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 quarter ended September 30, 2000
OR
[] TRANSITION OF REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to __________
Commission File Number:
GoThink.Com, Incorporated
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(Exact name of Registrant as specified in its charter)
Nevada 87-6121862
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
230 Lookout Place, Suite 200, Maitland, Florida 32751
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (407) 468-0599
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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 short 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 X
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19,196,016 Common Shares, $.01 par value were issued and outstanding at
September 30, 2000.
<PAGE>
GOTHINK.COM, INCORPORATED
Index
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 2000 (Unaudited)
and December 31, 1999 1
Consolidated Statements of Operations
Three months and nine months ended
September 30, 2000 (Unaudited) and
September 30, 1999 (Unaudited) 2
Consolidated Statements of Cash Flows
Nine months ended
September 30, 2000 (Unaudited) and
September 30, 1999 (Unaudited) 3
Notes to Consolidated Financial Statements (Unaudited) 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II. OTHER INFORMATION 7
SIGNATURES 8
<PAGE>
GOTHINK.COM, INCORPORATED AND SUBSIDIARY
Consolidated Balance Sheets
Assets
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
(Unaudited)
----------------- -----------------
Current assets:
<S> <C> <C>
Cash $ 3,482 $ 319
================= =================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 35,077 $ 35,327
Advances from related party 18,816 5,000
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Total current liabilities 53,893 40,327
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Stockholders' deficit:
Common stock, $.01 par value authorized 50,000,000
shares, issued and outstanding 19,196,016 191,960 191,960
Treasury stock, 1,700,000 shares, at cost (319,000) (319,000)
Additional paid-in capital 617,852 617,852
Stock subscription receivable (160,600) (160,600)
Accumulated deficit (380,623) (370,220)
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Total stockholders' deficit (50,411) (40,008)
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$ 3,482 $ 319
================= =================
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
GOTHINK.COM, INCORPORATED AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
------------------ ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Net sales $ 10,000 $ 46,376 $ 30,000 $ 199,849
Operating expenses 12,752 245,743 40,403 492,145
------------------ ----------------- ----------------- ------------------
Operating loss (2,752) (199,367) (10,403) (292,296)
Other expense
Bad debt - related party 0 (9,072) 0 (210,181)
Acquisition costs 0 0 0 (619,121)
------------------ ----------------- ----------------- ------------------
Loss before income taxes
and extraordinary item (2,752) (208,439) (10,403) (1,121,598)
Income tax expense 0 0 0 0
------------------ ----------------- ----------------- ------------------
Loss before
Extraordinary item (2,752) (208,439) (10,403) (1,121,598)
Extraordinary item: Gain from
debt restructuring 0 0 0 666,977
------------------ ----------------- ----------------- ------------------
Net loss $ (2,752) $ (208,439) $ (10,403) $ (454,621)
================== ================= ================= ==================
Loss per share common stock $ (0.00) $ (.03) $ (0.00) $ (.09)
================== ================= ================= ==================
Weighted average number of
shares outstanding 18,181,266 6,651,141 18,181,266 5,172,734
================== ================= ================= ==================
</TABLE>
See accompanying notes to financial statements.
2
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GOTHINK.COM, INCORPORATED AND SUBSIDIARY
Consolidated Statements of Cash Flows
Nine months ended September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
2000 1999
------------------ ------------------
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (10,403) $ (454,621)
Adjustments to reconcile net loss to net cash
used by operating activities:
Provision for doubtful accounts 0 4,600
Depreciation and amortization 0 12,989
Issuance of common stock for services 0 624,884
Acquisition of subsidiary 0 (666,977)
Cash provided by (used for) changes in:
Accounts receivable 0 (46,103)
Prepaid expenses 0 (35,625)
Accounts and related party payable 13,566 58,547
Deferred revenue 0 20,000
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Net cash provided by (used in) operating activities 3,163 (482,306)
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Cash flows from investing activities:
Purchase of equipment 0 (60,605)
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Net cash used in investing activities 0 (60,605)
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Cash flows for financing activities:
Loan repayments 0 (40,000)
Proceeds from issuance of common stock 0 624,000
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Net cash provided by financing activities 0 584,000
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Net increase in cash 3,163 41,089
Cash at beginning of period 319 (872)
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Cash at end of period $ 3,482 $ 40,217
================== ==================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
GOTHINK.COM, INCORPORATED AND SUBSIDIARY
Notes to Consolidated Financial Statements
(1) Presentation of Unaudited Financial Statements
The unaudited financial statements have been prepared in accordance with rules
of the Securities and Exchange Commission and, therefore, do not include all
information and footnotes necessary for a fair presentation of financial
position, results of operations and cash flows, in conformity with generally
accepted accounting principles. The information furnished, in the opinion of
management, reflects all adjustments (consisting only of normal recurring
accruals) necessary to present fairly the financial position as of September 30,
2000, and results of operations and cash flows for the three and nine month
periods ended September 30, 2000 and 1999. The results of operations may not
necessarily be indicative of results which may be expected for any other interim
period, or for the year as a whole.
(2) Sales to Major Customers
During the nine months ended September 30, 2000, one customer accounted for 100%
of total revenue. During the nine months ended September 30, 1999, no customer
accounted for more than 10% of total revenue.
(3) Principles of Consolidation, Basis of Presentation and Equity
Transactions
The accompanying consolidated financial statements include the financial
statements of GoThink.Com, Incorporated (the Company) and its wholly owned
subsidiary, Southern Educational Alliance, Inc. ("SEA") d/b/a GoThink Tech
(GTT). All significant intercompany balances and transactions have been
eliminated in consolidation.
Effective February 16, 1999, the Company acquired 100% of the outstanding common
stock of SEA for 1,325,000 newly issued common shares of the Company.
The acquisition of SEA was treated as a reverse acquisition of the Company by
SEA. In a reverse acquisition, the shareholders' equity of the acquirer prior to
the merger is retroactively restated for the equivalent number of shares
received in the merger after giving effect to any difference in par value of the
issuer's and acquirer's stock recognized as additional paid-in capital. All
share and per share information has been presented in the accompanying
consolidated financial statements as if the reverse acquisition and
recapitalization has occurred on September 1, 1996, the inception date of SEA
and its predecessor entities.
On February 18, 1999, the Company sold EFO Technologies, Inc. for a nominal
amount. The buyer also received an option to purchase 20,000 shares of the
Company's restricted stock within thirty days of the agreement for $10.00. The
Company also agreed to indemnify the buyer from any and all claims or
liabilities in connection with the buyer's purchase of the stock of EFO.
(Continued)
4
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GOTHINK.COM, INCORPORATED AND SUBSIDIARY
Notes to Consolidated Financial Statements
(3) Principles of Consolidation, Basis of Presentation and Equity
Transactions (Continued)
On February 16, 1999, the Company agreed in principal to issue 2,650,000 shares
of its common stock to acquire two subsidiaries, Internet Presentations, Inc.
("IPI") and SEA. The stock was issued on April 8, 1999 in addition to 350,000
shares for fees related to the transaction. SEA was incorporated on December 10,
1998 to continue the activities of Southwest Medical Academy which had operated
as a sole proprietorship. SEA subsequently changed its name to GoThink Tech,
Inc.
Subsequent to issuing the stock to acquire IPI, the company rescinded the
acquisition of IPI. The Company cancelled 1,325,000 shares issued in the
transaction and issued 200,000 shares of its stock to the principal of IPI. The
principal of IPI also received options to purchase the Company's common stock as
follows:
Option Price
Exercise Date Shares per Share
February 1, 2001 50,000 1.50
August 1, 2001 50,000 2.00
February 1, 2002 50,000 2.50
All options expire within one hundred eighty (180) days of the last listed
exercise date.
In 1999, the Company recorded bad debt expense of $201,109, representing an
uncollectible receivable from IPI, which represents cash advances and expenses
paid on its behalf by the Company prior to rescinding the acquisition of IPI.
(See note 2)
The Company recorded $666,977 as an extraordinary income item in the
accompanying financial statements. This was primarily as result of the
forgiveness of debt owed to former officers of EFO. Subsequent to the reverse
acquisition, they sold all of their stock in the Company to an unrelated party
and stated in separate agreements that they had no future claims or interest in
the Company. They had not been officers for at least two years prior to the
reverse acquisition.
Effective September 30, 1999, the Company sold all of its stock in Go Think Tech
to a former shareholder and officer. In exchange for its stock and $10,000 cash,
the Company received 1,700,000 shares of its common stock, which has been
recorded as treasury stock in the accompanying financial statements. On the date
of sale, GTT had little or no equity and the stock returned had a fair value of
approximately $319,000. The results of operations through June 30, 1999 of GTT
have been included in the accompanying financial statements.
(4) Goodwill
The Company recorded goodwill in the amount of $619,121 as a result of the
reverse acquisition of SEA. Goodwill would ordinarily be capitalized and
amortized as expense over its estimated useful life. During 1999, management
determined that this asset had been impaired and ascribed no value to the
goodwill. Accordingly, the $619,121 was expensed entirely in 1999.
5
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liability and Capital Resources
Working capital amounted to $(50,411) at September 30, 2000 as compared to
$(40,008) at December 31, 1999. Cash and short term investments amounted to
$3,482 at September 30, 2000 as compared to $319 at December 31, 1999. The
Company operated at a loss in 1999 and anticipates minimal operational
activities through 2000. Working capital has been provided over the latter half
of 1999 and in 2000 from its majority stockholder, Blue Ridge Finance Company,
Inc. (Blue Ridge).
The Company's operations and plan of business have been significantly revised
subsequent to the sale of its subsidiary in September, 1999. Through the third
quarter of 1999, the subsidiary was the Company's only source of revenue from
operations. Since the divestiture of its subsidiary, the Company has been in the
process of developing its internet consulting business and has made contacts
with several companies regarding internet development. No contracts or
agreements have been reached to date.
There are no material commitments for capital expenditures or any long term
credit arrangements as of September 30, 2000. In the near future, short term
working capital is anticipated to be provided by Blue Ridge.
Results of Operations
At the present time, the Company has minimal revenues and limited prospects for
revenues in the foreseeable future.
The Company currently has no marketing program, no products, one customer, no
clients, no advertising program and only one employee, the CEO, Jennifer L.
Brenner. Ms. Brenner does not devote all of her time to the Company, and
receives no salary or benefits. Ms. Brenner is also the sole director of the
Company. Ms. Brenner has no relevant experience in the Company's intended
Internet consulting operations. The Company does not plan to add staff or
contract labor to implement its intended plan of operations.
The Company has a minimum of available funds as shown in the financial
statements, and intends to use Ms. Brenner, in her capacity as an unpaid
officer, as its contact with potential clients and customers. It is uncertain
whether the Company can generate revenue with an uncertain business plan and
only one part-time employee. The Company has no lines of credit ability to
obtain credit, and no property for collateralizing any loan.
The Company's prior revenue history is not an indication of the Company's future
revenues, as the subsidiary that provided those revenues has been sold and the
Company has no present operations beyond the intent to consult and contract
with, on a fee basis, clients and customers in an attempt to assist them in
utilizing the Internet in their businesses.
The Company does not presently engage in any business operations in connection
with its former subsidiaries, Internet Presentations, Inc. or Southern Education
Alliance, Inc. and has no plans to do so in the future.
6
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings: None
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Item 2. Changes in Securities: None
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Item 3. Defaults Upon Senior Securities: None
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Item 4. Submission of Matters to a Vote of Security Holders:
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During the quarter ended September 30, 2000, the Company did not have any
meeting of stockholders.
Item 5. Other Information: None
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Item 6. Exhibits and Reports on Form 8-K:
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(a) Exhibits
11 Earnings per share - included in the Statements of Operations
12 Financial Data Schedule
(a) During the quarter ended September 30, 2000, no report on Form 8-K
was filed nor required to be filed.
7
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GOTHINK.COM, INCORPORATED
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GOTHINK.COM, INCORPORATED
--------------------------------
(Registrant)
Dated: November 6, 2000 By /s/ Jennifer L. Brenner
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Jennifer L. Brenner (Chief Executive Officer)
8
