SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q SB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
--------------------------------------
For Quarter Ended February 29, 2000 Commission file number 0-21 725
SILK BOTANICALS.COM, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 65-0886132
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
975 S. Congress Ave. #102
Delray Beach, Fl. 33445
-------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: ( 561) 265 - 3600
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such 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:____Y_____ No: __________
REGISTRANT IS A CORPORATION
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TABLE OF CONTENTS
ITEM 1. Financial Statements
The following Unaudited financial statements are filed herewith:
Balance Sheet as of February 29, 2000 and
May 31, 1999 Page 3
Consolidated Statements of Operations for the Three and Nine
Months Ended February 29, 2000 and 1999 Page 4
Consolidated Statements of Cash Flows for the Nine months Ended
February 29, 2000 and 1999 Page 5
ITEM 2. Results of Operations and Management's Discussion and
Analysis of Financial Condition Page 7
Signatures Page 10
The statements, insofar as they relate to the period
subsequent to May 31, 1999, are Unaudited.
2
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Item 1. Financial Information
SILKBOTANICALS.COM, INC.
BALANCE SHEETS
(see notes to financial statements)
February 29, May 31,
2000 1999
---- ----
(unaudited)
ASSETS:
Current assets:
Cash in Banks $ 19,252 $ -
Accounts receivable 114,719 -
Inventory 49,910 57,353
--------- ---------
Total current assets 183,881 57,353
Property and equipment 1,122 1,500
License rights, net of valuation allowance
accumulated amortization 37,190 42,500
--------- ---------
$ 222,193 $ 101,353
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Short-term Debt $ 19,505 $ -
Accounts payable 44,369 21,414
Accounts payable due to related party 183,089 101,353
--------- ---------
Total current liabilities 246,963 122,767
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Stockholders' deficit:
Series A preferred stock, $.001 par value, 1,900 shares
authorized, issued and outstanding 2 2
Preferred stock, $.001 par value, 4,998,100 authorized,
none issued and outstanding - -
Common stock, $.001 par value, 25,000,000 shares
authorized 6,250,000 shares issued and outstanding 6,250 6,250
Additional paid-in capital 671,460 671,460
Deficit accumulated during the development stage (699,126) (699,126)
Retained deficit (3,356) -
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Total stockholders' deficit (24,770) (21,414)
--------- ---------
$ 222,193 $ 101,353
========= =========
3
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SILKBOTANICALS.COM, INC.
STATEMENT OF OPERATIONS
(unaudited)
Nine months ended Three months ended
February 29 February 29
--------------------------------------------------
2000 1999 2000 1999
---- ---- ---- ----
Revenues $ 507,434 $ - $ 226,190 $ -
Cost of goods sold 355,204 - 158,333 -
----------- ------ ---------- -----
Gross profit 152,230 - 67,857 -
Operating expenses:
General and administrative 147,036 - 56,117 -
----------- ------ ---------- -----
Total 147,036 - 56,117 -
----------- ------ ---------- -----
Net Income (loss) 5,194 - 11,740 -
Preferred dividend requirement 8,550 - 2,850 -
----------- ------ ---------- -----
Net loss available to common
shareholders (3,356) - 8,890 -
----------- ------ ---------- -----
Net loss per share of common
stock:
Basic and diluted $ - $ - $ - $ -
Weighted average number of common
shares outstanding 6,250,000 4,435,813 6,250,000 4,435,813
4
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SILKBOTANICALS.COM, INC.
STATEMENT OF CASH FLOWS
Nine months ended
February 29,
2000 1999
---- ----
Cash flows from operating activities:
Net Loss $ (3,356) $ -
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 5,688 -
Changes in assets and liabilities:
Increase in accounts receivable (114,719) -
(Increase) decrease in inventory 7,443 -
Increase in accounts payable 22,955 -
Increase in due to related parties 81,736 -
------------------
Net cash used in operation activities (253) -
Cash flow from financing activities
Bank lines 19,505 -
------------------
Net increase in cash 19,252 -
Cash at beginning of period - -
------------------
Cash at end of period $ 19,252 $ -
==================
5
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SILK BOTANICALS.COM, INC.
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of Silk Botanicals.Com, Inc.
(The Company) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q SB. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the nine-month period
ended February 29, 2000 are not necessarily indicative of the results that may
be expected for the year ended May 31, 2000.
6
<PAGE>
Item 2. Results of Operations and Management's Discussion & Analysis of
Financial Condition
2. REVENUES
Silk Botanicals.Com began generating revenues on June 1, 1999. Prior to that the
Company was a development stage company and did not generate revenues.
Sales revenue for the third quarter of operation increased to $226,190,
which was a 34% increase over sales revenue for the second quarter of $168,782.
The Company began shipments of product to select locations for a large national
discount department store chain. Cost of goods sold remained constant at 70.0%
producing a gross profit of $67,857 or 30.0%. General and administrative
operating expenses were $56,117 or 24.8% of sales, producing a net income of
$11,740 or 5.2%.
For the nine months ended February 29, 2000, revenues were $507,434. The cost of
goods sold was $355,204 with a gross profit of $152,230 or 30.0%. Operating
expenses were $147,036 or 29.0%, producing a net income of $5,194 or 1.1%. The
Company maintained $49,910 of inventory as of February 29th. The turnover of
such inventory would be annualized at 9.5 times per year.
3. YEAR 2000
The Company did not incur any costs associated with its computer system as it
relates to the conversion to the Year 2000. The financial institutions and
vendors used by The Company were also in compliance and no problems occurred.
4. OTHER EVENTS
During the third quarter, The Company completed the final production phase of
its website which includes all in-line Living Silk, Forever Fresh and Silk
Botanicals products. The Company's pro-rata expense for completing this phase
was included in General and administrative expenses during this quarter. The
website includes a shopping cart which will enable customers to order products
on line. The Company plans to continue making enhancements to the website on a
regular basis and is also evaluating several marketing techniques to promote the
website.
7
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5. FORWARD LOOKING INFORMATION
Certain statements in this section and elsewhere in this report are
forward-looking in nature and relate to trends and events that may affect The
Company's future financial position and operating results. The words "expect",
"anticipate", "intend", and "project" and similar words or expressions are
intended to identify forward-looking statements. These statements speak only as
of the date of this report. The statements are based on current expectations,
are inherently uncertain, are subject to risks, and should be viewed with
caution. Actual results and experience may differ materially from the forward-
looking statements as a result of many factors, including: changes in economic
conditions in the various markets served by The Company's operations, increased
competition, and other unanticipated events and conditions. It is not possible
to foresee or identify all such factors. The Company makes no commitment to
update any forward-looking statement or to disclose any facts, events, or
circumstances after the date hereof which may affect the accuracy of any
forward-looking statement except as may be required by law.
6. SUBSEQUENT EVENTS
During the month of March, The Company received a "no comment" status from both
the Securities & Exchange Commission and NASD. On March 30, 2000 it obtained the
symbol SIBO (OTC:BB).
8
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SILK BOTANICALS.COM, INC.
PART II -- OTHER INFORMATION
ITEM 1. Legal Proceedings
None
ITEM 2. Changes in Securities
None
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) 27 Financial Data Schedule
(b) None
9
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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.
SILK BOTANICALS. COM, INC.
A Florida Corporation
By: /S/ Joseph R. Bergmann
----------------------
Joseph R. Bergmann
President
Date: April 14, 2000
10
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-START> JUN-01-1999
<PERIOD-END> FEB-29-2000
<CASH> 19,252
<SECURITIES> 0
<RECEIVABLES> 114,719
<ALLOWANCES> 0
<INVENTORY> 49,910
<CURRENT-ASSETS> 183,881
<PP&E> 1,122
<DEPRECIATION> 0
<TOTAL-ASSETS> 222,193
<CURRENT-LIABILITIES> 246,963
<BONDS> 0
0
2
<COMMON> 6,250
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 222,193
<SALES> 507,434
<TOTAL-REVENUES> 507,434
<CGS> 355,204
<TOTAL-COSTS> 355,204
<OTHER-EXPENSES> 155,586
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,356)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,356)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,356)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
