<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[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
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number 0-29781
AMERICABILIA.COM, INC.
--------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Florida 65-0142472
-------------------------------- --------------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
9155 LAS VEGAS BOULEVARD SOUTH, SUITE 242, LAS VEGAS, NEVADA 89123
--------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
702-914-8411
-------------------------------
(ISSUER'S TELEPHONE NUMBER)
Not Applicable
--------------------------------------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR,
IF CHANGED SINCE LAST REPORT)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 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
---
As of July 24, 2000, the Company had 6,652,692 shares of its $.001 par
value common stock issued and outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Page
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) ----
Condensed Consolidated Balance Sheets (Unaudited)
at June 30, 2000 and December 31, 1999...................................3
Condensed Consolidated Statements of Operations (Unaudited)
for the Three Months ended June 30, 2000 and 1999, for the
Six Months ended June 30, 2000, and for the period from
March 2, 1999 (Date of Inception) to June 30, 1999.......................5
Condensed Consolidated Statement of Stockholders' Equity
(Unaudited) for the Six Months ended June 30, 2000.......................6
Condensed Consolidated Statements of Cash Flows (Unaudited)
for the Six Months ended June 30, 2000 and for the period
from March 2, 1999 (Date of Inception) to June 30, 1999..................7
Notes to Unaudited Condensed Consolidated Financial Statements.............9
-2-
<PAGE>
AMERICABILIA.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 30, 2000 AND DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
ASSETS 2000 1999
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents $ 57,948 $ 323,127
Accounts receivable, net 245,175 236,583
Inventories 700,860 446,448
Prepaid expenses and deposits 17,221 23,796
---------- ----------
Total current assets 1,021,204 1,029,954
PROPERTY AND EQUIPMENT, Net 140,034 154,399
GOODWILL, Net 229,185 282,061
OTHER ASSETS 8,354 7,494
---------- ----------
TOTAL $1,398,777 $1,473,908
========== ==========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
(Continued)
-3-
<PAGE>
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
JUNE 30, 2000 AND DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 2000 1999
CURRENT LIABILITIES:
<S> <C> <C>
Accounts payable and accrued expenses $ 161,106 $ 224,422
Current portion of long-term debt 9,139 9,122
Income taxes payable 3,549
----------- -----------
Total current liabilities 170,245 237,093
LOANS FROM STOCKHOLDERS 238,584 34,508
LONG-TERM DEBT, Less current portion 157,859 12,092
----------- -----------
Total liabilities 566,688 283,693
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value; authorized 50,000,000 shares;
6,652,692 shares issued and outstanding at June 30, 2000
and December 31, 1999 6,653 6,653
Additional paid-in capital 1,677,525 1,637,525
Notes receivable from stockholders for stock (108,848) (104,412)
Accumulated deficit (743,241) (349,551)
----------- -----------
Total stockholders' equity 832,089 1,190,215
----------- -----------
TOTAL $ 1,398,777 $ 1,473,908
=========== ===========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
(Concluded)
-4-
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS ENDED
JUNE 30, 2000 AND 1999, SIX MONTHS ENDED JUNE 30, 2000, AND PERIOD FROM MARCH 2,
1999 (DATE OF INCEPTION) TO JUNE 30, 1999
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
THREE THREE SIX PERIOD FROM
MONTHS MONTHS MONTHS MARCH 2, 1999
ENDED ENDED ENDED TO
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2000 1999 2000 1999
REVENUES:
<S> <C> <C> <C> <C>
Retail/wholesale $ 420,131 $ 14,554 $ 807,504 $ 22,199
Cost of sales 282,808 11,886 591,940 14,512
----------- ----------- ----------- -----------
Gross profit 137,323 2,668 215,564 7,687
----------- ----------- ----------- -----------
OPERATING EXPENSES:
General and administrative expenses 266,930 43,532 460,935 48,516
Marketing expenses 40,922 876 61,259 876
Depreciation and amortization 46,182 2,112 69,684 2,217
Organization costs -- 757 -- 2,257
----------- ----------- ----------- -----------
Total operating expenses 354,034 47,277 591,878 53,866
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS BEFORE
INTEREST AND TAXES (216,711) (44,609) (376,314) (46,179)
----------- ----------- ----------- -----------
OTHER (EXPENSE) INCOME:
Interest expense (10,368) -- (13,101) --
Interest income and other 3,568 -- 7,725 --
----------- ----------- ----------- -----------
Total other expense - net (6,800) -- (5,376) --
----------- ----------- ----------- -----------
LOSS FROM OPERATIONS BEFORE
INCOME TAXES (223,511) (44,609) (381,690) (46,179)
BENEFIT FOR INCOME TAXES -
Deferred tax benefit -- -- -- --
----------- ----------- ----------- -----------
NET LOSS $ (223,511) $ (44,609) $ (381,690) $ (46,179)
=========== =========== =========== ===========
EARNINGS PER SHARE:
Basic -
Net loss $ (223,511) $ (44,609) $ (381,690) $ (46,179)
=========== =========== =========== ===========
Weighted-average common shares
outstanding $ 6,652,692 $ 1,343,333 6,652,692 1,011,250
=========== =========== =========== ===========
Loss per share $ 0.03 $ 0.03 $ 0.06 $ 0.05
=========== =========== =========== ===========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
-5-
<PAGE>
AMERICABILIA.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NOTES
COMMON STOCK ADDITIONAL RECEIVABLE
------------------------- PAID-IN FROM ACCUMULATED
SHARES AMOUNT CAPITAL STOCKHOLDERS DEFICIT TOTAL
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 2000 6,652,692 $ 6,653 $ 1,637,525 $ (104,412) $ (349,551) $ 1,190,215
Contributed services of officers
and employees 28,000 28,000
Interest income from notes
receivables from stockholders (4,436) (4,436)
Net loss (381,690) (381,690)
--------- ------- ----------- ---------- ---------- ---------
BALANCE, JUNE 30, 2000 6,652,692 $ 6,653 $ 1,665,525 $ (108,848) $ (731,241) $ 832,089
========= ======= =========== ========== ========== =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
-6-
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2000 AND
PERIOD FROM MARCH 2, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS MARCH 2, 1999
ENDED TO
JUNE 30, 2000 JUNE 30, 1999
CASH FLOWS USED IN OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $(381,690) $ (46,179)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 69,684 2,217
Provision for bad debts
Contributed services of officers and employees 28,000 11,000
Changes in operating assets and liabilities, net of effects from
acquisition of businesses:
Increase in trade accounts receivable (8,592)
Increase in inventories (254,412) (91,367)
Decrease in prepaid assets and deposits 6,575 --
Increase in other assets (860)
(Decrease) Increase in trade accounts payable and accrued expenses (63,316) 9,010
Decrease in income taxes payable (3,549) --
--------- ---------
Net cash used in operating activities (608,160) (115,319)
--------- ---------
CASH FLOWS USED IN INVESTING ACTIVITIES -
Purchase of property and equipment (2,443) (54,478)
--------- ---------
Net cash used in investing activities (2,443) (54,478)
--------- ---------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Increase in interest receivables from loans to shareholders (4,436) --
Proceeds from loans 150,000 --
Payments on loans (4,216) --
Loans from stockholders 204,076 131,943
Common stock issued, net of receivable from stockholders 200,000
--------- ---------
Net cash provided by financing activities 345,424 331,943
--------- ---------
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (265,179) 162,146
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 323,127 --
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 57,948 $ 162,146
========= =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
(Continued)
-7-
<PAGE>
PERIOD FROM MARCH 2, 1999 (DATE OF INCEPTION) TO JUNE 30, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
FROM
SIX MONTHS MARCH 2,
ENDED 1999 TO
JUNE 30, JUNE 30,
2000 1999
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
<S> <C> <C>
Interest $ 13,101
========
Income taxes $ 3,700
=======
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
(Concluded)
-8-
<PAGE>
AMERICABILIA.COM, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements
include the consolidated accounts of americabilia, com, Inc. together with
its subsidiaries (collectively referred to herein as the "Company"). All
material intercompany balances and transactions have been eliminated.
These statements have been prepared in conformity with accounting
principles generally accepted in the United States of America and used in
preparing the Company's annual audited consolidated financial statements
but do not contain all of the information and disclosures that would be
required in a complete set of audited financial statements. They should,
therefore, be read in conjunction with the Company's audited consolidated
financial statements and related notes thereto for the period from March
2, 1999 (inception) to December 31, 1999. In the opinion of management,
the accompanying unaudited condensed consolidated financial statements
reflect all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the financial results for the interim
periods presented.
2. LONG-TERM DEBT
During the first quarter of 2000 each of the Company's Chairman and
President loaned the Company $50,000 each under terms similar to their
previous loans. See the Related Party Note 6.
The Company secured a $350,000 line of credit in April 2000 and has drawn
down $150,000 for inventory purchases. The line of credit bears interest
at nine percent and must be paid in full for at least 30 days during any
12-month period.
3. LEASES
During the first quarter of 2000, the Company rented production equipment
under a three-year operating lease for $1,600 per month, which included
maintenance and certain supplies.
4. STOCKHOLDERS' EQUITY
EARNINGS PER SHARE - Basic EPS is computed by dividing net income by the
weighted-average number of common shares outstanding for the period.
Diluted EPS is computed by dividing net income by common and common
equivalent shares outstanding for the period. Options to purchase common
stock, whose exercise price was greater than the average market price for
the period, have been excluded from the computation of diluted EPS. For
the interim periods presented, there were no dilutive options, as the
options would have been anti-dilutive due to the net loss for the periods.
5. INCOME TAXES
Statement of Financial Accounting Standards No. 109 requires a valuation
allowance to be recorded when it is more likely than not that some or all
of the deferred tax assets will not be realized. A valuation allowance has
been established on the computed deferred tax asset at June 30, 2000 and
December 31, 1999 due to the uncertainties associated with realizing such
assets in the future.
6. RELATED PARTY TRANSACTIONS
The Company's chairman of the board and the Company's president each
loaned the Company $50,000 in the first quarter of 2000, which bears
interest at the rate of eight percent per annum and is due and payable in
February 28, 2001.
-9-
<PAGE>
7. SUBSEQUENT EVENTS
The Company, through its wholly owned subsidiary, Unique Images, entered
into a supply contract with Art Vivant, Ltd. of Japan. Under the contract,
Unique Images will grant Art Vivian, Ltd. of Japan the exclusive right to
market Unique Images sports and movie collectibles in Japan. The Company
expects to satisfy the contract with its existing manufacturing capacity.
8. SEGMENT REPORTING
The Company has two reportable segments based upon products offered:
retail sales and corporate operations, and wholesale distribution and
manufacturing.
The Company evaluates each segment's performance based on segment
operating profit. The accounting policies of the operating segments are
the same as those described in the summary of significant accounting
policies.
Information pertaining to the operations of reportable segments is as
follows:
-10-
<PAGE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30, 2000 WHOLESALE
RETAIL AND DISTRIBUTION AND
CORPORATE MANUFACTURING TOTAL
<S> <C> <C> <C>
Revenues from external customers $ 180,512 $ 239,619 $ 420,131
Intersegment revenues 4,133 36,044 40,177
Depreciation and amortization 41,649 4,533 46,182
Interest income and other 3,183 385 3,568
Intersegment interest income 3,935 -- 3,935
Interest expense 7,817 2,551 10,368
Intersegment interest expense -- 3,935 3,935
Segment loss before interest and taxes (90,115) (126,596) (216,711)
Net loss before taxes (95,510) (128,001) (223,511)
Income tax (benefit) provision -- -- --
Net property and equipment 54,642 85,392 140,034
RECONCILIATION OF SEGMENT REVENUES TO
CONSOLIDATED REVENUES
Total revenues for reportable segments $ 460,308
Elimination of intersegment revenues 40,177
---------
Total consolidated revenues $ 420,131
=========
</TABLE>
Significantly all (over 95 percent) of the Company's sales are in the United
States.
-11-
<PAGE>
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED JUNE 30, 1999 WHOLESALE
RETAIL AND DISTRIBUTION AND
CORPORATE MANUFACTURING TOTAL
<S> <C> <C> <C>
Revenues from external customers $14,554 $-- $14,554
Intersegment revenues -- -- --
Depreciation and amortization 2,212 -- 2,212
Segment loss before interest and taxes 44,609 -- 44,609
Net loss before taxes 44,609 -- 44,609
Income tax (benefit) provision -- -- --
Net property and equipment 54,478 -- 54,478
RECONCILIATION OF SEGMENT REVENUES TO
CONSOLIDATED REVENUES
Total revenues for reportable segments $14,554
Elimination of intersegment revenues --
-------
Total consolidated revenues $14,554
=======
</TABLE>
Significantly all (over 95 percent) of the Company's sales are in the United
States. Prior to August 11, 1999, the Company had no wholesale distribution and
manufacturing segment.
-12-
<PAGE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 2000 WHOLESALE
RETAIL AND DISTRIBUTION AND
CORPORATE MANUFACTURING TOTAL
<S> <C> <C> <C>
Revenues from external customers $ 311,150 $ 496,354 $ 807,504
Intersegment revenues 4,133 75,569 79,702
Depreciation and amortization 60,619 9,065 69,684
Interest income and other 6,579 1,146 7,725
Intersegment interest income 6,809 6,809
Interest expense 9,169 3,932 13,101
Intersegment interest expense -- 6,809 6,809
Segment loss before interest and taxes (222,441) (153,873) (376,314)
Net loss before taxes (225,031) (156,659) (381,690)
Income tax (benefit) provision -- -- --
Net property and equipment 54,642 85,392 140,034
RECONCILIATION OF SEGMENT REVENUES TO
CONSOLIDATED REVENUES
Total revenues for reportable segments $ 887,206
Elimination of intersegment revenues 79,702
---------
Total consolidated revenues $ 807,504
=========
</TABLE>
Significantly all (over 95 percent) of the Company's sales are in the United
States.
-13-
<PAGE>
<TABLE>
<CAPTION>
WHOLESALE
FOR THE PERIOD FROM MARCH 2, 1999 (DATE OF RETAIL AND DISTRIBUTION AND
INCEPTION) TO JUNE 30, 1999 CORPORATE MANUFACTURING TOTAL
<S> <C> <C> <C>
Revenues from external customers $ 22,199 $-- $ 22,199
Intersegment revenues -- -- --
Depreciation and amortization 2,217 -- 2,217
Segment loss before interest and taxes (46,179) -- (46,179)
Net loss before taxes (46,179) -- (46,179)
Income tax (benefit) provision -- -- --
Net property and equipment 54,478 -- 54,478
RECONCILIATION OF SEGMENT REVENUES TO
CONSOLIDATED REVENUES
Total revenues for reportable segments $ 22,199
Elimination of intersegment revenues --
--------
Total consolidated revenues $ 22,199
========
</TABLE>
Significantly all (over 95 percent) of the Company's sales are in the United
States. Prior to August 11, 1999, the Company had no wholesale distribution and
manufacturing segment.
******
-14-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
OVERVIEW
SPECIAL FACTORS AFFECTING THE COMPARABILITY OF CURRENT PERIOD AND PRIOR PERIOD
OPERATING RESULTS
The following discussion should be read in conjunction with, and is qualified in
its entirety by our unaudited condensed consolidated financial statements as of
and for the period ended June 30, 2000 and for the period from March 2, 1999
(Date of Inception) through June 30, 1999. The Company was formed on March 2,
1999. The Company did not achieve substantial operations until after June 30,
1999. Further, the Company acquired Unique Images in the third quarter of 1999.
The period presented in the unaudited condensed consolidated financial
statements from March 2, 1999 through June 30, 1999 is not a full six months of
operations and was during the development stage of the Company. Such period may
not be comparable to the six months ended June 30, 2000. The period from March
2, 1999 through June 30, 1999 is referred to herein as the "June 1999 period"
while the period from January 1, 2000 through June 30, 2000 is referred to
herein as the "June 2000 period". The period from April 1, 1999 through June 30,
1999 is referred to herein as the "June 1999 quarter" while the period from
April 1, 2000 through June 30, 2000 is referred to herein as the "June 2000
quarter".
DESCRIPTION OF BUSINESS
The Company is engaged in direct internet merchandising of American-themed
collectibles, gifts, and memorabilia. The Company manufactures and assembles its
own products and also purchases products from a number of sources. The Company's
products are marketed on an internet shopping site, www.americabilia.com. The
Company strives to offer its customers a broad selection of products, a
convenient shopping experience, and a competitive price. The Company commenced
with organizational and operational activities on March 2, 1999 in Nevada as
americabilia.com.
The Company offers both framed memorabilia which it manufactures and products
which it acquires from suppliers. Generally, the products acquired from
suppliers are purchased by the Company, shipped by the supplier to the Company's
facilities in Nevada and held in inventory until sale and shipment to customers.
In selected instances, the Company purchases products from suppliers which drop
ship the products to the Company's customers. In each instance, the Company
acquires title to the product from the supplier and has all risks and rewards of
ownership of the product. In each instance, the Company and not the supplier
bears the risk of collection. In the case the customer returns the product, the
product is returned to the Company and held by the Company in inventory for sale
to a future customer. The Company acts as principal and not agent in connection
with all product sales.
On August 11, 1999, the Company acquired the outstanding capital stock of Veltre
Enterprises, Inc. dba Unique Images. Unique Images designs and manufactures
Hollywood and sports memorabilia for fine art and memorabilia galleries. Unique
Images also provides high volume and custom picture framing services. Unique
Images uses computerized joiner and mat cutting equipment. The purchase price
paid for Unique Images consisted of (i) $200,000 in cash, (ii) a Promissory Note
in the original principal amount of $200,000 and (iii) 100,000 shares of the
Rule 506 common stock of americabilia.com Nevada. The stock was issued at its
fair value on the issue date of $1.00 per share or $100,000 in total. The
Promissory Note was paid in full in November 1999. As part of the purchase,
americabilia.com Nevada agreed to lease from Keith
-15-
<PAGE>
Veltre and his affiliates the premises that are used for Unique Images' business
operations as well as certain business equipment.
The Company was originally organized under the laws of the state of Florida on
August 22, 1989 under the name First Zurich Investments, Inc. On November 15,
1996, the name of the entity was changed to Terra International Pharmaceuticals,
Inc. On September 7, 1999, the entity's name was changed to americabilia.com,
Inc. On September 17, 1999, the Company conducted a recapitalization through the
merger of americabilia.com Nevada with and into Worldwide Collectibles, Inc., a
Nevada corporation and a wholly owned subsidiary of the Company formed for the
purpose of the merger. Pursuant to an Agreement of Merger dated September 14,
1999, each of the former stockholders of americabilia.com Nevada received one
(1) share of Common Stock, in exchange for their shares of americabilia.com
Nevada. As a result of the acquisition, a total of 6,115,000 shares of common
stock were issued to the former shareholders of americabilia.com Nevada. Prior
to its acquisition of americabilia.com Nevada, the Company did not have any
operations. For accounting purposes, the acquisition has been treated as a
recapitalization of americabilia.com with americabilia.com as the acquirer
(reverse merger). As a result of this transaction the Company became a publicly
traded company.
The recapitalization was accounted for by adjusting common stock by $537 for the
537,692 shares of common stock held by the shareholders at the time that the
entity was known as Terra International Pharmaceuticals, Inc. In addition,
because the net assets of Terra International Pharmaceuticals, Inc. were $0,
paid in capital was decreased by an amount equal to the par value of the 537,692
shares. Prior to the reverse merger, Terra Pharmaceuticals had no operations.
The companies involved in the recapitalization included Terra Pharmaceuticals,
Terra's wholly owned subsidiary, Worldwide Collectibles, and americabilia.com
Nevada. Unique Images is a wholly owned subsidiary of Worldwide Collectibles.
RESULTS OF OPERATIONS - JUNE 2000 QUARTER COMPARED TO JUNE 1999 QUARTER
REVENUES
The Company's revenues increased $405,577 from $14,554 in the June 1999 quarter
to $420,131 in the June 2000 quarter. The increase is due to the fact that in
the June 2000 quarter, the Company had three months of operations from both
Worldwide Collectibles as well as Unique Images. In the June 1999 quarter,
however, the Company's sales were limited due to the fact that the Company's
only sales outlet at that time was through Ebay. In the June 2000 quarter,
Worldwide Collectibles sales were $180,512 compared to $14,554 for the June 1999
quarter. Unique Images external sales for the June 2000 quarter were $239,619.
External sales refer to sales to third parties, excluding intercompany sales by
Unique Images to Worldwide Collectibles, Inc.
EXPENSES
Costs of sales in the June 2000 quarter were $282,808, or 67% of sales compared
to $11,886 or 82% of sales in the June 1999 quarter. The increase in the costs
of sales compared to 1999 activity relates to the fact that the June 2000
quarter includes operations from both Worldwide Collectibles and Unique Images
whereas the 1999 results included only Worldwide Collectibles activity.
Additionally, during the June 1999 quarter, the Company was not renting
inventory warehouse space and had limited operations and inventory.
-16-
<PAGE>
General and administrative expenses increased $223,398 from $43,532 in the June
1999 quarter to $266,930 in the June 2000 quarter due to the Company adding
significant staff and operations for the reasons mentioned above.
Marketing expenses increased $40,046 from $876 in the June 1999 quarter to
$40,922 in the June 2000 quarter as the Company increased its marketing efforts
once a viable Internet and retail showroom were available for customers to
visit. Marketing was 10% of revenues for the June 2000 quarter. Several officers
of the Company are currently not receiving salaries. However, contributed salary
expense has been recognized in the form of contributed capital during the June
2000 quarter ($8,000) and the June 1999 quarter ($10,000).
OTHER INCOME (EXPENSE)
Interest expense in the June 2000 quarter was $10,368 due to debt carried by the
Company that did not exist in the June 1999 quarter. Interest income for the
June 2000 quarter was $3,568 due to available and interest bearing cash in the
June 2000 quarter that did not exist in the June 1999 quarter as well as
interest earned on the loans to shareholders of $2,348. The loans to
shareholders related to stock issued in exchange for loans receivable in 1999.
NET LOSS
The Net Loss in the June 2000 quarter compared to the June 1999 quarter
increased by $178,902 from $44,609 to $223,511 as a result of corporate
operations and due to the results of operations for World Wide Collectibles and
from Unique Images whose operations were acquired on August 11, 1999 as
discussed above.
RESULTS OF OPERATIONS - JUNE 2000 PERIOD COMPARED TO JUNE 1999 PERIOD
REVENUES
The Company's revenues increased $785,305 from $22,199 in the June 1999 period
to $807,504 in the June 2000 period. The increase is due to the fact that in the
June 2000 period, the Company had six months of operations from both Worldwide
Collectibles as well as Unique Images. In the June 1999 period, however, the
Company's sales were limited due to the short operating period and the fact that
the Company's only sales outlet at that time was through Ebay. In the June 2000
period, Worldwide Collectibles sales were $311,150 compared to $22,199 for the
June 1999 period. Unique Images external sales for the June 2000 period were
$496,354. External sales refer to sales to third parties, excluding intercompany
sales by Unique Images to Worldwide Collectibles, Inc.
EXPENSES
Costs of sales in the June 2000 period were $591,940, or 73% of sales compared
to $14,512 or 65% of sales in the June 1999 period. The increase in the costs of
sales compared to 1999 activity relates to the fact that the June 2000 period
includes operations from both Worldwide Collectibles and Unique Images whereas
the 1999 results included only Worldwide Collectibles activity. Additionally,
the during the June 1999 period, the Company was not renting inventory warehouse
space and had limited operations and inventory.
-17-
<PAGE>
General and administrative expenses increased $412,419 from $48,516 in the June
1999 period to $460,935 in the June 2000 period due to the Company adding
significant staff and operations for the reasons mentioned above.
Marketing expenses increased $60,383 from $876 in the June 1999 period to
$61,259 in the June 2000 period as the Company increased its marketing efforts
once a viable Internet and retail showroom were available for customers to
visit. Marketing was 8% of revenues for the June 2000 period. Several officers
of the Company are currently not receiving salaries. However, contributed salary
expense has been recognized in the form of contributed capital during the June
2000 period ($28,000) and the June 1999 period ($11,000).
OTHER INCOME (EXPENSE)
Interest expense in the June 2000 period was $13,101 due to debt carried by the
Company that did not exist in the June 1999 period. Interest income for the June
2000 period was $7,725 due to available and interest bearing cash in the June
2000 period that did not exist in the June 1999 period as well as interest
earned on the loans to shareholders of $4,436. The loans to shareholders related
to stock issued in exchange for loans receivable in 1999.
NET LOSS
The Net Loss in the June 2000 period compared to the June 1999 period increased
by $335,511 from $46,179 to $381,690 as a result of corporate operations and due
to the results of operations for World Wide Collectibles and from Unique Images
whose operations were acquired on August 11, 1999 as discussed above.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 2000, the Company had cash and cash equivalents of $57,948. The
Company had working capital of $850,959 and stockholders' equity of $832,089.
The cash decreased during the June 2000 period as compared to the June 1999
period when there were no loans from related parties or loans to shareholders
such as existed in the June 2000 period.
Cash flow from operations is expected to be sufficient to pay operating costs of
the Company during the remainder of fiscal 2000. However the Company expects to
raise additional funds through a combination of private placements, public
offerings of its stock or bank loans in order to expand operations and increase
its technical infrastructure and inventory. However, there can be no assurance
that any additional financing, if needed to meet liquidity needs, will be
available to us on favorable terms or at all. There can be no assurance that our
estimate of foreseeable liquidity needs is accurate or that no new business
developments or other unforeseen events will not occur, any of which could
result in the need to raise additional funds. We expect that the adequacy of our
operating cash flow will depend upon:
- customer acceptance of our products;
- the continued development of the Internet market as a source for our
products;
- the intensity of our competition;
- the efficiency of operations;
-18-
<PAGE>
- the depth of customer demand, and the effectiveness of our marketing
and promotional efforts.
LOANS FROM RELATED PARTIES
During the June 2000 period, Henry E. Cartwright, the Company's Chairman of the
Board and Gary Moore, the Company's President, each loaned the Company $50,000.
Each of these loans bear interest at the rate of eight percent (8%) per annum
and are due and payable on February 28, 2001.
RECENTLY ISSUED ACCOUNTING STANDARDS
The Financial Accounting Standards Board recently issued FAS No. 137, "Deferral
of FAS 133 Accounting for Derivatives" which delays the implementation of that
pronouncement to June 15, 2000. The Company has not determined what effect, if
any, that FAS 133 may have on its financial position or results of operations.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). SAB
101 clarifies existing accounting principles related to revenue recognition in
financial statements. The Company is required to comply with the provisions of
SAB 101 by the fourth quarter of 2000. Management has not yet completed an
analysis of the impact that SAB 101 will have on the Company's current revenue
recognition practices.
FORWARD LOOKING STATEMENTS
The Private Securities Litigation Reform Act provides a "safe harbor" for
certain forward-looking statements. Certain matters discussed in this filing
could be characterized as forward-looking statements such as statements relating
to plans for future expansion, as well as other capital spending, financing
sources and effects of regulation and competition. Such forward-looking
statements involve important risks and uncertainties that could cause actual
results to differ materially from those expressed in such forward-looking
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company invests its cash and cash equivalents in FDIC insured savings
accounts which, by their nature, are not subject to interest rate fluctuation.
As of June 30, 2000, the Company had $405,582 in borrowings. The borrowings are
related to bank loans, capitalized leases and loans from officers and directors
which, by their nature, are not subject to interest rate fluctuations.
-19-
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Inapplicable.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
Inapplicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Inapplicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Inapplicable.
ITEM 5. OTHER INFORMATION.
Inapplicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS
27.1 Financial Data Schedule
(B) REPORTS ON FORM 8-K
None.
-20-
<PAGE>
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.
AMERICABILIA.COM, INC.
(Registrant)
Dated: August 7, 2000 By: /s/ HENRY E. CARTWRIGHT
--------------------------------
Henry E. Cartwright, Chairman of
the Board
Dated: August 7, 2000 By: /s/ DIXIE L. CARTWRIGHT
--------------------------------
Dixie L. Cartwright, Treasurer
(Principal Financial Officer)
-21-
