UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended June 30, 2000
[_] 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: 001-15301
EQUITYALERT.COM, INC.
(exact name of small business issuer as specified in its charter)
NEVADA 58-2377963
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Suite 216 - 1628 West 1st Avenue, Vancouver, BC,V6J 1G1
(Address of principal executive offices)
(604) 659-5009
(Issuer's telephone number, including area code)
Checkwhether the Issuer: (1) has filed all reports required 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 Issuer was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [X] No[_]
State the number of shares outstanding of each of the Issuer's classes of common
equity as of the latest practicable date: as of June 30, 2000 there were
41,398,186 shares of the Issuer's Common Stock, $0.00001 par value per share,
outstanding.
Transitional Small Business Disclosure Format (Check One): YES [_] NO [x]
1
<PAGE>
EQUITYALERT.COM, INC.
FORM 10-QSB, QUARTER ENDED MARCH 31, 2000
INDEX
PART I FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheet as of June 30, 2000............................. 3
Statement of Operations for the Quarter Ended June 30, 2000 and 1999........ 4
Statement of Cash Flows for the Quarter Ended June 30, 2000, ............... 5
Notes to Interim Consolidated Financial Statements.......................... 6
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
Item 2 Management's Discussion and Analysis................................ 7
PART II OTHER INFORMATION
Item 1 Legal Proceedings................................................... 9
Item 2 Changes in Securities............................................... 9
Item 3 Defaults Upon Senior Securities..................................... 9
Item 4 Submission of Matters to a Vote of Security Holders................. 9
Item 5 Other Information................................................... 9
Item 6 Exhibits and Reports on Form 8-K.................................... 9
Signatures.......................................................... 10
2
<PAGE>
Item 1. Financial Statements.
EQUITYALERT.COM, INC.
Interim Balance Sheet
June 30, 2000 and December 31, 1999
<TABLE>
<CAPTION>
Unaudited
ASSETS 2000 1999
----------- -----------
<S> <C> <C>
Current Assets
Cash $ 431,281 $ 591,980
Accounts Receivable 205,780 0
Prepaid Expenses 9,074 9,074
Security Deposits 345
----------- -----------
Total Current Assets $ 646,480 601,054
Property and Equipment, Net (Note 4) 355,823 19,252
----------- -----------
Total Assets $ 1,002,303 $ 620,306
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 37,118 $ 24,978
Other Advances 10,000 10,000
Income Taxes Payable (Note 5) 59,708
----------- -----------
Total Current Liabilities $ 106,826 $ 34,978
Stockholders' Equity
Preferred Stock: $0.001 Par Value; Authorized Shares,
1,000,000 None None
Common Stock: $0.00001 Par Value; Authorized Shares,
100,000,000; Issued and Outstanding, 41,398,186
41,398,186, at June 30, 2000 and December 31,1999, respectively 414 414
Additional Paid In Capital 1,568,534 1,568,534
Retained Earnings (A Deficit) (679,107) (989,256)
Accumulated Other Comprehensive Income 5,636 5,636
----------- -----------
Total Stockholders' Equity 895,477 585,328
----------- -----------
Total Liabilities and Stockholders' Equity $ 1,002,303 $ 620,306
=========== ===========
</TABLE>
3
<PAGE>
EQUITYALERT.COM, INC.
Interim Statement of Operations
for the six months ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
For The Six For The Six For The Three For The Three
Months Ended Months Ended Months Ended Months Ended
June 30, 1999 June 30, 1999 June 30, 2000 June 30, 2000
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 790,558 $ 0 $ 403,253 $ 0
Expenses
General and Administrative 436,683 41,575 296,859 41,508
Other Income
Interest Income 15,983 13,844 10,423 11,105
------------ ------------ ------------ ------------
Net Income Before Provision
For Income Taxes $ 369,858 $ (27,731) $ 116,817 $ (30,404)
------------ ------------ ------------ ------------
Provision (Benefit)
For Income Taxes 59,708 0 0 0
Net Income (Loss) Available
To Common Stockholders $ 310,150 $ (27,731) $ 116,817 $ (30,404)
------------ ------------ ------------ ------------
Basic Income (Loss) Per Common Share
$ 0.007 ($ 0.000) $ 0.003 ($ .000)
============ ============ ============ ============
Basic Weighted Average
Common Shares Outstanding 41,398,186 41,382,186 41,398,186 41,382,186
============ ============ ============ ============
</TABLE>
4
<PAGE>
EQUITYALERT.COM, INC.
Interim Statement of Cash Flows
for the six month period ended June 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended Six Months Ended
June 30, 2000 June 30, 1999
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities
Net Income (Loss) $ 310,150 $ (27,731)
Adjustments to Reconcile Net Income (Loss) to Net Cash
Provided By (Used In) By Operating Activities
Depreciation 8,141
Common Stock Issued For Services
Translation Adjustments
Changes in Assets and Liabilities
(Increase) Decrease in Accounts Receivable (205,780)
(Increase) Decrease in Prepaid Expenses
(Increase) Decrease in Security Deposits (345)
Increase (Decrease) in Accounts Payable 12,140 601
Increase (Decrease) in Income Taxes Payable 59,708
--------- ---------
Total Adjustments (126,136) 601
--------- ---------
Net Cash Provided By (Used In) By Operating Activities 184,014 (27,130)
Cash Flows From Investing Activities
Purchase of Property and Equipment (344,713)
--------- ---------
Net Cash Flows From Investing Activities (344,713)
Cash Flows From Financing Activities
Proceed From Sales of Common Stock 925,000
Advances From Related Parties
--------- ---------
Net Cash Provided By Financing Activities 925,000
--------- ---------
Increase (Decrease) in Cash and Cash Equivalents (160,699) 897,870
Cash and Cash Equivalents, Beginning of Year 591,980 3,551
--------- ---------
Cash and Cash Equivalents, End of Year $ 431,281 $ 901,421
========= =========
</TABLE>
5
<PAGE>
EQUITYALERT.COM, INC.
Notes to Interim Financial Statements
June 30, 2000
Note 1: Statement of Information Furnished
The accompanying unaudited interim financial statements have been prepared in
accordance with the instructions for Form 10QSB and, Item 310 of Regulation S-B.
In the opinion of management, contains all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly the financial position
as of June 30, 2000, the results of operations for the three and six month
periods ended June 30, 2000, and the statement of cash flows for the three and
six months ended June 30, 2000. These results have been determined on the basis
of generally accepted accounting principles and practices and applied
consistently with those used in the preparation of the Company's 1999 Annual
Report on 10-SB.
Certain information and footnote disclosure normally included in the financial
statements presented in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that the accompanying financial
statements be read in conjunction with the accompanying financial statements and
notes thereto incorporated by reference in the Company's 1999 Annual Report on
Form 10-SB.
Note 2: Development Stage Status
The Company was classified as a development stage company in the prior year.
Note 3: Significant Accounting Policies
EquityAlert.com, Inc. is a re-distributor of public company and mutual fund news
alerts via email. Additionally, the Company offers a wide range of other free
information and services through its website (www.equityalert.com), such as
"live chat," message boards, insider trading, insurance, mortgage and loan
information, online banking, and consumer credit and charge card products.
Revenues are derived from the sale of nonrefundable advertising agreements and
are recognized over the period the services are provided. The advertising
agreements are for one-day periods.
Note 4: Property and Equipment
Property and Equipment consists of the following at June 30, 2000:
Computer Hardware $304,387
Computer Software 55,271
Furniture and Fixtures 5,828
--------
Total $365,486
Less Accumulated Depreciation 9,662
--------
Net Book Value $355,824
========
Depreciation expense charged to operations during 2000 was $8,141.
6
<PAGE>
Note 5: Income Taxes
The provision for income taxes includes federal income taxes payable of $59,708
computed at an average rate of 34%. The Company is not required to pay any state
income taxes.
The provision was computed as follows:
Net Income $ 369,858
Amortization of Start-Up Costs (194,248)
---------
Total $ 175,610
Tax Rate 34%
---------
Net Book Value $ 59,708
=========
The Company continues to record a full valuation allowance for temporary
differences consisting of start-up costs which are amortized over a five-year
period for income tax purposes.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
When used in this discussion, the words "believes," "anticipates," "expects,"
and similar expressions are intended to identify forward-looking statements.
Such statements are subject to certain risks and uncertainties, which could
cause actual results to differ materially from those projected. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date hereof. Actual results, performance or achievements
could differ materially from those anticipated in such forward looking
statements as a result of numerous factors, including but not limited to the
Company's ability to continually expand its subscriber base and opt-in email
lists, market its services too potential advertisers, the regulatory environment
in which the Company operates, future acceptance of its services and other
factors described in the company's filings with the Securities and Exchange
Commission. The Company undertakes no obligation to republish revised
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events. Readers are also
urged to carefully review and consider the various disclosures made by the
Company which attempt to advise interested parties of the factors which affect
the Company's business, in this report, as well as the Company's periodic
reports on Forms 10-KSB, 10QSB and 8-K filed with the Securities and Exchange
Commission.
Overview
With the proliferation of financial information on the Internet, more and more
individuals are taking greater control of their investments and trading
securities through an online broker versus the traditional securities broker.
The online investor represents one of the most desirable of any demographic on
the web, being better educated, having a higher income and net worth than most
other online users. Consequently, since launching "EquityAlert.com" on June 7,
1999, the Company's main focus has been to build its subscriber base by offering
individuals free subscriptions to its website.
Subscribers to EquityAlert's free website enjoy a broad suite of financial news
and information, including live chat, message boards, insider trading,
insurance, mortgage and loan information, online banking,
7
<PAGE>
consumer credit and charge card products, mutual fund news alerts via email,
conference calls, and much more, including EquityAlert's most popular feature -
free real time public company news alerts via email.
With upwards of 1,000,000 emails sent on a daily basis, the Company believes
that it has become one of the largest re-distributors of public company and
mutual fund news alerts via email. In January, 2000, the Company began to sell
advertising on these email alerts.
Results of Operations
Revenues. The Company generated $403,252 and $790,558 in revenues for the three
month and six month periods ended June 30, 2000, respectively, versus no
revenues for the same periods in 1999. The revenues generated during the three
and six month periods ended June 30, 2000, were exclusively from the sale of
advertising on its email alerts.
During the next several years, the Company expects to derive the majority of its
potential revenues from the sale of advertising on its e-mail alerts in the
United States, Canada and possibly select foreign markets. However, there can be
no assurances that customers will continue to purchase advertising on the
Company's email alerts or web pages, that advertisers will not make smaller
purchases, or that market prices for the Company's advertising will not decrease
due to competitive or other factors.
General and Administrative Expenses. During the three and six month periods
ended June 30, 2000, the Company incurred $296,859 and $436,683 in general and
administrative expenses, respectively, an increase of 715% and 1050% when
compared with the corresponding periods in 1999. This significant increase in
general and administrative expenses is primarily to the development and launch
of the Company's business, resulting in additional salary, operating and
marketing expenses.
Interest Income. Interest income was $10,423 and $15,983 for the three and six
month periods ended June 30, 2000, respectively, versus $11,105 and $13,844 for
the corresponding period in 1999. Interest earned in the future will be
dependent on Company funding cycles and prevailing interest rates.
Provision for Income Taxes. As at June 30, 2000, the Company's retained earnings
deficit of $679,107, and a provision of $59,808 for income taxes.
Net Income. For the three and six month periods ended June 30, 2000, the Company
recorded net income of $116,817, or $0.003 per share, and $310,150, or $0.007
per share, respectively, compared to a net loss of $30,404, or $0.00 per share,
and a net loss of $27,731 or $0.00 per share, for the same periods in 1999.
Liquidity and Capital Resources
As at June 30, 2000, the Company had a cash balance of $431,281, compared to
$591,980 as at June 30, 1999, a decrease of $160,699 or 27.1%.
As at June 30, 2000, the Company had $205,780 in accounts receivable, compared
to $0.00 as at June 30, 1999. This increase is a result of the Company beginning
selling advertising on its e-mail alerts.
As at June 30, 2000, the Company had $9,074 in prepaid expenses, versus $9,074
as at December 31, 1999. As at June 30, 2000, the Company had $37,118 in
accounts payable, an increase of $12,140, or 48.6%, over the amount of $24,978
as December 31, 1998.
Net cash flows from investing activities was $344,713 for the six month period
ending June 30, 2000, compared to $0 for the same period in 1999. The increase
in the net cash flows from investing activities
8
<PAGE>
was due mainly to purchasing equipment for the Company's website and e-mailing
facilities during 2000, versus no purchases during the same period in 1999.
Net cash provided by financing activities was $0 for the six month period ending
June 30, 2000, compared to $925,000 for the same period in 1999. The Company has
financed its operations primarily through net income generated from its
operations during the three and six month periods ended June 30, 2000.
The Company's future funding requirements will depend on numerous factors. These
factors include the Company's ability to operate its business profitably in the
future, recruit and train qualified management, technical and sales personnel,
and the Company's ability to compete against other, better capitalized
corporations who offer similar web based services.
The Company may raise additional funds through private or public equity
investment in order to expand the range and scope of its business operations. In
doing so, the Company may seek access to the private or public equity, but there
is no assurance that such additional funds will be available for the Company to
finance its operations on acceptable terms, if at all.
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) Exhibits
Financial Data Schedule
(b) Reports on Form 8-K
No reports were filed on Form 8-K during the three month period ended June 30,
2000.
9
<PAGE>
Signature Page
Pursuant to the requirements of section 13 or 15(d) 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.
EQUITYALERT.COM, INC.
/s/ Bhupinder Mann
------------------------
Bhupinder Mann
CEO and President
/s/ Harmel S. Rayat
------------------------
Harmel S. Rayat
Director and Chairman
/s/ Gurmukh S. Kundan
------------------------
Gurmukh S. Rayat
Director and Chairman
Dated: August 10, 2000
10
