SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE
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
AllnetServices.com Corporation
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(Exact name of registrant as specified in this charter)
Florida 65-0755455
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(State of other jurisdiction (IRS Employer
of incorporation) Identification No.)
3650 Coral Ridge Drive, Suite 101, Coral Springs, FL 33065
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Address of principal executive offices
Registrant's telephone number, including area code 954-346-7575
Check whether the issuer (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 [ ]
As of June 30, 2000 there were 13,389,867 shares of the Issuer's Common Stock
outstanding.
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<CAPTION>
ALLNETSERVICES.COM CORP.
FORM 10-QSB
INDEX
Part I. Financial Information
PAGE(S)
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<S> <C> <C>
Item 1. Financial Statements 3-8
Consolidated Balance Sheets at June 30 2000 (Unaudited) and December 31, 1999 3
Consolidated Statements of Operations for the three months and six
months ended June 30, 2000 and 1999 (Unaudited) 4-5
Statement of Shareholders Equity 6
Consolidated Statements of Cash Flows for the six months ended June 30, 2000 and 1999 7
(Unaudited)
Notes to Consolidated Financial Statements (Unaudited) 8
Item 2. Management's Discussion and Analysis 9
Part II. Other Information 11
Item 1. Legal Proceedings 11
Item 2. Signatures 12
Exhibits
Financial Data Schedule
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2
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SEE ATTACHED FINANCIAL STATEMENTS OF THE ISSUER
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<CAPTION>
ALLNETSERVICES.COM CORP.
BALANCE SHEETS
June 30, 2000 December 31,1999
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(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets
Cash $ 223,631 $ --
Accounts receivable (net allowance for doubtful accounts of $90,000 1,568,409 25,752
Due from factor -- 790,040
Inventories (net of allowance for obsolescence of $11,000) 59,812 8,158
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Total current assets 1,851,852 823,950
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Property and equipment 79,260 70,344
Less: Accumulated depreciation 28,308 21,458
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Property and equipment-net 50,952 48,886
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Other 7,268 7,268
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$ 1,910,072 $ 880,104
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LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities $ 1,070,738 $ 298,399
Due to factor -- 767,614
Due to related party-net 65,182 95,182
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Total current liabilities 1,135,920 1,161,195
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Shareholders Equity (Deficit)
Common stock-$.0001 par value, 50,000,000 shares authorized, Issues and
outstanding 13,627,367 at June 30, 2000 and
10,044,700 at December 31,1999 1,363 1,005
Additional paid in capital 6,185,429 5,175,863
Deficit (5,412,640) (5,457,959)
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Total shareholders' equity (deficit) 774,152 (281,091)
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$ 1,910,072 $ 880,104
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</TABLE>
The accompanying notes are an integral part of these
financial statements.
3
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<TABLE>
<CAPTION>
ALLNETSERVICES.COM CORP.
STATEMENT OF OPERATIONS
Three months ended June 30, 2000 and June 30,1999
Three Months Ended June 30,
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2000 1999
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Unaudited Unaudited
<S> <C> <C>
Revenues $ 2,213,586 $ 391,749
Cost of Sales 1,427,117 299,761
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Gross profit 786,469 91,988
Selling, general and administrative expenses 754,714 201,362
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Profit (loss) from operations before income tax benefit 31,755 (109,374)
Income tax benefit (4,800) --
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Net income $ 36,555 ($109374)
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Basic income (loss) per common share $ 0.004 ($ 0.013)
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Average common shares outstanding 10,053,928 8,182,367
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</TABLE>
The accompanying notes are an integral part of these
financial statements.
4
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<TABLE>
<CAPTION>
ALLNETSERVICES.COM CORP.
STATEMENT OF OPERATIONS
Six months ended June 30, 2000 and June 30,1999
Six Months Ended June 30,
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2000 1999
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Unaudited Unaudited
<S> <C> <C>
Revenues $ 3,060,436 $ 1,523,517
Cost of Sales 2,106,778 1,338,124
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Gross profit 953,658 185,393
Selling, general and administrative expenses 914,239 455,812
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Profit (loss) from operations before income tax benefit 39,419 (270,419)
Income tax benefit (5,900) --
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$ 45,319 ($ 270,419)
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Basic income (loss) per common share $ 0.004 ($ 0.032)
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Average common shares outstanding 11,332,256 8,365,700
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</TABLE>
The accompanying notes are an integral part of these
financial statements.
5
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ALLNETSERVICES.COM CORP
STATEMENT OF SHAREHOLDERS EQUITY
Six Months ended June 30, 2000
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<CAPTION>
Common Stock Additional Paid-In Capital (Deficit)
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Balance December 31, 1999 $ 1,005 $ 5,175,863 ($5,457,959)
Sale of common stock 186 430,000 --
Common stock issued for services 172 579,566
Net income -- -- 45,319
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Balance June 30, 2000 (Unaudited) $ 1,363 $ 6,185,429 ($5,412,640)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
6
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<TABLE>
<CAPTION>
ALLNETSERVICES.COM CORP.
STATEMENT OF CASH FLOWS
Six Months ends June 30, 2000 and June 30, 1999
Six Months ended June 30,
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2000 1999
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UNAUDITED UNAUDITED
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $ 45,319 ($ 273,225)
Adjustments to reconcile net (loss) to net cash
provided (used) by operating activities
Depreciation 6,850 5,612
Common stock issued for services 579,738
(Increase) decrease in accounts receivable (1,543,015) 164,876
Increase (decrease) in due to/from factor-net 22,784 (234,965)
(Increase) in inventory (51,654) (23,728)
(Increase) in other assets -- (25,000)
(Decrease) increase in accounts payable and accrued expenses 772,339 (34,471)
(Decrease) in due to related party (30,000) (51,950)
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Total Adjustments (242,958) (199,626)
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Net cash (used) by operating activities (197,639) (472,851)
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Cash flows from investing activities
Purchase of property and equipment (8,916) (17,858)
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Net cash (used) by investing activities (8,916) (17,858)
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Cash flows from financing activities
Sale of restricted common stock 430,186 700,002
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Net cash provided by financing activities 430,186 700,002
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Increase in cash 223,631 209,293
Cash- beginning -- 14,385
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Cash - end $ 223,631 $ 223,678
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Supplemental disclosure of cash flow information:
Interest paid $ 671 $ 4,151
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</TABLE>
The accompanying notes are an integral part of these
financial statements.
7
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ALLNETSERVICES.COM CORP.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(Unaudited)
Note 1. Summary of Significant Accounting Policies
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting principles,
have been condensed or omitted in this Form 10-QSB in compliance with the Rules
and Regulations of the Securities and Exchange Commission. However, in the
opinion of ALLNETSERVICES.COM CORP. the disclosures contained in the Form 10-QSB
are adequate to make the information fairly presented. See Form 10-KSB for the
year ended December 31, 1999 for additional information relevant to significant
accounting policies followed by the Company.
Note 2. Basis of Presentation
In the opinion of the Company, the accompanying unaudited financial statements
reflect all adjustments (consisting of normal recurring accruals) necessary to
present fairly the financial position as of June 30, 2000 and the results of
operations for the six month periods ended June 30, 2000 and 1999. The results
of operations for the six months ended June 30, 2000 are not necessarily
indicative of the results which may be expected for the entire year.
The Company reclassified certain minor items to conform to the June 30, 2000
presentation.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this report and
together with the Company's Form 10-KSB for the year ended December 31, 1999.
OVERVIEW
AllnetServices.com Corp. is a diversified Internet-related business that
specializes in the on-line marketing and distribution of a broad range of
products and e-commerce solutions to business-to-business (B2B) and
business-to-consumer (B2C) customers. Its Internet-related businesses include:
AllnetServices.com, which offers professional graphics design, database
management, web site development and web hosting services; AllCopiers.com,
offering wholesale pricing on copiers and other related office equipment;
Allnetmortgages.com, an online mortgage lending web site; Allmonitors.com, a web
site dedicated solely to offering all monitor-related merchandise;
AllnetDirect.com, which lists over 45,000 computer-related products;
Allnotebooks.com, offering notebooks computers, PDA's and accessories; and
Allnetpagers.com which offers wireless messaging products and services.
Allnetmortgages.com, Allnetdirect.com and Allmonitors.com are also published in
Spanish.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2000 COMPARED TO JUNE 30, 1999 AND SIX MONTHS ENDED
JUNE 30, 2000 COMPARED TO JUNE 30, 1999
Net sales are comprised of product sales, net returns and allowances. Net sales
for the three months ended June 30, 2000 were $2,213,586 compared to $376,249
for the same period in 1999. Net sales for the six month period ending June 30,
2000 were $3,060,436 compared to $1,523,517 for the same period in 1999. This
increase in sales was due to increased marketing efforts for display products,
and an increase in sales personnel in the AllCopiers.com and Web services
divisions.
Cost of sales for the three months ended June 30, 2000 was $1,427,117 compared
to $299,761 for the same period in 1999. Cost of sales for the six months ended
June 30, 2000 was $2,106,778 compared to $1,338,124 for the same period in 1999.
These increases are attributed to an increase in overall sales.
Selling, general and administrative expense includes administrative, finance and
purchasing, personnel and related costs, general office and depreciation
expense, as well as professional fees and advertising costs. Selling, general
and administrative expenses for the three months ended June 30, 2000 were
$786,469 compared to $78,488 for the same period in 1999. Selling, general and
administrative expenses for the six month period ended June 30, 2000 was
$953,658 compared to $185,393 for the same period in 1999. This increase is due
to the issuance of restricted common stock to consultants for services rendered
to the Company in lieu of cash compensation, and a general increase in the
overall revenue generated in the periods.
Net income for the three months ended June 30, 2000 was $36,555 compared to a
net loss of $122,874 for the same period in 1999. Net income for the six months
ended June 30, 2000 was $45,319 compared to a net loss of $273,225 for the same
period in 1999. This increase in net income is primarily attributable to
increased revenues, profit margins, and a decrease in Company expenses.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used by operating activities for the six months ended June 30, 2000 was
$197,639 compared to $472,851 for the same period in 1999. Net cash used in
operating activities was primarily attributable to an increase in sales and an
increase in accounts receivable.
Net cash used in investing activities for the six months ended June 30, 2000 was
$8,916 compared to $17,858. This decrease was primarily related to a decrease in
purchases of property and equipment.
Net cash provided by financing activities for the six months ended June 30, 2000
was $430,186 compared to $700,002 for the same period in 1999. This decrease is
attributable to a decrease in the sale of restricted common stock.
YEAR 2000
The Company had successfully completed all Year 2000 remediation, replacement,
and testing prior to January 1, 2000. Through May 1, 2000, the Company nor its
suppliers have experienced no Year 2000 problems that affected business
operations. At this time, the Company does not expect any future problems
related to Year 2000 to materialize. The cost of Year 2000 compliance was not
material.
9
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ALLNETSERVICES.COM CORP.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
10
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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.
ALLNETSERVICES.COM CORP.
Date: August 11, 2000 By: /s/ ROBERT AUBEL
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Robert Aubel, President & CEO
11
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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27 Financial Data Schedule
