U.S. 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 September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-26027
DATIGEN.COM, INC.
(Exact name of small business issuer as specified in its
charter)
Utah 87-0626333
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3191 North Canyon Road, Provo, Utah 84604
(Address of principal executive offices)
(801) 373-3990
(Issuer's telephone number)
887 W. Center Street, Orem, Utah 84057
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the
preceding 12 months (or for such shorter period that the issuer
was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13, or 15(d) of the
Exchange Act subsequent to the distribution of securities under
a plan confirmed by a court. Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's
classes of common equity, as of November 10, 2000: 625,000
shares of common stock.
Transitional Small Business Format: Yes [ ] No [ X ]
Documents incorporated by reference: None
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FORM 10-QSB
DATIGEN.COM, INC.
INDEX
Page
PART I. Financial Information 3
Balance Sheets for the Period Ending 3
September 30, 2000 (unaudited)
Statement of Operations from February 10, 4
1999 (Date of Inception) to September 30,
1999, for the Three Months Ended September
30, 2000 and 1999, and for the Nine Months
Ended September 30, 2000, and Cumulative
Amounts from Inception (unaudited)
Statement of Cash Flows from February 10, 5
1999 (Date of Inception) to September 30,
1999, and for the Nine Months Ended
September 30, 2000, and Cumulative Amounts
from Inception (unaudited)
Notes to Financial Statements 6
Item 2. Management's Discussion and
Analysis of Financial Condition 8
PART II. Item 5. Other Information 9
Exhibits and Reports on Form 8-K 9
Signatures
2
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PART I.
Financial Information
DATIGEN.COM
(A Development Stage Company)
Balance Sheet
September 30, 2000
(Unaudited)
Assets
Current assets:
Cash $ 7,107
Marketable securities 52,500
Notes receivable 663,184
Total current assets 722,791
Net assets of discontinued operations 443,698
Total assets $ 1,166,489
Liabilities and Stockholders' Equity
Current liabilities - $ -
Stockholders' equity:
Common stock, no par value, 50,000,000 shares
authorized; 825,000 shares issued and outstanding 1,465,100
Unrealized holding gain 2,500
Accumulated deficit (301,111)
Total stockholders' equity 1,166,489
Total liabilities and stockholders' equity $ 1,166,489
See accompanying notes to financial statements.
3
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DATIGEN.COM
(A Development Stage Company)
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
February
Nine 10, 1999 Cumulative
Three Months Ended Months (Date of Amounts
September 30, Ended Inception From
September to
September
30,
2000 1999 2000 1999 Inception
<S> <C> <C> <C> <C> <C>
Revenue - interest $ 22,231 $ 29,686 $ 67,773 $ 55,545 $ 151,968
Income tax expense (3,000) (4,000) (10,000) (8,000) (51,000)
Net income before
discontinued operations 19,231 25,686 57,773 47,545 100,968
Loss from operations
of discontinued segment, net of tax (123,640) (6,742) (355,029) (40,891) (402,079)
$ (104,409) $ 18,944 $ (297,256) $ 6,654 $(301,111)
Net (loss) income per share -
basic and diluted:
Continuing operations $ .02 $ .04 $ .07 $ .08 $ .14
Discontinued operations (.15) (.01) (.43) (.07) (.56)
$ (.13) $ .03 $ (.36) $ .01 $ (.42)
Weighted average common
shares - 825,000 625,000 823,000 625,000 715,000
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
DATIGEN.COM
(A Development Stage Company)
Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
February 10,
Nine Months 1999 (Date of Cumulative
Ended Inception to Amounts
September 30, September 30, From
2000 1999 Inception
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (297,256) $ 6,654 $ (301,111)
Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:
Net assets of discontinued operations 32,540 (2,400) 6,302
Issuance of below market warrants - 20,500 20,500
Net cash (used in) provided by
operating activities (264,716) 24,754 (274,309)
Cash flows from investing activities:
Purchase of marketable securities (50,000) - (50,000)
Decrease (increase) in notes receivable 299,644 (986,962) (663,184)
Net cash provided by (used in)
investing activities 249,644 (986,962) (713,184) 4)
Cash flows from financing activities -
issuance of common stock - 994,600 994,600
Net (decrease) increase in cash (15,072) 32,392 7,107
Cash, beginning of period 22,179 - -
Cash, end of period $ 7,107 $ 32,392 $ 7,107
</TABLE>
See accompanying notes to financial statements.
5
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DATIGEN.COM
(A Development Stage Company)
Notes to Financial Statements
(1) The unaudited financial statements include the accounts of
Datigen.com and include all adjustments (consisting of
normal recurring items) which are, in the opinion of
management, necessary to present fairly the financial
position as of September 30, 2000 and the results of
operations for the three months ended September 30, 2000 and
1999 and the results of operations and cash flows for the
nine months ended September 30, 2000 and period from
February 10, 1999 (date of inception) to September 30, 1999,
and cumulative amounts since inception. The results of
operations for the nine months ended September 30, 2000 are
not necessarily indicative of the results to be expected for
the entire year.
(2) (Loss) income per common share is based on the weighted
average number of shares outstanding during the period.
(3) During the nine months ended September 30, 2000, the
Company issued 200,000 shares of common stock in exchange
for technology of $450,000.
The Company has not paid any cash for interest or income
taxes since inception.
(4) On November 1, 2000, the Company adopted a plan which
would result in the Company exchanging its technology in
exchange for 200,000 shares of the Company's common stock.
The Company would also liquidate its other assets and
liabilities related to the technology operations and
discontinue this line of business.
Financial information related to the technology operations as of
September 30, 2000 and for the nine months then ended are as
follows:
September 30,
2000
Accounts receivable $21,740
Property and equipment, net 47,424
Technology, net 382,500
Accounts payable and accrued liabilities (7,966)
$443,698
6
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DATIGEN.COM
(A Development Stage Company)
Notes to Financial Statements
Continued
Nine Months
Ended
September 30,
2000
Sales $49,538
Costs and expenses (404,567)
Loss for operations of discontinued segment (355,029)
Income tax expense -
Net loss from discontinued segment
$(355,029)
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
Forward-Looking Statements
This Form 10-QSB includes, without limitation, certain
statements containing the words "believes", "anticipates",
"estimates", and words of a similar nature, constitute "forward-
looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. This Act provides a "safe harbor"
for forward-looking statements to encourage companies to provide
prospective information about themselves so long as they identify
these statements as forward looking and provide meaningful,
cautionary statements identifying important factors that could
cause actual results to differ from the projected results. All
statements other than statements of historical fact made in this
Form 10-QSB are forward-looking. In particular, the statements
herein regarding industry prospects and future results of
operations or financial position are forward-looking statements.
Forward-looking statements reflect management's current
expectations and are inherently uncertain. The Company's actual
results may differ significantly from management's expectations.
Results of Operations
For the Nine Months Ended September 30, 2000 and the Period from
Inception on February 10, 1999 to September 30, 1999.
The Company was formed as a Utah corporation in February
1999 for the purpose of engaging in the development and marketing
of various Internet and Internet related products and services,
including the development and marketing of web-based software.
While in the process of developing that business, the Company has
also engaged in the business of acquiring or investing in trust
deed notes secured by real property to generate interest income.
In January 2000, the Company acquired from Steven Lloyd all
of the computer software programs and websites (including domain
names) designated as WebTest, Forman, Userpro, Visual Telnet,
File Manager, Ping Pong, Sentinel, E-Read, Datigent.com,
Datigent.org, Datigent.net, Inshift.com, Inshift.org, and
Inshift.net which are used or useful for offering and performing
computer diagnostic and improvement functions. The consideration
for the acquisition consisted of 200,000 shares of the Company's
restricted common stock valued at $2.00 per share, or a total of
$400,000. After pursuing the development of this business
through October 2000, the Company discontinued further
development, marketing, and operation of the computer business
acquired from Mr. Lloyd based on a determination that it is
unlikely the computer business will meet the Company's
expectations or goals for business growth and development.
Consequently, in November 2000, the Company reconveyed the
computer technology to Mr. Lloyd in exchange for the 200,000
shares of common stock originally issued to Mr. Lloyd.
At the present time, the Company intends to continue its
business of investing in trust deed notes secured by real
property.
The Company recognized $67,773 in revenue from interest on
trust deed investments for the nine months ended September 30,
2000 compared to $55,545 for the period from inception to
September 30, 1999. The increase in revenue is attributed to the
longer period in 2000 that funds were invested as compared to
1999.
The Company recognized a loss of $355,029 on its
discontinued computer business for the nine months ended
September 30, 2000 as compared to a loss of $40,891 for the
period from inception to September 30, 1999. The increase in the
loss from the discontinued operation is attributable to the fact
that
8-
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the Company was actively pursuing the computer business only
during the last two months of the 1999 period as compared to nine
months in 2000.
As a result of the foregoing factors, the Company realized a
net loss $297,256 for the nine months ended September 30, 2000
compared to a net income of $6,654 for the period from inception
to September 30, 1999.
Liquidity and Capital Resources
At September 30, 2000, the Company had cash of $7,107 and
notes receivable and securities of $715,684. Net assets of the
Company's discontinued computer business were $443,698, which
were divested by the Company in November 2000 in exchange for
200,000 shares of the Company's common stock that were returned
to the Company for cancellation. The Company had no liabilities
at September 30, 2000.
Management believes that the Company has sufficient cash and
short-term investments to meet the anticipated needs of the
Company's operations through at least the next 12 months.
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
Effective November 1, 2000, Steven Lloyd resigned as an
officer and director of the Company. The number of persons
comprising the board of directors was reduced to three, and
Joseph Ollivier, Tracy Livingston, and Josh James continue to
serve as directors of the Company.
EXHIBITS AND REPORTS ON FORM 8-K.
REPORTS ON FORM 8-K: None
EXHIBITS: Included as exhibits to this report are the following:
Exhibit No. 1 Exhibit Reference No. 10 Reconveyance Agreement with Steven Lloyd
Exhibit No. 2 Exhibit Reference No. 27 Financial Data Schedule
SIGNATURES
In accordance with the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned
thereunto duly authorized.
DATIGEN.COM, INC.
Date: November 13, 2000 By: /s/ Joseph Ollivier, President
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