UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from ________________ to ________________
Commission file number 000-28279
PLANETGOOD TECHNOLOGIES, INC. (d/b/a BrowseSafe.com)
(Exact name of small business issuer as specified in its charter)
Nevada 35-2090110
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
7202 East 87th Street, Indianapolis, Indiana 46256
(Address of principal executive offices)
(317) 806-3000
(Issuer's telephone number)
BrowseSafe.com, Inc.
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) 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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after 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 the latest practicable date:
Outstanding as of November 6, 2000: 24,193,826 shares of common stock, $0.001
par value per share; no shares of preferred stock, $0.001 par value per share.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
<PAGE>
PART I - FINANCIAL INFORMATION
-------------------------------------------------------------------------------
Item 1. Financial Statements.
(The Consolidated Statement of cash flows has been amended to correct the amount
included for deferred revenue for the period From Inception to September 30,
2000.)
PLANETGOOD TECHNOLOGIES, INC. AND SUBSIDIARY
(d/b/a BrowseSafe.com)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
(Unaudited)
September 30, December 31,
2000 1999
<S> <C> <C>
CURRENT ASSETS
Cash $ 62,825 $ 6,475
Prepaid consulting expense 888,636 177,344
Prepaid promotional supplies 321,429
Prepaid expenses and other 106,908 54,950
----------- -----------
Total Current Assets 1,379,798 238,769
----------- -----------
OFFICE EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net of
accumulated depreciation and amortization of $72,027
at September 30, 2000 and $11,395 at December 31, 1999 398,442 93,281
----------- -----------
OTHER ASSETS
Web design and computer software costs, net of accumulated
amortization of $94,741 at September 30, 2000 and
$50,430 at December 31, 1999 67,344 50,430
Product development costs 97,316 78,950
Deposits 31,622 24,034
----------- -----------
Total Other Assets 196,282 153,414
----------- -----------
TOTAL ASSETS $ 1,974,522 $ 485,464
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Bank line of credit $ 198,944
Accounts payable $ 572,660 348,442
Accrued payroll and related expenses 130,679 127,875
Payable to related party 105,847
Accrued stock issuance 337,500
Deferred revenue 5,720
Current maturities of long-term debt 54,208 34,314
Note payable - 176,389
----------- -----------
Total Current Liabilities 763,267 1,329,311
LONG-TERM DEBT 58,165 29,310
CONTINGENCIES - -
----------- -----------
Total Liabilities 821,432 1,358,621
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, $.001 par value; 85,000,000 shares
authorized at September 30, 2000 and 25,000,000
shares authorized at December 31, 1999, 24,193,826
shares issued and outstanding at September 30, 2000
and 19,075,346 shares issued and 17,575,346 shares
outstanding at December 31, 1999 24,194 17,575
Additional paid-in capital 8,888,671 793,899
Warrants outstanding 1,458,281 71,094
Deficit accumulated during development stage (9,218,056) (1,755,725)
----------- -----------
Total Stockholders' Equity (Deficit) 1,153,090 (873,157)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 1,974,522 $ 485,464
=========== ===========
</TABLE>
Unaudited Interim Financial Statements
2
<PAGE>
PLANETGOOD TECHNOLOGIES, INC. AND SUBSIDIARY
(d/b/a BrowseSafe.com)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Period from
February 10,
1998
(Inception)
Three Months Ended Nine Months Ended to
September 30, September 30, September 30,
2000 1999 2000 1999 2000
<S> <C> <C> <C> <C> <C>
REVENUES $ 46,447 $ - $ 48,225 $ - $ 48,225
MARKETING, GENERAL AND ADMINISTRATIVE
Product development and Internet expenses 10,919 5,150 13,131 6,595 132,543
Marketing and advertising 255,701 16,765 265,969 23,168 569,777
Payroll expenses 547,119 47,176 1,130,636 215,015 1,628,718
Legal and professional 141,552 17,859 636,894 47,171 835,245
Non-cash consulting services-Note 10 1,493,189 4,977,058 5,008,308
Hardware lease expense 26,567 24,216 60,555 80,861 137,438
Contract termination 200,000 200,000 200,000
Depreciation and amortization 52,087 15,025 104,943 43,313 166,770
Interest expense 3,936 1,832 15,888 9,429 109,128
Commissions 14,961 14,961 14,961
Software and fulfillment expenses 17,284 17,877 17,877
Other general and administrative expenses 105,212 64,215 272,644 76,644 445,516
------------ ------------ ------------ ------------ ------------
Total General and Administrative 2,668,527 392,238 7,510,556 702,196 9,266,281
------------ ------------ ------------ ------------ ------------
Net Loss before Income Taxes (2,622,080) (392,238) (7,462,331) (702,196) (9,218,056)
INCOME TAXES - - - - -
------------ ------------ ------------ ------------ ------------
NET LOSS $ (2,622,080) $ (392,238) $ (7,462,331) $ (702,196) $ (9,218,056)
============ ============ ============ ============ ============
NET LOSS PER COMMON SHARE $ 0.1107 $ 0.0245 $ 0.3283 $ 0.0528 $ 0.5931
============ ============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 23,678,217 16,038,000 22,729,002 13,289,097 15,543,321
============ ============ ============ ============ ============
</TABLE>
Unaudited Interim Financial Statements
3
<PAGE>
PLANETGOOD TECHNOLOGIES, INC. AND SUBSIDIARY
(d/b/a BrowseSafe.com)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) Period
from February 10, 1998 (date of inception) to September 30, 2000
<TABLE>
<CAPTION>
Additional
Members' Common Paid-in Warrants Accumulated
Deficit Stock Capital Outstanding Deficit Total
<S> <C> <C> <C> <C> <C> <C>
Capital contributions from members of BrowseSafe LLC at
inception on February 10, 1998 $ 190,000 $ 190,000
Net loss (541,420) (541,420)
Reclassification of members' deficit to reflect contribution
of BrowseSafe LLC assets and liabilities to BrowseSafe
Technology, Inc. in exchange for 11,200,000 shares of
BrowseSafe Technology, Inc. common stock 351,420 $ 11,200 $ 178,800 $ (541,420) -
---------- ---------- ---------- ---------- ----------
BALANCE AT DECEMBER 31, 1998 - 11,200 178,800 (541,420) (351,420)
Issuance of 2,738,000 shares of common stock 2,738 24,645 27,383
Issuance of 2,100,000 shares of common stock in connection
with Motioncast transaction 2,100 372,720 374,820
500,000 shares issued and held in escrow as collateral for
liability -
1,000,000 shares issued and held in escrow pursuant to -
consulting agreement
Issuance of warrants to purchase 350,000 shares of common
stock for services $ 71,094 71,094
Interest expense attributable to the beneficial conversion
feature of debentures 66,667 66,667
Conversion of debentures to 1,537,000 shares of common stock 1,537 151,067 152,604
Net loss - - - - (1,214,305) (1,214,305)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE AT DECEMBER 31, 1999 - 17,575 793,899 71,094 (1,755,725) (873,157)
</TABLE>
4
<PAGE>
PLANETGOOD TECHNOLOGIES, INC. AND SUBSIDIARY (CONTINUED)
(d/b/a BrowseSafe.com)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) Period
from February 10, 1998 (date of inception) to September 30, 2000
<TABLE>
<CAPTION>
Additional
Members' Common Paid-in Warrants Accumulated
Deficit Stock Capital Outstanding Deficit Total
<S> <C> <C> <C> <C> <C> <C>
Issuance of 128,571 shares of common stock 129 44,871 45,000
Issuance of 6,036,000 shares of common stock and warrants to
purchase 550,000 shares of common stock 6,036 2,556,996 256,968 2,820,000
Issuance of 975,000 shares of common stock and warrants to
purchase 300,000 shares of common stock for services 975 3,521,525 935,000 4,457,500
Issuance of 500,000 shares of common stock for repayment of
contract termination liability 500 199,500 200,000
Issuance of 250,000 shares of common stock upon exercise of
warrants 250 205,531 (50,781) 155,000
Issuance of 360,000 shares of common stock and warrants to purchase 570,000
shares of common stock related to Swartz
financing transaction 360 (266,673) 266,313 -
Net loss for the quarter ended March 31, 2000 - - - - (2,765,626) (2,765,626)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE AT MARCH 31, 2000 (UNAUDITED) - 25,825 7,055,649 1,478,594 (4,521,351) 4,038,717
Issuance of 335,909 shares of common stock for services 336 624,267 624,603
Issuance of 100,000 shares of common stock upon exercise of
warrants 100 160,213 (20,313) 140,000
Cancellation of 2,738,000 shares of common stock (2,738) 2,738 -
Net loss for the quarter ended June 30, 2000 - - - - (2,074,625) (2,074,625)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE AT JUNE 30, 2000 (UNAUDITED) - 23,523 7,842,867 1,458,281 (6,595,976) 2,728,695
Issuance of 300,000 shares of common stock 300 299,700 300,000
Issuance of 371,000 shares of common stock for services 371 746,104 746,475
Net loss for the quarter ended September 30, 2000 - - - - (2,622,080) (2,622,080)
---------- ---------- ---------- ---------- ---------- ----------
BALANCE AT SEPTEMBER 30, 2000 (UNAUDITED) $ - $ 24,194 $8,888,671 $1,458,281 $(9,218,056) $1,153,090
========== ========== ========== ========== =========== ==========
</TABLE>
Unaudited Interim Financial Statements
5
<PAGE>
PLANETGOOD TECHNOLOGIES, INC. AND SUBSIDIARY
(d/b/a BrowseSafe.com)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Period from
February 10,
1998
(Inception)
Nine Months to
Ended September 30, September 30,
2000 1999 2000
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net loss $(7,462,331) $ (702,196) $(9,218,056)
Adjustments to reconcile net loss to net cash
(used) by operating activities:
Depreciation and amortization 104,943 43,313 166,769
Noncash consulting services 4,977,058 5,011,036
Noncash settlement 200,000
Interest expense attributable to beneficial
conversion feature of debentures 66,667
(Increase) decrease in certain current assets:
Inventories 6,889
Prepaid promotional supplies (321,429) (321,429)
Prepaid expenses and other (51,958) (194) (106,908)
Increase (decrease) in certain current liabilities:
Accounts payable 226,946 (52,054) 572,660
Accrued payroll and related expenses 2,804 - 130,679
Payable to related party (105,847) -
Contract termination payable 200,000
Deferred revenue 5,720 - 5,720
----------- ----------- -----------
Net Cash (Used) by Operating Activities (2,624,094) (504,242) (3,492,862)
----------- ----------- -----------
INVESTING ACTIVITIES
Cash purchases of office equipment and leasehold
improvements (365,793) (6,510) (396,325)
Increase in deposits (7,588) (31,622)
Cash paid for software developed for internal use (61,225) (162,085)
Cash paid for product development costs (18,366) (51,516) (97,316)
----------- ----------- -----------
Net Cash (Used) by Investing Activities (452,972) (58,026) (687,348)
----------- ----------- -----------
FINANCING ACTIVITIES
Proceeds from notes payable 74,000 108,500 268,389
Repayments of notes payable (176,389) (10,000) (194,389)
Payments on capital lease (25,251) (35,772)
Borrowings on line of credit 95,542 198,944
Payments on line of credit (198,944) (1,608) (198,944)
Proceeds from debentures 152,604
Proceeds from issuance of common stock 3,460,000 397,203 3,862,203
Contributed capital - - 190,000
----------- ----------- -----------
Net Cash Provided by Financing Activities 3,133,416 589,637 4,243,035
----------- ----------- -----------
NET INCREASE IN CASH 56,350 27,369 62,825
CASH
Beginning of Period 6,475 418 -
----------- ----------- -----------
End of Period $ 62,825 $ 27,787 $ 62,825
=========== =========== ===========
SUPPLEMENTAL DISCLOSURES
Cash paid for interest $ 15,545 $ 1,297 $ 40,387
Noncash investing and financing activities:
Assets acquired through capital lease 74,145
Conversion of debentures to common stock 152,604
Stock issued in repayment of accounts payable 2,728
Stock and warrants issued for consulting
services 711,292 888,636
Issuance of stock accrued 337,500
</TABLE>
Unaudited Interim Financial Statements
6
<PAGE>
PLANETGOOD TECHNOLOGIES, INC. AND SUBSIDIARY
(d/b/a BrowseSafe.com)
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
In the opinion of the management of PlanetGood Technologies, Inc. (the
"Company"), the accompanying unaudited consolidated financial statements contain
all adjustments (consisting of only normal, recurring adjustments) necessary to
present fairly the financial position of PlanetGood Technologies, Inc. and its
wholly owned subsidiary, BrowseSafe Technology, Inc., as of September 30, 2000,
and the results of their operations and their cash flows for the three-month and
nine-month periods ended September 30, 2000 and 1999, and for the period from
February 10, 1998 (date of inception) to September 30, 2000. The results of
operations for any interim period are not necessarily indicative of the results
for the year. These interim unaudited consolidated financial statements should
be read in conjunction with PlanetGood Technologies, Inc.'s annual consolidated
financial statements and related notes in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1999.
The unaudited consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, as well as the accounts of the
Company's predecessor, BrowseSafe LLC, which was organized on February 10, 1998.
All intercompany balances and transactions have been eliminated from the
unaudited consolidated financial statements.
Effective July 20, 2000, the Company's name was changed from
BrowseSafe.com, Inc. to PlanetGood Technologies, Inc. and the Articles of
Incorporation were amended to increase the number of authorized shares of common
stock to 85,000,000 and to authorize 15,000,000 shares of preferred stock.
Revenue recognition:
Revenue is recognized when earned. Revenue attributable to undelivered
elements, including software updates and technical support is based on the fair
value of those services and is recognized ratably on a straight-line basis over
the applicable term of the agreement.
NOTE 2 - REORGANIZATION AND SHARE EXCHANGE
In July 1998, BrowseSafe Technology, Inc., the current operating
subsidiary of the Company, was incorporated as a Nevada corporation as part of a
plan to enter into a two-step transaction (1. an Asset and Liability
Contribution Agreement and 2. a Share Exchange Agreement) with a group of
related companies (collectively the "Funding Group"). The two-step transaction
contemplated that BrowseSafe, LLC and the Funding Group would, among other
things, contribute certain monies, assets and liabilities to BrowseSafe
Technology in exchange for its common shares, and thereafter, BrowseSafe, LLC
and the Funding Group would exchange their BrowseSafe Technology shares for
common shares of Motioncast. This transaction was entered into during May and
June of 1999.
7
<PAGE>
NOTE 3 - MANAGEMENT'S PLANS AND ISSUES AFFECTING LIQUIDITY
The unaudited consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. The Company has a
limited operating history and has sustained losses since inception. The Company
experienced negative cash flow from operations aggregating approximately
$2,624,000 for the nine-month period ended September 30, 2000. As a result, the
Company has had to rely principally on private equity funding to continue its
activities.
On March 14, 2000, the Company entered into an Investment Agreement
with Swartz Private Equity, LLC for the sale of up to $30 million of common
stock upon the exercise of certain put rights (the "Put Rights"). The Put Rights
become available upon the effectiveness of a registration statement to be filed
with the Securities and Exchange Commission to register the stock that will be
sold under the Agreement, which expires after three years. The Company intends
to file the Registration Statement on the appropriate form with the Security and
Exchange Commission. Regardless of when the Registration Statement becomes
effective and the Company becomes entitled to exercise its Put Rights, the
Company will need additional cash to continue to fund its operations. The
Company currently is in discussions with several third parties with respect to
obtaining equity or debt financing. The Company will not be able to continue
operations without obtaining such interim financing.
NOTE 4 - LEGAL PROCEEDINGS
On or about April 14, 2000, the Funding Group (see Note 2) filed a
lawsuit against the Company, our President and Chief Executive Officer and our
Chief Financial Officer in the Federal District Court for the State of Nevada
alleging, among other things, that the investor group is entitled to general
damages in a sum in excess of $10,000,000, punitive damages in a sum in excess
of $10,000,000 and title to 2,738,000 shares of common stock of the Company. The
lawsuit also alleges certain inaccuracies in the Company's SEC filings.
Because the Company believed the Funding Group failed to comply with is
contribution obligations under the Asset and Liability Contribution Agreement
and the Share Exchange Agreement, it issued the 2,738,000 common shares into
escrow but did not deliver them to the Funding Group. In a letter dated November
19, 1999, the Company advised all members of the Funding Group that the Company
believed they were in breach of the agreements and asked them to remedy the
breaches. The Company is currently in litigation with the Funding Group over
these transactions. The Company believes it has meritorious defenses and is
vigorously defending the lawsuit.
NOTE 5 - INVESTMENT AGREEMENT
On March 14, 2000, the Company entered into an Investment Agreement with
Swartz Private Equity, LLC to raise up to $30 million during a three-year period
through a series of private sales of its common shares to Swartz, who, in turn,
intends to sell those shares in the public market or in privately negotiated
transactions. The dollar amount of each sale is limited by the common shares
trading volume, and certain other factors. Also, the Company may not
8
<PAGE>
sell more than $2,000,000 to Swartz at any one time, and a minimum amount of
time must occur between sales.
The Company also agreed to pay a finders fee of 4% fee for this
transaction. The finder was issued 360,000 shares of the Company's common stock
for this transaction and may be paid up to $30,000 in cash. The cash will be
paid, as the Put Rights are exercisable. The Company will record as a reduction
of the equity proceeds, the cash paid and the value of the stock based on the
quoted market value.
NOTE 6 - OTHER
In February 2000, the Company entered into an agreement with
GenesisTank.com, formerly known as California Applied Research, Inc., under
which GenesisTank agreed to buy 6,000,000 shares of the Company's common stock.
The purchase price of the stock was $.50 per share payable $500,000 upon
execution of the agreement, $1,000,000 on or before February 29, 2000, and
$1,500,000 on or before March 31, 2000. All amounts have been paid to the
Company. In connection with the GenesisTank financing, the Company issued a
finders fee of 36,000 shares of the Company's common stock and $30,000. The
Company estimated the value of the stock to be approximately $160,000.
In addition, the Company issued a five-year warrant to an individual
for his services in arranging this financing. The warrant provides for the
purchase of up to 550,000 shares of the Company's common stock at the lower of
$.50 per share or the lowest reset price (the terms of the warrant provide that
the purchase price will be reset every six months).
In March 2000, the Company entered into an amended and restated investor
relations agreement for business advisory services with an individual in
exchange for 50,000 shares of the Company's common stock. The individual was
fully vested in the stock as of the date of the contract. At September 30, 2000,
$225,000 is included in non-cash services representing the value of the stock
based on the quoted market price on the date the stock was earned.
In March 2000, the Company also agreed to a contract with an
organization and its principal owner to provide financing and advisory services.
The Company agreed to issue up to 450,000 shares of its common stock if the
quoted market price met certain levels at March 31, 2000. The performance
measurements pursuant to this contract were achieved, and the stock was issued.
At September 30, 2000, $2,025,000 is included in non-cash consulting services,
representing the value of the stock based on the quoted market price on the date
the stock was earned.
In March 2000, the Company entered into a contract with an organization
for advisory services. The contract requires a monthly fee of $10,000, issuance
of 275,000 shares of the Company's common stock and a warrant to purchase
300,000 shares of the Company's common stock at prices ranging from $5 to $15
per share. The organization is fully vested in the stock. The Company has valued
the stock at $1,135,000 based on its quoted market price on the contract date
and has valued the warrants at $935,000 using the Black-Scholes method. The
amounts will be expensed over the term of the agreement, which has now been
concluded as of September 30, 2000, the agreement has been completed and fully
expensed.
9
<PAGE>
In May 2000, the Company entered into a six-month agreement with an
organization to develop, implement and maintain an on-going market awareness
program. The Company issued 200,000 shares of the Company's common stock as
compensation for this agreement. The organization is fully vested in the stock
as of the contract date. The Company has valued the stock at $375,000 based on
its quoted market price on the contract date. At September 30, 2000, $125,000 is
included in prepaid consulting fees.
In May 2000, the Company entered into a business development agreement
with two individuals to provide business contacts and business structure
consulting. The Company issued 100,000 shares of the Company's common stock as
compensation for this agreement. The individuals are fully vested in the stock
as of the contract date. The Company valued the stock at $187,500 based on its
quoted market price on the contract date. At September 30, 2000, $80,357 is
included in prepaid consulting fees.
In June 2000, the Company entered into a six-month agreement with a
firm to provide marketing programs, custom database management, e-marketing and
a corporate due diligence site. The agreement required the Company to issue
56,000 shares of its common stock as compensation. The firm is fully vested in
the stock as of the contract date. The Company valued the stock at $95,000 based
on the value of services stated in the agreement. At June 30, 2000, the Company
had issued 35,000 shares to the consulting firm. The remaining shares were
issued to the firm in July of 2000. At September 30, 2000, $31,667 is included
in prepaid consulting fees.
In June 2000, the Company issued a warrant to a European market
awareness firm. The warrant provides for the purchase of up to 2,500,000 shares
of the Company's common shares for $2 per share on or before October 1, 2000.
In July 2000, the Company issued a warrant to purchase 150,000 common
shares to a company affiliated with Swartz Private Equity, LLC for arranging the
financing with the European market awareness firm. The exercise price for the
warrant is $2.00 per share, subject to revision every six months, and the term
of the warrant is for a period of five years.
In September 2000, the Company entered into an agreement with an
individual to provide strategic business planning services. The Company issued
350,000 shares of the Company's common stock as compensation for this agreement.
The consultant is fully vested in the stock as of the contract date. The Company
valued the stock at $710,850 based on the value of services stated in the
agreement. At September 30, 2000, $651,513 is included in prepaid consulting
fees.
In October 2000, the Company entered into a one-year agreement with a
firm to provide investor relations services. The Company is required to issue
50,000 shares of the Company's common stock as compensation. The consultant is
fully vested in 20,000 shares as of the contract date and becomes fully vested
in the remaining shares 120 days after the contract date. The Company is also
required to issue a warrant to the consultant to purchase 150,000 shares of the
Company's common stock. The consultant is fully vested in 50,000 shares of the
warrant at the contract date and becomes vested in the other portions of the
warrant based on the market performance of the Company's stock.
In September 2000, the Company entered into a four-year term note with
a bank. The note, due October 2004, requires monthly payments of $1,877,
including interest computed at 10.0%. The note is secured by assets of the
Company.
NOTE 7 - PREPAID CONSULTING EXPENSES
10
<PAGE>
As described in Note 6, the Company has entered into consulting and
advisory contracts with various third party firms and consultants. The $888,636
of prepaid consulting expenses at September 30, 2000, represents the value of
stock exchanged for these services. The contracts expire at various times
through September 2001. These fees are being expensed over the terms of the
agreements.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
PLANETGOOD TECHNOLOGIES, INC.
Date: November 15, 2000 By /s/ Mark W. Smith
-------------------------------------
Mark W. Smith,
Chief Executive Officer
Date: November 15, 2000 By /s/ Gregory P. Urbanski
-------------------------------------
Gregory P. Urbanski,
Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
11