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Previous: RESOURCES CONNECTION INC, S-1/A, EX-23.1, 2000-11-17 |
Next: GONETGEN COM INC, 10QSB, EX-27, 2000-11-17 |
UNITED STATES |
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SECURITIES AND EXCHANGE COMMISSION |
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Washington, DC 20549 |
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Form 10-QSB |
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| (Mark one) | |
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE |
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SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended: September 30 , 2000 |
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE |
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SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from ____________ to _____________ |
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Commission file number: 0-26307 |
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GONETGEN.COM, INC. |
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(Exact name of small business issuer as specified in its charter) |
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Florida |
65-0873448 |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
1481 S. Military Trail #12, West palm Beach, FL |
33415 |
(Address of principal executive offices) |
(Zip Code) |
(561) 649-3901 |
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(Issuer’s telephone number) |
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6685 Forrest Hill Blvd., Suite 211, West Palm Beach, FL 33414 (561) 641-2424 |
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(Former name, former address and former fiscal year, if changed since last report) |
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Check whether the issuer (1) filed all reports required to be filed by section 13 or 15 (d) of the Exchange Act during the past 12 months ( or for such shorter period that the registrant was required to file such report (s), and (2) has been subject to such filing requirements for the past 90 days. Yes [ X ] No [ ] |
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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: |
Common Stock, $.001 par value 6,090,400 shares outstanding as of September 30, 2000. |
Transitional Small Business Disclosure Format: Yes __ No X |
Page 1 of 13 |
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION |
Page |
| Item 1. Financial Statements (Unaudited) | 2 |
| Item 2. Management’s Discussion and Analysis | 2 |
PART II. OTHER INFORMATION |
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| Item 1. Legal Proceedings | 6 |
| Item 2. Changes in Security | 6 |
| Item 3. Default Upon Senior Securities | 6 |
| Item 4. Submission of Matters to a Vote of Security Holders | 6 |
| Item 5. Other Information | 6 |
| Item 6. Exhibits and Reports on Form 8-K | 6 |
PART I FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)Accountant's Review Report
Balance Sheet - September 30, 2000 (Unaudited)
Statements of Operations - Three months ended September 30, 2000 and 1999 (Unaudited).
Statements of Cash Flows - Three months ended September 30, 2000 and 1999 (Unaudited).
Notes to Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsForward-Looking Statements; Market Data
We make forward-looking statements in the "Management’s Discussion and Analysis of Financial Condition and, Results of Operations" in this Quarterly Report. These forward-looking statements include, but are not limited to, statements about our plans, objectives, expectations, intentions and assumptions and other statements that are not historical facts. We generally intend the, words "expect", anticipate", "intend", "plan", "believe", "seek", "estimate" and similar expressions to identify forward-looking statements.
Because these forward-looking statements involve risks and uncertainties, our actual results may differ materially from those expressed or implied by these forward-looking statements. All forward-looking statements in this Quarterly Report reflect our current views about future events and are based on assumptions and are subject to risks and uncertainties. Except as required by applicable law, including the securities laws of the United States, we do not intend to update or revise any forward-looking statements.
This Quarterly Report may contain certain estimates and plans related to us which may assume that certain events, trends and activities will occur and the projected information based on those assumptions. We do not know that any assumptions are accurate. In particular, we do not know and cannot predict with any degree of certainty any growth in any market in which we operate and shall seek to operate. If our assumptions are wrong about any events, trends and activities, then to the extent that we make any estimates for future growth, such estimates if any may also be wrong. There can be assurances that an of our estimates as to our business growth will be achieved.
Results of Operations
During the three month period ended September 30, 2000 we had revenues of $26,225 compared to revenues of $20,681 during the same three month period of 1999. We increased our sales during the recent three month period ended September 30, 2000 compared to the same period of the prior year by 26,7%, which was the result of our expanded customer base.
We had a net loss of $677,061 (net loss of $0.12 per share) for the three month period ended September 30, 2000. This compares to a net loss of $142,616 (net loss of $0.03 per share) for the three month period ended September 30, 1999. The reason for our significant increase in net loss for the three month period ended September 30, 2000 compared to the net loss during the same period for the prior year was principally due to non-cash compensation in the form of the issuance of shares in lieu of cash compensation. It should be noted that there has been no active trading market in the shares of our common stock, the market for which is very limited, sporadic and without liquidity. The expensing of non-cash compensation explains the increase in our General and Administrative expenses from $71,704 during the quarter ended September 30, 1999 to $679,733 during the quarter ended September 30, 2000. As a result of the limited and sporadic trading market for our common stock, the amount expensed for non-cash compensation ($645,500) substantially exceeds the fair market value of our shares of common stock at September 30, 2000 and as of the date of this quarterly report.
Liquidity and Capital Resources
At September 30, 2000 we had current assets of $88,927 compared to current assets of $33,016 at September 30, 1999. The increase in current assets is mainly attributable to an increase in accounts receivable and prepaid expenses. We had no significant change in non-current assets. Our current liabilities were $33,879 at September 30, 2000 compared to $761 at September 30, 1999. The increase in liabilities during the three month period ended September 30, 2000 was principally caused by unearned revenues of $26,531, which the Company will report as sales in subsequent quarters.
During the quarter ended September 30, 2000 we received no additional funds from the sale of shares to private investors.
During the quarter ended September 30, 2000 and for the past year, we have sought to develop our web directory service for business customers, and indeed established a customer base that we were expanding.
Our operation involved Internet marketing services specializing in the design, creation and marketing of advertising sites for service oriented companies and service professionals (our clients) and cost-effective Internet products and custom software. We strive to provide our clients, with interactive Internet image sites along with marketing services. In addition, we provided a subscription service to clients for the servicing and publication of their image sites in strategic zip code locations for clients to enhance their Internet presence and advertising their services. The development of Internet products and services is in constant flux. We are constantly reviewing our business and services. As a result of the untimely death of our Chief Executive Officer, Jullian Ferretti, we are evaluating our business operations and considering the pursuit of additional of business opportunities with both affiliated and non-affiliated parties.
There is a trend in the Internet industry toward rapid technological change and development, and such trend could adversely impact our ability to generate income from continuing operations. As a result, we are aware that such trends in the Internet industry may have a material impact on its short-term or long term liquidity. Our liquidity has mainly been the result of the sale of the Company’s securities to private investors, the conversion of debt into securities, and the exercise of options.
PART II. OTHER INFORMATION
Item 1. Legal ProceedingsNone
None.
Item 3. Default Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit No. |
Document Description |
3(i) |
Articles of Incorporation and amendments (filed as Exhibits to the Company's Registration Statement on Form 10-SB/12g and incorporated herein by reference) |
3(ii) |
Bylaws (filed as Exhibit to the Company's Registration Statement on Form 10-SB/12g and incorporated herein by reference) 10 Material Contracts. Employment Agreement with the Chief Financial Officer (filed as an Exhibit to the Company’s Registration Statement on Form 10-SB/12g and incorporated herein by reference); |
10 |
Stock Option Agreement (filed as an Exhibit to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2000); Services Agreement between the Company and Edward Muller dated January 15, 2000 (filed as an Exhibit to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2000). |
27 |
Financial Data Schedule |
(b) Form 8-K.
During the quarter ended September 30, 2000, the Company did not file any Reports on Form 8-K.
SIGNATURES
In accordance with Section 12 or 15(d) of the Exchange Act, the small business issuer has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
GONETGEN.COM, INC.
| By: /s/ Doug Meyers |
| Doug Meyers, President and Director |
| Dated: November 16, 2000 |
| West Palm Beach, FL |
PAGE |
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| ACCOUNTANT'S REVIEW REPORT | |
BALANCE SHEET |
8 |
STATEMENT OF OPERATIONS |
9 |
STATEMENT OF CASH FLOWS |
9 |
NOTES TO FINANCIAL STATEMENTS |
10 |
INDEPENDENT ACCOUNTANT'S REPORT
To the Board of Directors
Gonetgen.Com, Inc.
224 Datura Street, Suite 402
West Palm Beach, FL 33401
I have reviewed the accompanying Balance Sheet of Gonetgen.Com, Inc. (a Development Stage Company) as of September 30, 2000, and 1999, and for the three month and nine month periods then ended. These financial statements are the responsibility of the Company's Management.
I conducted my review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with generally accepted accounting principles.
As discussed in Note E, certain conditions indicate that the Company may be unable to continue as a going concern. The accompanying financial statements do not include any adjustments to the financial statements that might be necessary should the Company be unable to continue as a going concern.
November 10, 2000
GONETGEN.COM, INC. |
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(A Development Stage Company) |
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BALANCE SHEET AS OF SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 |
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ASSETS |
September 30, 2000 |
September 31, 1999 |
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Current Assets |
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Cash |
342 |
33,016 |
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Accounts Receivable |
61,400 |
- |
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Prepaid Expenses |
23,785 |
- |
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Deferred Costs |
3,400 |
- |
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Total Current Assets |
88,927 |
33,016 |
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Property and Equipment, Net |
12,520 |
13,376 |
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Deposits |
3,755 |
2,000 |
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TOTAL ASSETS |
$105,202 |
$48,392 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current Liabilities |
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Accounts Payable and Accrued Expenses |
7,358 |
761 |
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Unearned Revenue |
26,521 |
- |
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Total Current Liabilities |
$33,879 |
$761 |
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Stockholder’s Equity: |
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Preferred Stock, $1.00 par value 1,000 shares authorized, issued and outstanding |
10,000 |
- |
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| Common Stock, $.01 par value 6,000,000 shares authorized 6,090,400 shares issued and outstanding | 60,904 |
44,900 |
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Additional Paid-In Capital |
4,105,196 |
313,500 |
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Accumulated Deficit during Development Stage |
(4,104,777) |
(310,769) |
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Total Stockholders' Equity |
71,323 |
47,631 |
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| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $105,202 |
$48,392 |
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See Notes to Financial Statements
GONETGEN.COM, INC. |
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(A Development Stage Company) |
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FOR THE QUARTERS ENDED JUNE 30, 2000 AND 1999 |
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For the Three Month Period Ended 09/30/00 |
For the 3 Month Period Ended 09/30/99 |
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Sales |
$26,225 |
$20,691 |
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| Selling Expenses | 3,900 |
43,803 |
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| General and Administrative | 679,733 |
71,704 |
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Commissions |
5,188 |
5,875 |
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Labor |
14,465 |
44,311 |
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Total Expenses |
703,282 |
165,693 |
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Income (Loss) from Operations |
(677,061) |
(145,002) |
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| Other Income & Expense | |||
Dividends |
- |
2,386 |
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Total Other Income & Expense |
- |
2,386 |
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Net Income (Loss) |
$(677,061) |
$(142,616) |
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Loss Per Share Basic and Diluted |
$(0.12) |
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Weighted average shares Outstanding |
6,090,400 |
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See Notes to Financial Statements
GONETGEN.COM, INC. |
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(A Development Stage Company) |
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FOR THE QUARTERS ENDED September 30, 2000 AND 1999 |
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For the Three Months Ended 09/30/00 |
For the Three Months Ended 09/30/99 |
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CASH FLOW FROM OPERATING ACTIVITIES: |
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Net Loss |
$(677,061) |
$(142,616) |
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| Adjustment to reconcile net loss to net cash used for Operating Activities: | |||
Depreciation |
900 |
- |
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Compensation For Services |
645,400 |
10,400 |
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Changes in operating assets and liabilities: |
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(Increase) Decrease in Accounts payable and Accrued Expenses |
11,385 |
- |
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(Increase) Decrease in prepayment |
3,350 |
- |
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(Increase) Decrease in Accounts payable and Accrued Expenses |
(3,800) |
942 |
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(Increase) Decrease in Unearned Revenue |
(6,500) |
- |
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NET CASH USED OF OPERATING ACTIVITIES |
(26,326) |
(131,274) |
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CASH FLOWS FROM INVESTING ACTIVITIES: |
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Purchase of Property and Equipment |
- |
(1,166) |
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NET CASH USED FOR INVESTING ACTIVITIES |
- |
(1,166) |
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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Common Stock Issued for Private Placement |
- |
78,550 |
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| NET CASH PROVIDED BY FINANCING ACTIVITIES | - |
78,550 |
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NET INCREASE (DECREASE) IN CASH |
(26,326) |
(53,890) |
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CASH AT BEGINNING OF PERIOD |
26,668 |
86,906 |
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CASH AT END OF PERIOD |
$342 |
$33,016 |
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| SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid during the year for: |
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Income Taxes |
$- |
$- |
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Interest |
$- |
$- |
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See Notes to Financial Statements
GONETGEN.COM, INC. |
(A Development Stage Company) |
FOR THE QUARTERS ENDED SEPTEMBER 30, 2000 AND 1999 |
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Operations
GoNetgen.com, Inc. ("the Company") was incorporated in the State of Florida on October 22, 1998. The Company specializes in designing, creating and marketing cost effective Internet web and image sites, products and custom software.
Effective in January 2000 the Company started trading on the NASDAQ BB using the symbol NTGI.
Development Costs
Development costs incurred by the Company are charged to expenses in accordance with Statement of Position 98-5 Reporting on the Costs of Start Up Activities effective for fiscal years after December 15, 1998.
Property and Equipment
Property and equipment are recorded at cost for financial reporting purposes and are depreciated under the straight-line method over their estimated economic useful lives. Significant additions and betterments are capitalized. Expenditures for maintenance, repairs and minor renewals are charged to operations as incurred.
Income Taxes
Income tax assets and liabilities are computed for temporary differences between the financial statement and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based upon enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Income tax expense is the tax payable or refundable for the period, plus or minus the change during the period in deferred tax assets and liabilities.
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The fair value of the Company's financial instruments, consisting of accounts payable, approximate their carrying value.
NOTE B - PROPERTY AND EQUIPMENT
Property and equipment is stated at cost and at June 30, 2000 was comprised of the following:
Computer Equipment |
$13,407 |
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Furniture & Fixtures |
3,909 |
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Leasehold Improvements |
685 |
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$18,001 |
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Less: Accumulated Depreciation |
5,481 |
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$12,520 |
NOTE C - ISSUANCE OF STOCK
In July 2000, various consultants exercised their options to purchase a total of 645,400 shares in lieu of compensation. The expenses related to the exercise of their options have been accounted for at fair market value.
NOTE D - INCOME TAXES
At July 2000, the Company had available a net operating loss carry-forward for federal and state tax purposes of approximately $4,125,000 which could be applied against taxable income in subsequent years through 2014. The tax effect of the operating loss carry-forward is approximately $1,525,000 and a valuation allowance for the same amount has been provided.
NOTE E - GOING CONCERN
As shown in the accompanying financial statements the Company has incurred net operating losses for the Quarter ended September 30, 2000 of $4,125,000. These net operating losses create an uncertainty about the Company's ability to continue as a going concern.
Management, however, has projected that the Company will generate significant sales in the year 2000 and subsequent years because its web-site is fully operational and the Company now has the ability to sell effective Internet web and image sites to its customers.
The Company had net loss of $677,061 for the quarter ended September 30, 2000.
NOTE F - ACCOUNTING ADJUSTMENTS
The balance sheet as of September 30, 2000, the income for the three months and the nine months ended September 30, 2000 and 1999 and cash flows for the three months ended September 30, 2000 and 1999 have been prepared by Gonetgen.com, Inc. (the Company) without audit. In the opinion of Management, all adjustments necessary to present the financial position, the results of operations and cash flows for the periods reported have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report. The results for the three month period ended September 30, 2000 are not indicative of the results that may occur for the fiscal year ending December 31, 2000.
NOTE G - UNEARNED REVENUE
Sales contracts of the Company are for one (1) year. Unearned revenue represents that portion of the sale that will be recorded as income for 2001.
NOTE H - DEFERRED COSTS
These costs represent the part of marketing and advertising costs that will be charged to those sales that have been booked as unearned revenue.
NOTE I - PREPAID EXPENSES
Included in prepaid expenses are commissions paid in advance on unearned revenue, these commissions amount to $6,785. At the point of sale the full commission is payable, consequently because a portion of the sale is unearned the commissions relating to that period have been recorded as prepayments.
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