UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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...................................................0-26885
SPEEDLANE.COM, INC.
-------------------
(Exact name of registrant as specified in its charter)
NEVADA............ 82-0511729
--------------------------------- ---------------------------
(State or other jurisdiction (I.R.S. Employer)
of incorporation or
organization) Identification No.)
165 University Avenue
Palo Alto, California
(Address of principal executive offices)
94301
-----
(Zip Code)
(650) 322-4500
--------------
(Registrant's telephone number, including area code)
(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 report(s), and (2) has been subject to such
filing requirements for the past 90 days.
Yes.... No....
The number of shares of Common Stock, par value $.0001 per share, outstanding
as of June 30, 2000: 48,474,262
<PAGE>
SPEEDLANE.COM. INC.
BALANCE SHEET
FOR THE SIX MONTHS ENDED JUNE 30, 2000
ASSETS
------
CURRENT ASSETS
Cash - Operating Account $ 2,681
Accounts Receivable 5,326
Prepaid & Refundable Taxes 135,682
Advances 4,900
----------
TOTAL CURRENT ASSETS 148,589
----------
FIXED ASSETS
Property, Plant & Equipment 26,673
Accumulated Depreciation (8,791)
----------
TOTAL FIXED ASSETS 17,882
----------
OTHER ASSETS 31,221
----------
Deposits
TOTAL OTHER ASSETS 31,221
----------
TOTAL ASSETS $ 197,692
==========
-2-
<PAGE>
SPEEDLANE.COM. INC.
BALANCE SHEET
FOR THE SIX MONTHS ENDED JUNE 30, 2000
LIABILITIES
-----------
CURRENT LIABILITIES
Accounts Payable $ 234,308
Short-Term Notes Payable - Bridge Loan 345,000
Accrued Payroll Taxes 4,704
Accrued Interest Payable 14,785
Deposits - Private Placement 407,000
-----------
TOTAL CURRENT LIABILITIES 1,005,797
-----------
STOCKHOLDERS' EQUITY (DEFICIT)
-----------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock; 200,000,000 shares authorized,
48,475,962 shares issued and outstanding,
par value $0.005 per share 242,380
Deferred Compensation (2,020,500)
Additional Paid-in-Capital 2,932,349
Accumulated Deficit (1,962,334)
-----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (808,105)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 197,692
===========
-3-
<PAGE>
SPEEDLANE.COM. INC.
BALANCE SHEET
FOR THE SIX MONTHS ENDED JUNE 30, 2000
2000 1999
---- ----
REVENUES $ 135,852 $ 219,127
EXPENSES 1,153,307 (244,837)
------------ -----------
NET (LOSS) $ (1,017,455) $ (25,710)
============ ===========
HISTORICAL BASIC AND DILUTED (LOSS)
PER SHARE $ (0.02) $ --
============ ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 48,474,262 48,200,532
============ ===========
-4-
<PAGE>
SPEEDLANE.COM. INC.
INCOME STATEMENT
FOR THE THREE MONTHS ENDED JUNE 30
2000 1999
---- ----
REVENUES $ 93,137 $ 90,029
EXPENSES 732,694 154,545
----------- -----------
NET (LOSS) $ (693,557) $ (64,516)
=========== ===========
HISTORICAL BASIC AND DILUTED (LOSS)
PER SHARE $ (0.14) $ --
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING 48,474,262 48,200,532
=========== ===========
-5-
<PAGE>
SPEEDLANE.COM. INC.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss from Operations $(1,017,455) $ 38,805
Depreciation and Amortization 113,372 1,023
Decrease (Increase) in Accounts Receivable 3,591 (4,950)
Increase (Decrease) in Prepaid Taxes 161,086 (9,336)
Increase (Decrease) in Accounts Payable and Accrued Expenses 19,489 (102,246)
----------- ---------
Net Cash Flows Used by Operating Activities (719,917) (76,704)
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Equipment (10,894) (365)
Deposits (30,871) --
Officers Loans (11,688) 57,211
----------- ---------
Net Cash Flows Provided (Used) by Investing Activities (53,453) 56,846
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Short-term Notes Payable - Bridge Loans 345,000 --
Deposits - Private Placement 407,000 --
Issuance of Common Stock for Services 17,000 28,509
----------- ---------
Net Cash Flows Provided by Financing Activities 769,000 28,509
----------- ---------
NET INCREASE (DECREASE) IN CASH (4,370) 8,651
CASH - BEGINNING OF PERIOD 7,051 (5,155)
----------- ---------
CASH - END OF PERIOD $ 2,681 $ 3,496
=========== =========
CASH PAID DURING THE YEAR FOR:
Interest $ -- $ --
=========== =========
Taxes $ 135,682 $ 9,336
=========== =========
</TABLE>
-6-
<PAGE>
SPEEDLANE.COM, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
COMMON ADDITIONAL
SHARES COMMON PAID-IN ACCUMULATED
OUTSTANDING STOCK CAPITAL DEFICIT TOTAL
----------- ----- ------- ------- -----
<S> <C> <C> <C> <C> <C>
OPENING BALANCE; December 31, 1999 4,332,562 $ 596,327 $2,561,402 $ (944,879) $ 2,212,850)
Net Loss for the Period Ending June 30, 2000 -- -- -- (1,017,455) (1,017,455)
Reverse Acquisition of Plume Creek, Inc. and
Recapitalization of Par Value at $.05 per
Share 44,140,000 (353,964) 353,964 -- --
Issuance of Common Shares for Services -- 17 16,983 -- 17,000
----------- --------- ---------- ----------- -----------
Balance, June 30, 2000 48,472,562 $ 242,380 $2,932,349 $(1,962,334) $ 1,212,395
=========== ========= ========== =========== ===========
</TABLE>
-7-
<PAGE>
SPEEDLANE.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDING JUNE 30, 2000 AND 1999,
AND FOR THE PERIOD FROM MARCH 25, 1970 (INCEPTION) TO JUNE 30, 2000
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited, condensed financial statements reflect all normal
recurring adjustments which are in the opinion of management, necessary to
present a fair statement of the condensed financial position at June 30, 2000
and 1999, and the condensed statements of income and cash flows for the six
month periods ending June 30, 2000 and 1999 and for the three month periods
ending June 30, 2000 and 1999.
The accompanying condensed financial statements have been prepared in accordance
with the instructions for Form 10Q and, therefore, do not include all
information, and footnotes necessary for a complete presentation of the results
of operations, the financial position, and cash flows, in conformity with
generally accepted accounting principles.
The preparation of financial statements requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
The results of operations for the interim period ended June 30, 2000 are not
necessarily indicative of the results to be expected for the full year.
NOTE 2 STOCKHOLDERS' EQUITY-DEFERRED COMPENSATION
In August 1999 450,000 shares were sold to service providers for $.01 per share.
The shares had a market value of $5.00 per share. Because of the ongoing nature
of the services provided, the company has elected to charge the additional
compensation to expense ratably over five years beginning January 1, 2000. The
current charge is $225,000.
NOTE 3 NOTES PAYABLE
The Company has entered into various "Bridge Loans" which are due and payable
upon the completion of the funding of the pending Private Placement offering of
the Company. Interest accrues on the loans at 11% per annum. As of June 30,
2000, $345,000 is the outstanding principle balance due on the loans. The
funding of the Private Placement is expected to occur before December 31, 2000.
Accrued interest payable on these loans at June 30, 2000 is $14,875.
NOTE 4 PRIVATE PLACEMENT MEMORANDUM
The Company is offering for sale up to 1,250,000 shares of the Company's common
stock, par value $.001 per share. Each share will be offered at a price of
$4.00. Each purchaser of the shares offered will also be issued warrants to
purchase the number of shares of the Company's common stock, par value $.001 per
share, that is equal to 100 percent of the aggregate number of the shares
purchased. The share subscriber warrants will be exercisable at any time during
the five year period commencing on the date of issuance at an exercise price per
share of Common Stock equal to $1.00. When subscriptions of $500,000 are
received and accepted by the Company, the initial closing will occur. The
offering termination date of June 30, 2000 has been extended an additional 180
days. At June 30, 2000, $407,000 of deposits for subscriptions have been
received.
-8-
<PAGE>
SPEEDLANE.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDING JUNE 30, 2000 AND 1999,
AND FOR THE PERIOD FROM MARCH 25, 1970 (INCEPTION) TO JUNE 30, 2000
NOTE 5 INCOME TAXES
The Company has cumulative losses at June 30, 2000 that could result in net
operating loss carryforwards for federal income tax purposes. Ownership changes
in the Company may result in an annual limitation on the utilization of
operating loss carryforwards.
NOTE 6 PROPERTY AND EQUIPMENT
Property and Equipment consists of computer equipment stated at cost.
Depreciation is computed utilizing the straight-line method, at rates based on
the estimated useful lives, for financial reporting purposes. The accelerated
cost recovery method is utilized for federal income tax purposes. Property,
Plant, and Equipment consisted of the following:
Computer Equipment $ 26,673
Less: Accumulated
Depreciation (8,791)
---------
$ 17,882
=========
NOTE 7 BASIS OF CONSOLIDATION
The accompanying financial statements have been prepared to give effect to the
exchange completed on the 23rd of March 2000. The two companies in the exchange
are:
Speedlane.com, Inc., a Nevada Corporation, (formerly Plume Creek, Inc.
"The Company" and Speedlane, Inc., a California Corporation
After the exchange, the Company owned all of the outstanding shares of
Speedlane, Inc. The exchange is accounted for utilizing the pooling of interests
method. All assets are reflected at historical cost. For purposes of the
proforma statements of stockholder's equity, multiple transactions are
considered to have taken place concurrently. All subsequent references to the
Company means the combined entity.
REORGANIZATION
The following are the principal terms with respect to the exchange of share of
capital stock of Speedlane.com, Inc. (The Company), a Nevada Corporation,
formerly Plume Creek, Inc., for the shares of Speedlane, Inc., a California
Corporation.
-9-
<PAGE>
SPEEDLANE.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDING JUNE 30, 2000 AND 1999,
AND FOR THE PERIOD FROM MARCH 25, 1970 (INCEPTION) TO MARCH 31, 2000
NOTE 7 BASIS OF CONSOLIDATION
(Continued)
Pre-Exchange Capitalization
The following is a summary of the pre-exchange capitalization:
PLUME CREEK, INC.
Articles of Incorporation were filed with the State of Nevada. 250,000
shares were authorized at a par value of .001per share or $250.
Amendment was filed on June 09, 1999 changing the shares authorized to
100,000,000 and the par value per share to .005.
Per the December 31, 1999 Form 10KSB total shares authorized were
200,000,000; shares issued were 4,332,565 at a par value per share of
.005 or $21,663.
EQUITY CONVERSION MECHANICS
The following is a summary of the equity conversion mechanics, for the merger of
Speedlane, Inc. into Plume Creek, Inc.
Plume Creek, Inc. issued 42,240,000 shares of its stock to Speedlane.
Plume Creek, Inc. issued 1,900,000 shares of its stock to Chadbourne
Securities as part of the facilitation of the merger.
Calculation of total Plume Creek, Inc. shares issued and outstanding
after the merger: Plume Creek, Inc. shares outstanding:
o prior to the merger 4,332,562
o amount of shares issued to Speedlane 42,240,000
o amount of shares issued to Chadbourne 1,900,000
-----------
Total shares issued and outstanding 48,472,562
-----------
Par value per share .005
----
Par value of shares issued and outstanding $ 242,363
===========
Post Exchange Mechanics
After the exchange the capitalization consisted of 48,472,562 shares of common
stock issued and outstanding.
-10-
<PAGE>
SPEEDLANE.COM, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDING JUNE 30, 2000 AND 1999,
AND FOR THE PERIOD FROM MARCH 25, 1970 (INCEPTION) TO MARCH 31, 2000
NOTE 9 UNCERTAINTY - GOING CONCERN
The Company does not have any operating cash to meet its current operating
requirements. The Company's continued existence is dependent upon its ability to
resolve its liquidity problems, principally by obtaining additional debt
financing and equity capital. While pursuing additional debt and equity funding,
the Company must continue to operate on limited cash flows generated internally.
The Company has experienced a net loss from continuing operations for the six
months ended June 30, 2000 of $1,017,455.
-11-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
Speedlane.com, Inc., formerly known as Plume Creek, Inc. (the "Company"), was
incorporated in 1970 under the laws of the State of Idaho, under the name Plume
Creek Silver Mines, Inc. From 1970 to 1984, the Company engaged in initial
exploration and assessment of its claims and the construction of mining roads
and tunnels. On June 17, 1999, the Company changed its domicile to Nevada.
From 1984 to March 2000, the Company was inactive and undertook no business
operations. On March 23, 2000 the Company consummated its reverse acquisition
with Speedlane, Inc. ("Old Speedlane") and changed its name to Speedlane.com,
Inc.
As a result of the reverse acquisition, Speedlane acquired the business assets
of Old Speedlane. Old Speedlane provided internet-enabling technologies, product
and services for consumer and business use. Pursuant to the acquisition
agreement, the directors and officers of the Company resigned and the management
of Old Speedlane filled the vacancies, and the former shareholders of Old
Speedlane obtained 87.1 % of the Company's total voting power. After the reverse
acquisition, the Company continues the business of Old Speedlane.
Results of Operations
Revenues. The Company generates revenues primarily through sales of software
that enhances the websurfing experience to customers. It recognizes revenues
when the software is sold, most often in a credit card transaction. Management
believes that growth in revenue will come from additional penetration in markets
currently served by competitors, expansion of complementary product lines to
existing and new customers, and its memory module sales division. The Company
has spent, and will continue to spend, significant resources on research and
development, as well as marketing.
Cost of Revenues. Cost of revenues consists of advertising costs and processing
costs. These costs are expensed in the period when services are rendered and are
generally proportional to the number of customers. The Company does not
currently anticipate that inflation will have a material impact on its results
of operations.
Sales and Marketing. Sales and marketing expenses include fees paid to
third-party sales agents, marketing and sales support functions. In an effort to
increase revenues, user base and brand awareness, the Company expects to
increase significantly the amount of spending on sales and marketing over the
next year. Marketing costs associated with increasing the user base, which to
date have been minimal, are expensed in the period incurred.
General and Administrative. General and administrative expenses include expenses
for financial and legal advisors. Management expects general and administrative
expenses to increase in absolute dollars as the Company continues to expand its
administrative infrastructure to support the anticipated growth, including costs
associated with being a public company. For the period ended June 30, 2000,
there were substantial nonrecurring expenses, including $174,000 in fees and
commissions paid to Chadbourn Securities for the acquisition and related
transaction expenses.
-12-
<PAGE>
Reverse Acquisition Treatment. In March 2000 the Company completed an
acquisition of Old Speedlane. Old Speedlane was incorporated in 1997 and its
operations began in January 1998. As a result of the acquisition, the Company
acquired the business operations, services and assets of Old Speedlane, which
constitute all of the Company's business operations. In conformance with
generally accepted accounting principles, the acquisition has been accounted for
as a "reverse acquisition," and the accounting survivor is Old Speedlane.
The acquisition was completed through the exchange of 42,240,000 shares of the
Company's common stock for 100% of the outstanding stock of Old Speedlane. It
was structured as a tax free statutory merger pursuant to Section 368(a)(1)(B)
of the Internal Revenue Code of 1986, as amended. Because it was treated as a
reverse acquisition for accounting purposes, the financial information for the
period ended June 30, 2000 is consolidated, and the financial information for
the period ended June 30, 1999 is that of Old Speedlane only.
The following table sets forth selected consolidated statements of operating
data as a percentage of total revenues:
Six Months Ended Six Months Ended
June 30, June 30,
2000 1999
---- ----
Revenues $ 135,852 100% $ 219,127 100%
Expenses 1,153,307 849% 244,837 112%
----------- ---------
Net Loss
From Operations $(1,017,455) (749%) $ (25,710) (12%)
=========== =========
Revenues. Revenues for the quarter ended June 30, 2000 were $135,852, which
represented a decrease of $83,275, or 38%, from $219,127 for the quarter ended
June 30, 1999. The decrease was primarily attributable to the ongoing
development of the company's new flagship product, SpeedWiz.
Expenses. Expenses for the quarter ended June 30, 2000 were $1,153,307, which
represented an increase of $908,470, or 715%, from $244,837 for the quarter
ended June 30, 1999. The increase was primarily attributable to expenses related
to the acquisition of Old Speedlane, consulting fees and stocks issued for
services.
Liquidity and Capital Resources
Going Concern
The Company's continued existence is dependent upon its ability to resolve its
liquidity problems, principally by obtaining additional debt financing and
equity capital. While pursuing additional debt and equity funding, the Company
must continue to operate on limited cash flows generated internally. The Company
has experienced a net loss from continuing operations for the six months ended
June 30, 2000 of $1,017,455.
Since Old Speedlane's inception, it has financed its operations primarily
through the private placement of equity securities (through a SCOR offering in
California) and cash flow from operations. As of June 30, 2000, cash reserves
totaled $2,681 with total current assets of $148,589.
-13-
<PAGE>
The consolidated statement of cash flows show net cash used for operating
activities was $719,917 for the quarter ended June 30, 2000. Net cash used for
operating activities consisted primarily of net operating losses and merger
expenses. During that period, net cash provided by financing activities was
$769,000. Net cash provided by financing activities was principally attributable
to the proceeds from short term bridge loans and deposits received for intended
private placement.
Management expects to continue to incur significant capital expenditures in the
future, including additions and enhancements to the product line and its
offices. The actual amount of capital expenditures will depend on the rate of
growth in the Company's user base and available resources, which are difficult
to predict and which could change dramatically over time. Technological advances
may also require the Company to make capital expenditures to develop or acquire
new equipment or technology. Management intends to use a combination of cash,
debt, and future securities offerings to fund capital expenditures in a manner
which minimizes the cost of capital.
If additional funds are needed, the Company can not assure that funds will be
available from any source, or, if available, that it will be able to obtain the
funds on acceptable terms. Also, the acquisition of funding through the issuance
of debt could result in a substantial portion of cash flow from operations being
dedicated to the payment of principal and interest on the indebtedness, and
could render the Company more vulnerable to competitive and economic downturns.
Factors Affecting Future Operations
The Company's operating results may fluctuate substantially in the future as a
result of a variety of factors, many of which are outside of its control.
Management plans to significantly increase operating expenses and capital
expenditures to expand the Company's sales and marketing efforts, promote the
brand, continue to enhance the features and functionality of its product lines,
pursue new distribution channels and hire new personnel across all levels of the
organization. There are risks associated with the timing and achievement of
revenue targets due to a variety of factors, and there can be no assurance that
revenues will increase commensurately with expenses. Management believes that
expenses will exceed revenues for the foreseeable future. As a result of these
and other factors, operating results may vary substantially from quarter to
quarter.
Seasonal Aspects
The Company's business is not seasonal.
Year 2000 Compliance
The Company's computer systems have operated within compliance to date. However,
management cannot guarantee that further disruptions of its own or its
supplier's systems will not occur.
Forward Looking Statements
This Quarterly Report contains statements that constitute forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934. These statements appear in a number of places in this Report and include
all statements regarding the intent, belief or current expectations of the
Company, its directors or its officers with respect to, among other things: (i)
the Company's financing plans; (ii) trends affecting the Company's financial
condition or results of operations; and (iii) the Company's growth strategy and
operating strategy. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
projected in the forward-looking statements as a result of various factors
discussed herein.
-14-
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
NONE
Item 2. Changes in Securities and Use of Proceeds.
During the quarter ended March 31, 2000, in connection with the acquisition of
Old Speedlane, the Company issued 1,900,000 shares of Common Stock to Chadbourn
Securities, its financial advisor, as partial payment for services rendered. The
Company believes that the issuance of such shares was exempt from registration
under the Securities Act of 1933 by virtue of Rule 506 promulgated hereunder. A
restrictive securities legend has been placed on the certificates representing
the shares.
During the quarter ended March 31, 2000, the Company issued 170,000 shares of
Common Stock to nine accredited investors in connection with their extension of
bridge loan financing to the Company. The Company believes that the issuance of
such shares was exempt from registration under the Securities Act of 1933 by
virtue of Rule 506 promulgated hereunder.
Item 3. Default 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.
(a) No Exhibits are filed with this Form 10-QSB.
(b) No reports on Form 8-K were filed during the quarter ended March 31, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
Speedlane.com, Inc. has caused this notification to be signed on its behalf by
the undersigned officer, thereunto duly authorized.
Date: June 2, 2000 SPEEDLANE.COM, INC.
By: /s/ Chris Mentzel
------------------
Chris Mentzel
Title: President
