development stage company, in
accordance with SFAS #7.
In the opinion of management, the accompanying financial statements contain
all adjustments necessary (consisting only of normal recurring accruals) to
present fairly the financial information contained therein. These
statements do not include all disclosures required by generally accepted
accounting principles and should be read in conjunction with the audited
financial statements of the Company for the year ended January 31, 2000.
The results of operations for the nine month period ended October 31, 2000
are not necessarily indicative of the results to be expected for the year
ending January 31, 2001.
2. GOING CONCERN
The Company'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. Without realization of additional capital,
it would be unlikely for the Company to continue as a going concern. It is
management's plan to seek additional capital through equity financings.
<TABLE>
==============================================================================================
October 31, January 31,
2000 2000
----------------------------------------------------------------------------------------------
<S> <C> <C>
Deficit accumulated during the development stage $ (697,038) $ (270,449)
Working capital (deficiency) 236,714 (37,030)
==============================================================================================
</TABLE>
3. SIGNIFICANT ACCOUNTING POLICIES
Inventory
Inventory is valued at the lower of cost and net realizable value.
4. DUE FROM RELATED PARTIES
<TABLE>
================================================================================
October 31, January 31,
2000 2000
----------------------------------------------------------------- --------------
<S> <C> <C>
Due from the president of the Company $ 29,189 $ -
Due from an officer of the Company 18,445 -
------------- -----------
$ 47,634 $ -
================================================================================
</TABLE>
Amounts due from related parties are unsecured, non-interest bearing with
no terms of repayment.
5
<PAGE>
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
OCTOBER 31, 2000
================================================================================
5. COMMON STOCK
On April 7, 2000, the Company completed a private placement whereby it
issued 590,400 units under Rule 506 of Regulation D and S of the Securities
Act of 1933 at $1.25 per unit for total proceeds of $738,000. Each unit
consists of one restricted share of common stock and one non-transferable
share purchase warrant. Each warrant entitles the holder to purchase one
restricted share of common stock of the Company at a price of $1.625 per
common share until April 7, 2001.
On August 4, 2000, the Company issued 400,000 shares of common stock on the
exercise of stock options under Rule 504 of Regulation D of the Securities
Act of 1933 for total proceeds of $40,000.
On September 21, 2000, the Company issued 22,400 shares of common stock on
the exercise of stock options under Rule 504 of Regulation D of the
Securities Act of 1933 for total proceeds of $5,600.
6. STOCK OPTIONS
Following is a summary of stock option activity during the nine month
period ended October 31, 2000:
==========================================================================
Weighted
Average
Number Exercise
Of Shares Price
--------------------------------------------------------------------------
Outstanding, January 31, 2000 2,000,000 $ 0.17
Granted 955,000 0.61
Exercised (422,400) 0.11
Cancelled (477,600) 0.22
-----------
Outstanding, October 31, 2000 2,809,400 0.38
==========================================================================
The weighted average fair value of options granted during the nine month
period ended October 31, 2000 was $0.76 per share.
7. RELATED PARTY TRANSACTIONS
During the nine month period ended October 31, 2000, the Company entered
into the following transactions with related parties:
a) The Company paid consulting fees of $59,000 (October 31, 1999 -
$30,000) to the president of the Company, and $18,066 (October 31,
1999 - $18,000) to a former director of the Company.
b) The Company paid $Nil (October 31, 1999 - $2,800) in management fees
to the president of the Company.
Included in accounts payable as at October 31, 2000 is an amount of $Nil
(January 31, 2000 - $18,000) due to a director of the Company.
6
<PAGE>
KIDSTOYSPLUS.COM, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
(Expressed in United States Dollars)
(Unaudited)
OCTOBER 31, 2000
================================================================================
8. COMMITMENTS
During the nine month period ended October 31, 2000, the Company terminated
Consulting Agreements with a director and consultant of the Company. The
agreements called for consulting fees of $4,000 per month to be paid.
9. SEGMENTED INFORMATION
The Company currently conducts substantially all of its operations in
Canada in one business segment.
10. SUBSEQUENT EVENT
The Company entered into an agreement effective November 1, 2000 for a term
of 6 months with Renmark Financial Communications ("Renmark") whereby
Renmark will provide investor relations and communication services to the
Company in return for fees of $5,000 per month and the issue 150,000
restricted shares of common stock of the Company.
7
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Except for disclosures that report the Company's historical results, the
statements set forth in this section contain forward-looking statements. Words
or phrases "will likely result", "are expected to", "will continue", "is
anticipated", "estimate", "project or projected", or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the Reform Act).
Actual results could differ materially form those projected in forward-looking
statements. Additional information and factors that could cause actual results
to differ materially from those in the forward-looking statements are set forth
in this Form 10-QSB, and in the section entitled "Risk Factors" in the Company's
Annual Report on Form 10-KSB filed with the Securities and Exchange Commission.
The Company desires to take advantage of certain provisions in the Private
Securities Litigation Reform Act of 1995, which provide a safe harbor for
forward-looking statements made by or on behalf of the Company. The Company
hereby cautions stockholders, prospective investors in the Company, and other
readers to not place undue reliance on these forward-looking statements, which
can only address known events as of the date of this report.
General Overview
Kidstoysplus.com, Inc. (the "Company," "we," "our" or "us"), was organized and
incorporated under the laws of the State of Nevada on February 4, 1999. We
operate a retail website on the Internet specializing in marketing children's
products, including children's toys, collectable toy items and hobby related
products. Subsequent to October 31, 2000 the Company opened a retail store in
order to expand operations beyond the Internet and the Company published and
distributed a full color product catalog for the 2000 holiday shopping season.
The following discussion and analysis explains our results of operations for the
three-month fiscal quarter ended October 31, 2000 and our financial condition.
You should review our discussion and analysis of financial condition in
conjunction with our financial statements and the related notes, as well as
statements contained in the Company's Securities and Exchange Commission
filings.
Results of Operations
Fiscal Quarter Ended October 31, 2000
Revenues: We officially launched our website for online sales on June 21, 2000.
As of October 31, 2000, we had approximately 1,650 items in stock and posted for
sale on our website. We believe that our product selection is appropriate given
the Company's size and scope of operations for the 2000 holiday shopping season,
and we believe that our current inventory will allow management to gauge the
Company's potential for success selling toy products on the Internet. We
continue to examine the feasibility of expanding our operations into traditional
retail and mail order avenues. During our fiscal quarter ending October 31,
2000, we generated revenues from Internet sales and from our brick and mortar
retail store in the amount of $2,624, which represents an increase of 53% over
our second quarter sales revenue of $1,709 for the fiscal quarter ending July
31, 2000. We had no revenues from sales during the fiscal quarter ending October
31, 1999. We had interest income in the amount of $3,014 during the fiscal
quarter ended October 31, 2000, compared to interest income in the amount of
$1,458 for the fiscal quarter ended October 31, 1999.
Our cost of sales for the quarter ended October 31, 2000 was $3,595. Gross
profit from sales during the fiscal quarter ended October 31, 2000 was (971).
8
<PAGE>
Expenses: We announced on July 7, 2000 that we planned to move into the mail
order market sector with a product catalog. We began shipping our mail order
catalog on November 18, 2000. During our fiscal quarter ended October 31, 2000,
we incurred expenses in the aggregate of $159,973 related primarily to: (i)
continuous development of our website technologies, (ii) costs related to
consolidating our operations into a smaller warehouse and establishing a retail
brick and mortar location in Courtenay, British Columbia, Canada, (iii) costs
related to hiring staff, (iv) costs related to the sale of inventory, (v)
expenses related to the design and layout of our fall toy catalog, (vi) fees
related to the increased expenditures on website positioning programming, (vii)
costs incurred for consulting fees for corporate communications and financial
services, and (viii) fees and costs related to corporate legal, accounting,
shareholder communication services and general operating costs. During the
fiscal quarter ended October 31, 2000, we paid consulting fees in the amount of
$53,954, which included fees paid to: (i) Chandra Wright of Netwirx Holdings,
our website positioning firm, (ii) Terry Komm, our design and layout consultant
for services related to our new product catalog, (iii) Axel Miedbrodt, our
Operations Manager, (iv) Ian Martinovsky and Bernie Brauer, our corporate
communications consultants, (v) fees paid to our data entry clerk and a
programmer, (v) fees paid to Albert R. Timcke, our President, (vi) fees paid to
Gerry Williams, our business consultant, and (vii) fees paid to FJR Resources
for corporate communications services rendered. We paid legal and accounting
fees of $15,486 during the fiscal quarter ending October 31, 2000. We incurred
other expenses including: travel and automobile expenses of $8,805, telephone
and utility expenses of $3,753, rent and security expenses of $5,029, investor
relations expenses of $35,665, entertainment and promotion expenses of $752,
office and miscellaneous expenses of $20,147, equipment rental expenses of
$1,088, transfer agent and filing fees of $3,801, and marketing and advertising
expenses of $9,247.
During the fiscal quarter ended October 31, 2000, we consolidated our operations
by closing our original warehouse and consolidating our warehouse space into a
smaller location in order to reduce overhead expenses. Our new warehouse
facility is within walking distance of our head office and our bricks and mortar
retail store location.
Several of the expenses we incurred in the fiscal quarter ended October 31,
2000, were non-reoccurring expenses on a quarterly basis, including expenses
related to the design and layout of our full color mail order catalog. We
anticipate, however, that our operating and administrative expenses will
increase during the fourth quarter of our fiscal year 2000 as we expand our
operations, increase our advertising, and hire additional personnel for our
operations in connection with the 2000 holiday shopping season.
Net Loss for fiscal quarter: We had a net loss of $157,930 for the fiscal
quarter ended October 31, 2000, compared to a net loss of $99,454 for the fiscal
quarter ended October 31, 1999. Our losses are anticipated to increase in future
periods as our operating and administrative expenses are expected to increase at
a rate faster than our revenues from sales.
Loss per Share for fiscal quarter: We experienced a loss per share of $0.01 for
the fiscal quarter ended October 31, 2000, compared to a loss per share of $0.01
for the fiscal quarter ended October 31, 2000.
Nine Months Ended October 31, 2000, compared to the corresponding period in 1999
Revenues: We were organized and incorporated on February 4, 1999 and our cost
during the first nine months of operation in 1999 reflected start-up costs
associated with starting our business and costs relating to design and
development of our website. We had no revenue during 1999. We had revenue from
sales in the nine-month period ending October 31, 2000 of $4,333. Our loss for
the period from February 4, 1999 to October 31, 1999.
Net Loss for the Nine Month Period Ended October 31, 2000: We had a loss of
$426,589 for the nine-month period ended October 31, 2000, compared to a loss of
$167,798 for the period from February 4, 1999 to October 31, 1999.
9
<PAGE>
Loss per share: Our basic and diluted loss per share for the nine-month period
ending October 31, 2000, was $0.04 per share, compared to our basic and diluted
loss per share for the period from February 4, 1999 to October 31, 1999 of
$0.02.
Plan of Operation
During our fiscal quarter ending October 31, 2000, we experienced a significant
growth in cash disbursements. We continued to purchase opening inventories at an
accelerated rate, we increased our spending on website positioning programming
and internal website development programming, we incurred design and layout
expenses for our fall product catalog and we increased our consumption of
financial consulting and corporate communications services and incurred related
fees. We expect that costs in certain of these areas will continue to grow into
our fourth fiscal quarter. We anticipate incurring further advertising costs. We
plan to use various print media, including a full color catalogue, in order to
effectively market and advertise our company and our products during the 2000
holiday shopping season.
For the fiscal quarter ending January 31, 2001, we intend to focus on recruiting
and training additional qualified operational and sales personnel; we intend to
intensify promotional efforts for our website and brand name; we intend to focus
on building market awareness and attracting customers to our website and we
intend to work hard to refine our distribution and fulfillment operations
strategy. We anticipate that we will actively market merchandise through our
website and develop strategic relationships with additional fulfillment vendors;
however, we will also focus on opening additional company retail store fronts
and on promoting the success of our mailing catalogue.
Capital Requirements
We anticipate our operating budget to implement our business plan and to meet
our financial obligations during the remainder of our fiscal year ending January
31, 2001, and through the fiscal quarters ending July 31, 2001, will be as
follows:
10
<PAGE>
PERIOD
------
Fiscal Quarter Ended
--------------------
DESCRIPTION January 31, April 30, July 31,
2001 2001 2001
--------------------------------------------------------------------------------
Accounting and legal $11,000 $10,000 $10,000
expenses.
Office and $30,000 $30,000 $28,000
administration
Website enhancements $10,000 $6,000 $10,000
and posting
Web maintenance and $3,000 Nil Nil
software upgrades
Warehouse and office $3,000 $2,000 $2,000
facilities
Company marketing $5,000 $5,000 $5,000
expense
Inventory Expense $5,000 $5,000 $5,000
Working capital $5,000 $5,000 $5,000
Totals $73,000 $63,000 $65,000
--------------------------------------------------------------------------------
Liquidity and Capital Resources
As of October 31, 2000, we had working capital in the amount of $236,714 and we
had cash or cash equivalents of $119,647. We had prepaid expenses and deposits
of $16,709. We had receivables due from related parties in the amount of
$47,634. We had accounts payable and accrued liabilities in the amount of
$34,747.
For the fiscal quarter ended October 31, 2000, we had total assets of $296,751,
compared to total assets of $29,712 for the fiscal year ended January 31, 2000.
We anticipate that our working capital is sufficient to satisfy our cash
requirements through our second fiscal quarter ending July 31, 2001. We
anticipate we will be required to raise additional funds towards the end of the
second quarter of 2001 in order to allow us to expand operations through 2001.
We anticipate that we will be required to raise at least $250,000 to $500,000
during fiscal year 2001 to meet our anticipated cash requirements related to the
possible expansion of our retail operations in physical facilities. We
anticipate that, whether or not we are able to develop additional retail outlets
on Vancouver Island, that we will incur other expenses throughout 2001, such as
costs and fees related to inventory acquisition, marketing expenses, legal fees,
accounting fees, website consulting fees, payroll, and fees incurred for work
performed relating to our distribution center technologies.
We believe our estimates of our capital requirements are reasonable. The capital
requirements are only estimates and can change for many different reasons, some
of which are beyond our control. We are a development stage company in the
beginning stages of operating a online retail website and a "bricks and mortar"
retail store on Vancouver Island, British Columbia, Canada. We are in the
process of finalizing
11
<PAGE>
our product lines and making arrangements to purchase inventory. We are also
exploring the possibility of obtaining a credit facility and
manufacturer/distributor financing facility in order to enable us to acquire
additional inventory.
We cannot assure you that we will be able to obtain financing, a line of credit
or a manufacturer/distributor financing facility in a timely manner or on
acceptable terms, if at all.
Product Research and Development
Our website was completely functional and suffered no major downtime during the
fiscal quarter ended October 31, 2000. Design and production changes planned for
2000 are nearing completion. Our programmers will carry out all the required
programming for the rest of the fiscal year 2000 ending January 31, 2001. Some
minor programming modifications will be made to several categories on the
website. Continuous changes will occur to product descriptions, pricing and the
addition of new products offered for sale on our website.
We also anticipate that we will spend approximately $5,000 to complete
development of our customer service and support systems, inventory control
systems, distribution and logistical facilitation systems, accounting systems
and other internal control systems to our year end of January 31, 2001.
Our commercial success will depend on our ability to attract visitors and
shoppers to our Kidstoysplus.com website. This will require us to develop and
use increasing sophisticated technologies to generate, sustain and maintain user
interest and satisfaction. See "Note Regarding Forward Looking Statements."
Our Distribution Center and Customer Service Center
We leased a distribution and warehouse facility located near our corporate
office and customer service center in Courtenay on Vancouver Island, British
Columbia, Canada. We consolidated our distribution center into a smaller
location to reduce our overhead. We have now leased new facility located near
our head office and retail store. Our distribution facility is now approximately
1,700 square feet and it includes office, warehouse and delivery space for our
distribution operations. Our corporate office/customer service facility is
approximately 3,200 square feet. The rent for our distribution facility is
approximately $450 per month and the rent for our corporate office/customer
service facility is approximately $700 per month. We anticipate that we will
spend approximately $12,000 during the next twelve months improving our
distribution and customer service facilities.
Personnel
For the quarter ended October 31, 2000, we had 7 full-time personnel. Albert R.
Timcke, our director, our President and our corporate secretary, assists us with
strategic corporate planning, financing activities and product research and
development. Axel Miedbrodt is our Vice President of Operations and has been
establishing our distribution and customer service facilities. Ian Martinovsky
and Bernie Brauer assist us with our corporate communications and marketing.
Booker Bennett assists us as a website programmer. Caroline Miskenack aids us
with respect to inspection and data entry and Terry Komm of Ewire Design, a
design firm, has been assisting us in developing our product catalog for
printing.
For the fiscal quarter ended October 31, 2000, we also had one part-time
consultant, Chandra Wright of Netwirx Holdings, a website positioning firm. In
the near future, we may engage additional consultants to assist us with the
development of our website or technology or in the licensing of software and
information systems, as well as with the implementation of our business plan.
For the fiscal year 2001, we anticipate that we will employ additional staff in
order to provide 1-800 number consumer support services, to staff our
distribution warehouse and to assist us with administration functions.
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Our success will depend in large part on our ability to attract and retain
skilled and experienced employees. We do not anticipate any of our employees
will be covered by a collective bargaining agreement.
We do not maintain key man life insurance on any of our directors or executive
officers.
Option Grants to Directors and Employees
During the fiscal quarter ended October 31, 2000, our Board approved the grant
of options exercisable to acquire, in aggregate, a total of 60,000 of our common
shares. We approved the grant of these options to one employee on September 14,
2000. These options have not been issued as of October 31, 2000. Our stock
option grants are more fully described in note six of the accompanying financial
statements.
Inflation
Our results of operations have not been affected by inflation and management
does not expect inflation to have a significant effect on our operations in the
future.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
We agreed to issue an aggregate of 225,000 of our common shares to 3588122
Canada Inc., doing business as "Renmark Financial Communication" pursuant to an
agreement for services dated October 16, 2000. Under that agreement, 150,000
restricted common shares were issued to Renmark Financial Communication during
the fiscal quarter ended October 31, 2000 in exchange for services. Under
certain circumstances, we will be obligated to issue an additional 75,000
restricted common shares to Renmark Financial Communication before the end of
the first fiscal quarter of 2001. The common shares issued to Renmark Financial
Communication during the fiscal quarter ended October 31, 2000 were issued
pursuant to an exemption from registration under Rule 506 of Regulation D
promulgated under the Securities Act of 1933, as amended.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FROM 8-K
(a) Exhibits
Exhibit
Number Description
------ -----------
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
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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 thereto duly authorized.
KIDSTOYSPLUS.COM, INC.
----------------------
(Registrant)
Date: December 20, 2000
/s/ Albert R. Timcke
----------------------
Albert R. Timcke, Chairman of the Board of Directors,
President and Secretary
(Principal Financial Officer)
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EXHIBIT INDEX
Exhibit
Number Description
------ -----------
27.1 Financial Data Schedule
