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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
PALWEB CORPORATION
(Name of registrant as specified in its charter)
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Delaware 000-26331 75-1984048
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(State or other jurisdiction of Commission File (I.R.S. Employer Identification
incorporation or organization) Number No.)
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<S> <C>
1607 WEST COMMERCE STREET DALLAS, TEXAS 75208
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(Address of principal executive offices) (City, State, and Zip Code)
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(214) 698-8330
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(Issuer's telephone number)
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
requirements for the past 90 days.
Yes X . No .
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The number of shares of common stock, $0.10 par value, outstanding at
August 31, 1999 was 217,981,046.
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Explanatory Note
This Amendment to our Form 10-Q for the quarter ended August 31, 1999 is to
correct an error to the Stockholder's Deficiency: Preferred Stock in the column
for 1999 under the Liabilities and Stockholders Deficiency on page 3.
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INDEX
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Page No.
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PART I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheet --
August 31, 1999 and 1998 ................................... 3
Consolidated Statement of Operations --
Three Months Ended August 31, 1999
and 1998 ................................................... 4
Consolidated Statement of Cash Flows --
Three Months Ended August 31, 1999
and 1998 ................................................... 5
Notes to Consolidated Financial Statements ................. 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations ................................................. 7
PART II. Other Information:
Item 6. Exhibit 27-Financial Data Schedule was previously filed
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PalWeb Corporation
(a development stage company)
Consolidated Balance Sheets
(Unaudited)
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<CAPTION>
August 31,
------------------------------
ASSETS 1999 1998
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Current Assets:
Cash $ 1,064 $ --
Inventory 9,938 28,346
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Total current assets 11,002 28,346
Property, Plant and Equipment, at cost 2,189,965 2,659,958
Accumulated depreciation (375,101) (257,885)
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Total Property, Plant and Equipment 1,814,864 2,402,073
Other Assets:
Intangible assets 67,964 60,058
Accumulated Amortization (7,215) (4,737)
Other 30,173 29,353
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Total other assets 90,922 84,674
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Total Assets $ 1,916,788 $ 2,515,093
============ ============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities:
Notes and mortgages payable $ 50,000 $ 2,313,807
Accounts payable and accrued expenses 547,374 816,359
Payable to related parties 2,413,992 1,758,918
Customer deposits 300,000 --
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Total current liabilities 3,311,366 4,889,084
Lease Finance Obligation 1,766,958 --
Stockholders' Deficiency:
Preferred stock, $.0001 par, 20,000,000
shares authorized - outstanding 4,968,890
and 880,000, respectively 497 38
Common stock, $.10 par value,
250,000,000 authorized, outstanding -
217,981,046, and 168,981,046, respectively 9,206,888 4,066,938
Additional paid-in capital 612,925 --
Deficit accumulated during
development stage (12,981,846) (6,440,967)
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Total stockholders' deficiency (3,161,536) (2,373,991)
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Total Liabilities and
Stockholders Deficiency $ 1,916,788 $ 2,515,093
============ ============
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See notes to consolidated financial statements.
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PalWeb Corporation
(a development stage company)
Consolidated Statements of Operations
(Unaudited)
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From Inception
(November 20, 1995)
Quarter Ended August 31, To August 31,
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1999 1998 1999
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Sales $ -- $ 11,585 $ 92,694
Other income (loss) (6,337) 27,400 270,848
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(6,337) 38,985 363,542
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Expenses:
Research and development -- -- 406,943
General and administrative
expenses 838,315 295,105 9,049,256
Impairment -- -- 3,456,231
Interest expense 38,383 48,145 501,574
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Total expenses 876,698 343,250 13,414,004
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Loss before
extraordinary items (883,035) (304,265) (13,050,462)
Extraordinary gain -- -- 68,616
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Net Loss $ (883,035) $ (304,265) $(12,981,846)
============ ============ ============
Loss per common share $ (0.004) $ (0.002)
============ ============
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See notes to consolidated financial statements.
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PalWeb Corporation
(a development stage company)
Consolidated Statements of Cash Flows
(Unaudited)
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From Inception
(November 20, 1995)
Quarter Ended August 31, To August 31,
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1999 1998 1999
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Net cash provided from
Operating activities $ 40,181 $ -- $ 415,919
Cash Flows from Investing Activities:
Purchase of property and equipment (57,827) -- (3,303,400)
Proceeds from sale of equipment 18,000 -- 92,995
Proceeds from lease finance
obligation -- -- 149,517
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Net cash used by investing activities (39,827) -- (3,030,888)
Cash Flows from Financing Activities:
Increase in notes and mortgage
payable -- -- 2,124,057
Proceeds from issuance of
common stock -- -- 491,976
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Net cash provided by
financing activities -- -- 2,616,033
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Net Increase (Decrease) in Cash 354 -- 1,064
Cash, beginning of period 710 -- --
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Cash, end of period $ 1,064 $ -- $ 1,064
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See notes to consolidated financial statements.
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PALWEB CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments and reclassifications,
which are of a normal recurring nature, necessary to present fairly its
financial position as of August 31, 1999 and 1998, and the results of
its operations and its cash flows for the three month periods then
ended. These consolidated financial statements should be read in
conjunction with the consolidated financial statements as of and for
the years ended May 31, 1999 and 1998 and the notes thereto included in
the Company's Form 10.
2. The results of operations for the three month period ended August 31,
1999 is not necessarily indicative of the results to be expected for
the full year.
3. During the three month period ended May 31, 1999, the Company issued
4,088,890 shares of preferred stock for services. The preferred stock
is convertible into common stock on a one to one basis. The valuation
of the services totalling $613,334 is based on the market value of the
underlying common stock as of the effective date.
During the three month period ended May 31, 1998, the Company issued
2,125,000 shares of common stock for services. The valuation of the
services totalling $203,000 is based on the market value of the common
stock as of the effective date.
4. The computation of earnings per share is based on the weighted average
shares outstanding for the quarters ended August 31, 1999 and 1998 in
the amounts of 217,981,046 and 168,284,046, respectively. Convertible
preferred stock is not considered as their effect is antidilutive.
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Management Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The Company incurred a net loss of $883,035 and $304,265 in the three month
periods ended August 31, 1999 and 1998. The Company continues in its capacity as
a development stage company to develop its products. The Company is developing
two primary products - (1) a marketable plastic pallet to compete with standard
wood pallets and (2) an injection molding machine which will compete both on the
acquisition cost and operating efficiency. The primary reason for the increase
in net loss in the three month period ended August 31, 1999 over 1998 is the
value of preferred stock issued in 1999 for services.
Changes in Financial Position
During the three month periods ended August 31, 1999 and 1998, the Company
continues to rely on related parties to provide funding. Management is in the
process of completing a financing arrangement with a bank for a $400,000 credit
line. The Company has a commitment letter from the bank and is formalizing
collateralization provided by a related party.
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SIGNATURE
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned there unto duly authorized.
PALWEB CORPORATION
By: /s/ RONALD G. HALE
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Ronald G. Hale, President
Dated: November 3, 1999
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