SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB/A
(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.
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
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Commission File No. 0-26665
WINNERS INTERNET NETWORK, INC.
-----------------------------------
(Name of registrant in its charter)
NEVADA 91-1844567
(State of incorporation) (I.R.S.Employer Identification No.)
145 OVIEDO STREET
ST. AUGUSTINE, FLORIDA 32084
----------------------------
(Address of principal executive offices) (zip code)
(904)824-7447
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(Registrant's telephone number including area code)
GLENNAIRE FINANCIAL SERVICES, INC.
(Former name of registrant, if changed since last report)
3158 REDHILL AVE., SUITE 240
COSTA MESA, CALIFORNIA 92626
(Former address of registrant, if changed since last report)
Indicate by check mark whether the Registrant (1) had 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 outstanding of Registrant's common stock, par value $.001
per share, as of November 17, 2000 were 20,984,339 common shares.
<PAGE>
Text of the Amendment
Explanatory note:
Each of the below listed items is hereby amended by deleting the item in its
entirety and replacing it with the items attached hereto and filed herewith.
The purpose of this amendment is to amend the Company's 10-QSB for the period
ending June 30, 2000 (the "Original Filing"). The amendment is being filed as of
result of the Company having eliminated the previously reported software
licensing revenue of $3,000,000 from its Quarterly Report on Form 10-QSB for the
nine month period ended September 30, 2000. The software licensing revenue had
been reported from the December 1999 software exchange agreement with CyberLink
where the Company acquired the Plus Network software. Elimination of the revenue
was deemed necessary for the financial statements to be consistent with all
applicable accounting standards. The Company also eliminated $3,000,000 of the
previously reported asset value of the software for the same reasons. The
revised reporting of this transaction is in accordance with APB 29 in connection
with Securities and Exchange Commission review of the Company's filed reports.
<PAGE>
Item 1. Financial Statements
WINNERS INTERNET NETWORK, INC.
Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
Six-Months Year
Ended Ended
June 30, 2000 Dec. 31, 1999
------------- -------------
ASSETS:
Current Assets:
<S> <C> <C>
Cash in Bank $ 84,016 32,961
Accounts Receivable 357,000 548,912
---------------- ----------------
Total current assets 441,016 581,873
Fixed Assets:
Software 1,300,000 516,138
SupraNet AG 116,250 -
Glennaire Financial Services 157,864 -
Equipment 84,289 84,289
Furniture & Fixtures 4,489 4,489
Vehicle 44,500 44,500
---------------- ----------------
Less Depreciation (491,563) (100,276)
---------------- ----------------
Total fixed assets 1,215,829 549,140
Total assets $ 1,656,845 $1,131,013
================ ================
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable & Accrued Payables $ 11,544 $ 174,507
Loan Payabe 69,000 -
Note Payable - Ford Credit 10,090 10,788
---------------- ----------------
Total current liabilities 90,634 185,295
Stockholders' equity
Common Stock, par value $0.001: 50,000,000 shares
authorized; 20,684339 shares issued and
outstanding for 2000, and 15,116,355 shares issued 20,684 15,991
and outstanding for 1999.
Additional Paid-In Capital 5,600,270 2,948,093
Accumulated Defict (4,054,743) (2,018,366)
---------------- ----------------
Total stockholders' equity 1,566,211 945,718
Total liabilities & stock equity $ 1,656,845 $1,131,013
================ ================
</TABLE>
The accompany notes are an integral part of these financial statements.
<PAGE>
WINNERS INTERNET NETWORK, INC.
Statement of Cash Flow
For the Six-Months Ended June 30
(Unaudited)
2000 1999
---- ----
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $(2,036,377) $ 537,956
Depreciation 430,000 (43,713)
CHANGES IN ASSETS & LIABILITIES:
GGLS Payable - (250,000)
Accounts Payable 162,963 313,273
Accounts Receivable (68,637)
Accrued Expenses - (27)
Notes Payable - Ford Credit - 1,210
Prepaid Expenses - (3,700)
-------------- -----------
Net Cash Provided by Operating Activities (1,512,051) 554,999
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Capital Expenditure (1,057,976) (1,512)
-------------- -----------
Net Cash Used for Investing Activities (1,057,976) (1,512)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Loan 69,000 -
Issuance of Ordinary Shares 2,652,177 (311,645)
-------------- -----------
Net Cash Provided by Financing 2,652,177 (311,645)
Net Cash in Cash & Cash Equivalents 82,150 241,842
Cash & Cash Equivalents at Beginning of Period 1,866 28,857
-------------- -----------
Cash & Cash Equivalents at End of Period $ 84,016 $ 270,699
============== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest - -
Income Taxes - -
The accompany notes are an integral part of these financial statements.
<PAGE>
WINNERS INTERNET NETWORK, INC.
Statement of Operations
For the Six-Months Ended June 30
(Unaudited)
2000 1999
---- ----
REVENUE:
Processing Income $ 160,613 $ 804,265
Other Income 10,901 -
Lease of Software - 5,000
--------------- --------------
Total Revenue 171,514 809,265
EXPENSES:
Bank Charges $ 4,538 $ 187
Commission 26,000 12,500
Consulting Fees 61,887 9,600
Contract Services 35,565 16,200
Depreciation Expense 430,000 -
Dues & Subscriptions - 60
Insurance 23,331 2,761
Internet 1,931 16,300
Marketing 1,269,467 -
Meals & Entertainment - -
Miscellaneous Expense 6,037
Office Expenses 3,008 420
Postage & Freight 1,686 494
Professional & Legal Fees 44,230 21,316
Rent 36,889 18,838
Rent of Equipment 9,696 426
Repairs 938 -
Security 222 111
Taxes & Payroll Taxes 17,680 9,823
Telephone 19,556 11,516
Travel 3,651 32,581
Utilities 1,258 6,353
Wages 210,321 111,823
--------------- --------------
Total Expenses 2,207,891 271,309
--------------- --------------
NET PROFIT(LOSS) $(2,036,377) $ 537,956
=============== ==============
NET PROFIT (LOSS) PER COMMON STOCK $ (0.12) $ 0.04
--------------- --------------
WEIGHTED AVERAGE SHARES OUTSTANDING 16,644,626 14,898,551
--------------- --------------
The accompany notes are an integral part of these financial statements.
<PAGE>
WINNERS INTERNET NETWORK, INC.
Stockholders' Equity
June 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Additional Accumulated Total
COMMON STOCKS Paid-In Earnings Stockholders'
-------------
Shares Amount Capital (Deficit) Equity
------ ------ -------- ---------- -------------
<S> <C> <C> <C> <C>
Davki Agency Ltd., Inc. Merger 8,000,000 8,000 359,287 (367,287) -
Comstock/Empire International, Inc. Merger 294,944 295 703,373 (703,668) -
Issuance of Stock for Cash & Services 2,539,912 2,540 110,160 - 112,700
Net Deficit 12/31/97 - - - (111,918) (111,918)
---------- ------- --------- ----------- ---------
Balance December 31, 1997 10,834,856 10,835 1,172,820 (1,182,873) 782
========== ======= ========= =========== =========
Issuance of Stock for Services 500,000 500 49,500 - 50,000
Issuance of Stock for Cash 1,000,000 1,000 299,000 - 300,000
Issuance of Stock for Cash 500,000 500 199,500 - 200,000
Issuance of Stock for Services 500,000 500 24,500 - 25,000
Issuance of Stock for Cash 550,000 550 219,450 - 220,000
Issuance of Stock for Cash 285,000 285 99,465 - 99,750
Issuance of Stock for Services 21,358 21 10,658 - 10,679
Issuance of Stock for Services 500,000 500 24,500 - 25,000
Issuance of Stock for Cash 100,000 100 99,900 - 100,000
Issuance Correction (Comstock Merger) 141 - - - -
Net Defict 12/31/98 - - - (840,560) (840,560)
---------- -------- --------- ----------- ---------
Balance December 31, 1998 14,791,355 14,791 2,199,293 (2,023,433) 190,651
========== ======== ========= =========== =========
Issuance of Stock for Cash 100,000 100 99,900 - 100,000
Issuance of Stock for Cash 225,000 225 202,275 - 202,500
Issuance of Stock for Services 10,000 10 7,488 - 7,498
Issuance Correction (Comstock Merger) 1,350 2 - - 2
Issuance of Stock for Cash 400,000 400 219,600 - 220,000
Issuance of Stock for Cash 315,789 316 149,684 - 150,000
Issuance of Stock for Cash 147,369 147 69,853 - 70,000
Net Profit 12/31/99 - - - 5,067 5,067
---------- --------- ---------- ---------- --------
Balance December 31, 1999 15,990,863 15,991 2,948,093 (2,018,366) 945,718
========== ========= ========== ========== ========
Issuance of Stock for Services 1,632,500 1,632 965,326 - 966,958
Issuance of Stock for Cash 100,000 100 299,900 - 300,000
Issuance of Stock for Cash 27,000 27 13,473 - 13,500
Issuance of Stock for Services 28,600 29 21,518 - 21,547
Issuance of Stock for Services 10,000 10 2,990 - 3,000
Issuance of Stock for Services 300,000 300 83,700 - 84,000
Issuance of Stock for Asset 1,523,926 1,524 998,476 - 1,000,000
Issuance of Stock for Cash 375,000 375 259,625 - 260,000
Issuance of Stock for Acquisition 686,480 686 6,179 - 6,865
Issuance of Stock for Acquisition 10,000 10 990 - 1,000
Net Profit 6/30/2000 - - - (2,036,377) (2,036,377)
----------- -------- ---------- ----------- ----------
Balance June 30, 2000 20,684,369 $ 20,684 $5,600,270 $(4,054,743) $1,566,211
=========== ======== ========== =========== ==========
</TABLE>
The accompany notes are an integral part of these financial statements.
<PAGE>
WINNERS INTERNET NETWORK, INC.
Notes to Financial Statements
June 30, 2000
(Unaudited)
Note 1 - Organization and Summary of Significant Accounting Policies:
------------------------------------------------------------
Organization:
------------
On July 14, 1997, Winners Internet Network, Inc. (WIN) was incorporated under
the laws of Nevada. The Company's fiscal year end is December 31. On July 15,
1997 Winners Internet Network, Inc. and Comstock-Empire International, Inc., a
Washington Corporation merged pursuant to 368(a)(1)(A) and 368(a)(1)(F) of the
Internal Revenue Code of 1986 as amended. Comstock-Empire merged into WIN,
acquiring all issued and outstanding shares of Comstock-Empire for and in
exchange for 294,944 shares of WIN common stock. On July 31, 1997 Winners
Internet Network, Inc. and Davki Agency LTD, Inc., a Delaware Corporation,
merged in a plan of reorganization. WIN acquired all issued and outstanding
shares of Davki Agency LTD, Inc. for and in exchange of 8,000,000 shares of WIN
common stock. This stock transfer is pursuant to 368(a)(1)(B) of Internal
Revenue code of 1986 as amended, as a tax-free exchange. The Davki Agency LTD,
Inc. became a wholly owned subsidiary of WIN. Both entities were acquired by the
purchase method and all inter-company transactions were eliminated in the
acquisition. The impact of these acquisitions was not material in relation to
the Company's results of operations. The company is primarily engaged in the
operation of an Internet E-Commerce enterprise. The Company made an Agreement
and Plan to Reorganization with Glennaire Financial Services, Inc. as of May 9,
2000. This is to be an acquisition by the Purchase Method of Accounting. The
agreement is for the exchange of 1,000,000 common shares, which represents all
of Glennaire's outstanding shares of common stock, for 10,000 shares of Winners
Internet Network.
Capital Stock Tranastions:
-------------------------
The authorized capital stock of the corporation is 20,000,000 shares of common
stock with a par value of $.001. On March 17, 1998 the authorized capital stock
of the corporation was increased to 50,000,000 shares of common stock.
Cash and Cash Equivalents:
-------------------------
The Company considers all highly liquid debt instruments, purchased with an
original maturity of three-months, to be cash equivalents.
<PAGE>
Property and Equipment:
----------------------
Property and equipment is stated at cost. The cost of ordinary maintenance and
repairs is charged to operations while renewals and replacements are
capitalized. Depreciation is figured on a straight-line basis as follows:
Computer Software 5 years
Equipment 5 years
Furniture & Fixtures 10 years
Vehicle 7 years
Revenue Recognition:
-------------------
Revenue is recognized when earned and expenses are recognized when they occur.
Use of estimates:
----------------
The preparation of financial statements, in conformity with generally accepted
accounting principles, requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
Note 2 - Federal Income Taxes:
--------------------
Significant components of the Company's deferred tax liabilities and assets are
as follows:
Deferred Tax Liability $ 0
================
Deferred Tax Assets
Net Operating Loss Carryforwards $ 624,743
Book/Tax Differences in Bases of Assets 491,563
Less Valuation Allowance (1,116,306)
----------------
Total Deferred Tax Assets $ 0
================
Net Deferred Tax Liability $ 0
================
As of June 30, 2000, the Company had a net operating loss carryforward for
federal tax purposes approximately equal to the accumulated deficit recognized
for book purposes, which will be available to reduce future taxable income. The
full realization of the tax benefit associated with the carryforward depends
predominantly upon the Company's ability to generate taxable income during the
carryforward period. Because the current uncertainty of realizing such tax
assets in the future, a valuation allowance has been recorded equal to the
amount of the net deferred tax asset, which caused the Company's effective tax
rate to differ from the statutory income tax rate. The net operating loss
carryforward, if not utilized, will begin to expire in the year 2010.
<PAGE>
Note 3 - Asset Recognition
-----------------
On December 13, 1999 Intertreuhand, AG, a Liechtenstein Corporation (INTR) as
trustee of Cyberlink Monetary System, EST (CMS) a Liechtenstein Corporation
entered into an agreement with Winners Internet Network, Inc. (WINR) for the
sale of right, title and interest in the "Plus Network". It was agreed by both
parties that WINR would pay a total of Four Million US ($4,000,000) for this
agreement. These funds were agreed to be paid within ten days of signing of the
agreement, which would terminate on December 23, 1999. It was also stated that
WINR would be paid the amount of Three Million USD ($3,000,000) for the
"Processing In" Banking Software developed by WINR. It was agreed that the Three
Million USD ($3,000,000) payment due WINR will serve as a partial offset to the
Four Million USD ($4,000,000) payment due WINR by CMS. However, it is understood
that the terms of the original note remains in effect in the amount of Six
Hundred Thousand USD ($600,000) will be prorated per quarter. Specifically, the
amount due on the Three Million Dollar note will be paid/and or offset to the
Four Million Dollar Agreement at the rate of equal installments of Six Hundred
Thousand USD with a continuing payment on or before December 31, 1999, March 31,
2000 and June 30, 2000 which represents payment in full. Payments have been
credited for the initial two quarters so that on June 30, 2000 this obligation
totaling Three Million USD for the "Processing In Software" will be paid in
full. 1,523,926 shares of stock were issued for the One Million USD balance in
March 2000. In accordance with APB 29 we have recorded the asset and the offset
into the equity portion of the Balance Sheet.
Note 4 - Related Party
-------------
Cyberlink Monetary System is the Management Company for the processing of the
transactions for Winners Internet Network. The president of Cyberlink (Dr.
Proksch) is a member of the Board of Directors of Intertreuhand, AG and Winners
Internet Network.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
WINNERS INTERNET NETWORK, INC.
Dated: November 20, 2000 By: /s/ David C. Skinner, Jr.
-----------------------------
President and Chief Financial Officer
<PAGE>
