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 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
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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
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(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 March 31, 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
For the Period Ended March 31
(unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
ASSETS:
Current Assets:
<S> <C> <C>
Cash in Bank $ 156,217 363,058
Accounts Receivable 268,900 225,000
-------------- --------------
Total current assets 425,117 588,058
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 $1,913,082 $1,280,254
============== ==============
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable $ 11,445 $142,431
Loan Payabe 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; 19,612,889 shares issued and
outstanding for 1999, and 15,116,355 shares issued 19,613 15,116
and outstanding for 1998.
Additional Paid-In Capital 5,333,476 3,151,468
Accumulated Defict (3,521,450) (2,042,676)
-------------- --------------
Total stockholders' equity 1,831,639 1,123,908
Total liabilities & stock equity $1,913,082 $1,280,254
============== ==============
</TABLE>
The accompany notes are an integral part of these financial statements.
<PAGE>
WINNERS INTERNET NEWORK, INC.
Statement of Cash Flow
For the Period Ended March 31
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
CASH FLOW FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net Income $(1,503,084) $ 114,070
CHANGES IN ASSETS & LIABILITIES:
GGLS Payable - (250,000)
Accounts Payable 130,986 138,594
Accounts Receivable (43,900)
Accrued Expenses - (29,554)
Notes Payable - Ford Credit 2,917 (13,915)
Prepaid Expenses (107,782) 318,949
-------------- --------------
Net Cash Provided by Operating Activities (1,520,863) 278,144
CASH FLOWS USED FOR INVESTING ACTIVITIES:
Capital Expenditure (1,114,718) (134,810)
-------------- --------------
Net Cash Used for Investing Activities (1,114,718) (134,810)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Loan 59,000 -
Issuance of Ordinary Shares 2,789,932 219,707
-------------- --------------
Net Cash Provided by Financing 2,789,932 219,707
Net Cash in Cash & Cash Equivalents 154,351 363,041
Cash & Cash Equivalents at Beginning of Period 1,866 17
-------------- --------------
Cash & Cash Equivalents at End of Period $ 156,217 $ 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>
WINNERS INTERNET NETWORK, INC.
Statement of Operations
For the Period Ended March 31
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
---- ----
REVENUE:
<S> <C> <C>
Processing Income $ 13,335 $ 249,332
------------- ---------------
Total Revenue 13,335 249,332
EXPENSES:
Bank Charges $ 547 $ 96
Commission - 12,500
Consulting Fees 41,901 2,100
Dues & Subscriptions 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
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Total Expenses 1,516,419 135,262
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NET PROFIT (LOSS) $(1,503,084) $ 114,070
============= ===============
NET PROFIT (LOSS) PER COMMON STOCK $ (0.09) $ 0.01
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WEIGHTED AVERAGE SHARES OUTSTANDING 15,990,863 14,891,355
------------- ---------------
</TABLE>
The accompany notes are an integral part of these financial statements.
<PAGE>
WINNERS INTERNET NETWORK, INC.
Stockholders' Equity
March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Additional Accumulated Total
COMMON STOCKS Paid-In Earnings Stockholders'
------------- Capital (Deficit) Equity
Shares Amount
------ ------ ---------- ------------ ------------
<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 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 147369 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
Net Profit 3/31/2000 - - - (1,503,084) (1,503,084)
---------- -------- ---------- ----------- -----------
Balance March 31, 2000 19,612,889 $ 19,613 $5,333,476 $(3,521,450) $ 1,831,639
========== ======== ========== =========== ===========
</TABLE>
The accompany notes are an integral part of these financial statements.
<PAGE> WINNERS INTERNET NETWORK, INC.
Notes to Financial Statements
March 31, 2000
(Unaudited)
Note 1 - Organization and Summary of Significant Accounting Policies:
------------------------------------------------------------
Organization:
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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.
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.
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
<PAGE>
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 $ 521,450
Book/Tax Differences in Bases of Assets 133,278
Less Valuation Allowance (654,728)
----------------
Total Deferred Tax Assets $ 0
================
Net Deferred Tax Liability $ 0
================
As of March 31, 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.
Note 3 - Subsequent Events
--------------------------
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.
Note 4 - 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 USD ($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
<PAGE>
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 5 - 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>
