<PAGE> 1
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 2000.
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________ to ____________
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
(Registrant's telephone number including area code)
GLENNAIRE FINANICAL 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 March 31, 2000 were 15,116,355 common shares.
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
ITEM I. Financial Statements
WINNERS INTERNET NETWORK, INC.
Consolidated Balance Sheet
For the Period Ended March 31
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
ASSETS:
CURRENT ASSETS:
Cash in Bank $ 156,127 $ 363,058
Accounts Receivable 323,654 225,000
------------ ------------
TOTAL CURRENT ASSETS 479,781 588,058
FIXED ASSETS:
Software 1,300,000 300,000
SupraNet AG 116,250 --
Equipment 84,269 85,801
Furniture & Fixtures 4,489 4,489
Vehicle 44,520 44,520
Less Depreciation (61,563) (61,563)
------------ ------------
TOTAL FIXED ASSETS 1,487,965 373,247
OTHER ASSETS
Prepaid Expenses -- 318,949
------------ ------------
TOTAL OTHER ASSETS -- 318,949
TOTAL ASSETS $ 1,967,746 $ 1,280,254
============ ============
LIABILITIES AND STOCKHOLDERS EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 11,445 $ 142,431
Loan Payable 59,000 --
Note Payable - Ford Credit 10,998 13,915
------------ ------------
TOTAL CURRENT LIABILITIES 81,443 156,346
STOCKHOLDERS' EQUITY
Common Stock, par value $0.001: 50,000,000 shares
authorized; 15,116,355 shares issued and
outstanding for 2000, and 10,834,856 shares issued 19,613 15,116
and outstanding for 1999
Additional Paid-In Capital 3,888,140 3,151,468
Accumulated (2,021,450) (2,042,676)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 1,886,303 1,123,908
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 1,967,746 $ 1,280,254
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
WINNERS INTERNET NETWORK, INC.
Consolidated Statement of Operations
For the Period Ended March 31
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
REVENUE:
Processing Income $ 13,335 $ 249,332
Lease of Software 1,500,000 --
------------ ------------
TOTAL REVENUE 1,513,335 249,332
EXPENSES:
Bank Charges $ 547 $ 96
Commission -- 12,500
Consulting Fees 41,901 2,100
Dues & Licenses 3,100 60
Insurance 17,305 137
Internet 2,000 2,400
Marketing 1,265,327 --
Meals & Entertainment -- 31
Office Expenses 3,351 124
Postage & Freight 1,120 200
Professional & Legal Fees 25,960 15,000
Rent 21,074 6,541
Rent of Equipment 138 --
Taxes & Payroll Taxes 7,976 4,628
Telephone 12,383 3,067
Travel 1,323 23,080
Utilities 387 3,725
Wages 112,527 61,573
------------ ------------
TOTAL EXPENSES 1,516,419 135,262
------------ ------------
NET PROFIT $ (3,084) $ 114,070
============ ============
NET PROFIT PER COMMON STOCK $ (0.01) $ 0.01
------------ ------------
WEIGHTED AVERAGE SHARES OUTSTANDING 15,990,863 14,891,355
------------ ------------
</TABLE>
The accompany notes are an integral part of these financial statements.
<PAGE> 4
WINNERS INTERNET NETWORK, INC.
Stockholders' Equity
March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS Additional Accumulated Total
---------------------------- Paid-In Earnings Stockholders'
Shares Amount Capital (Deficit) Equity
------------ ------------ ------------ ------------ -------------
<S> <C> <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 for Services 500,000 500 49,500 -- 50,000
Issuance for Cash 1,000,000 1,000 299,000 -- 300,000
Issuance for Cash 500,000 500 199,500 -- 200,000
Issuance for Services 500,000 500 24,500 -- 25,000
Issuance for Cash 550,000 550 219,450 -- 220,000
Issuance for Cash 285,000 285 99,465 -- 99,750
Issuance for Services 21,358 21 10,658 -- 10,679
Issuance for Services 500,000 500 24,500 -- 25,000
Issuance 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 for Cash 100,000 100 99,900 -- 100,000
Issuance for Cash 225,000 225 202,275 202,500
Issuance for Services 10,000 10 7,488 -- 7,498
Issuance Correction (Comstock Merger) 1,350 2 -- -- 2
Issuance for Cash 400,000 400 219,600 -- 220,000
Issuance for Cash 315,789 316 149,684 -- 150,000
Issuance 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 for Services 1,632,500 1,632 268,847 -- 270,479
Issuance for Cash 100,000 100 299,900 -- 300,000
Issuance for Cash 27,000 27 13,473 -- 13,500
Issuance for Services 28,600 29 21,518 -- 21,547
Issuance for Services 10,000 10 2,990 -- 3,000
Issuance for Services 300,000 300 83,700 -- 84,000
Issuance for Services 1,523,926 1,524 249,619 -- 251,143
Net Deficit 3/31/2000 -- -- -- (3,084) (3,084)
------------ ------------ ------------ ------------ ------------
Balance March 31, 2000 19,612,889 $ 19,613 $ 3,888,140 $ (2,021,450) $ 1,886,303
============ ============ ============ ============ ============
</TABLE>
The accompany notes are an integral part of these financial statements.
<PAGE> 5
WINNERS INTERNET NETWORK, INC.
Consolidated Statement of Cash Flow
For the Period Ended March 31
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (3,084) $ 114,070
CHANGES IN ASSETS & LIABILITIES:
GGLS Payable -- (250,000)
Accounts Payable 130,986 138,594
Accrued Expenses (29,554) (29,554)
Loan Payable (59,000) --
Notes Payable - Ford Credit 2,917 (13,915)
Prepaid Expenses (318,949) 318,949
---------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES (276,684) 278,144
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Capital Expenditure (666,919) (134,810)
---------- ----------
NET CASH USED FOR INVESTING ACTIVITIES (666,919) (134,810)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Ordinary Shares 736,672 219,707
---------- ----------
NET CASH PROVIDED BY FINANCING 736,672 219,707
NET CASH IN CASH & CASH EQUIVALENTS (206,931) 363,041
CASH & CASH EQUIVALENTS AT BEGINNING OF PERIOD 363,058 17
---------- ----------
CASH & CASH EQUIVALENTS AT END OF PERIOD $ 156,127 $ 363,058
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID DURING THE YEAR FOR:
Interest -- --
Income Taxes -- --
</TABLE>
The accompany notes are an integral part of these financial statements.
<PAGE> 6
WINNERS INTERNET NETWORK, INC.
Notes to Financial Statements
March 31, 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.
BASIS OF PRESENTATION:
The Company is primarily engaged in the operation of an Internet Gaming Pay-out
structure. The authorized capital stock of the corporation is 20,000,000 shares
of common stock $.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.
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 15 years
Equipment 5 years
Furniture & Fixtures 10 years
Vehicle 7 years
<PAGE> 7
WINNERS INTERNET NETWORK, INC.
Notes to Financial Statements
March 31, 2000
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:
The Company adopted statement of financial Accounting Standards No. 109,
"Accounting For Income Taxes." FAS 109 requires the recognition of deferred tax
liabilities and assets for the anticipated future tax effects of temporary
differences that arise as a result of differences in the carrying amounts and
tax bases of assets and liabilities. There was no material effect on the
financial statements as a result of adopting FAS 109.
<PAGE> 8
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion contains forward-looking statements regarding
our Company, its business, prospects and results of operations that are subject
to certain risks and uncertainties posed by many factors and events that could
cause our actual business, prospects and results of operations to differ
materially from those that may be anticipated by such forward-looking
statements. Factors that may affect such forward-looking statements include,
without limitation: our ability to successfully develop new products for new
markets; the impact of competition on our revenues, changes in law or regulatory
requirements that adversely affect or preclude clients from using our products
for certain applications; delays our introduction of new products or services;
and our failure to keep pace with emerging technologies.
When used in this discussion, words such as "believes", "anticipates",
"expects", "intends" and similar expressions are intended to identify
forward-looking statements, but are not the exclusive means of identifying
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. Our Company undertakes no obligation to revise any forward-looking
statements in order to reflect events or circumstances that may subsequently
arise. Readers are urged to carefully review and consider the various
disclosures made by us in this report and other reports filed with the
Securities and Exchange Commission that attempt to advise interested parties of
the risks and factors that may affect our business.
Results of Operations
Our revenues increased from $249,332 for the three months ended March
31, 1999 to $1,513,335 for the three months ended March 31, 2000. The increase
was primarily due to an overall increase in our operations.
Expenses include all direct and indirect costs incurred in our
business. The difference between our gross revenues and expenses is our net
profit.
Our expenses were $1,516,419 for the three months ended March 31, 2000
compared to $135,262 for the three months ended March 31, 1999. The major
components of expenses are marketing, office salaries and associated payroll
costs, general and health insurance costs, rent and telephone expenses.
<PAGE> 9
We had a net loss from operations of $3,084 for the three months ended
March 31, 2000, compared to a net profit of $114,070 for the three months ended
March 31, 1999. This loss comes as a result of extraordinary marketing expenses,
which we do not expect to continue.
While our revenues were significantly higher for the first fiscal
quarter of 2000 as compared to the first fiscal quarter of 1999, our expenses,
particularly our marketing expenses, were much higher. We believe that we may
see an increase in revenue as the fiscal year progresses. We do not expect to
have the same level of marketing expenses for the rest of the fiscal year.
However, it is too early to know whether or not we will be profitable this year.
Liquidity and Capital Resources
Cash at the end of the period decreased to $156,127 for the three
months ended March 31, 2000, compared to $363,058 for the three months ended
March 31, 1999.
Accounts receivable increased for the three months ended March 31, 2000
to $323,654, compared to $225,000 for the three months ended March 31, 1999.
Prepaid Expenses went to zero for the three months ended March 31,
2000, compared to $318,949 for the three months ended March 31, 1999.
Accounts payable decreased for the three months ended March 31, 2000 to
$11,445, compared to $142,431 for the three months ended March 31, 1999.
We were profitable for the first fiscal quarter of 1999 but sustained a
small loss in the first fiscal quarter of 2000. We feel that we are more solid
financially as a company this year compared to last year. Our primary activity
will be to seek to expand our client base and, consequently, our revenues. If we
succeed in expanding our client base and generating sufficient revenues, we will
again become profitable. We cannot guarantee when, if ever, this will occur.
Year 2000 Compliance
Our IT systems and non-IT systems requiring Year 2000 modification have
been completed. In addition, we do not foresee a need to deal with the
possibility that some suppliers or vendors might fail to provide goods and
services on a timely basis as a result of Year 2000 problems.
<PAGE> 10
PART II- OTHER INFORMATION
ITEM 1. Legal Proceedings
No legal proceedings of a material nature to which we are a party were
pending during the reporting period, and we know of no legal proceedings of a
material nature pending or threatened or judgments entered against any of our
directors or officers in his capacity as such.
ITEM 2. Changes in Securities and Use of Proceeds. None.
ITEM 3. Defaults upon Senior Securities. None.
ITEM 4. Submission of Matters to a Vote of Security Holders. None
ITEM 5. Other Information. None.
ITEM 6. Exhibits and Reports on Form 8-K.
Exhibit No. 27.1- Financial Data Schedule
No reports on Form 8-K were filed as of the fiscal quarter.
<PAGE> 11
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: May 18, 2000 By: /s/ David C. Skinner, Jr.
-------------------------------------
President and Chief Financial Officer
<PAGE> 12
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 156,127
<SECURITIES> 0
<RECEIVABLES> 323,654
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 479,781
<PP&E> 1,549,528
<DEPRECIATION> (61,563)
<TOTAL-ASSETS> 1,967,746
<CURRENT-LIABILITIES> 8,443
<BONDS> 0
0
0
<COMMON> 19,613
<OTHER-SE> 1,866,690
<TOTAL-LIABILITY-AND-EQUITY> 1,967,746
<SALES> 1,513,335
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,516,419
<LOSS-PROVISION> (3,084)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
