<PAGE>
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
ACT OF 1934
For the quarterly period ended July 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 000-27107
---------
THE BIGHUB.COM, INC.
(Exact name of small business issuer as specified in its charter)
Florida 65-0580634
----------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2939 Mossrock, Suite 275, San Antonio, TX 78230
-----------------------------------------------
(Address of principal executive offices)
(210) 979-9228
--------------
Registrant's telephone number, including area code
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 past 12
months (or for such shorter period that the issuer was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. (1) Yes___ No X .
---
(2) Yes X No___ .
---
State the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
There were 21,685,521 shares of common stock outstanding at August 30,
----------------------------------------------------------------------
2000.
-----
Transitional Small Business Disclosure Format (check one): Yes No X.
--------------------------------------------------------------------------
<PAGE>
THE BIGHUB.COM, INC.
Form 10-QSB
For the Quarterly Period ended July 30, 2000
Table of Contents
<TABLE>
<CAPTION>
Page No.
<S> <C>
Part I. Financial information
Item 1. Financial Statements i
Condensed consolidated balance sheets - July 30, 2000 (unaudited) and October 31, 1999 1
Condensed consolidated statements of operations and comprehensive operations - 2
fiscal three and nine months ended July 30, 2000 and 1999 (unaudited)
Condensed consolidated statements of cash flows - fiscal three and nine months 3
ended July 30, 2000 and 1999 (unaudited)
Notes to condensed consolidated financial statements - July 30, 2000 4
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 16
Part II. Other information
Item 1. Legal Proceedings 19
Item 2 . Changes in Securities and Use of Proceeds 19
Item 3 . Defaults Upon Senior Securities 19
Item 4 . Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibits and Reports on Form 8-K 20
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
----------------------------
The financial statements included herein have been prepared by The BigHub.com,
Inc. (the "Company" or the "Registrant"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission (the "SEC"). As
contemplated by the SEC under Rule 10-01 of Regulation S-X (as amended by
Regulation S-B), the accompanying financial statements have been condensed and
therefore do not contain all disclosures required by generally accepted
accounting principles. However, the Company believes that the disclosures are
adequate to make the information presented not misleading. All dollar amounts
referenced in this document are denominated in United States dollars. The
accompanying financial statements should be read in conjunction with the
financial statements and notes thereto of The BigHub.com, Inc. included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended October 31,
1999 as filed with the SEC (file number 000-27107) and the financial statements
and notes thereto of Next Generation Media Corp. for the year ended December 31,
1999 filed in the Company's amended Current Report on Form 8K/A filed with the
SEC on July 14, 2000.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JULY 30, OCTOBER 31,
2000 1999
(UNAUDITED) (AUDITED
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents $ 198,069 $ 87,858
Marketable securities 78,125 -
Accounts receivable, net 604,361 5,133
Inventories 46,122 -
Note receivable 200,000 -
Advertising credits 270,000 -
Prepaid expenses and other current assets 61,307 -
------------- -------------
Total current assets 1,457,984 92,991
Property and equipment, net 2,152,051 1,502,226
Intangibles, net 3,410,614 -
Other assets 114,519 1,800
------------- -------------
$ 7,135,168 $ 1,597,017
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 1,189,542 $ 1,199,503
Accrued liabilities 1,023,679 197,512
Related party payables 60,000 785,172
Notes and accrued interest payable to related parties 452,660 950,000
Notes payable 455,203 -
------------- -------------
Total current liabilities 3,181,084 3,132,187
------------- -------------
Minority interest 573,933 -
Stockholders' equity (deficit):
Preferred stock, 25,000,000 shares authorized, $0.001 par value,
no shares outstanding - -
Common stock, 50,000,000 shares authorized, $0.001 par value
21,685,521 and 16,105,976 shares outstanding, respectively 21,686 16,106
Additional paid-in capital 13,628,955 4,232,628
Accumulated deficit (9,348,615) (5,783,904)
Accumulated other comprehensive loss (921,875) -
------------- -------------
Total stockholders' equity (deficit) 3,380,151 (1,535,170)
------------- -------------
$ 7,135,168 $ 1,597,017
============= =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Months Ended Three Months Ended Nine
July 30, July 30, July 30, July 30,
2000 1999 2000 1999
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Net sales $ 3,053,654 $ 5,145 $ 3,365,632 $ 15,261
Cost of sales 2,025,752 10,432 2,229,599 13,519
----------- ----------- ----------- -----------
Gross profit 1,027,902 (5,287) 1,136,033 1,742
----------- ----------- ----------- -----------
Operating expenses:
General and administrative 2,146,865 971,608 4,789,622 1,133,870
Depreciation and amortization 315,654 48,785 584,849 146,355
----------- ----------- ----------- -----------
Total operating expenses 2,462,519 1,020,393 5,374,471 1,280,225
----------- ----------- ----------- -----------
Loss from operations (1,434,617) (1,025,680) (4,238,438) (1,278,483)
Interest expense (30,610) - (77,386) (412,500)
Minority interest in loss of 28,117 - 28,117 -
subsidiary
----------- ----------- ----------- -----------
Loss before extraordinary item (1,437,110) (1,025,680) (4,207,707) (1,690,983)
Extraordinary item - gain on forgiveness of debt - - - 67,000
----------- ----------- ----------- -----------
Net loss from continuing operations (1,437,110) (1,025,680) (4,207,707) (1,623,983)
Gain on discontinued operation, net minority
interest of $324,824 722,996 - 722,996 -
----------- ----------- ----------- -----------
Net loss (714,114) (1,025,680) (3,564,711) (1,623,983)
Other comprehensive income - unrealized loss on
marketable securities available for sale, net (343,750) - (921,875) -
of tax of -$0-
----------- ----------- ----------- -----------
Comprehensive loss $ (1,057,864) $ (1,025,680) $ (4,486,586) $ (1,623,983)
=========== =========== =========== ===========
Net loss per common share:
Loss before extraordinary item $ (0.06) $ (0.12) $ (0.23) $ (0.30)
Extraordinary item - gain on - - - 0.01
forgiveness of debt
----------- ----------- ----------- -----------
Loss from continuing operations (0.06) (0.12) (0.23) (0.29)
Gain on discontinued operation 0.03 - 0.04 -
----------- ----------- ----------- -----------
Loss per common share $ (0.03) $ (0.12) $ (0.19) $ (0.29)
=========== =========== =========== ===========
Weighted average number of common
shares outstanding
21,673,526 10,744,984 18,499,789 6,731,501
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
July 30, July 30,
2000 1999
------------ ------------
<S> <C> <C>
Cash flows used in operating activities:
Net loss $ (3,564,711) $ (1,623,983)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 584,849 146,355
Amortization of deferred revenue (350,000) -
Value of shares issued for consulting services - 84,150
Interest imputed on conversion of preferred
shares to Class A special preferred shares - 412,500
Extraordinary item - Gain on forgiveness of debt - (67,000)
Gain on disposition of discontinued operation (1,047,820) -
Minority interest in income of subsidiary 296,707 -
Changes in operating assets and liabilities,
net of assets and liabilities acquired:
Accounts receivable (20,484) -
Inventories 106,445 -
Prepaid expenses and other assets 72,200 (14,000)
Related party payables (219,978) -
Accounts payable and accrued liabilities (611,143) 218,220
------------ ------------
Net cash used in operating activities (4,753,935) (843,758)
------------ ------------
Cash flows used in investing activities:
Loans to NexGen prior to acquisition (500,000) -
Acquisition of property and equipment (184,993) (514,381)
------------ ------------
Net cash used in investing activities (684,993) (514,381)
------------ ------------
Cash flows from financing activities:
Proceeds from sale of common stock 5,450,000 -
Repayment of notes payable (151,493) -
Proceeds from notes payable to related parties 1,090,000 1,528,800
Repayment of notes payable to related parties (1,067,736) -
------------ ------------
Net cash provided by financing activities 5,320,771 1,528,800
------------ ------------
Net change in cash (118,157) 170,661
Cash at beginning of fiscal period 87,858 644
Cash acquired 228,368 -
------------ ------------
Cash at end of fiscal period $ 198,069 $ 171,305
============ ============
Supplemental disclosure of cash flow information -
Cash paid during the nine fiscal months for interest $ 6,936 $ -
============ ============
Cash paid during the nine fiscal months for income taxes $ - $ -
============ ============
</TABLE>
Supplemental disclosure of non-cash financing and
investing activity:
During the nine fiscal months July 30, 2000, the Company's largest
shareholder contributed marketable securities with a value of $1,000,000 (See
Note 2).
During the nine fiscal months ended July 30, 2000, the Company exchanged
software with a net book value of $433,429 for a reduction in notes payable
to related-parties of $519,604, with the resulting $86,175 difference
recorded to additional paid-in capital.
During the nine fiscal months ended July 30, 2000, NexGen recognized a gain of
1,047,820 on the sale of its Newspaper publishing subsidiary.
See accompanying notes to condensed consolidated financial statements.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
1. Summary of significant accounting policies
------------------------------------------
Management's representation
The management of the BigHub.com, Inc. without audit has prepared the
financial statements included herein. The unaudited condensed consolidated
financial statements include the consolidated accounts of The BigHub.com,
Inc. as of and for the three and nine months ended July 30, 2000 and those
of Next Generation Media Corporation as of and for the two months ended
June 30, 2000 (collectively, the "Company"). Certain information and note
disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
In the opinion of the management of the Company, all adjustments considered
necessary for fair presentation of the financial statements have been
included and were of a normal recurring nature, and the accompanying
financial statements present fairly the financial position of the Company
as of July 30, 2000, the results of operations for the fiscal quarters
ended July 30, 2000 and 1999 and the results of operations and cash flows
for the fiscal nine months ended July 30, 2000 and 1999.
It is suggested that these financial statements be read in conjunction with
the Company's audited financial statements and notes for the years ended
October 31, 1999 and 1998 filed with the Company's annual report on Form
10-KSB and the audited financial statements of Next Generation Media
Corporation (acquired during the fiscal quarter ended July 30, 2000) filed
with the Company's amended current report on Form 8-K/A on July 14, 2000.
The interim results are not necessarily indicative of the results for a
full year.
Change in Fiscal Year End
Effective November 1, 1999, the Company changed its reporting period from a
fiscal year ending on October 31 to a fiscal year ending on the last Sunday
of October.
Principles of Consolidation
The accompanying condensed consolidated financial statements include the
accounts of the Company and its subsidiaries as of and for the three and
nine months ended July 30, 2000 except for Next Generation Media
Corporation ("NexGen") where accounts are included as of June 30, 2000 and
for the two months ended June 30, 2000. Intercompany transactions and
balances have been eliminated in consolidation.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
Minority Interest
The Company consolidates NexGen's assets, liabilities, revenues and
expenses, with reductions on the balance sheet and statement of income for
the minority shareholders' 31% interest in NexGen's equity and earnings.
Minority interest of $573,933 was recorded on the consolidated balance
sheet at July 30, 2000.
Comprehensive Income
The Company has adopted Statement of Financial Accounting Standards No. 130
("SFAS 130"), "Reporting Comprehensive Income." SFAS 130 establishes
standards for reporting and display of comprehensive income and its
components in a full set of general purpose financial statements. The
effect of SFAS 130 is reflected in these financial statements.
Inventories
Inventories consist primarily of paper, envelopes and printing materials
and are stated at the lower of cost or market, with cost determined on the
first-in, first-out method.
Earnings Per Share
Basic net income per common share is computed by dividing the net income
available to common stockholders for the period by the weighted average
number of common shares outstanding during the period. Incremental common
shares issuable upon the exercise of stock options and warrants, are
included in the computation of diluted net loss per common share to the
extent such shares are dilutive. As the Company has a loss for the periods
presented, all options and warrants are antidilutive and are therefore not
included in the per share computation.
Segment Information
The Company has adopted Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information,"
which requires public companies to report selected segment information in
their quarterly reports. It also requires entity-wide disclosures about
the products and services an entity provides, the material countries in
which it holds assets and reports revenues and its major customers. During
the quarter ended July 30,
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
2000, the Company operated in three reportable segments as disclosed in the
accompanying statement of operations. See Note 9 "Segment Information."
Recent Accounting Pronouncements
The FASB issued Statement of Financial Accounting Standards No. 133 ("SFAS
133"), "Accounting for Derivative Instruments and Hedging Activities."
SFAS 133 establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities on the balance sheet at
their fair value. This statement, as amended by SFAS 137, is effective for
financial statements for all fiscal quarters of all fiscal years beginning
after June 15, 2000. The Company does not expect the adoption of this
standard to have a material impact on its results of operations, financial
position or cash flows as it currently does not engage in any derivative or
hedging activities.
In March 2000, the Emerging Issues Task Force reached a consensus on Issue
No. 00-2, "Accounting for Web Site Development Costs" ("EITF 00-2") to be
applicable to all web site development costs incurred for the quarter
beginning after June 30, 2000. The consensus states that for specific web
site development costs, the accounting for such costs should be accounted
for under AICPA Statement of Position 98-1 (SOP 98-1), "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use." The
Company has not yet addressed whether the adoption of EITF 00-2 will have a
material effect on its financial statements.
In March 2000, the FASB issued Interpretation No. 44 ("FIN 44"),
"Accounting for Certain Transactions Involving Stock Compensation, an
Interpretation of APB 25." FIN 44 clarifies the application of APB 25 for
(a) the definition of employee for purposes of applying APB 25, (b) the
criteria for determining whether a plan qualifies as a noncompensatory
plan, (c) the accounting consequence for various modifications to the terms
of a previously fixed stock option or award, and (d) the accounting for an
exchange of stock compensation awards in a business combination. FIN 44 is
effective July 1, 2000, but certain provisions cover specific events that
occur after either December 15, 1998, or January 12, 2000. The adoption of
certain other provisions of FIN 44 prior to July 30, 2000 did not have a
material effect on the financial statements. The Company does not expect
that the adoption of the remaining provisions will have a material effect
on the financial statements.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin 101 ("SAB 101"), "Revenue Recognition," which outlines
the basic criteria that must be met to recognize revenue and provide
guidance for presentation of revenue and for disclosure related to revenue
recognition policies in financial statements filed with the Securities and
Exchange Commission. The effective date of this pronouncement is the fourth
quarter of the fiscal year beginning after December 15, 1999. The Company
believes that adopting SAB 101 will not have a material impact on its
financial position and results of operations.
Reclassifications
Certain reclassifications have been made to fiscal year to date results of
operations to conform to the presentation of the three months ended July
30, 2000.
2. Going Concern
-------------
Because the Company had incurred cumulative losses over the last two fiscal
years of $4,460,812 and a loss of $3,564,711 for the nine months ended July
30, 2000, had a working capital deficit of approximately $1,723,100 as of
July 30, 2000 and because of the lack of profitable operational history in
Internet services, there is doubt as to the Company's ability to continue
as a going concern which contemplates, among other things, the realization
of assets and satisfaction of liabilities in the normal course of business.
The ability of the Company to continue in existence is dependent primarily
upon obtaining additional debt and equity financing as well as the
generating of income from strategic alliances and the sale of products and
services. The financial statements do not include any adjustments relating
to the reservability and classification of asset carrying amounts or the
amount and classification of liabilities that might result should the
Company be unable to continue as a going concern.
3. Acquisition of Next Generation Media Corporation
------------------------------------------------
On May 1, 2000, the Company purchased approximately 69% of the issued and
outstanding capital stock of (52% on a fully diluted basis), from Nexgen
and an aggregate of 28 shareholders of NexGen.
BigHub purchased the shares of NexGen common stock using shares of BigHub
common stock as consideration. The securities purchased from NexGen
consisted of a total of 3,175,100 shares of NexGen common stock, options to
purchase 164,915 shares of NexGen common stock from NexGen, with an
exercise price of $0.16 per share, and options to purchase 300,000 shares
of NexGen common stock from certain stockholders, with an exercise price of
$0.50.
The total number of BigHub shares paid as consideration for the NexGen
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
securities was 1,079,545. In addition, BigHub gave two of the NexGen
shareholders, Joel Sens and Gerard R. Bernier, options to purchase an
aggregate of 300,000 shares of BigHub's common stock at an exercise price
of $1.25 per share and options to purchase an aggregate of 400,000 shares
of BigHub's common stock at an exercise price of $5.50 per share, as
additional consideration in the transaction.
The total consideration (including the value of the options) was
$2,865,732, which was allocated as follows under the purchase method of
accounting:
<TABLE>
<S> <C>
Cash $ 228,368
Accounts receivable 578,744
Inventories 152,567
Property and equipment 1,290,198
Other assets 246,226
Goodwill 3,603,526
Total liabilities (2,614,671)
Minority interest (619,226)
-----------
$ 2,865,732
===========
</TABLE>
Goodwill will be amortized on a straight line basis over an estimated
useful life of 10 years.
Prior to the transactions between BigHub and the selling shareholders
described above, NexGen received a working capital loan in the amount of
$500,000 from BigHub and as a result of the transaction agreed to include
two appointees of BigHub on its five member Board of Directors.
The following unaudited pro forma summary for the fiscal year ended October
31, 1999 and the fiscal nine months ended July 30, 2000 gives effect to the
acquisition of NexGen as if it had occurred on November 1, 1998 and 1999,
respectively, and is based on historical results of operations of The
BigHub.com for the fiscal year ended October 31, 1999 and the nine month
period ended July 30, 2000 and of NexGen for the fiscal year ended December
31, 1999 and the six month period ended June 30, 2000. This summary is not
necessarily indicative of what actual results would have been had the
transactions occurred on either November 1, 1998 or 1999 nor do they
purport to indicate future results of the Company.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
Year Ended 9 Mo. Ended
---------------------------------------------------------------------------------
October 31, 1999 July 30, 2000
---------------------------------------------------------------------------------
<S> <C> <C>
Revenues $ 7,901,324 $ 5,675,937
---------------------------------------------------------------------------------
Net loss from continuing operations (5,138,906) (4,389,079)
---------------------------------------------------------------------------------
Basic and diluted loss per common share from
continuing operations $ (0.61) $ (0.23)
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
</TABLE>
On June 30, 2000, NexGen sold its entire interest in its newspaper
publishing subsidiary. See Note 10. "Discontinued Operations."
4. Marketable Securities
---------------------
In January 2000, a significant shareholder of the Company contributed
250,000 shares of the common stock of Techlabs, Inc. ("Techlabs"), valued
at $1,000,000 based on the trading price of the stock on that date. The
common stock of Techlabs trades on the over-the-counter bulletin board
under the stock symbol TKLB. No cash or equity consideration was paid to
the stockholder or to any party and no liabilities exist for future
consideration in connection with the contribution.
The Company has treated the stock as available for sale under Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities."
At the end of each reporting period, the Company assesses the fair value of
its marketable securities and records adjustments as appropriate. As of
July 30, 2000 the Company determined the fair value of the Techlabs common
stock to be $78,125 and, accordingly, reported an unrealized loss of
$343,750 as other comprehensive loss for the fiscal quarter and a
cumulative unrealized loss of $921,875 as of July 30, 2000.
5. Notes Receivable
----------------
Notes receivable at July 30, 2000 is comprised of a $200,000 secured
promissory note in favor of NexGen issued by UNICO, Inc. in connection with
UNICO, Inc.'s purchase of NexGen's newspaper publishing subsidiary. The
note shall accrue interest until June 1, 2001 at a floating interest rate
equal to the Prime Rate plus two percent. The principal shall be repaid in
installments between January 1, 2001 and June 1, 2001. See "Discontinued
Operations."
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
6. Advertising Credit
------------------
A prepaid advertising credit of $270,000 was recorded in June 2000 upon
execution by UNICO, Inc. of a trade allowance agreement in favor of NexGen
in connection with UNICO, Inc.'s purchase of NexGen's newspaper publishing
subsidiary. See "Discontinued Operations."
7. Notes Payable
-------------
Notes payable is comprised of the following:
<TABLE>
----------------------------------------------------------------------
<S> <C>
Note payable to a bank, interest at prime + 1%,
monthly payments of principal and interest of
$12,500, collateralized by the assets of Direct
Mail Marketing segment, due on September 15, 2000 $ 239,786
----------------------------------------------------------------------
----------------------------------------------------------------------
Line of credit from a bank in the amount of $100,000,
interest at prime, guaranteed by the president of
NexGen, due in September, 2000 100,000
----------------------------------------------------------------------
----------------------------------------------------------------------
Note payable to a bank, interest at prime +.50%,
originally due on April 30, 2000 but subsequently
extended, guaranteed by UNICO, Inc. 60,000
----------------------------------------------------------------------
----------------------------------------------------------------------
Note payable, non-interest bearing, due in
September, 2000 55,417
---------
----------------------------------------------------------------------
$ 455,203
=========
----------------------------------------------------------------------
</TABLE>
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
8. Stockholders' Equity (Deficit)
------------------------------
Equity Transactions - Common Stock
During February and March 2000, the Company issued 3,000,000 shares of its
common stock in exchange for aggregate cash proceeds of $6,000,000. The
shares were sold to several accredited investors in private, unsolicited
transactions pursuant to Rule 506 of Regulation D, as promulgated by the
Securities and Exchange Commission under the Securities Act of 1933, as
amended. In addition, the placement agent received placement fees in the
aggregate amount of $550,000 (which are netted against the proceeds
received) and warrants to purchase 875,000 shares of the Company's common
stock exercisable at a price of $2.00 per share at any time through March
6, 2005. In addition, various consultants related to this financing
received 1,500,000 shares of common stock as compensation for their
services, which are included as additional shares issued in connection with
this transaction.
In connection with the acquisition of NexGen, the Company issued 1,079,545
shares of its common stock effective May 1, 2000. See Note 3. "Acquisition
of NexGen".
Stock Options
The following is a summary of the stock options activity for the nine
fiscal months ended July 30, 2000:
<TABLE>
<CAPTION>
<S> <C>
Balance, October 31, 1999 472,500
Granted in connection with acquisition of
NexGen 700,000
Canceled (92,500)
---------
Balance, July 30, 2000 1,080,000
=========
Exercisable, July 30, 2000 700,000
=========
</TABLE>
Warrants
From time to time, the Company issues warrants pursuant to various
consulting agreements. All warrants were either exercised or expired during
fiscal 1998 and no new warrants were issued in the fiscal nine months ended
July 30, 2000, except the warrant issued in connection with the financing
transaction described
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
above.
9. Segment Information
-------------------
The Company has three reportable segments for the quarter ended July 30,
2000: Internet, Direct Mail Marketing and Newspaper Publishing. The Direct
Mail Marketing and Newspaper Publishing segments were acquired through the
purchase of a majority interest in Next Generation Media Corporation on May
1, 2000. The Newspaper Publishing segment was sold on June 30, 2000. See
Note 10 "Discontinued Operations". Each segment is a separate corporate
entity with different management teams and different products and services.
The accounting policies of the reportable segments are the same as those
set forth in the Summary of Accounting Policies. Summarized financial
information concerning the Company's reporting segments for the nine months
ended July 30, 2000 and 1999 is presented below.
<TABLE>
<CAPTION>
Nine Months Ended July 30, 2000 Nine Months Ended July 30, 1999
Direct Newspaper Direct Newspaper
Internet Mail Publishing Internet Mail Publishing
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Revenue $ 579,209 $2,168,317 $618,106 $ 15,261 $0 $0
Segment
profit
(loss) $(3,547,311) 794,051 81,420 $(1,623,983) 0 0
Total assets 1,772,606 1,960,266 0 $ 1,099,541 0 0
</TABLE>
10. Discontinued Operations
-----------------------
On June 30, 2000, the Company sold its Newspaper Publishing segment,
Independent News, Inc., in exchange for a promissory note in the amount of
$200,000, advertising credits of $270,000, assumption of indebtedness in
the amount of $245,000 and cancellation of certain preferred stock of
NexGen and accrued and unpaid dividends thereon valued at $342,000 for a
total sales price of $1,057,000.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
The components of the discontinued operations are as follows:
<TABLE>
Gain on sale of segment:
<S> <C>
Sale proceeds (including advertising credits) $ 470,000
Less book value of assets sold (9,180)
Add liabilities assumed by buyer and preferred
stock redeemed 587,000
----------
$1,047,820
==========
</TABLE>
11. Related Party Transactions
--------------------------
Disposition of Notes Receivable, Unearned Revenue and certain payables from
Related Parties
During the fiscal quarter ended July 30, 2000, notes receivable from
related parties of $1,323,738 due from three affiliates was disposed of as
follows. A note receivable from NexGen in the amount of $500,000 was
eliminated in consolidation upon the acquisition of NexGen on May 1, 2000.
Unearned revenue payable to an affiliate of $243,870 was applied in partial
repayment of the note receivable from such affiliate. A payable to the
affiliate in the amount of $252,721 was applied in partial repayment of the
note receivable from such affiliate. At July 30, 2000, management assessed
the likelihood of collecting the remaining balance of $327,147 of notes
receivable and accrued interest and determined that the entire amount
should be reserved against.
Unearned Revenue
Unearned revenue was comprised of prepaid monthly fees pursuant to an
Affiliate Agreement (see below) that provided for $573,465 owed by the
Company to the affiliate to be offset against the first year fees due to
the Company by the affiliate for providing advertising and marketing for
the affiliate. The amount of $573,465 represents the net present value of
the $50,000 per month fee over twelve months at a discount rate of 10%. As
of July 30, 2000, $243,870 of unearned revenue remained to be amortized.
For the three and nine month periods ended July 30, 2000, the Company
recorded related-party revenue of $150,000 and $350,000, respectively,
under this arrangement, comprising 56% and 60%, respectively, of Internet
revenues recognized. At July 30, 2000, pursuant to an agreement between the
Company and the affiliate, the entire $243,870 balance of unearned revenue
was applied in partial payment of a note receivable from the affiliate. See
above.
Related Party Payables
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
On July 30, 2000, the Company agreed to reduce the note receivable from the
related party by $252,721, the entire balance owed to such related party by
the Company as of July 30, 2000.
The remaining related party payables of $60,000 are owed to a related party
pursuant to a consulting agreement (see below).
Notes Payable to Related Parties
During the nine fiscal months ended July 30, 2000, the Company borrowed an
aggregate of $1,090,000 for working capital purposes from two affiliates
and a stockholder. The notes bear interest of 10% per annum and are due on
the closing of the first tranche of the Company's future private placement.
Interest expense related to all notes payable to related parties totaled
$25,780 and $72,556 during the fiscal quarter and nine month period ended
July 30, 2000, respectively.
On January 31, 2000, the Company exchanged software with a net book value
of $433,429 with a related party for a $519,604 reduction in notes payable
to the related party. The difference of $86,175 has been recorded to
additional paid-in capital in the fiscal nine months ended July 30, 2000.
As of July 30, 2000, an aggregate of $440,000 in notes payable to related
parties plus accrued interest thereon of $12,660 remained outstanding.
These notes bear interest of 10% per annum and are due on the closing of
the first tranche of the Company's future private placement.
Operating Expenses
Operating expenses paid or accrued to a related party for the nine months
ended July 30, 2000 was approximately $534,000 most of which was offset
against notes receivable on July 30, 2000. See above.
Affiliate Agreement
Prior to July 30,2000, the Company had a three-year Affiliate Agreement
with an affiliate pursuant to which the Company provided strategic
placement of advertising and marketing internet banners on the Company's
web site in consideration for a monthly fee payable to the Company. The
monthly fee was $50,000 in the first year, $100,000 in the second year, and
$125,000 in the third year. For the nine month period ended July 30, 2000,
the Company had recorded revenue of $350,000 related to this agreement (see
above). On July 30, 2000, the Company and the affiliate agreed to the
termination of the Affiliate Agreement.
<PAGE>
THE BIGHUB.COM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
July 30, 2000
(Unaudited)
Consulting Agreement
In April 1999, the Company entered into a three-year consulting agreement
with a related party. Pursuant to the agreement, which was subsequently
amended, the Company agreed to pay the related party $21,500 per month for
consulting services and to provide the lead consultant with full health and
life insurance benefits during the term of the agreement. As of January 1,
2000, the agreement was terminated. As of July 30, 2000, the Company owed
$60,000 under this agreement, which has been classified as related party
payables (see above).
12. Litigation
On July 10, 2000, PriceNet USA, Inc. ("PriceNet") filed a Complaint with
the Superior Court of the State of California for the County of Orange. The
Company was named as a co-defendant along with Jerry Ballah, Bruce Ballah, The
BigStore.com, Inc., TheBigStore.com Marketing, Inc., The BigBiz.com, Inc.,
OhGolly.com, Inc., IpowerBiz.com, PriceNet Marketing, Inc., and MGI
Worldnet.com. PriceNet seeks an undetermined amount of compensatory and
punitive damages in excess of $25,000,000. PriceNet alleges that the Company
breached the Licensing Agreement dated [ ] by and between the Company and
PriceNet by telling PriceNet not to pay sums due to the Company under the
Licensing Agreement and then canceling the Licensing Agreement because of
alleged non-payment. PriceNet also alleges that the Company disclosed certain of
its confidential information to unauthorized third parties. The Company believes
that the claims of PriceNet are specious, defamatory and completely without
merit and will vigorously pursue any and all defenses and counterclaims
determined to be available to the Company.
On July 11, 2000, Pacific Finance Search ("Pacific") filed a Complaint with
the Orange County Superior Court. The Company was named as a co-defendant along
with The BigStore.com, Inc., Michael Skellern, Frank W. Denny, Robert McNulty,
and Chet Howard. Pacific seeks alleged contract damages in the amount of
$38,600, alleged general damages exceeding $233,500, plus interest, costs and
undetermined punitive and exemplary damages to be determined in connection with
the co-defendants' alleged breach of contract, common counts, intentional
misrepresentation and negligent misrepresentation. The Company has disputed and
intends to dispute in trial a portion of the amounts billed by Pacific.
Additionally, the Company believes that the claims of Pacific with respect to
alleged intentional misrepresentation and negligent misrepresentation are
without merit and will vigorously contest them.
Management is not able to predict the outcome of these matters. As a
result, no amounts are recorded related to these matters on the accompanying
unaudited financial statements.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations.
--------------
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information contained herein (as
well as information included in oral statements or other written statements made
or to be made by the Company contains statements that are forward-looking, such
as statements relating to anticipated future revenues and expenses of the
Company and the success of current and planned product offerings. Such forward-
looking information involves important risks and uncertainties that could
significantly affect anticipated results in the future, and accordingly, such
results may differ materially from those expressed in any forward-looking
statements made by or on behalf of the Company. The potential risks and
uncertainties include, among others, limited operating history, competitive and
economic factors of the marketplace including acceptance of the Company's
proprietary search engine and licensed e-commerce technology and content
products, the continued growth and acceptance of the Internet, Year 2000 issues,
and the state of the economy.
Introduction
The following discussion is based upon, and should be read in conjunction
with, the audited financial statements of the Company as of and for the fiscal
years ended October 31, 1999 and 1998, together with the notes thereto, and the
unaudited financial statements of the Company as of July 30, 2000 and for the
fiscal three and nine months ended July 30, 2000 and 1999.
During 1999, the Company underwent a restructuring of its core business to
Internet e-commerce. On May 1, 2000, the Company acquired a controlling
interest in Next Generation Media Corporation. The results of operations for
Next Generation Media Corporation from the date of acquisition through June 30,
2000 are included in the Company's consolidated results of operations reported
herein. Accordingly, the Company believes that the following presentation of
comparative results of operations, while required, is not meaningful. In
addition, the Company believes that historical results are not indicative of
future results.
This Form 10-QSB contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ significantly from the results
discussed in the forward-looking statements.
Results of Operations
Fiscal Quarter Ended July 30, 2000 Compared with the Fiscal Quarter Ended July
------------------------------------------------------------------------------
30, 1999
--------
Sales for the fiscal quarter ended July 30, 2000 increased $3,048,509 to
$3,053,654 over the $5,145 recorded during the comparative prior year quarter
and was comprised primarily of coupon sales and print advertising revenue in
contrast with the web site banner advertising revenue reported in fiscal 1999.
Included in sales for the July 30, 2000 fiscal quarter is $150,000 from a
related party. Cost of sales in the third fiscal quarter of 2000 increased
$2,015,320 to $2,025,752 as compared with the $10,432 reported in the fiscal
quarter ended July 30, 1999.
During the fiscal quarter ended July 30, 2000, general and administrative
expenses increased by $1,175,257 to $2,146,865 from the $971,608 reported in the
comparative prior year quarter. This change resulted from the increase in the
overall business development activities of the Company including operating the
Direct Mail Marketing and Newspaper Publishing segments, upgrading its search
engine and web site and developing new sources of revenue, in contrast to the
prior year quarter's activities which were centered around the restructuring of
the Company's core business to Internet e-commerce.
Depreciation and amortization expense increased by $266,869 to $315,654 in
the fiscal quarter ended July 30, 2000 compared to $48,785 reported in the
comparative prior year quarter. This increase resulted from the increase in
value of the Company's search engine and website as a result of improvements
capitalized in the second half of 1999 as well as additions to equipment and the
amortization of intangibles acquired in connection with the purchase of a
majority interest in NexGen.
During the period, NexGen reported a gain on discontinued operation of
$722,996 in connection with the disposal of the Newspaper Publishing segment.
As a result of the foregoing, for the fiscal quarter ended July 30, 2000,
the Company reported a net loss of ($714,114), or ($0.03) per share. This
compares to a net loss of ($1,025,680), or ($0.12) per share for the comparative
prior year quarter.
Fiscal Nine Months Ended July 30, 2000 Compared with the Fiscal Nine Months
---------------------------------------------------------------------------
Ended July 30, 1999
-------------------
Sales for the fiscal nine months ended July 30, 2000 increased $3,350,371
to $3,365,632 over the $15,261 recorded during the comparative prior year period
and was comprised primarily coupon sales and print advertising revenue in
contrast with the web site banner advertising revenue reported in fiscal 1999.
Included in sales for the July 30, 2000 fiscal nine months is $300,000 from a
related party. Cost of sales in the first nine fiscal months of 2000 increased
$2,216,080 to $2,229,599 as compared with the $13,519 reported in the fiscal
nine months ended July 30, 1999.
During the fiscal nine months ended July 30, 2000, general and
administrative expenses increased by $3,655,752 to $4,789,622 from the
$1,133,870 reported in the comparative prior year period. This change resulted
from the increase in the overall business development activities of the Company
including operating the Direct Mail Marketing and Newspaper Publishing segments,
upgrading its search engine and web site and developing new sources of revenue,
in contrast to the prior year period's activities which were centered around the
restructuring of the Company's core business to Internet e-commerce.
Depreciation and amortization expense increased by $438,494 to $584,489 in
the fiscal nine months ended July 30, 2000 compared to $146,355 reported in the
comparative prior year period. This increase resulted from the increase in
value of the Company's search engine and website as a result of improvements
capitalized in the second half of 1999 as well as additions to equipment and the
amortization of intangibles acquired in connection with the purchase of a
majority interest in NexGen.
Interest expense decreased by $335,114 to $77,386 in the fiscal nine months
ended July 30, 2000 compared to $412,500 reported in the comparative prior year
period. One-time, non-cash interest expense in 1999 was incurred in connection
with certain equity transactions as set forth in the Company's annual report on
Form 10-KSB for the fiscal year ended October 31, 1999. In contrast, interest
expense in 2000 was incurred in connection with notes payable and notes payable
to related parties.
During the period, NexGen reported a gain on discontinued operation of
$722,996 in connection with the disposal of the Newspaper Publishing segment.
As a result of the foregoing, for the fiscal nine months ended July 30,
2000, the Company reported a net loss of ($3,564,711), or ($0.19) per share.
This compares to a net loss of ($1,623,983), or ($0.29) per share for the
comparative prior year period.
Liquidity and Capital Resources
During the fiscal quarter ended July 30, 2000, the Company's net cash
position decreased by $104,389. For the nine months ended July 30, 2000, the
Company generated a net of $5,320,771 from financing activities, while operating
and investing activities used net cash of $5,438,928. These activities
contributed to a $1,723,100 deficit in working capital as of July 30, 2000.
During fiscal 1999 and the first nine fiscal months of 2000, the Company
has relied heavily on funds borrowed from two affiliates and a stockholder who
supplied $1,090,000 for the nine fiscal months ended July 30, 2000. As of July
30, 2000, all but $440,000 of such funds had been repaid. The Company may be
required to borrow additional funds from these parties or other sources. There
cannot be any assurances that funds will continue to be available from either of
these parties or any other source.
During February and March 2000, the Company issued 3,000,000 shares of its
common stock in exchange for aggregate cash proceeds of $6,000,000. The shares
were sold to several accredited investors in private, unsolicited transactions
pursuant to Rule 506 of Regulation D, as promulgated by the Securities and
Exchange Commission under the Securities Act of 1933, as amended. The
placement agent received placement fees in the aggregate amount of $550,000 and
warrants to purchase 875,000 shares of the Company's common stock exercisable at
a price of $2.00 per share at any time through March 6, 2005. In addition,
various consultants related to this financing received 1,500,000 shares of
common stock as compensation for their services, which are included
<PAGE>
as additional shares issued in connection with this transaction.
On May 1, 2000, the Company purchased approximately 69% of the issued and
outstanding capital stock of Next Generation Media Corporation ("NexGen") (52%
on a fully diluted basis), from an NexGen and aggregate of 28 shareholders of
NexGen. The Company issued 1,079,545 shares of common stock in consideration for
the NexGen shares. In addition, the Company gave two of the NexGen shareholders,
Joel Sens and Gerard R. Bernier, options to purchase an aggregate of 300,000
shares of the Company's common stock at an exercise price of $1.25 per share and
options to purchase an aggregate of 400,000 shares of Company's common stock at
an exercise price of $5.50 per share, as additional consideration in the
transaction. The total consideration (including the value of the options) was
$2,865,732.
Because the Company had incurred cumulative losses over the last two fiscal
years of $4,460,812, had a working capital deficit of approximately $3,039,196
as of October 31, 1999 and because of the lack of profitable operational history
in Internet services, the Company's auditors, in their report on the financial
statements of the Company as of October 31, 1999, expressed doubt as to the
Company's ability to continue as a going concern which contemplates, among other
things, the realization of assets and satisfaction of liabilities in the normal
course of business. In addition, the Company incurred a net loss of $3,564,711
for the nine fiscal months ended July 30, 2000. Finally, the Company has
consented to the termination of all material revenue generating contracts held
by the Internet segment. The Company intends to obtain additional debt and
equity financing for marketing, software development and the funding of
operations as well as the generating of income from strategic alliances and
sales of products and services. Management believes these funding sources will
be sufficient to fund its capital expenditures, working capital requirements and
other cash requirements through at least December 31, 2000.
As of the date of this report, we are attempting to raise additional funds
with a private placement to accredited investors. We seek to raise up to
approximately $3.0 million from such a placement, which we anticipate would be
adequate funding for the next four months and for preparation of an anticipated
secondary public offering. At present, we are managing the private placement.
There is no assurance we will be able to obtain sufficient additional funds when
needed, or that such funds, if available, will be obtainable on terms
satisfactory to us.
Year 2000 Compliance.
---------------------
To the fullest extent permitted by law, the following discussion is a "Year
---------------------------------------------------------------------------
2000 Readiness Disclosure" within the meaning of the Year 2000 Information and
------------------------------------------------------------------------------
Readiness Disclosure Act 105 p.l. 271. Compliance with the Year 2000
----------------------------------------------------------------------
Information and Readiness Disclosure Act does not preclude claims for violations
--------------------------------------------------------------------------------
of federal securities laws.
--------------------------
The Year 2000 problem is the result of computer programs being written to
recognize two digits rather than four to define the applicable year. This causes
computer programs to interpret a date using "00" as the year 1900 rather than
the year 2000, which could result in computer failures and miscalculations. The
effects of this issue will vary from system to system and may adversely affect
an entity's operations and its ability to prepare financial statements.
All systems and applications at the Company are Year 2000 compliant. This
includes both servers and desktop systems and applications. The overall
infrastructure of Company was built starting in May 1999. We undertook specific
steps to ensure that all systems and applications acquired are Year 2000
compliant. The MetaSearch technology acquired from Isleuth was completely
reengineered and is also Year 2000 compliant.
Neither the Company nor its customers or suppliers are known to have
experienced any Year 2000 problems as of the filing of this quarterly report on
Form 10-QSB. However, there can be no assurance that the Year 2000 problem will
not affect the Company in the future by causing disruptions in the business
operations of persons with whom the Company does business, such as customers or
suppliers. Future or undiscovered Year 2000 problems could have a material
adverse effect on the Company.
If the necessary providers of power, communications and other such providers
of important services are not fully prepared for the Year 2000, the Year 2000
could have a material impact on the Company. We have no way of knowing how the
Year 2000 will affect future Internet functions.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
-------------------------
On July 10, 2000, PriceNet USA, Inc. ("PriceNet") filed a Complaint with
the Superior Court of the State of California for the County of Orange. The
Company was named as a co-defendant along with Jerry Ballah, Bruce Ballah, The
BigStore.com, Inc., TheBigStore.com Marketing, Inc., The BigBiz.com, Inc.,
OhGolly.com, Inc., IpowerBiz.com, PriceNet Marketing, Inc., and MGI
Worldnet.com. PriceNet seeks an undetermined amount of compensatory and
punitive damages in excess of $25,000,000. PriceNet alleges that the Company
breached the Licensing Agreement dated [ ] by and between the Company and
PriceNet by telling PriceNet not to pay sums due to the Company under the
Licensing Agreement and then canceling the Licensing Agreement because of
alleged non-payment. PriceNet also alleges that the Company disclosed certain of
its confidential information to unauthorized third parties. The Company believes
that the claims of PriceNet are specious, defamatory and completely without
merit and will vigorously pursue any and all defenses and counterclaims
determined to be available to the Company.
On July 11, 2000, Pacific Finance Search ("Pacific") filed a Complaint with
the Orange County Superior Court. The Company was named as a co-defendant along
with The BigStore.com, Inc., Michael Skellern, Frank W. Denny, Robert McNulty,
and Chet Howard. Pacific seeks alleged contract damages in the amount of
$38,600, alleged general damages exceeding $233,500, plus interest, costs and
undetermined punitive and exemplary damages to be determined in connection with
the co-defendants' alleged breach of contract, common counts, intentional
misrepresentation and negligent misrepresentation. The Company has disputed and
intends to dispute in trial a portion of the amounts billed by Pacific.
Additionally, the Company believes that the claims of Pacific with respect to
alleged intentional misrepresentation and negligent misrepresentation are
without merit and will vigorously contest them.
Item 2. Changes in Securities and Use of Proceeds
--------------------------------------------------
On May 1, 2000, the Company purchased approximately 69% of the issued and
outstanding capital stock of Next Generation Media Corporation ("NexGen") (52%
on a fully diluted basis), from NexGen and an aggregate of 28 shareholders of
NexGen.
The Company issued 1,079,545 shares of common stock in consideration for
the NexGen shares. In addition, the Company gave two of the NexGen shareholders,
Joel Sens and Gerard R. Bernier, options to purchase an aggregate of 300,000
shares of the Company's common stock at an exercise price of $1.25 per share and
options to purchase an aggregate of 400,000 shares of Company's common stock at
an exercise price of $5.50 per share, as additional consideration in the
transaction.
The total consideration (including the value of the options) was
$2,865,732.
Item 3. Defaults Upon Senior Securities
----------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
None.
Item 5. Other Information
-------------------------
Effective November 1, 1999, the Company changed its reporting period from a
fiscal year ending on October 31 to a fiscal year ending on the last Sunday of
October.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
----------------------------------------
(a) Exhibits
Exhibit No. Description
----------- -----------
2.1 Agreement and Plan of Merger between Optima Medical Group of
Hileah, Inc. and Optima Medical Group of No. Miami, Inc. and
Coordinated HealthCare, Inc., dated October 16, 1995.****
2.2 Articles of Merger of Optima Medical Group of Hileah, Inc.,
Optima Medical Group of No. Miami, Inc. and Coordinated
HealthCare, Inc. dated October 16, 1995.****
2.3 Agreement for Purchase and Sale of Assets by and between
Coordinated Healthcare, Inc. and ALF Realty I, Inc. dated
July 15, 1998.****
2.4 Agreement and Plan of Reorganization by and between Happy
Landings, Inc. and Isleuth.com, Inc. dated September 3,
1998.****
3.1 Articles of Incorporation of Coordinated Healthcare Inc.,
filed February 16, 1995.****
3.2 Articles of Amendment to Articles of Incorporation of
Coordinated HealthCare, Inc. authorizing 5,000,000 shares of
Common Stock at a par value of $0.001 per share, filed
January 17,1996.****
3.3 Articles of Amendment to Articles of Incorporation of
Coordinated HealthCare, Inc., authorizing 20,000,000 shares
of Common Stock at a par value of $0.001 per share, filed
June 24, 1996.****
3.4 Articles of Amendment to Articles of Incorporation of
Coordinated HealthCare, Inc. authorizing 25,000,000 shares
of Common Stock at a par value of $0.001 per share and
10,000 shares of Preferred Stock at a par value of $0.001
per share, filed July 29, 1998.***
3.5 Articles of Amendment to Articles of Incorporation of
Coordinated HealthCare, Inc., changing the name of
Coordinated Healthcare, Inc. to Isleuth.com, Inc., filed
July 29, 1998.****
<PAGE>
3.6 Articles of Amendment to Articles of Incorporation of
Isleuth.com, Inc. authorizing 25,000,000 shares of Special
Preferred Stock at a par value of $0.001 per share, filed
October 15, 1998.****
3.7 Articles of Amendment to Articles of Incorporation of
Isleuth.com, Inc. designating 12,500,000 shares of the
Special Preferred Stock as Class A Special Preferred Stock
at a par value of $0.001 per share, filed December 28,
1998.****
3.8 Articles of Amendment to Articles of Incorporation
Isleuth.com, Inc., changing the name of Isleuth.com, Inc. to
The BigHub.com, Inc., filed April 29, 1999. ****
3.9 Articles of Amendment to Articles of Incorporation of The
BigHub.com, Inc., authorizing 50,000,000 shares of Common
Stock of a par value of $0.001 per share and 25,000,000
shares of Preferred Stock at a par value of $0.001 per
share, filed October 18, 1999.**
3.10 Bylaws of the registrant.****
10.1 Stock Purchase Agreement, dated March 16, 2000, by and among
The BigHub.com, Inc., Next Generation Media Corporation, the
"Preferred Shareholders" and the "Common Shareholders."
*****
10.2 Stock Purchase Agreement, dated March 16, 2000, by and among
The BigHub.com, Inc., Next Generation Media Corporation,
Gerard R. Bernier, and Joel Sens.*****
10.3 Registration Rights Agreement, dated March 16, 2000, by and
among The BigHub.com, Inc. and Investors.*****
27.1 Financial Data Schedule*
____________________
* Filed herewith.
** Filed with the Form 10-KSB of The BigHub.com, Inc. filed on January 27,
2000
*** Filed with Amendment No. 1 to the Form 10-SB of The BigHub.com, Inc. filed
on October 1, 1999.
**** Filed with the Form 10-SB of The BigHub.com, Inc. filed on August 20,
1999.
***** Filed with the Form 8-K of The BigHub.com, Inc. filed on May 15, 2000
(b) Reports on Form 8-K
Date Filed Subject
---------- -------
5/1/00 Acquisition of 52% of Next Generation Media Corp.
<PAGE>
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.
The BigHub.com, Inc.
By: /s/ Chet Howard
---------------------------------------
Chet Howard, Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)
Date: October 12, 2000
