UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
/X/ Annual report under section 13 or 15(d) of the Securities Exchange Act of
1934 for the fiscal year ended December 31, 1999.
/ / Securities Exchange Act of 1934 for the transition period from
___________________ to ________________________.
Commission file number 0-28363
Inet Commerce Conduit Corporation
(Name of Small Business Issuer in Its Charter)
Florida 65-05830
- ------------------------------- -------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
615 Mount Pleasant Road, Suite 318, Toronto, Ontario, Canada M453C5
(Address of Principal Executive Offices) (Zip Code)
(416) 482-3191
Issuer's Telephone Number
Securities to be registered pursuant to Section 12(b) of the Act:
(Title of class) Name of exchange on which registered
None
Securities to be registered under Section 12(g) of the Act:
$.001 Per Share Par Value Common Stock
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act, during the past 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 No X (Has not been subject to requirement for 90 days)
--- ---
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
The revenue for its most fiscal year was $2,014.00.
The last quoted bid price for the Issuer's Common Stock was on October 22, 1999
more than 60 days prior to this report. On February 29, 2000, there were
5,432,200 shares of Common Stock outstanding held by non-affiliates of the
Issuer.
The Issuer has never been involved in bankruptcy proceedings.
The number of shares outstanding of each of the Issuer's common stock as of
February 29, 2000 was 6,517,200.
Documents incorporated by reference. There are no: (1) annual report to security
holders; (2) proxy or information statements; or (3) any prospectus filed
pursuant to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act")
incorporated by reference herein.
Traditional Small Business Disclosures
Format (Check one):
Yes X No
--- ---
<PAGE>
PART I
The Issuer, Inet Commerce Conduit Corp., a Florida corporation, is electing to
furnish the information required by Items 6-12 of Model B of Form 1-A under
Alternative 2 of Form 10-SB.
Item 1A. Company Risk Factors.
- -------- ---------------------
The Issuer and its outstanding securities are subject to risks including
those set out in this Item 1A.
WE ARE ENTERING INTO A NEW BUSINESS AND HAVE NO PRESENT CLIENTS OR REVENUE.
The Issuer is initiating operations into a new business of acting as a business
and financial consultant to, or investing in, new or emerging business engaged
in an Internet related enterprise. The Issuer presently has no clients or any
source of significant revenue. Unless its efforts to develop the new business
are successful, the Issuer will have to acquire additional capital or cease
operations.
WE WILL NEED ADDITIONAL CAPITAL TO BE ABLE TO MAKE VENTURE CAPITAL
INVESTMENTS IN DEVELOPING INTERNET COMPANIES. The Issuer does not presently have
sufficient capital to make material investments in new or emerging Internet
ventures. To be able to implement this portion of its business plan, it will
have to develop such capital from revenue or acquire additional investment
capital. There is no assurance the Issuer will have any future operating
revenue; and there are no arrangements for or assurances of any additional
capital.
WE WILL HAVE TO DEVELOP A CONSULTING AND MANAGEMENT TEAM TO BE ABLE TO
SERVICE ANY FUTURE BUSINESS. The Issuer's only present employee is its
President. To be able to adequately service any future clients and business it
may acquire, the Issuer will have to develop an adequate team of consultants or
employees. The Issuer is presently in discussions with prospective consultants
experienced in the requisite areas.
THE COST OF MAINTAINING THE REGISTRATION OF OUR STOCK UNDER SECTION 12(G)
OF THE SECURITIES EXCHANGE ACT WILL CONTINUE OUR OVERHEAD AND ASSET DEPLETION.
The cost of filing this registration statement and in complying with the
reporting requirements created by this filing will materially increase the
Issuer's administrative overhead and accelerate the depletion of its assets.
WE HAVE NO PRESENT ARRANGEMENTS TO ACQUIRE ANY ADDITIONAL CAPITAL NEEDED TO
CONTINUE OUR EXISTENCE. The Issuer has no present arrangement under which it
might acquire any additional capital needed to continue its existence. There is
no assurance that it will be able to develop any such capital source.
WE HAVE NO ASSURANCE THAT ANY BUSINESS COMBINATION OR ASSET ACQUISITION WE
MIGHT MAKE WILL BE SUCCESSFUL. There is no assurance that any business
combination or asset acquisition entered into by the Issuer will result in
successful income producing operations.
Item 1. Description of the Business
- ------- ---------------------------
(Item 6 of Model B of Form 1A)
The Issuer was organized on September 20, 1996 as a Florida corporation
named Cosmetics Consultants Corporation. Its name was changed to Lomillo
Consultants Corp. on November 25, 1996 and then to Inet Commerce Conduit Corp.
on July 17, 1997. On July 17, 1997 the Issuer also completed a reorganization in
which its then outstanding 1,034,4000 shares of Common Stock were reverse split
into 517,200 shares on the basis of one new share for each two old shares. All
references to outstanding Common Stock contained herein have been adjusted to
reflect this reverse stock split.
The Issuer was formed to provide advice and sales support services to
retail sellers of cosmetic products. These services involved staff training,
in-house promotions, mail order sales programs and arrangement of joint
promotions between the cosmetic suppliers and the retail sellers, all designed
to increase the retailer's cosmetic sales.
2
<PAGE>
In September of 1996, the Issuer sold 500,000 shares to its then President
and director for $10,000.00. During the period from October of 1996 through
February, the Issuer sold an additional 17,200 shares of Common Stock at $0.30
per share for total proceeds of $5,160.00. These shares were sold pursuant to
the exemption from the registration requirements of Section 5 of the Securities
Act of 1933 provided in Rule 504 of Regulation D adopted under that Act.
The issuer continued to pursue the marketing of its sales development and
support services to retailers of cosmetic products through 1997 without material
results.
From February 10, 1999 through April 1, 1999, the Issuer sold 6,000,000
shares of its Common Stock at $.05 per share for total proceeds of $300,000.00.
These shares were sold pursuant to the exemption from the registration
requirements of Section 5 of the Securities Act of 1933 provided in Rule 504 of
Regulation D adopted under that Act.
In September of 1999, the Issuer terminated its efforts to market its sales
and support services to retailers of cosmetic products, due to a lack of sales.
In November of 1999, Paul H. Stone, President of the Issuer, became its sole
officer and director. Mr. Stone was so engaged to initiate the Issuer's
activities in its new business venture related to the Internet. The Issuer acts
as a consultant to Internet related enterprises that are seeking capital. It
may, in the future, act as a venture capital firm and make direct investments in
Internet companies
The Issuer is presently negotiating consulting arrangements with
experienced venture capitalists, investment bankers, systems analysts and
technical Internet consultants to put together a team able to evaluate and
assist emerging Internet companies and introduce them to potential capital
sources. The Issuer will only be paid for its services if its client is
successful in acquiring capital. The Issuer's activities will include: (i)
reviewing and evaluating the client's business plan, business operations,
personnel and facilities; (ii) advising the client as to its business and
capital structure; (iii) assisting the client in developing information and
documentation on its company, operations and an investment therein; and (iv)
introducing the client to capital sources interested in an investment in such a
business venture. The Issuer may take steps to facilitate negotiations between a
client and prospective capital sources; but will not engage in selling
activities as such.
If sufficient capital becomes available to the Issuer, it may also acquire
and hold direct venture capital investments in Internet related companies it has
evaluated. There are no present arrangements under which the Issuer can acquire
such capital, nor any assurance that such capital will become available. It is
the present intention of the Issuer, that most venture capital investments will
result in the Issuer holding a majority voting interest in the company in which
the investment is made and to otherwise conduct its operations so that the
Issuer does not become an Investment Company under the Investment Company Act of
1940.
Item 2. Description of Property
- ------- -----------------------
(Item 7 of Model B of Form 1A)shares of Common Stock
The Issuer has no materially important physical properties. Its only
material assets are its cash or cash equivalents which were approximately
$221,000, as of December 31, 1999.
The Issuer's present operations are conducted at the residence office of
its President and through the use of a mail drop at 615 Mount Pleasant Road,
Suite 318, Toronto, Ontario, Canada M4S3C5. The Issuer's President has not
previously and will not in the future charge the Issuer for its use of these
facilities. The Issuer is in the process of locating its initial office facility
to be located in Toronto, Ontario. Additional offices may be located in other
areas, as and if, the Issuer's business develops.
3
<PAGE>
Item 3. Directors, Executive Officers and Significant Employees.
- ------- --------------------------------------------------------
(Item 8 of Model B of Form 1A)
The following table sets forth information regarding the sole director
and executive officer of the Company.
Beginning
of
Name Age Positions Term
---- --- --------- ---------
Paul H. Stone 41 President and Director 11/99
Paul H. Stone became the President and sole director if the Issuer on
November 1, 1999. From 1980 to 1997, Mr. Stone was a "money market" broker for
various companies working in monetary and securities transactions between banks
and investment banking firms in Toronto, Canada. These employers and employment
periods were: (I) 1980-1983 / Euro-Brokers Harlow, Ltd.; (ii) 1983-1988 / Prebon
Yamane; (iii) 1988-1989 / Garvin, Guy, Butler; (iv) 1989-1993 / Prebon Yamane;
(v) 1993-1995 / Tullet and Tokyo Forex, Inc.; and (vi) 1995-1997 / Contor
Fitzgerald. From 1997 to May of 1999, Mr. Stone operated his own company,
Protective Products in Toronto, Ontario. That company was engaged in importing
into Canada and distributing skin care products. It is anticipated that as the
activities of the issuer increase in its new business, additional officers,
directors and employees will be appointed or employed. The identity of such
persons in not now known.
Item 4. Remuneration of Directors and Officers.
- ------- --------------------------------------
(Item 9 of Model B to Form 1A)
Information with respect to the only remuneration paid to any of the former
officers and directors of the Issuer during the year 1999 is as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1998 Patti Cooke (1) Administrative Fee (1) $15,000.00
1/1/99 to 9/30/99 Patti Cooke (1) Administrative Fee (1) $15,000.00
----------
Total $30,000.00
</TABLE>
(1) These administrative fees were paid to Wellington Cooke Gallery for
services performed for the Issuer by Patti Cooke who was then
Secretary of the Issuer. She is the sole owner of that company.
(2) These administrative fees were paid to Hatchment Holdings, Inc., an
Ontario company wholly owned by Bradley R. Wilson who was then
President and the director of the Issuer
In addition, the Issuer paid cellular telephone charges for mobile
telephones used by its then officers and directors during the year 1999 as
follows:
--------------------------------------------------------------------
Period Name of Individual Telephone Charges (1)
--------------------------------------------------------------------
1999 Patti Cooke $2,248.87
1999 Bradley R. Wilson $1,235.61
---------
Total 1999 $3,484.48
(1) It is estimated that approximately 90% of these charges were for calls
on the Issuer's business. Accordingly, approximately $350.00 of the
total paid of $3,484.48 could be deemed to be compensation to the
named officers and directors.
4
<PAGE>
Paul H. Stone will receive a salary, commencing December 1, 1999 at a rate
of $250.00 per month. If the Issuer's business develops and it begins to
generate revenue, the salary may be increased in an amount not now determinable.
Item 5. Security Ownership of Management and Certain Securityholders.
- ------- -------------------------------------------------------------
(Item 10 to Model B of Form 1A)
The following table sets forth information as of February 29, 2000 with
respect to the ownership of the Issuer's Common Stock by its sole officer and
director, and any person owning more than 10% of the Issuer's Common Stock:
Title of Name and Number of Percent
Class Address of Owner Shares Owned of Class
- --------- ---------------- ------------ --------
Common Stock Paul H. Stone 785,000 12.0%
10 Elm Road
Toronto, Ontario M5M 3T2
Canada
There are no outstanding options, warrants or other rights to acquire
shares of the Issuer's Common Stock.
Item 6. Interest of Management and Others in Certain Transactions.
- ------- ----------------------------------------------------------
(Item 11 to Model B of Form 1A)
In April of 1999, Hatchment Holdings, Inc., an Ontario corporation wholly
owned by the then President and sole director of the Issuer purchased 300,000
shares of its Common Stock for $0.05 per share. In addition, Wellington Cooke
Gallery, a company wholly owned by the then Secretary of the Issuer, also
purchased 300,000 shares at $0.05 per share. These shares were purchased in an
offering made by the Issuer under Rule 504 of Regulation D adopted under the
Securities Act of 1933. They were purchased on the same terms and conditions as
the non-affiliated purchasers in the offering.
During the year 1999 the Issuer reimbursed Hatchment Holdings, Inc. $10,000
for legal fees of the Issuer which had been advanced by Hatchment. During 1999,
it also reimbursed Wellington Cooke Gallery $3,500 for painting expenses of the
Issuer which had been advanced by Wellington Cooke.
In May of 1999, the Issuer loaned Hatchment Holdings, Inc. $70,000 on an
unsecured demand loan. The loan was repaid in October of 1999 in full together
with $2,041.00 in interest.
Item 7. Description of Securities.
- ------- --------------------------
(Item 12 of Model B of Form 1A)
The Issuer's authorized capitalization consists of 50,000,000 shares of
$.001 par value common stock ("Common Stock"). As of February 29, 2000, there
were 6,517,200 shares of Common Stock outstanding and there are no outstanding
options, warrants or other rights to acquire shares of Common Stock. Under
applicable Florida law and its Articles of Incorporation, the Issuer's Board of
Directors may issue additional shares of its stock to bring its outstanding
stock up to the total amount of authorized Common Stock without approval of its
shareholders.
5
<PAGE>
On July 18, 1997 the Issuer completed a recapitalization in which its them
outstanding 1,034,400 shares of Common Stock were reverse split on the basis of
one new share for each two old shares. Thus the then outstanding 1,034,400
shares became 517,200 shares. All references to outstanding Common Stock
contained in this Form 10-SB have been adjusted to give effect to this reverse
stock split.
The shares of Common Stock currently outstanding are fully paid and
non-assessable. The holders of Common Stock do not have any preemptive rights to
acquire shares of any capital stock of the Company. In the event of liquidation
of the Company, assets then legally available for distribution to the holders of
Common Stock (assets remaining after payment or provision for payment of all
debts and of all preferential liquidation payments to holders of any outstanding
Preferred Stock) will be distributed in pro rata shares among the holders of
Common Stock and the holders of any outstanding Preferred Stock with liquidation
participation rights in proportion to their stock holdings.
Each stockholder is entitled to one vote for each share of Common Stock
held by such shareholder. A quorum for a meeting of the stockholders is one-half
of the shares of capital stock entitled to vote at that meeting. There is no
right to cumulate votes for the election of directors. This means that holders
of more than 50% of the shares voting for the election of directors can elect
100% of the directors if they choose to do so; and, in such event, the holders
of the remaining shares voting for the election of directors will not be able to
elect any person or persons to the Board of Directors.
Holders of Common Stock are entitled to dividends when, and if, declared by
the Board of Directors out of funds legally available therefore; and then, only
after all preferential dividends have been paid on any outstanding Preferred
Stock. The Company has not had any earnings and it does not presently
contemplate the payment of any cash dividends in the foreseeable future.
The Issuer's Common Stock does not have any mandatory redemptive
provisions, sinking fund provisions or conversion rights.
6
<PAGE>
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity and
Other Related Shareholder Matters.
- ------- --------------------------------------------------------------------
The Issuer's Common Stock has been quoted on the OTC Bulletin Board under
the symbol ICMC since May of 1997. To the knowledge of the Issuer there have
been very few trading transactions in its Common Stock
The following table sets forth high and low bid prices of the Common Stock
on the OTC Bulletin Board for the periods indicated. The bid prices represent
prices between dealers, which do not indicate retail markups, markdowns or
commissions and the bid prices may not represent actual transactions:
Quarter Ending: High Low
--------------- ---- ---
May - June, 1997 5 1/2
June - September, 1997 5 3/4
October - December, 1997 5 3/8 1/2
January - March, 1998 6 1/2
April - June, 1998 5 1/2
July - September, 1998 5 3/4
October - December, 1998 5 1/2
January - March, 1999 4 1/2
April - June, 1999 4 13/16 11/16
July - September, 1999 4 13/16 11/16
October - December, 1999 5 5
The Issuer's Common Stock has not been quoted since October 22, 1999.
The number of record holders of Common Stock of the Issuer at February 29,
2000 was 33. Additional owners of the Common stock hold their shares at street
name with various brokerage and depository firms (there are three such firms
included in the list of record owners).
The holders of Common Stock are entitled to receive dividends as may be
declared by the Board of Directors out of funds legally available therefore. The
Issuer had never had any material earnings and does not presently have any
capability to generate any such earnings. The Issuer has never declared any
dividend. It does not anticipate declaring and paying any cash dividend in the
foreseeable future. See Item 7 in Part I.
Item 2. Legal Proceedings.
- ------- ------------------
Neither the Issuer nor any of its property is a party or subject to any
pending legal proceeding. The Issuer is not aware of any contemplated or
threatened legal proceeding against it by any governmental authority or other
party.
Item 3. Changes in and Disagreements with Accountants.
- ------- ----------------------------------------------
No principal independent accountant of the Issuer or any subsidiary thereof
has ever resigned, been dismissed or declined to stand for re-election.
Item 4. Submission of Matters to a Vote of Security Holders.
- ------- ----------------------------------------------------
No matters were submitted during the calendar quarter ending December 31,
1999 to a vote of securities holders through the solicitation of proxies or
otherwise.
7
<PAGE>
Item 5. Compliance with Section 16(a) of the Exchange Act.
- ------- --------------------------------------------------
All Form 3, 4 and 5 required to be filed by any reporting person with
respect to the Common Stock of the Issuer for the year ended December 31, 1999
were timely filed.
Item 6. Reports on Form 8-K.
- ------- --------------------
The Issuer was not required to and did not file any reports on Form 8-K for
the calendar quarter ended December 31, 1999.
8
<PAGE>
PART F/S
INET COMMERCE CONDUIT CORP.
FINANCIAL STATEMENTS
TABLE OF CONTENTS
Page
----
For the Year Ended December 31, 1999:
- -------------------------------------
Independent Auditor's Report....................................... F-2
Balance Sheet...................................................... F-3
Statement of Operations............................................ F-4
Statement of Stockholders' Equity.................................. F-5
Statement of Cash Flows............................................ F-6
Notes to Financial Statements...................................... F-7
F-1
<PAGE>
BARRY I. HECHTMAN, P.A.
Certified Public Accountant
Member of
Florida and American
Institute of CPAs
8100 SW 81 Drive Telephone: (305) 270-0014
Suite 210 Fax: (305) 598-3695
Miami Florida, 33143-6603 email: [email protected]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Inet Commerce Conduit Corp.
We have audited the balance sheet of Inet Commerce Conduit Corp. (a Florida
corporation) as of December 31, 1999, and the related statements of operations,
retained earnings, and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. The financial statements of Inet Commerce Conduit Corp. as of
December 31, 1998, were audited by other auditors whose report dated September
30, 1999, expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the 1999 financial statements referred to above present fairly,
in all material respects, the financial position of Inet Commerce Conduit Corp.
as of December 31, 1999, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/ Barry I. Hechtman, P.A.
Barry I Hechtman, P.A.
Miami, FL
March 6, 2000
F-2
<PAGE>
Inet Commerce Conduit Corp.
Balance Sheets
(A Development Stage Company)
December 31, 1999 and 1998
1999 1998
ASSETS
Cash $221,417 $ 0
Deposits 6,750 0
-------- --------
TOTAL ASSETS $228,167 $ 0
======== ========
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts Payable - Trade $ 83 $ 17,089
-------- --------
TOTAL LIABILITIES 83 17,089
STOCKHOLDERS' EQUITY
Common stock - par value $.001,
authorized 50,000,000 shares;
issued and outstanding 517,200
at December 31, 1998 and
6,517,200 shares at December
31, 1999. 6,517 517
Additional Paid-in Capital 308,643 14,643
Accumulated Deficit (87,076) (32,249)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 228,084 (17,089)
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $228,167 $ 0
======== ========
See accompanying notes & accountants' report
Barry I Hechtman, P.A.
F-3
<PAGE>
Inet Commerce Conduit Corp.
Statements of Operations
(A Development Stage Company)
Years Ended December 31, 1999 and 1998
1999 1998
REVENUES:
Interest Income $ 2,014 $ 0
--------- ---------
TOTAL REVENUES 2,014 0
EXPENSES
DEVELOPMENT STAGE EXPENSES (56,841) (17,089)
--------- ---------
NET LOSS $ (54,827) $ (17,089)
========= =========
NET LOSS PER SHARE $ (.011) $ (.004)
========= =========
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 5,017,200 $ 517,200
========= =========
See accompanying notes & accountants' report
Barry I Hechtman, P.A.
F-4
<PAGE>
<TABLE>
<CAPTION>
Inet Commerce Conduit Corporation
Statement of Changes in Stockholders' Equity
For the Year Ended December 31, 1999
Common Stock
Par Value $.001 Additional Total
------------------------- Paid-In Retained Stockholders'
Shares Amount Capital Earnings Equity
-------- -------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1998 517,200 $ 517 $ 14,643 $(15,160) $ -
Net Loss 1998 (17,089)
-------------------------------------------------------------------------------
Balance at December 31, 1998 517,200 517 14,643 (32,249) $(17,089)
Common stock issued in connection
with 504 offering 6,000,000 6,000 294,000 $300,000
Net Loss 1999 (54,827) $(54,827)
-------------------------------------------------------------------------------
Balance at December 31, 1999 6,517,200 6,517 308,643 (87,076) 228,084
===============================================================================
See accompanying notes & accountants' report
Barry I Hechtman, P.A.
</TABLE>
F-5
<PAGE>
<TABLE>
<CAPTION>
Inet Commerce Conduit Corp.
Statements of Cash Flows
For the Years Ended December 31, 1999 and 1998
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net Loss $(54,827) $(17,089)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Deposits (6,750)
Accounts Payable (17,006) 17,089
-------- --------
Net cash utilized by operating activities (78,583) 0
Cash flows from investing activities:
Net cash utilized by investing activities 0 0
Cash flows from financing activities:
Proceeds from issuance of common stock 300,000 0
-------- --------
Net cash provided from financing activities 300,000 0
-------- --------
Net Increase in Cash 221,417 0
Cash & Cash Equivalents balance at January 1, 0 0
-------- --------
Cash & Cash Equivalents balance at December 31, 221,417 0
======== ========
</TABLE>
See accompanying notes & accountants' report
Barry I Hechtman, P.A.
F-6
<PAGE>
Inet Commerce Conduit Corp.
(A Development Stage Company)
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business and Organization
- -------------------------
Inet Commerce Conduit Corp. (the "Company"), a development stage company, was
incorporated in the State of Florida on September 20, 1996 as Cosmetics
Consultants Corp. for the purpose of marketing sales and support services to
retailers of cosmetic companies. In November of 1999 the Company changed its
activities to acting as a consultant to internet related enterprises that are
seeking capital.
On November 25, 1996, Cosmetics Consultants Corp. changed its name to Lomillo
Consultants Corp.
On July 17, 1997, the Company amended and restated its articles of incorporation
and changed its name to Inet Commerce Conduit Corp.
Development Stage
- -----------------
The Company has operated as a development stage enterprise since its inception
by devoting substantially all its efforts to the ongoing development of the
Company.
Accounting Method
- -----------------
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a calendar year end of December 31.
Loss per Share
- --------------
The computation of loss per share of common stock is based upon the weighted
average common shares outstanding during each period.
NOTE 2 - DEPOSITS
This represents an amount deposited on November 15, 1999 with a bank for a
secured corporate credit card with a credit limit of $5,000. The deposit must be
kept in the account for twelve months not to forfeit the deposit. The deposit
can be returned any time after the initial twelve months provided the request is
made in writing and there is no balance outstanding on the account. Should any
balance be outstanding, the deposit would be applied against the balance due and
the remainder would be refunded to the Company. As of December 31, 1999 the
balance due on the card was $83.
NOTE 3 - STOCKHOLDER'S EQUITY
The Company had the following classes of capital stock as of December 31, 1998
and December 31, 1999:
Common stock, $0.001 par value; authorized 50,000,000 shares; issued and
outstanding 517,200 shares at December 31, 1998 and 6,517,200 shares at December
31, 1999.
F-7
<PAGE>
NOTE 4 - 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. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's intention to seek additional
capital through a merger with an existing operating company and raising capital.
NOTE 5 - CAPITAL STOCK ACTIVITY
On July 18, 1997 the Company reverse split the outstanding shares of the
Company's common stock 1 for 2.
During the year ended December 31, 1999 the Company completed a private offering
of 6,000,000 shares of common stock at a price of $0.05 per share. Gross
proceeds related to the offering were $300,000 and selling expenses associated
with the offering were $12,868.
NOTE 6 - INCOME TAXES
For financial reporting purposes, a valuation allowance of $20,421 has been
recognized to offset the net deferred tax assets related to these carryforwards
and other deferred tax assets since realization of any portion of the Company's
deferred tax asset is not considered to be more likely than not.
Deferred income taxes reflect the net effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets are as follows:
Deferred tax assets:
Net operating loss carryforwards $ 20,421
--------
Total deferred tax assets 20,421
Valuation allowance for deferred tax assets (20,421)
--------
0
========
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. Fees totaling $43,500 have
been paid to companies owned by shareholders during the year ended December 31,
1999 for administrative fees, consulting services rendered and, expenses paid on
behalf of the Company. The officers and directors of the Company are involved in
other business activities and may, in the future, become involved in other
business opportunities.
F-8
<PAGE>
PART III
1. Index to Exhibits
-----------------
Exhibit No. Description of Exhibits
----------- -----------------------
2(a) Issuer's Amended and Restated
Articles of Incorporation filed as
Exhibit 2(a) to the Issuer's
Registration Statement on Form 10-SB
is hereby incorporated herein by
this reference.
2(b) Issuer's Bylaws filed as Exhibit
2(b) to the Issuer's Registration
Statement on Form 10-SB is hereby
incorporated herein by this
reference.
27 Financial Data Schedule
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
INET COMMERCE CONDUIT CORP.
By: /s/ Paul H. Stone
-----------------------------------------
Paul H. Stone, President and principal
Executive, Financial and Accounting
Officer and Sole Director
Date: March 14, 2000
-----------------------------------------
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT
TO SECTION 15(d) OF THE EXCHANGE ACT BY NON-REPORTING ISSUERS
No annual report, proxy statement, proxy form or other proxy soliciting
material was sent to the Issuer's securities holders for or during the year
1999; nor is any such material to be sent to them subsequent to the filing of
this Form 10-KSB.
9
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999 AND IS
QUALIFIED IN ITS ENTIRETY TO SUCH FORM 10-KSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 221,417
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 228,167
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 228,167
<CURRENT-LIABILITIES> 83
<BONDS> 0
0
0
<COMMON> 6,517
<OTHER-SE> 231,092
<TOTAL-LIABILITY-AND-EQUITY> 237,609
<SALES> 0
<TOTAL-REVENUES> 2,014
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 56,841
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (54,827)
<INCOME-TAX> 0
<INCOME-CONTINUING> (54,827)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (54,827)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
