EDGAR FILINGNET INC
10QSB/A, 2000-08-30
BUSINESS SERVICES, NEC
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB/A

(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

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 Number:

EDGAR® Filing.net, Inc.
(Exact name of registrant as specified in its charter)

Nevada
(State or other jurisdiction of incorporation or organization)

88-0428896
(I.R.S. Employer Identification No.)

3110 South Valley View, Las Vegas, NV
(Address of principal executive offices)

89102
(Zip Code)

702.257.4680
(Registrant's telephone number, including area code)

None
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has 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:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of April 30, 2000: 7,686,125

ITEM 1. FINANCIAL STATEMENTS

 

 

 

TABLE OF CONTENTS

 

 

 

 

Page

   

Independent Accountant's Review Report

1

   

Balance Sheet

2

   

Income Statement

3

   

Statement of Cash Flows

4

   

Notes to Financial Statements

5

 

 

 

G. BRAD BECKSTEAD

Certified Public Accountant

330 E. Warm Springs

Las Vegas, NV 89119

702.528.1984

425.928.2877 (efax)

 

INDEPENDENT ACCOUNTANT'S REVIEW REPORT

 

Board of Directors

Edgar Filing.net, Inc.

Las Vegas, NV

I have reviewed the accompanying balance sheet of Edgar Filing.net, Inc. (a Nevada corporation) as of June 30, 2000 and the related statements of operations for the three-month and six-month periods ended June 30, 2000 and for the period May 28, 1999 (Inception) to June 30, 1999, and statements of cash flows for the six months ending June 30, 2000 and for the period May 28, 1999 (Inception) to June 30, 1999. These financial statements are the responsibility of the Company's management.

I conducted my reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, I do not express such an opinion.

Based on my reviews, I am not aware of any material modifications that should be made to the accompanying financial statements referred to above for them to be in conformity with generally accepted accounting principles.

I have previously audited, in accordance with generally accepted auditing standards, the balance sheet of Edgar Filing.net, Inc. as of December 31, 1999 and the related statements of income, changes in stockholders' equity, and cash flows for the period May 28, 1999 (Inception) to December 31, 1999 (not presented herein) and in my report dated February 4, 2000, I expressed an unqualified opinion on those financial statements.

 

/s/G. Brad Beckstead, CPA

August 4, 2000

 

 

Edgar Filing.net, Inc.

Balance Sheet

June 30, 2000 and December 31, 1999

(unaudited)

June 30,

December 31,

2000

1999

Assets

Current assets:

Cash

3,366

28,981

Short-term investments

49,563

139,087

Accounts receivable

10,935

325

Other current assets

-

1,500

Organizational costs

-

260

Total current assets

63,864

170,153

Total Assets

63,864

170,153

Liabilities and Stockholders' Equity

Current liabilities:

Income taxes payable

1,145

1,145

Total current liabilities

1,145

1,145

Long-term liabilities

-

-

Total liabilities

1,145

1,145

Stockholders' Equity:

Preferred stock, $0.001 par value, 5,000,000

shares authorized, no shares issued

or outstanding

-

-

Common stock, $0.001 par value, 20,000,000

shares authorized, 7,686,125 shares issued

and outstanding

7,686

7,686

Additional paid-in capital

154,834

154,834

(Deficit)/Retained earnings

(99,801)

6,488

Total stockholders' equity (deficit)

62,719

169,008

Total Liabilities and Stockholders' Equity

63,864

170,153

 

 

Edgar Filing.net, Inc.

Statement of Operations

(unaudited)

For the Three Months and Six Months Ending June 30, 2000

and For the Period May 28, 1999 (Inception) to June 30, 1999

Three Months

Six Months

May 28, 1999

Ending

Ending

(Inception) to

June 30, 2000

June 30, 2000

June 30, 1999

Revenue

5,020

15,240

1,200

Expenses:

General administrative expenses

22,901

48,102

-

Total expenses

22,901

48,102

-

Net operating loss

(17,881)

(32,862)

1,200

Other income (expense):

Interest income

1,616

2,206

Gain (loss) on sale of assets

-

(75,633)

-

Total other income (expenses)

1,616

(73,427)

-

Net (loss) income

(16,265)

(106,289)

1,200

Weighted average number of

common shares outstanding

7,686,125

7,686,125

-

Net income (loss) per share

-

-

-

 

 

Edgar Filing.net, Inc.

Statement of Cash Flows

(unaudited)

For the Six Months Ending June 30, 2000

and For the Period May 28, 1999 (Inception) to June 30, 1999

(Unaudited)

May 28, 1999

Six Months

Ending

(Inception) to

June 30,

June 30,

2000

1999

Cash flows from operating activities

Net (loss) income

(106,289)

1,200

Adjustments to reconcile net income to net cash used

by operating activities:

(Increase) decrease in:

Accounts receivable

(10,610)

(1,200)

Other current assets

1,500

-

Organizational costs

260

-

Net cash used by operating activities

(115,139)

-

Cash flows from investing activities

Proceeds from sale of marketable securities

89,524

-

Net cash provided (used) by investing activities

89,524

-

Cash flows from financing activities

Net cash provided by financing activities

-

-

Net (decrease) increase in cash

(25,615)

-

Cash - beginning

28,981

-

Cash - ending

3,366

-

Supplemental disclosures:

Interest paid

1,874

-

Income taxes paid

-

-

Edgar Filing.net, Inc.

Notes to Financial Statements

June 30, 2000

Note 1 - History and Organization of the Company

The Company operates as a Security Exchange Commission documents filing company. It was organized May 28, 1999 (Date of Inception) under the laws of the State of Nevada, as Edgar Filing.net, Inc. The Company is authorized to issue 20,000,000 shares of $0.001 par value common stock and 5,000,000 shares of $0.001 par value preferred stock.

On June 15, 1999, the Company issued 7,000,000 shares of its $0.001 par value common stock to its founding shareholders for cash in the amount of $25,295.00. $7,000.00 is considered common stock, and $18,295.00 is considered additional paid-in capital.

On November 30, 1999, the Company issued 686,125 shares of its $0.001 par value common stock to investors pursuant to rule 504 offering for a total amount of $137,225.00. $686.00 represents common stock and $136,539.00 represents additional paid-in capital.

There have been no other issuances of common or preferred stock.

Note 2 - Summary of Significant Accounting Policies

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information.

Cash and Cash Equivalents

For purposes of financial statement presentation, the Company classifies all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents include money market funds of $49,563 at June 30, 2000.

Accounts Receivable

Accounts receivable represent amounts due for consulting services rendered. No allowance has been provided on accounts receivable because management believes all amounts are collectible.

Income Taxes

Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable o the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities.

Advertising Costs

Advertising costs are charged to operations when incurred. There were no advertising costs for the six months ended June 30, 2000.

Earnings per Share

Earnings per share is computed using the weighted average number of shares of common stock outstanding.

Dividends

The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid since inception.

Note 2 - Summary of Significant Accounting Policies (continued)

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 of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Note 3 - Securities

Although not a normal part of its operations, the Company does invest in marketable and other securities when it believes the investment will maximize any excess cash on hand. The Company did not have any investments in securities at June 30, 2000. At December 31, 1999, these securities were classified as available for sale securities and were reported at fair value, with the unrealized gains and losses included in comprehensive income. Costs are determined on an average cost per share basis for determining realized gains or losses. At December 31, 1999, these securities had a fair value of $139,087. Realized losses on these securities sold in 2000 were $75,633.

Note 4 - Related Party Transactions

The Company does not lease or rent any property. Office space and services are provided by the majority shareholder. Instead of paying rent for the use of the office space and services provided, the Company pays for certain leased equipment expenses incurred by companies owned by the Company's majority shareholder. The amount paid to the related companies for the six months ending June 30, 2000 was $7,574.

The Company receives almost 100% of its revenues from clientele provided by a company that is owned by the Company's majority shareholder.

Included in accounts receivable at June 30, 2000, is $7,390 that is due from a company that is owned by its majority shareholder.

For the six months ending June 30, 2000, 41% of the total consulting fees revenue was provided by a company that is owned by the Company's majority shareholder.

The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts.

Note 5 - Warrants and Options

There are no warrants or options outstanding to acquire any additional shares of common stock.

Note 6 - Year 2000 Issue

The Year 2000 issue arises because many computerized systems use two digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in systems that use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 issue may be experienced before, on, or after January 1, 2000, and if not addressed, the impact on operations and financial reporting may range from minor errors to significant system failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 issue affecting the entity, including those related to the efforts of customers, suppliers, or other third parties will be fully resolved.

 

Item 2. Management's Discussion and Analysis of Operation

Brief History of the Company

EDGAR® Filing.net, Inc. (";EDFN"; or the ";Company";), a Nevada corporation incorporated on May 28, 1999, is a company with a principal business objective to provide electronic filing services for clients that need to electronically file prospectuses, registration statements, and other documents pursuant to federal securities laws with the Securities and Exchange Commission (SEC) via the SEC's electronic data gathering system entitled Electronic Data Gathering Analysis and Retrieval ("EDGAR®"). This program requires participants or their agents to file disclosure information with the SEC in an electronic format rather than by the traditional paper filing package. This electronic format, usually in ASCII, includes additional submission information and coding "tags" within the document for aid in the SEC's analysis of the document and retrieval by the public. This electronic format is generally delivered by direct telecommunications, but may be delivered on magnetic computer tape or by diskette. EDGAR® allows registrants to file, and the public to retrieve, disclosure information electronically.

Management's Plan of Operation

In this 3 month operating period ended June 30, 2000, the Company incurred an operating net loss of $16,265 for selling, general and administrative expenses related to operations. It has yet to receive any positive net income from operations. The only components of expenditure include monthly rental payments on equipment and the employee's salary. Going forward, the Company will eliminate the monthly rental payments, significantly reducing it's overhead costs.

EDGAR Filing.net generates most of it's revenues at the end of the common fiscal quarters ending March 31, June 30, September 30, and year ending December 31. This is due to the recurring client base which require disclosure documents to be filed at this time. Revenue in the period between fiscal quarter ends is largely reliant on new clients who wish to file registration statements and amendments thereafter, and periodic current disclosure reports. The Company cannot effectively compare the current quarter to the same quarter last year as it was in the development stage and had not yet generated any revenue.

In May of 1999, one (1) founding shareholder purchased 7,000,000 shares of the Company's authorized treasury stock for cash and an advance of organizational costs totaling $25,295. This original stock offering was made pursuant to Nevada Revised Statues Chapter 90.490. Additionally, in December of 1999, the Company completed an offering of six hundred and eighty six thousand one hundred and twenty five (686,125) shares of the Common Stock of the Company to approximately seventy nine (79) affiliated and unaffiliated shareholders. This offering was made in reliance upon an exemption from the registration provisions of Section 4(2) of the Securities Act of 1933, as amended, pursuant to Regulation D, Rule 504 of the Act. As of the date of this filing, the Company has seven million six hundred and eighty six thousand one hundred and twenty five (7,686,125) shares of its $0.001 par value common voting stock issued and outstanding which are held by approximately eighty-eight (90) shareholders of record. Management fully anticipates that the proceeds from the sale of all of the Common Shares sold in the public offering delineated above will be sufficient to provide the Company's capital needs for the foreseeable future. It has generated revenue since shortly after inception and continues to do so increasingly as it attracts more clientele. The company has successfully reduced costs and anticipates reaching break-even point by the end of this fiscal year. The company believes that it has sufficient liquidity and cash reserves for the next 12 months. While these expectations are formulated based upon prudent and conservative presumptions, there can be no assurance that in fact such projections will indeed come to fruition. The company does believe however, that by positioning itself as a publicly traded and listed entity in this industry, it will secure a more optimal position in the view of the investing public. As such management believes that it would be more likely to attract additional investors via potential private placements should the need for additional capitalization present itself. Notwithstanding such an assessment, the company is not presently aware of any specific interest from potential investors, nor is management certain that such additional private capital will be available or that the company will in fact be successful in securing additional capital. If or when the company reaches break-even point and can therefore demonstrate to potential private investors that it can generate net income or profits, then this factor, coupled with publicly traded and listed status, will be utilized to market the company as an attractive investment for private placement purposes. Management has opted to pursue such a strategy in and about the first or second quarter of 2001. This strategy is reliant upon the company successfully listing on the OTC Bulletin Board, as management believes that without such listing it will prove far more difficult to successfully complete even a modest private placement. Given profitability and OTCBB listing, management intends on raising an additional $300,000.00 privately via the issuance of common stock, debt, or hybrid instruments as of yet not determined. This capital infusion shall be used mainly for aggressive marketing and advertising and supplementing the company's staff with one or two key personnel. If the company cannot succeed in implementing such a strategy, then its prospects for growth are substantially undermined. Without additional capitalization the company's capacity to survive as a going concern, much less achieve growth, is significantly constrained. Management is confident that no substantive additional capital will be needed until it is prepared to pursue its aggressive marketing strategy.

As of June 30, 2000, the Company had yet to generate any positive net income from operations. The Company, however, expects to be generating positive cash flows from operations by the end of its fiscal year ending December 31, 2000.

Business Strategy Behind Distribution of Company Services

The economics underlying the Company's business strategy are simple. For each new client the Company is able to garner, the Company will usually be able to generate approximately $500 to $4,200 in initial revenues. From that point forward, as long as the client continues to utilize the Company's EDGAR®ization services, each client should be worth a minimum of approximately $2,000 in annual revenues due to the filing of each client's quarterly and annual SEC regulatory filings. It must be noted however that many companies may wish to electronically file documents in-house or in fact may turn to other sources which may detrimentally impact the Company's anticipated revenue sources. As such, the Company's industry segment is characterized by what is commonly referred to as ";recurring revenue."; The Company currently has a client base of approximately twenty (20) recurring revenue clients. Additionally, the Company expects to garner additional clients via its relationship with CMA if in fact CMA continues to secure new clientele for itself and its referrals of those potential clients result in new clientele for EDFN.

Growth Strategy of Company

The Company believes that the current marketplace of established EDGAR® filers is highly fragmented, with literally dozens of EDGAR® filers located throughout the country. As such, the Company believes that there is an opportunity for a publicly-traded EDGAR® company to acquire several, smaller and more established EDGAR® filers with already-established client bases. In short, the Company would like to be a consolidator of its industry. The Company can give no assurance, however, that it will be successful as a consolidator, however. EDFN has no present plan(s) formal or informal, to acquire any specific competitors nor are there any understandings, arrangements or agreements relating to any acquisitions.

 

 

Part II - Other Information
Item 6. Exhibits

Exhibit
Number

Name and/or Identification of Exhibit

23.

Consent of Independent Public Accountant

   

27.

Financial Data Schedule ending March 31, 2000

Signatures

In accordance with the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EDGAR Filing.net, Inc.

(Registrant)

Date: August 11, 2000

By: /s/Thomas M. Chavez

President and CEO



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