UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
eQuorumNet
(Exact name of registrant as specified in its charter)
Commission file number: 000-27583
Nevada 88-0431508
(State of Other Jurisdiction of Incorporation (I.R.S. Employer
or Organization) Identification No)
301 W. Armour Suite 1000, Kansas City, MO 64111 64111
(Address of Principal Executive Office) (Zip Code)
877-603-4382
(Registrant's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 March 31, 2000 registrant had 7,500,000 shares of Common Stock
outstanding.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
MARCH 31, 2000
WILLIAMS & WEBSTER PS
CERTIFIED PUBLIC ACCOUNTANTS
BANK OF AMERICA FINANCIAL CENTER
W 601 RIVERSIDE, SUITE 1940
SPOKANE, WA 99201
(509) 838-5111
<PAGE>
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
MARCH 31, 2000
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Equity 4
Statement of Cash Flows 5
NOTES TO FINANCIAL STATEMENTS 6
<PAGE>
Board of Directors
eQuorumNet
301 W. Armour #1000
Kansas City, MO 64111
Independent Auditor's Report
We have audited the accompanying balance sheet of eQuorumNet (a development
stage company) as of March 31, 2000 and the related statements of operations,
cash flows, and stockholder's equity for the period from July 15, 1999
(inception) through March 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of eQuorumNet as of March 31, 2000
and the results of its operations and its cash flows for the period from July
15, 1999 (inception) to March 31, 2000, in conformity with generally accepted
accounting principles.
As discussed in Note 2, the Company has been in the development stage since its
inception and has no revenues. Realization of a major portion of the assets is
dependent upon the Company's ability to meet its future financing requirements,
and the success of future operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
regarding those matters are described in Note 2. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
April 14, 2000
1
<PAGE>
<TABLE>
<CAPTION>
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
<S> <C>
March 31,
A S S E T S 2000
----------------------
CURRENT ASSETS
Cash 97
----------------------
TOTAL CURRENT ASSETS 97
----------------------
TOTAL ASSETS 97
======================
L I A B I L I T I E S & S T O C K H O L D E R S ' E Q U I T Y
TOTAL CURRENT LIABILITIES $ -
----------------------
COMMITMENTS AND CONTINGENCIES -
----------------------
STOCKHOLDER'S EQUITY
Common stock, 50,000,000 shares authorized,
$.0001 par value; 7,500,000 shares
issued and outstanding 750
Additional paid-in capital 83,423
Deficit accumulated during development stage (84,076)
----------------------
TOTAL STOCKHOLDERS' EQUITY 97
----------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 97
======================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
From Inception
(July 15, 1999)
to
March 31,
2000
-------------------------
<S> <C>
R E V E N U E S -
-------------------------
E X P E N S E S 84,076
-------------------------
TOTAL OPERATING EXPENSES 84,076
-------------------------
NET LOSS (84,076)
=========================
Net loss per common share (0.01)
=========================
Basic and diluted weighted average
common stock outstanding 7,500,000
=========================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
Common Stock
------------------------- Deficit Accumulated Total
Number Additional During Stockholders'
of Shares Amount Paid-in Capital Development Stage Equity
--------- -------------- ---------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock in July 1999
for cash at an average of $.0006 per share 7,500,000 $ 750 $ 3,423 $ - $ 4,173
Additional capital contributed by the president
of the company - - 80,000 - 80,000
Loss for the period ending March 31, 2000 - - - (84,076) (84,076)
--------- -------------- ---------------- ----------------- -------------
Balance at March 31, 2000 - $ 750 $ 83,423 $ (84,076) $ 97
========= ============== ================ ================= =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
From Inception
(July 15, 1999)
to
March 31,
2000
----------------
<S> <C>
Cash flows from operating activities:
Net loss (84,076)
----------------
Net cash used in operating activities (84,076)
----------------
Cash flows from investing activities: -
----------------
Cash flows from financing activities:
Cash contributed by president of the company 80,000
Issuance of stock 4,173
----------------
Net cash provided by financing activities 84,173
----------------
Net increase in cash 97
Cash, beginning of period $ -
----------------
Cash, end of period $ 97
================
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest and income taxes:
Interest $ -
================
Income taxes $ -
================
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Start-up costs paid by shareholder $ 80,000
================
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
eQuorumNet, (hereinafter "the Company"), was incorporated in July 1999 under the
laws of the State of Nevada primarily for the purpose of network marketing of
electronics, nutritional and personal care products. At March 31, 2000, the
Company is operating from the residence of a business associate of the Company's
President rent free, in Kansas City, Missouri. In August 1999 the Company
formed eQuorumNet, LLC, a limited liability company, to facilitate the Initial
Public Offering (IPO) of the Company's stock. This limited liability company
was dissolved upon finalization of the Company's IPO.
The Company is in the development stage and as of March 31, 2000 had not
realized any significant revenues from its planned operations.
The Company's year-end is June 30.
6
<PAGE>
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 2-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of eQuorumNet is presented to
assist in understanding the Company's financial statements. The financial
statements and notes are representations of the Company's management which is
responsible for their integrity and objectivity. These accounting policies
conform to generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Development Stage Activities
- ------------------------------
The Company has been in the development stage since its formation on July 15,
1999. It is primarily engaged in network marketing.
Going Concern
- --------------
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.
As shown in the accompanying financial statements, the Company has generated no
revenues since inception. The Company, being a developmental stage enterprise,
is currently putting technology in place which will, if successful, mitigate
these factors which raise substantial doubt about the Company's ability to
continue as a going concern. The financial statements do not include any
adjustments relating to the recoverability and classification of recorded
assets, or the amounts and classification of liabilities that might be necessary
in the event the Company cannot continue in existence.
Management has established plans designed to increase the sales of the Company's
products. Management intends to seek new capital from new equity securities
issuances that will provide funds needed to increase liquidity, fund internal
growth and fully implement its business plan.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounting Method
- ------------------
The Company's financial statements are prepared using the accrual method of
accounting.
Loss per share
- ----------------
Basic loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted average
number of shares was calculated by taking the number of shares outstanding and
weighting them by the amount of time that they were outstanding. Diluted loss
per share is the same as basic loss per share as there are no common stock
equivalents outstanding.
Income Taxes
- -------------
No provision for taxes or tax benefit has been reported in the financial
statements, as there is not a measurable means of assessing future profits or
losses.
Year 2000
- ----------
The Company, like other firms, could be adversely affected if the computer
systems used by it, its suppliers or customers do not properly process and
calculate date-related information and data from the period surrounding and
including January 1, 2000. This is commonly known as the "Year 2000" issue.
Additionally, this issue could impact non-computer systems and devices such as
production equipment.
At this time, there have been no known problems associated with the Year 2000
issue. Management believes that the Year 2000 issue will not have an impact on
the Company's operations.
The Company has not purchased any software or hardware. When the Company does
purchase software and hardware it will determine at that time if there could be
any adverse effects to the Company's operations regarding Year 2000 issues.
Management also believes that Year 2000 issues should not adversely affect the
ability of its clients and customers to conduct business with the Company. Any
costs associated with Year 2000 compliance will be expensed when incurred.
NOTE 3 - PROPERTY AND EQUIPMENT
At March 31, 2000 the Company does not own any property or equipment.
7
<PAGE>
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 2000
NOTE 4-COMMON STOCK
Upon incorporation, the Company authorized the issuance of 50,000,000 shares of
common stock at a par value of $0.0001 per share of which 7,500,000 shares are
outstanding. Holders of shares of common stock are entitled to one vote for
each share on all matters to be voted on by the stockholders, but have no
cumulative voting rights. Holders of shares of common stock are entitled to
share ratably in dividends, if any, as may be declared by the Board of Directors
in its discretion, from funds legally available therefor. The Company has not
authorized any preferred stock, convertible stock, warrants or options as of
March 31, 2000.
NOTE 5 - CONTRIBUTED CAPITAL
The major stockholder of the Company contributed $80,000 for the payment of
expenses. This amount was recorded as additional paid-in capital.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Some of the statements contained in this Form 10-QSB discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information. These statements are
subject to known and unknown risks, uncertainties, and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and is
derived using numerous assumptions. Important factors that may cause actually
results to differ from projections include, for example:\
- - the success or failure of management's efforts to implement their business
strategy
- - the Company's ability to rise sufficient capital to meet operating
requirements
- - the Company's ability to compete with major established companies
- - the Company's ability to attract and retain overseas manufacturers as
clients
- - the Company's ability to keep its website operational and manage the site
- - federal, state or local governmental regulations
- - foreign governmental regulations and import/export laws
- - seasonal effects on revenue for the products its markets
- - the success of the Company's marketing campaigns
- - the amount and timing of operating costs and capital expenditures relating
to maintaining and expanding the business, operations and infrastructure
of the company
- - the Company's ability to upgrade and develop its systems and
infrastructure to accommodate growth
- - the Company's ability to attract new personnel in a timely and effective
manner
- - the Company's ability to retain key employees in its network marketing
business
- - the timing, cost and availability of advertising in traditional media and
on other websites and online services
- - consumer trends and popularity of the products to be sold
- - the level of use of the Internet and online services
- - general economic conditions
GENERAL
eQuorumNet was organized by the filing of articles of incorporation with
the Secretary of State of the State of Nevada on July 15, 1999. The articles of
the Company authorized the issuance of fifty million (50,000,000) shares of
Common Stock at a par value of $0.0001 per share.
The Company is a developmental stage company with the principal business
objective to provide network and e-commerce marketing for upscale and mass
market consumer products direct from the manufacturer. The Company intends to
distinguish itself and "the technology leader" in these fields with its quality
products, its network marketing compensation plans, its marketing materials and
support programs, and its e-commerce site.
The Company intends to identify overseas manufacturers of consumer products
that have a need for a marketing arm in the United States. According to the
Company's management, the development of new products such as nutritional aids
and electronics in the Far East is expansive and the need for a specialized
marketing company of the United States market has continued to grow in the last
ten years. eQuorumNet plans to market its network marketing and e-commerce
services to these manufacturers.
During its initial phase of development, the Company is formulating
profitability budgets, and marketing plans with the intention to make
presentations to overseas manufacturing firms to become its marketing company in
the United States. No specific manufacturing companies have signed a contract
with eQuorumNet as yet, and the Company anticipates 6 to 8 months until the
research phase is completed, and a manufacturer/client is identified and
contracted with in order to begin phase II, when revenues will be expected.
<PAGE>
The Company intends to build a distributor base and attract a new
generation of distributor leadership by providing additional financial
incentives for the core leadership (i.e., short-term income incentives,
recruiting incentives). It plans to increase long-term stability by addressing
key distributor structure/compensation areas: 1) create several "base of tree"
distributor lines to foster competition and increase opportunities for
aggressive new leadership 2) implement a compensation plan which fosters
long-term sustainable growth by continuing to highly reward aggressive, serious
business builders, while better rewarding the 95% of part-time
consumer/retailer-type distributor, and better ensuring that new distributor
leaders will have a solid organization under them before "breaking away", so
that they will better be able to qualify for leadership bonuses, and 3)
continually train distributor leadership to focus on building deep and wide with
a solid base of consumers and to nurture their networks.
The Company intends to focus on achieving and maintaining profitability
also ensuring tight financial and systems control by 1) being fully prepared
for cyclical sales performance while still providing top quality customer
service, 2) focusing on quality, not quantity, of new staff, 3) instituting
financial/accounting software systems to enable much tighter cash flow and
inventory control, and minimizing long-term contractual arrangements with
suppliers and keeping minimum order quantities as low as possible.
PLAN OF OPERATIONS
The Company has been in the development stage since its inception and has
not generated any revenues from operations. However, the Company anticipates
that expenses will continue to increase during 2000 with the development of its
website and the acquisition of contracts with overseas manufacturers.
Additional capital will be necessary to expand operations or continue current
operations. The Company has financed its growth primarily from the sale of
common stock. The Company's sources of external and internal financing are
limited, and it is not expected that its internal source of liquidity will
improve until net cash is provided by operating activities, and, until such
time, it will rely upon external sources for liquidity. The Company has not
established any lines of credit or other significant financing arrangement with
any third-part lenders. There can be no assurance that the Company will be able
to obtain financing on reasonable terms, if at all. Until the Company is able
to develop, construct and operate its website, and until the Company contracts
with an overseas manufacturer for its advertising in the United States, and
derive revenues there from, the Company will continue to use cash obtained from
outside sources for its operations and development of its business.
In the future, the Company may be required to seek debt or equity financing
(public or private), curtail operations, or otherwise bring cash flows in
balance if it approaches a condition of cash insufficiency. The Company
anticipates a need for additional capital, but has no specific commitments with
respect thereto. There is no assurance that the Company will be successful in
any such effort.
<PAGE>
PART II
Pursuant to the Instructions to Part II of the Form 10-QSB, Items 1, 2, 3, 4,
and 5 are omitted.
ITEM 6 EXHIBITS AND REPORTS
a) Exhibit 27.1 Financial Data Schedule
b) Form 8-K incorporated by reference filed April 4, 2000.
<PAGE>
SIGNATURES
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the undersigned, thereunto duly authorized.
eQuorumNet
Date: May 9, 2000 /S/ Richard Hung
Richard Hung, President
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
statement of Financial Condition at March 31, 2000 and the Statement of income
for the three months ended March 31, 2000 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0001091783
<NAME> eQuorumNet
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 97
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 97
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 97
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 750
<OTHER-SE> (653)
<TOTAL-LIABILITY-AND-EQUITY> 97
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 84076
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (84076)
<INCOME-TAX> 0
<INCOME-CONTINUING> (84076)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (84076)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
