UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB/A No 1
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-27285
ENGENYOUS Technologies, Inc
(Name of registrant as specified in its charter)
Delaware 13-375-4705
(State or other jurisdiction (I.R.S. Employer Identification No)
of incorporation or organization)
400 S Dixie Highway Hallandale Beach Fl 33009
(Address of principal executive offices) (Zip Code)
Registrant's telephone number (954) 458-3311
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the SecuritiesExchange Act of 1934 during the preceding 12
months (or for such shorterperiod 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
=============================================================
There were 3.769.385 shares of common stock with a par value
of $0.001 per share outstanding at April 30, 2000.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated balance sheets - April 30, 2000.
Consolidated statements of income - Nine months
April 30, 2000.
Notes to consolidated financial statements -
April 30, 2000.
Item 2. Management's Discussion and Analysis or Plan of Operation.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and use of Proceeds
Item 3. Defaults upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
ENGENYOUS Technologies Inc.
Interim Consolidated Statement
of Income & Retained Earnings ( Unaudited)
(dollars in thousand)
<TABLE>
<C> <C> <C>
For six months For nine months
ended For ended
Revenue 01/31/2000 04/30 2000
Sales $ 172,766 $ 215,956
* TOTAL $ 172,766 $ 215,956
======= =======
Cost of Sales
Purchase $ 81,200 $ 105,316
* TOTAL $ 81,200 $ 105,316
========= =======
*NET SALES $ 91,566 $ 110,640
========= =======
Selling Expenses
Advertising $ 6,325 $ 6,325
Advertising Printing 9,050 10,250
Travel & Entertainment 14,674 18,572
*TOTAL $ 30,049 $ 35,147
========= =========
General Expenses
Accounting $ 6,350 $ 8,550
Payroll 6,750 11,250
Depreciation 0 0
Legal Fee 7,850 9,350
Offices 3,225 4,725
Bank 2,214 3,125
Postage 3,304 3,672
Telephone 3,224 4,824
Rent 6,204 9,306
Electric 537 806
Misc 1,954 2,931
*TOTAL $ 41,612 $ 58,537
======= =======
*TOTAL EXPENSES $ 71,661 $ 93,684
*NET $ 19,905 $ 16,956
</TABLE>
Weighted average common shares
outstanding during the period 3.769,385
NET (LOSS) PER COMMON SHARE $ 0.15
<PAGE>
ENGENYOUS Technologies, Inc.
Interim Consolidated Balance Sheet ( Unaudited)
(dollars in thousand)
<TABLE>
<C> <C> <C>
ASSETS 01/31/2000 04/30/2000
Current Assets
Cash $ 9,215 3,251
Trade Receivable 39,734 37,193
Inventory 105,757 102,757
-------- -------
TOTAL Current Assets 154,706 143,201
Property & Rquipment ( Net) 77,546 77,546
Research & Development 351,809 351,809
TOTAL Assets $ 584,061 572,556
========= ========
LIABILITES & STOCKHOLDERS LIABILITIES
Current Liabilities
Trade Acct. Patable $ 42,193 33,637
Current potion L/T Debt 41,750 41,750
----------- -------
TOTAL Current Liabilities $ 83,943 75,387
Long Term Liabilities 0 0
TOTAL Long Term Liabilities 0 0
Stockholders' Equity
Common Stock $.001 par value 5,000 5,000
Authorized- 20.000.000 Shares
Issued and Outanding -
3.678.500 Shares
Share Premium 236,350 236,350
Addtional paid Capital 26,900 26,900
Retained Earning 211,963 211,963
Net Profit 19,905 16,956
-------- --------
TOTAL Stockholders' Equity $ 500,118 497,169
----------- --------
Total Liabilities $
Stockholders's Equity $ 584,061 572,556
</TABLE>
ENGENYOUS Technologies Incc
Statement of Cash Flows (unaudited)
(dollars in thousand)
<TABLE>
<C> <C> <C>
For 6 months For 9 months
ended 01/31/2000 04/30/2000
Cash Flows from operating 19,905 3,251
activities: Net profit (loss)
Adjustments to Reconcile Net Loss
to Net Cash Used in Operating
Activities:
Changes in Assets and Liabilites
Increase/(Decrease) in
Accounts Payable and Accrued
Expenses 0 0
Additional Paid in Capital
Contributed by Shareholders 26,900 26,900
Total Adjustments 46,805 43,844
Net Cash Used in
Operating Activites 152,861 199,000
Cash Flows from financing
Activites:
Increase in Loan Payable 0 0
Net Cash Provided by
Financing Activities 0 0
Net Change in Cash 10,690 13,705
Cash at Beginning of Period 9,215 3,251
Cash at End of Period 19,905 16,956
Supplemental Disclosure of
Cash Flow Information
Cash Paid During the period for
Interest Expense 2,214 3,125
Corporate Tax 0 0
</TABLE>
ENGENYOUS Technologies Inc
Statement of changes in Stockholders' equity
Period ending 04/30/2000
Name Common Stock Amount
# of shares
Clyde Smyth 90.885 $ 90,885
Shares issued
for Services
(Note 9 in Accounting policies)
<PAGE>
ENGENYOUS Technologies. Inc.
Notes to Consolidated Financial Statements (unaudited)
For the 9 Months ending April 30, 2000.
The Consolidated financial statements for the nine months as
of April 30, 2000, were prepared by the Registrant without
audit pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). Certain information
and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations. In the option of management,
all necessary adjustments to the financial statements have been
made to present fairly the financial position, results of
operations, and cash flows. The results of operations for
the period presented are not necessarily indicative
of the results for the respective complete years. The Registrant
has previously filed with the SEC an annual report on
Form 10SB12G/A, which included audited financial statements for
the year ended July 31, 1999. The financial statements contained
in this filing should be read in conjunction with the statements
and notes thereto.
1. ACCOUNTING POLICIES.
The Company has had no operations from January 1998 to July
1998. Accounting policies and procedures have been determined
as follows:
1. The Company uses the cash basis method of accounting.
2. Value per share is computed using the weighted
average number of shares of common stock outstanding.
3. The Company has not adopted any policy regarding
payment of dividends. No dividends have been paid.
4. Revenue is recognized at the point of sale and shipment
to the customer and there is no return of our products.
5. Property and Equipment are stated at cost. Depreciation
on theproperty and equipment is computed using the straight-line
method over seven years. Depreciation has been deferred until
fiscal year ending July 31, 2000. The amount of depreciation
deferral for fiscal year 1999 is $11.078.
6. Research and development will be amortized over seven
years in accordance with generally accepted accounting
principles for the cost of R/D IRS Tax Laws. Our Language
Products and Encryption Product is currently being marketed.
The total amount amortized is $ 351.809 for period ending
April 30, 2000.
The amortizing for the fiscal year 1999 on the R&D $301.809
has been deferred to fiscal year ending July 31, 2000. The
amount of the deferred amortizing is $43.116.
The cost of designing a package is an important part of the
cost of a product, and accountants should be aware of the
IRS' new rules relating to accounting for package design
costs. Revenue Ruling 89-23 states that, if an organization
creates a package design, then the term 'package design'
refers to the package, as well as the cost of related
materials, labor, and overhead. The methods of accounting
for package design costs include the capitalization method.
Under Sec. 174, a taxpayer can elect to deduct research or
experimental expenditures that are paid or incurred during
the taxable year in connection with his or her trade or
business. A taxpayer can also elect to amortize these research
expenses ratably over a period of not less than 60 months,
beginning with the month in which he or she first realizes
benefits from such expenditures
Tax deductions and credits for research and development
expenditures are outlined in Section 174 and Section 41,
respectively, of the Internal Revenue Code. The expenditures
that qualify for deductions under Section 174 include in-house
expenditures and patent expenditures. Research must meet three
criteria before expenditures are eligible for a tax credit under
Section 41; research must be conducted to discover technological
information, must be helpful in developing a 'new or improved
business component of the taxpayer,' and must have a purpose.
Research and development expenditures include all experimental
and laboratory costs incidental to the development of an
experimental or pilot model, plant process, product, formula,
invention or similar property, or the improvement of an already
existing property of like kind Regs. and Prop. Regs. Sec.
1.174-2(a)(1). The costs of developing computer software are
considered Sec. 174 expenditures Rev. Proc. 69-21. Computer
software includes all programs used to direct a computer to
perform a task or set of tasks and the documentation to
describe and maintain these programs.
7. Product Inventory is stated at actual cost and has not
assigned any sales cost in accordance to the generally
accounting principles.
8. The Company has a revolving line of credit with
Regent Bank that provides maximum borrowing of $40,000
with interest payable at prime plus 1% (10,25% at July
31,1999). The line is renewable on an annual basis and
guaranteed by the primary stockholder. The company has
borrowed against the line of credit.
9. Employee Compensation $ 90.885 is for services
rendered by the Company's officer for development of
electradoc technology during the period of August
997 to April 1998 has been recorded as retained
earnings as July 31,1999.
10. Income Taxes - The Company uses the asset and
liability method as identified in SFAS 109, Accounting
for Income Taxes. The Company's income taxes have not
been reflected on the current fiscal year 1999. The
profit of $56.478 in 1999 balanced against depreciation
and amortization of $ 54.194 leaves a profit of $2.284
and we have a carry forward of $201.167 from 1998.
We have calculated the taxes for fiscal year 1999 to be
$342.60 which we balanced against our carry forward of
$201.167 from 1998. There is no taxes due for fiscal
year 1999.
Deferred taxes are accounted for in accordance with
Statement of Financial Accounting Standards ("Statement")
No. 109 "Accounting for Income Taxes." The Statement
requires the use of the liability method to account for
income taxes. Deferred income taxes are provided for the
difference between the tax basis of an asset or liability
and its reported amountin the financial statements and at
the tax rates that are expected to be in effect when the
taxes are actually paid or recovered.
Deferred income taxes arise principally from differences
between financial and income tax reporting, including
amounts recorded for inventory, the allowance for doubtful
accounts, accrued expenses, the availability of net
operating loss carryforwards and certain other temporary
differences.
Deferred income tax assets are reduced by a valuation
allowance when, based on the weight of evidence available,
it is more likely than not that some portion or all of the
deferred tax assets will not be realized. The determination
of the requirement for a valuation allowance is an estimate
which is reasonably possible to change in the near term.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
ENGENYOUS Technologies Ind (the "Company") was incorporated on
April 7 1988, under the laws of the State of Delaware to engage
in any lawful corporate undertaking. On September 8, 1999 as
amended October 21, 1999 the Company submitted its Form 10-SB
to the Securities and Exchange Commission, which was declared
effective on November 10,1999, at which time the Company became
a reporting company under Section 12(g) of the 1934 Securities
and Exchange Act.
The Company is engaged in the business-to-business e-commerce
of providing turnkey conversions of e-commerce websites into any
language. This website will be launched on May 12, 2000 on 130
search engines around the world. We do not translate and adapt
the software content, but rebuild, test and fix the localized
product by converting it into any language of the world.
e-Conversions2.com will enable a successful web conversion
for e-commerce for the customer on an international scale.
The Company commenced operations in its Hallandale Beach location
on January 1998 developing and marketing encryption software,
encryption and decryption protocol for LANs, WANs and E-commerce
digital certificate to secure information and E-commerce
transactions. The UEL/2001 Encryption digital certificate ensures
that e-transations is not altered in transit. The identity of
both sender and recipient is validated, and one party cannot later
repudiate it. Digital certificates, which are being encourage by
the European Commission and the US administration, are designed
to authenticate the identity of e-commerce traders. This market
islikely to grow significantly as online sales rise.
At the same time the Company is marketing its languages courses
Learn English, Learn Spanish and Aprenda Ingles on CD-Rom for
computers.
Further the Company has during the last year developed four
web sites: Engenyous.com to serve as an identity site and
sell its encryption and languages products, Electradoc.com
to serve as e-commerce communication site for secure document
delivery with evidence tracking using the Company's UEL/2001
encryption software, e-conversions2.com to provide
fully turnkey conversions of e-commerce websites into any
language and Edocshop.com as a commercial site with merchandise
for sale and free turnkey web sites for edocshop members to
start their own business in the cyber space at present in eleven
different languages.
As the Company's activities have expanded and to maintain its
state-of-art status the management is constantly being updated
on all new industry developments. The need to increase both
facilities and staff has become imperative. The Company is
currently negotiating for a 6.800 sq.ft office space at 550
Broad Street, Newark, New Jersey with First Union Bank.
The management intends to augment its staff immediately to
30 people; administration, marketing and technical staff for
further development of its products as well as all the
computer hardware and software necessary to implement its
marketing efforts to companies and on the Internet and
especially with the e-conversions2.com in mind.
RESULTS OF OPERATIONS
The company's current sales for the first three quarters
ended April 30, 2000 was $215,956 with operation Expenses
of $199.000 with a profit of $16,956. The company sales for
the third quarter were $43,190 with operation expenses of
$46.139 with a loss of -2,949 compared to a profit of $19.905
for the first two quarters. The company's profit decreased
by $2,949 or 14.8% in the third quarter compared to the profit
for the first two quarters. The Company incurred interest
expense of approximately $ 3.672 for the nine months ended
April 30, 2000.
FORWARD-LOOKING STATEMENTS
The Company's sales and operations are expected to increase
in the fourth quarter of the fiscal year ending July 31, 2000
with the increase of sales of its current products (Languages
and Encryption Software) and also with the introduction of the
Company's e-conversions web site that was launched on May 11,
2000 for business-to-business to convert any e-commerce web
site into any language in the world. The actual results could
differ materially from those discussed here. As well as those
factors discussed in this report, other factors that could cause
or contribute to such differences include, among other items,
lack of substantial additional financing. Therefore, the condensed
financial data for the periods presented may not be indicative of
our future financial condition or results of operations.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities and use of Proceeds
In April 2000, the Company issued 90,885 shares to Clyde Smyth
having an aggregate value of $ 90.885. The shares were issued as
consideration for services rendered for the period from August
1997 to April 1, 1998 for the development of electradoc
technology and specifications.
The $90.885 was previously recorded as retained earnings in
our July 31,1999 Financial Statements.
The shares are exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) of the Securities Act
of 1933.
Item 3. Defaults 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) Exhibit 27.1 Financial Data Schedule
(b) The Company did not file any reports on Form 8-K during
the nine months ended April 30, 2000.
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.
Dated May 27, 2000 /s/ Clyde Smyth
----------------------------
Clyde Smyth, Chairman, and
Chief Executive Officer
Dated May 27, 2000 /s/ Margareta Totems
----------------------------
Margareta Totems
Chief Financial Officer
