UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
AMENDMENT NO.1 TO
FORM 10QSB
(X) Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly period ended
JUNE 30, 2000
( ) Transition report pursuant of Section 13 or 15(d) of the
Securities Exchange Act of 1939 for the transition period ____
to______
COMMISSION FILE NUMBER 000-26157
---------
AMERISTAR NETWORK, INC.
------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-1370942
---------------------------------- --------------------
(State or other jurisdiction of (IRS Employer Id. No.)
incorporation or organization)
321 No. Mall Drive., K-102
St. George, UT 84790 Telephone: 435-656-3677
-----------------------------------------------------------------
(Address of Principal Executive Offices, including Registrant's
zip code and telephone number)
NONE
--------------------------------------------------------------
Former name, former address and former fiscal year, if changed.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports,), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
The number of shares of the registrant's common stock as of
September 30, 2000: 19,728,712 shares.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
TABLE OF CONTENTS
-----------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Balance Sheet
(b) Statement of Operations
(c) Statement of Changes in Financial Position
(d) Statement of Shareholders' Equity
(e) Notes to Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Item 3. Risks
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults On Senior Securities
Item 4. Submission of Items to a Vote
Item 5. Other Information
Item 6
(a) Exhibits
(b) Reports on Form 8K
NONE
SIGNATURES
FINANCIAL DATA SCHEDULE
<TABLE>
<CAPTION>
AMERISTAR NETWORK, INC.
(A Development Stage Company)
Consolidated Balance Sheets
<S> <C> <C>
September 30, December 31,
2000 1999
------------- ------------
(Unaudited)
ASSETS
Current Assets:
Cash in banks $ 36,275 $ 5,176
Notes receivable 28,000 13,000
Investment - Intechnologies, Inc. 48
------------- ------------
Total Current Assets 64,323 18,176
------------- ------------
Property & Equipment:
Furnitures and equipment 22,269 22,269
Less: accumulated depreciation (6,651) (3,375)
------------- ------------
Total Fixed Assets 15,618 18,894
------------- ------------
Other Assets:
Software distribution rights (net of amortization) 136,526 139,854
------------- ------------
Total Other Assets 136,526 139,854
TOTAL ASSETS $ 216,467 $ 176,924
============= ============
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 233,841 $ 152,948
Accrued expenses 4,928 15,316
Short term notes payable 2,300 1,000
Total Current Liabilities 241,069 169,264
------------- ------------
Stockholders' Equity:
Preferred stocks, $.001 par value
Authorized shares - 10,000,000
Issued and oustanding shares- none - -
Common stocks , $.001 par value
Authorized shares - 90,000,000
Issued and oustanding shares-
19,728,712 shares 19,729 10,199
Paid in capital 3,246,570 1,401,874
Subscriptions receivable (246,793) (249,400)
Deficit accumulated during the development stage (3,044,108) (1,155,013)
------------- ------------
Total Stockholders' Equity (24,602) 7,660
------------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 216,467 $ 176,924
============= ============
See consolidated notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
AMERISTAR NETWORK, INC.
(A Development Stage Company)
Consolidated Statement of Operations
For the nine months ended September 30, 2000 and 1999 and
For the period September 23, 1996 (inception) through September 30, 2000
<S> <C> <C> <C>
Cumulative
September 30, September 30, During
2000 1999 Development
(Unaudited) (Unaudited) Stage
------------ ------------- -----------
Sales $ 41,500 $ 37,102 $ 118,697
Expenses
General and administrative expenses 1,924,558 985,324 3,099,688
Depreciation and amortization 5,772 1,576 19,646
Interest expense 265 850 6,392
------------ ------------- -----------
Total Expenses 1,930,595 987,750 3,125,726
------------ ------------- -----------
Net Loss (1,889,095) (950,648) (3,007,029)
Other Income
Interest income - - 23
------------ ------------- -----------
Total Other Income (Expenses) - - 23
------------ ------------- -----------
Net loss $ (1,889,095) $ (950,648) (3,007,006)
============ ============= ===========
Basic loss per share $ (0.214) $ (0.456)
============ =============
Weighted average shares outstanding 8,816,253 2,086,347
============ =============
See consolidated notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
AMERISTAR NETWORK, INC.
(A Development Stage Company)
Consolidated Statements of Cash Flows
For the nine months ended September 30, 2000 and 1999 and
For the period September 23, 1996 (inception) through September 30, 2000
<S> <C> <C> <C>
Cumulative
September 30, September 30 During
2000 1999 Development
(Unaudited) (Unaudited) Stage
------------- ------------ -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,889,095) $ (950,648) (3,007,006)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation & amortization 5,772 1,576 19,646
Services paid by stocks 1,850,000 1,850,000
Investment 48 48
(Increase) decrease in note receivable (15,000) (23,470)
Increase (decrease) in accounts payable 84,915 (27,500)
(39,162) Increase (decrease) in in accrued expenses (10,388) 68,936 58,548
------------- ------------ -----------
NET CASH USED BY OPERATING ACTIVITIES 26,252 (907,636) (1,141,396)
------------- ------------ -----------
Acquisition of property and equipment (10,786) (21,089)
Acquisition of software rights (5,156) (150,000)
Write off organization cost 336
NET CASH USED BY INVESTING ACTIVITIES - (15,942) (170,753)
CASH FLOWS FROM FINANCING ACTIVITIES
Notes and contract payable 1,300 (152,500) 1,300
------------- ------------ -----------
Cash received from subscription receivable (249,400) -
Proceeds from issuance of common stock 3,547 1,343,577 1,347,124
------------- ------------ -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,847 941,677 1,348,424
------------- ------------ -----------
INCREASE (DECREASE) IN CASH 31,099 18,099 36,275
BEGINNING CASH 5,176 332 -
------------- ------------ -----------
ENDING CASH $ 36,275 $ 18,431 $ 36,275
============= ============ ===========
DISCLOSURE FROM OPERATING ACTIVITIES
Interest expense $ $ 1,071 $ 6,496
NON CASH DISCLOSURE
1,075,000 shares issued for
incorporation expenses $ 1,175
350,000 shares issured for distribution rights $ 350
1,493,941 shares issued for servcies $ 25,000 518,676
5,500,000 shares issued to acquire CVS Technologies 5,500
250,000 shares issued to acquire Ameristar Mortgage $ 250
255,000 shares of common stocks subscribed $ 393 $ 249,400
See consolidated notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
AMERISTAR NETWORK, INC.
(A Development Stage Company)
Consolidated Statements of Stockholders' Equity
For the period September 23, 1996 (Inception) to September 30, 2000
<S> <C> <C> <C> <C> <C>
Deficit
Number Accumulated
of Common Additional Stock During the
Shares Stock at Paid-In- Subscripton Development
Out- Par Value Capital Receivables Stage
standing
-------- --------- ---------- ----------- -----------
Balance at September 23, 1996 (inception) - $ - $ - $ - $ -
Net loss for the period ended
December 31, 1996 (798)
Stocks issued for organization costs
at $.001 per share 1,175,000 1,175
Stocks issued for cash at $.10 per share 50,000 50 4,950
Stocks issued for marketing rights 350,000 350
-------- --------- ---------- ----------- -----------
Balance at December 31, 1996 1,575,000 1,575 4,950 (798)
Net loss for the period ended
December 31, 1997 (28,813)
Shares issued for professional fees
at $.001 per share 95,000 95
Share issued for cash at $.001 per share 330,000 330
Shares issued for cash at $2.00 per share 6,500 6 12,994
-------- --------- ---------- ----------- -----------
Balance at December 31, 1997 2,006,500 2,006 17,944 (29,611)
Net loss for the period
ended December 31, 1998 (34,453)
Stocks issued for cash at
$2.00 per share 6,550 7 13,093
Stocks issued for debt satisfaction
at $2.00 per share 5,816 6 11,626
Balance at December 31, 1998 2,018,866 2,019 42,663 (64,064)
Net loss for the period ended
December 31, 1999 (1,090,949)
Stocks issued for cash at $.63 per share 32,000 32 20,128
Stocks issued for cash at $.80 per share 562,500 563 449,438
Stocks issued for cash at $1.00 per share 41,000 41 40,959
Stocks issued for cash at $1.25 per share 10,000 10 12,490
Stocks issued for cash at $2.00 per share 35,000 35 69,965
Stocks issued for services at
$1.50 per share 330,000 330 494,670
Stocks issued for services at
$1.62 per share 13,846 13 22,416
Stocks issued for servcies at $.001 1,150,000 1,150
Common stocks subscribed at
$.80 per share 30,500 31 24,370 (24,400)
Common stocks subscribed at
$1.00 per share 225,000 225 224,775 (225,000)
Stocks issued to acquire
CVS Technologies 5,500,000 5,500
Stocks issued to acquire
Ameristar Mortgage 250,000 250
-------- --------- ---------- ----------- -----------
Balance at December 31, 1999 10,198,712 $ 10,199 $ 1,401,874 $(249,400) $ 1,155,013)
Net loss for the nine months
ended September 30, 2000 (1,889,095)
Stocks subscription - payment 3,000
Common stocks subscribed 280,000 280 3,946 (393)
Stocks issued for services 9,250,000 9,250 1,840,750
Balance at September 30, 2000 19,728,712 $ 19,729 $ 3,246,570 $ (246,793) $3,044,108)
See consolidated notes to financial statements.
</TABLE>
[CAPTION]
AMERISTAR NETWORK, INC.
(A Development Stage Company)
Consolidated Notes to Financial Statements
September 30, 2000
Note 1 - BUSINESS ACTIVITY
The Company was incorporated under the laws of the state of Delaware on
September 23, 1996 using the name AMERISTAR NETWORK, INC.
The purpose for which the Corporation is organized is to engage in any lawful
act or activity for which a corporation may be organized under the General
Corporation Law of the State of Delaware including, without limitation, to
engage directly or through a subsidiary or subsidiaries in the business of
acquiring, operate and or managing mortgage brokerage business and to develop,
research, design, produce, buy, sell, license or otherwise deal in mortgage
technology or related devises which are necessary, useful and desirable in
connection with said business.
The Company has been in the development stage since its formation on
September23, 1996. The Company has not earned significant revenue from planned
principal operations. Accordingly, the Company's activities have been
accounted for as those of a "Development Stage Enterprise" as set forth in
Financial Accounting Standards Board Statement No. 7 ("SFAS 7"). Among the
disclosures required by SFAS 7 are that the Company's financial statements be
identified as those of a development stage company, and that the statements of
operations, stockholders' equity (deficit) and cash flows disclose activity
since the date of the Company's inception.
Note 2 - SIGNIFICANT ACCOUNTING POLICIES
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.
Basis of Consolidation
----------------------
The financial statements reflect the financial position and results of
operations of Ameristar Network, Inc. and its subsidiaries on a consolidated
basis. The Company's policy is to consolidate all wholly owned subsidiaries.
All inter-company amounts have been eliminated in consolidation.
Cash and Cash Equivalents
-------------------------
The Company considers all investments purchased with an initial maturity
of three months or less to be cash equivalents. Cash and cash equivalents
are carried at cost, which approximates fair value.
Property and Equipment
----------------------
Property and equipment are stated at cost less accumulated depreciation
and amortization. When such items are retired or otherwise disposed of,
the cost and related accumulated depreciation and amortization are
relieved from the accounts and the resulting gain or loss is reflected in
operations. Depreciation and amortization are provided using the
straight-line method over the estimated useful lives of the assets. The
depreciation and amortization periods by asset category are as follows:
Property and Equipment (continued)
Furniture and fixtures 7 years
Computer equipment 5 years
Maintenance and minor replacements are charged to expense as incurred
while renewals and improvements are capitalized.
Long-Lived Assets
-----------------
The carrying value of long-lived assets is periodically reviewed by
management and impairment losses, if any are recognized when the expected
nondiscounted future operating cash flows derived from such assets are
less than their carrying value. To date, no such impairment has been
recorded.
Fair Value of Financial Instruments
-----------------------------------
Cash and cash equivalents, accounts receivable, other assets, accounts
payable, deferred revenue, notes payable and accrued expenses are carried
at cost which approximates their fair value because of the short-term
maturity of these instruments.
Revenue Recognition
-------------------
The Company recognizes revenue upon closing and sale of a mortgage note in
the secondary market. Processing fees are recognized ratably over the period to
which they relate.
Income Taxes
------------
The Company utilizes the liability method of accounting for income taxes.
Under this method, deferred tax liabilities and assets are determined
based on the difference between the financial statement and tax bases of
assets and liabilities using enacted tax rates in effect for the period
in
which the differences are expected to reverse. Valuation allowances are
established, when necessary, to reduce the deferred tax assets to the
amounts expected to be realized.
Advertising Costs
-----------------
The Company expenses the costs of advertising in the periods in which
those costs are incurred. Advertising expense was approximately $3,596
for the year ended December 31, 1999.
Earnings (Loss) Per Share
-------------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted average number of shares of common stock
outstanding during the period. Diluted earnings (loss) per share is
computed by dividing the net income (loss) by the weighted average number
of common shares outstanding plus the number of additional common shares
that would have been outstanding if all dilutive potential common shares
had been issued, using the treasury stock method. Potential common shares
are excluded from the computation when their effect is antidilutive.
Note 3 PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at September 30, 2000 and
December 31, 1999
September 30, December 31,
2000 1999
------------- -----------
Furniture and equipment $ 22,269 $ 22,269
Less: Accumulated depreciation and amortization ( 6,651) ( 3,375)
------------- -----------
Net property and equipment $ 15,618 $ 18,894
============= ===========
Note 5 SOFTWARE LICENSING AGREEMENT
On June 6, 1998, the Company purchased at cost an exclusive license agreement
from Wholesale Network Center portion of the Virtual Lender Software System and
Intellectual Property. The agreement grants the Company perpetual usage of the
license and technology for the United States of America, Mexico and Canada.
The Company paid a total cost of $150,000, which is being amortized over an
estimated useful life of 30 years. During the year 2000, the Company
cancelled the Software License Agreement with Mortgage Internet Technologies,
Inc. (MIT). As per agreement, the Company received 1,521,805 shares of MIT.
September December
30, 2000 31, 1999
--------- --------
Software distribution rights $ 0 $150,000
Less: Accumulated amortization (0) (10,146)
------- -------
$ 0 $139,854
======= =======
Note 6 INVESTMENTS
The Company acquired the following equity investments during the year 2000:
Intechnologies, Inc. carrying value at cost of $ 48. (Note 9)
Mortgage Internet Technologies, Inc. carrying value cost of $139,854.(Note 5)
NOTE 7 - GOING CONCERN
The Company has nominal assets and no current operations with which to create
operating capital. The Company seeks to raise operating capital with which to
seek business opportunities to utilize the technology it has acquired via
placements of its common stock. However, there can be no assurance that such
offering or negotiations for private capital will be successful. Management
plans to raise additional working capital in subsequent private offerings of
its common stock. The Company will initially seek to raise up to at least
$5,000,000 in a private placement of it's common stock, and continues to
negotiate for private capital. However, there can be no assurance that any
such offering or negotiations for private capital will be successful if the
Company is unable to regain its position on the NASD Bulletin Board.
NOTE 8 - INCOME TAXES
The Company has adopted the provisions of SFAS No. 109 "Accounting for Income
Taxes". SFAS 109 requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been included in
the financial statements or tax returns.Under this method, deferred tax
liabilities and assets are determined based on the differences between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These losses are
as follows:
Year of Loss Amount Expiration Date
------------ ------ ---------------
1996 $ 798 2011
1997 28,813 2012
1998 34,453 2013
1999 1,088,695 2014
NOTE 9. RELATED PARTY TRANSACTIONS
The Company issued 350,000 shares of its common stock to an officer of the
Company to acquire marketing rights.
The Company purchased furniture and fixtures and computer equipment for $2,524
from an officer of the Company.
The Company received 12,000,000 shares of Intechnologies, Inc. as fee for
services provided. The Chief Executive Officer of the Intechnologies, Inc. is
also Chief Executive Officer of Ameristar Network, Inc. (Note 6)
NOTE 10. NEW TECHNICAL PRONOUNCEMENTS
In February 1997, SFAS No. 129, "Disclosure of Information about Capital
Structure was issued effective for periods ending after December 15, 1997. The
Company has adopted the disclosure provisions of SFAS No. 129, effective with
the fiscal year ended December 31, 1997. Adoption of SFAS 129.
In June 1997, SFAS 130, "Reporting Comprehensive Income" was issued effective
for fiscal years beginning after December 31, 1997, with earlier application
permitted. The Company has elected to adopt SFAS No.130, with the fiscal year
ended December 31, 1998. Adoption of SFAS 130 is not expected to have a
material impact on the Company's financial statements.
NOTE 11. ACQUISITION OF SUBSIDIARIES
On April 26, 1999, the Company issued 5,500,000 shares of its common stock in
exchanged for 100% CVS Technologies, Inc. common stock shares issued and
outstanding. CVS incorporated on March 23, 1999 in the state of Delaware.
This combination is accounted for as a pooling of interest as per APB
Opinion No. 16
On May 13, 1999, the Company issued 250,000 shares of its common stock in
exchanged for 100% of the shares issued and outstanding of AmeriStar
Mortgage, Inc. AmeriStar Mortgage, Inc. incorporated March 18, 1999 in the
state of Delaware. This combination will be accounted for as a pooling of
interest as per APB Opinion No. 16.
PART II. OTHER INFORMATION
Item 1. Legal proceedings NONE
Item 2. Changes in securities and use of proceeds NONE
Item 3. Defaults on senior securities NONE
Item 4. Submission of items to a vote NONE
Item 5. Other information NONE
Item 6.
a) Exhibits NONE
b) Reports on 8K
[CAPTION]
SIGNATURES
In accordance with the requirements of the Securities and
Exchange Act of 1934, the registrant caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
Ameristar Network, Inc.
Dated: September 14, 2000 By: O. Russell Crandall
------------------------------
O. Russell Crandall, President
[CAPTION]
[TYPE]EX-27
2
[DESCRIPTION]FINANCIAL DATA SCHEDULE
[ARTICLE] 5
[MULTIPLIER] 1
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-START] SEP-31-2000
[PERIOD-END] SEP-30-2000
[CASH] 36275
[SECURITIES] 0
[RECEIVABLES] 0
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 64323
[PP&E] 0
[DEPRECIATION] 0
[TOTAL-ASSETS] 216467
[CURRENT-LIABILITIES] 241069
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 19729
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 216647
[SALES] 41500
[TOTAL-REVENUES] 0
[CGS] 0
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 1930595
[LOSS-PROVISION] (1889095)
[INTEREST-EXPENSE] 265
[INCOME-PRETAX] (1889095)
[INCOME-TAX] 0
[INCOME-CONTINUING] (1889095)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (1889095)
[EPS-BASIC] (.214)
[EPS-DILUTED] (.214)
