UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the fiscal year ended December 31, 1999
|_| 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: __________
NetworthUSA.com, Inc.
(Exact name of registrant as specified in its charter)
Florida 95-4720231
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8 Gaucho Drive, Rolling Hills Estates, California 90274
(Address of principal executive offices) (Zip Code)
310.831.9285
(Registrant's Telephone Number, Including Area Code)
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 |_| No |X|
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|
State issuer's revenues for its most recent fiscal year. $0.00
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.)
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date. As of December 31, 1999, there were
8,500,000 shares of the issuer's $.001 par value common stock issued and
outstanding.
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PART I
Item 1. Description of Business.
Our Development. The Company was originally incorporated as AMERICAN FINANCIAL
SEMINARS, INC., pursuant to the laws of the State of Florida on July 17, 1992.
The Company was inactive through June 1, 1998, because its corporate powers and
privileges had been suspended by the Florida Secretary of State (failure to pay
franchise taxes or file reports). The Company was reinstated on June 4, 1998. On
June 5, 1998, the Company filed an Amendment to its Articles of Incorporation
increasing the authorized capital stock of the Company from 1,000 shares of
$1.00 par value common stock to 50,000,000 shares of $.001 par value common
stock. On October 26, 1998, the Company filed an Amendment to its Articles of
Incorporation changing to ENVIRONMENTAL OIL TECHNOLOGIES, INC. On January 11,
1999, the Company filed an Amendment to its Articles of Incorporation changing
its name to AMERICAN INDUSTRIAL MINERALS GROUP, INC. On April 1, 1999, the
Company filed an Amendment to its Articles of Incorporation changing its name to
NETWORTHUSA.COM, INC. (previously defined as the "Company"). The Company's
address is 8 Gaucho Drive, Rolling Hills Estates, California 90274. The
Company's phone number is (310) 831-9285.
The Company has changed its management personnel several times since its
inception in 1992. Specifically, from 1992 through July 15, 1998, the Company's
sole director was Mark Bryn. On July 15, 1998, Mr. Bryn resigned and John Xinos
was appointed to serve as the sole director of the Company. Mr. Xinos was also
appointed President, Secretary and Treasurer of the Company. On or about January
7, 1999, Mr. Xinos resigned as director, President, Secretary and Treasurer of
the Company and Karl Hartz was appointed as a director and President, Secretary
and Treasurer of the Company. On or about April 18, 1999, Mr. Hartz resigned as
director, President, Secretary and Treasurer of the Company and Robert Lockwood
was appointed sole director, President, Secretary and Treasurer of the Company.
On or about January 14, 2000, Mr. Andre Pierrard was appointed to the Company's
Board of Directors. On or about February 4, 2000, Mr. Robert Gove resigned as a
director of the Company. On or about February 4, 2000, Mr. Thomas Burke, Mr.
Gregory Alan Burns, Mr. David R. Miller and Mr. Salvatore Buffone were appointed
to the Company's Board of Directors. On or about that same date, Mr. Burns was
appointed as the Company's President, Mr. Miller was appointed as Vice
President, Mr. Pierrard was appointed as Vice President and Chief Operating
Officer, Mr. Buffone was appointed Treasurer and Herbert Brugh was appointed as
Secretary. Mr. John F. Moody was appointed as Chairman of the Board of the
Advisory Board. On or about March 27, 2000, Mr. Burns resigned as an officer and
a director of the Company. The remaining directors are: James Davis, Robert
Lockwood, David Miller and Andre Pierrard. The current officers are: Robert
Lockwood as President and David Miller as Secretary and Treasurer.
Our Business. We originally organized under the name AMERICAN FINANCIAL
SEMINARS, INC. for the purpose of engaging in the business of promoting
financial seminars. After changing our name to ENVIRONMENTAL OIL TECHNOLGIES,
INC., we amended our business plan to contemplate commercial oil reclamation in
Europe. After changing our name to AMERICAN INDUSTRIAL MINERALS GROUP, INC., we
amended our business plan to contemplate commercial mining exploration activity.
On January 31, 1999, we entered into four contracts for the acquisition of
mineral rights (or entities owning mineral rights). On March 31, 1999, we
determined the financial requirements for mining operations in Canada exceeded
our budget and rescinded these four contracts. After changing our name to
NETWORTHUSA.COM, INC., we amended our business plan to provide for the
organization, development and commercial exploitation of an Internet banking
system offering international private Internet banking and securities brokerage
services.
Our Subsidiary. In or around March, 2000, we caused NetworthEurope.com.S.A. to
be formed in Luxembourg as our subsidiary. The total authorized capital of
NetworthEurope.com.S.A. is 310 shares, 309 of which are owned by the Company and
1 of which is owned by Jim Penning.
Overview of Electronic Banking and Securities Businesses and Competition. Over
the past few years, financial institutions throughout the world have developed
integrated Internet financial services, including online banking and real-time
trading of securities. For example, Royal Bank Financial Group, a Canadian
financial services company with over $270 billion in on-balance sheet assets and
$1 trillion in off-balance sheet assets, has been managing online
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banking and related Internet financial services for over four years through a
website located at www.royalbank.com. This company offers a full range of online
transactional capabilities to consumers and small businesses and provides
private network packaged software solutions to commercial and corporate banking
clients.
In the United States, many major banks offer online banking to their customers.
For example, Citizens Bank maintains a website which allows its customers to
conduct banking transactions over the Internet. Information about the bank and
the other services it provides are also included on the website. BankNet and
Security First Network Bank are online banks which allow members to track their
accounts, write electronic checks and carry out a number of other transactions
online. Even regional banks such as Zions Bank, with physical facilities in
Utah, have Internet websites which allow their customers to conduct Internet
banking and apply for credit cards or loans online.
In Europe, major Swiss banks such as Banca della Svizzera Italiana ("BSI")
maintain websites which provide information and online banking services to an
international clientele. BSI purports to be the first Swiss bank to maintain
such a website. So many European banks now offer such UNISYS, the Internet
Banking Site and the Internet Banking & Financial Index providing information,
news and directories of banks and their Internet services. The Internet banking
trend has likewise spread to South America where BradescoNet Internet Banking, a
Brazilian bank, offers access to customer accounts via the Internet, fax and
telephone.
Just as the banking industry is moving online, securities brokerage is also
available on the Internet. There are approximately 100 online securities trading
and brokerage concerns, including such early entrants as E-Trade, Ameritrade,
Charles Schwab and specialty firms such as AB Watley and OnlineTradingInc.com.
Online trading is the fastest growing segment of the brokerage industry and is
expected to continue to grow significantly. In a report dated March 11, 1999,
independent research firm Forrester Research, Inc. estimated that the number of
North American households investing online nearly doubled in 1998, reaching just
under 2.4 million by the beginning of 1999. They also estimate that the number
of investors will increase to 4.3 million by the end of 2000. The year-end
estimate was surpassed in April 1999. In addition, recent predictions foretell
the Internet will account for 60% of commissioned discount brokerage trading,
approximately $2.2 billion, by the year 2001. In 1996, Internet commissions
accounted for only 15% of the market, or $268 million dollars.
North American Institutional Brokers ("NAIB"), a market maker in Nasdaq and OTC
Bulletin Board stocks, recently opened a new division, EquityStation (located at
www.equitystation.com), which is one of the first online trading services
designed for the online investing community's top bracket of wealthy investors,
money managers and registered investment advisors. EquityStation offers
multilingual service to the United States, European and Latin American markets
and allows remote, real-time trading of equity securities. EquityStation
customers presently account for trading volume in excess of $6 million.
EquityStation's operations for its remote, real-time trading of equity
securities are located in Ft. Lauderdale, Florida. EquityStation employs English
and Spanish speaking Series 7 licensed service representatives and provides its
customers with real-time display of all market makers' bids and offers on a
stock.
We face other significant competition within our own domicile state. 1st
Internet Group, Inc., is a Florida corporation formed in 1998 which became a
holding company in February 1999 by acquiring all of the outstanding stock of
the following three operating companies: 1st Discount Brokerage, Inc.; 1st
Discount Insurance, Inc.; and, Corporate Accounting Group, Inc., all of which
are Florida corporations. The first of these companies is a broker-dealer
registered with the Securities and Exchange Commission ("SEC") and the National
Association of Securities Dealers ("NASD"), is currently licensed in 45 states
and is pending registration in all other states. Through its subsidiaries, 1st
Internet Group, Inc. now provides retail discount securities brokerage and
related investment/portfolio management counseling services and utilizes a
variety of electronic media, including the Internet, to service individual
investors throughout the United States and internationally. This company also
provides annuity and life insurance products to complement and augment the needs
of brokerage and non-brokerage clientele and even provides accounting and tax
preparation services to its brokerage and insurance clientele.
In addition to the direct competitors specified above, we also will compete
against full-commission and discount brokerage firms, as well as against
financial institutions, mutual fund sponsors and other organizations, many of
which
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are significantly larger than us. Among such competitors are E*Trade Group Inc.,
Charles Schwab & Co. Inc., Quick & Reilly Inc., Waterhouse Securities Inc.,
Fidelity Brokerage Services Inc. and Datek Securities Corporation. Moreover, our
management believes that our target market for products and services will
continue to attract additional competitors such as banks, insurance companies,
providers of online financial and information services and others as they expand
their product lines. The market for electronic banking and brokerage services is
intensely competitive, rapidly changing and has few barriers to entry.
All of the companies specified above and many new entrants to the online banking
and online securities markets, have greater financial and other resources and
more experience in online banking and securities brokerage, than us. Moreover, a
growing source of competition for Internet banking services comes, from the use
of mobile telephones as a platform for smart card-based banking services.
Telecom Italia Mobile ("TIM") recently ordered several million smart cards for
deployment in 1999 to enable its mobile telephone customers to access TIM's
equity trading. Many mobile phones are digital and digital mobile telephone
services are based on the use of a tamper-resistant smart card (the Subscriber
Identification Module, or "SIM") that provides a much higher level of security
than almost any security software currently available for use on the Internet.
The SIM was originally designed to hold a user's identification data, enabling
subscribers to use their handset on any network worldwide. New applications
utilizing the SIM make the mobile telephone a formidable platform for personal
financial services.
The Swedish Postal Bank (Postbanken) has a service called Mobil Smart that
allows consumers to make payments from their telephone. MeritaNordbanken's
customers can check their balance and transaction logs from their mobile phones.
Even securities trading can be done by telephone. Dagens Industri, Europe's
fourth largest business daily, has a pilot program which allows subscribers to
receive financial data and trade on the Stockholm Exchange using a telephone or
PDA (personal digital assistant, a handheld mobile phone incorporating other
features).
There can be no assurance that competitors have not or will not succeed in
developing technologies and products that are more effective than any which have
been or are being developed by us or which would render our products obsolete
and noncompetitive. Many of our competitors have substantially greater
experience, financial and technical resources and production, marketing and
development capabilities than us.
Risks Associated with International Operations and Expansion. A key part of our
strategy is to promote and commercially exploit our services in international
markets, as the Internet is an international medium. There can be no assurance
that we will be able to successfully market and operate our services in foreign
markets. In addition to the uncertainty as to our ability to generate revenues
from foreign operations and create an international presence, there are certain
risks inherent in doing business on an international level, such as unexpected
changes in regulatory requirements, export restrictions, trade barriers,
difficulties in staffing and managing foreign operations, longer payment cycles,
problems in collecting accounts receivable, political instability, fluctuations
in currency exchange rates, software piracy, seasonal reductions in business
activity in certain other parts of the world and potentially adverse tax
consequences, which could adversely impact the success of our international
operations. There can be no assurance that one or more of such factors will not
have a material adverse effect on our potential future international operations
and, consequently, on our business, operating results and financial condition.
In order to attract and retain a user base, we plan significant expenditures on
sales and marketing, content development, technology and infrastructure. Many of
these expenditures may be planned or committed in advance and in anticipation of
future revenues. If our revenues in a particular quarter are lower than it
anticipates, it may be unable to reduce spending in that quarter. As a result,
any shortfall in revenues would likely adversely affect our quarterly operating
results.
We may sell our services in currencies other than the United States Dollar,
which would make the management of currency fluctuations difficult and expose us
to risks in this regard. Our results of operations are subject to fluctuations
in the value of various currencies against the United States Dollar. Although
management will monitor our exposure to currency fluctuations, there can be no
assurance that exchange rate fluctuations will not have a material adverse
effect on our business, results of operations or financial condition.
Governmental Regulation. The banking and securities industries are subject to
extensive regulation pursuant to federal and state laws. We anticipate providing
our customers with a fully functional, secure Internet offshore banking
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and securities trading facility. Our business will expose us to risks that are
inherent in the offshore banking industry. We may also become subject to the
banking and securities regulations of various jurisdictions. The Federal Deposit
Insurance Corporation ("FDIC") maintains a website which features a searchable
database of banks with legitimate charters. This website solicits reports from
the public regarding banking websites which are not FDIC-insured. The FDIC's
Suspicious Internet Banking website also specifies that companies soliciting
assets over the Internet without an FDIC charter or insurance are violating
United States' federal banking laws. Unless a bank is state chartered, or a
national bank licensed by the United States Comptroller of the Currency, or a
federal bank registered with the Office of Thrift Supervision, Internet banks
offering services to United States citizens may be contacted by the Federal
Bureau of Investigation and the Department of Justice, which are the enforcement
arm for complaints provided by the public to the FDIC's website.
The FDIC has also promulgated new enforcement and review procedures for online
banking. The extent of a financial services risk management program must be
commensurate with the complexity and sophistication of the activities in which
it engages. For example, the FDIC will evaluate, among other things, the
security of internal networks, the security of public networks, the
functionality of electronic capabilities (including informational and
transactional capabilities) and the system components and process methodologies
used in electronic payment systems. Even offshore institutions which offer
services to residents of the United States are subject to the FDIC's review and
enforcement procedures. In the event the Company was the subject of an FDIC
complaint or investigation, it could have a material adverse affect on the
operations and profitability of the Company.
The SEC is the federal agency responsible for administering the federal
securities laws. In general, broker-dealers are required to register with the
SEC under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The Company is not a registered broker-dealer. Pursuant to the Exchange Act,
every registered broker-dealer that does business with the public is required to
be a member of and is subject to the rules of the NASD. The NASD has established
Conduct Rules for all securities transactions among broker- dealers and private
investors, trading rules for over-the-counter markets and operational rules for
its member firms. The NASD conducts examinations of member firms, investigates
possible violations of the federal securities laws and its own rules and
conducts disciplinary proceedings involving member firms and associated
individuals. The NASD administers qualification testing for all securities
principals and registered representatives for its own account and on behalf of
the state securities authorities. In the event the Company was found to be
acting in the capacity of a broker-dealer without having been registered, the
Company and its management, might be ordered to cease performing such activities
and may be subject to cease-and-desist orders and other penalties, which might
have a material adverse affect on the business and operations of the Company.
Moreover, regulators in the United States and Canada are actively policing
securities offers and sales in cyberspace. As a general rule, securities can
only be offered and sold to the public after the appropriate regulatory agencies
have reviewed and approved an issue's prospectus and other advertising
information which will be provided to the public. In certain circumstances, an
issuer may be exempt from the prospectus and registration requirements, but
those exemptions seldom permit unrestricted offers and sales of securities to
the public. Moreover, although the Regulation S exemption from the registration
requirements of the Securities Act of 1933, as amended ("Act"), is available for
offers and sales of securities outside the United States, the global nature of
an online offering on an open system (a system readily available to the public)
may preclude the possibility of an online Regulation S offering. Absent measures
designed to restrict access to permitted offerees, an online offering would
constitute a general solicitation or general advertisement in violation of Rules
505 and 506 (but not Rule 504) of Regulation D and the private offering
exemption of Section 4(2) of the Act.
The SEC has approved general solicitation on the Internet which has the limited
purpose of locating accredited investors as long as an investor invests only in
offerings posted on the system after the investor is first qualified. The SEC
also recently adopted a rule that coordinates with a new California exemption
that allows for general solicitation provided certain conditions are satisfied.
Nonetheless, offers and sales of securities over the Internet by the Company
will subject the Company to significant regulatory compliance requirements and
the Company's failure to demonstrate compliance with federal or foreign
securities regulations would have a material adverse affect on the Company's
operations.
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We will also become subject to regulations pursuant to state securities laws. An
amendment to the federal securities laws prohibits the states from imposing
substantive requirements on broker-dealers which exceed those imposed pursuant
to federal law. However, the recent amendment does not preclude the states from
imposing registration requirements on broker-dealers that operate within their
jurisdiction or from sanctioning these broker-dealers for engaging in
misconduct.
Other Internet Regulation. Due to the increasing popularity of the Internet,
various regulatory authorities are considering laws and/or regulations with
respect to online services covering issues such as user privacy, pricing,
content copyrights and quality of services. In addition, the growth and
development of the market for online commerce may prompt more stringent consumer
protection laws that may impose additional burdens on those companies conducting
business online. Furthermore, the applicability of existing laws to the Internet
and other online services in various jurisdictions is uncertain. Finally, as the
Company's services become available over the Internet in multiple states and
foreign countries, these jurisdictions may claim that the Company is required to
qualify to do business as a foreign corporation in each such state and foreign
country. New legislation or the application of laws and regulations from
jurisdictions to online banking or brokerage services could have an adverse
economic effect on the Company's results of operations. The Internet is largely
unregulated and the laws governing the Internet remain unsettled, even in areas
where there has been some legislative action. It may take years to determine
whether and how existing laws such as those governing intellectual property,
privacy and taxation apply to the Internet. In addition, because of increasing
popularity and use of the Internet, many laws and regulations may be adopted
with respect to the Internet or other online services covering issues such as
(i) user privacy, (ii) security, (iii) pricing, (iv) content, (v) copyrights,
(vi) distribution, (vii) taxation and (viii) characteristics and quality of
services.
Risks Inherent in Internet Banking. The FDIC has identified specific risks of
Internet electronic banking systems, which include the following: the uncertain
enforceability of digital contracts, agreements and signatures; user privacy
issues; contingent liabilities resulting from user or participant claims;
uncertain legal jurisdiction with respect to taxation, criminal and civil laws;
implications for interstate and international commerce; an uncertain regulatory
environment, including uncertain applicability of reserve requirements when
applied to electronic money; and uncertain acceptability of electronic
documentation and disclosures under various state, federal and foreign
regulations. Moreover, audit trails may be lacking in electronic systems, which
results in uncertain applicability of financial record keeping, disclosure and
under requirements mandated by the FDIC and the banking regulations it enforces.
Employees. We currently have no employees. Our management anticipates using
consultants for development of our financial services website, accounting,
engineering and legal services on an as-needed basis. Therefore, we do not
anticipate any material change in the number of employees during the next 12
months.
Item 2. Description of Property.
Our Property. As of the dates specified in the following table, we held the
following property:
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Property December 31, 1999 December 31, 1998
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Cash and Equivalents $1,071.00 $124,990.00
- --------------------------------------------------------------------------------
Our Facilities. At this time, we occupy facilities provided by Robert Gove at no
charge. The office space is located at 8 Gaucho Drive, Rolling Hills Estates,
California 90274.
Item 3. Legal Proceedings.
The Company is not aware of any pending litigation nor does it have any reason
to believe that any such litigation exists.
Item 4. Submission of Matters to Vote of Security Holders
None
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PART II
Item 5. Market Price for Common Equity and Related Stockholder Matters.
We participate in the OTC Bulletin Board, an electronic quotation medium for
securities traded outside of the Nasdaq Stock Market and prices for our common
stock are published on the OTC Bulletin Board under the trading symbol "EBUX".
This market is extremely limited and the prices quoted are not a reliable
indication of the value of our common stock. Over the last 52 weeks, our common
stock had a low bid price of 1 1/4 per share and a high bid price of 2 7/8 per
share. The bid price is currently approximately 1 1/8 per share.
The Company is authorized to issue 50,000,000 shares of common stock, $.001 par
value, each share of common stock having equal rights and preferences, including
voting privileges. The shares of $.001 par value common stock of the Company
constitute equity interests in the Company entitling each shareholder to a pro
rata share of cash distributions made to shareholders, including dividend
payments. The Bylaws of the Company specify how the cash available for
distribution, whether occurring from operations or sales or refinancing, is to
be shared among the shareholders. The holders of the Company's common stock are
entitled to one vote for each share of record on all matters to be voted on by
shareholders. There is no cumulative voting with respect to the election of
directors of the Company or any other matter, with the result that the holders
of more than 50% of the shares voted for the election of those directors can
elect all of the Directors. The holders of the Company's common stock are
entitled to receive dividends when, as and if declared by the Company's Board of
Directors from funds legally available therefor; provided, however, that cash
dividends are at the sole discretion of the Company's Board of Directors. In the
event of liquidation, dissolution or winding up of the Company, the holders of
common stock are entitled to share ratably in all assets remaining available for
distribution to them after payment of liabilities of the Company and after
provision has been made for each class of stock, if any, having preference in
relation to the Company's common stock. Holders of the shares of Company's
common stock have no conversion, preemptive or other subscription rights, and
there are no redemption provisions applicable to the Company's common stock. All
of the outstanding shares of Company's common stock are duly authorized, validly
issued, fully paid and non-assessable.
Dividend Policy. The Company has never declared or paid a cash dividend on its
capital stock and does not expect to pay cash dividends on its Common Stock in
the foreseeable future. The Company currently intends to retain its earnings, if
any, for use in its business. Any dividends declared in the future will be at
the discretion of the Board of Directors and subject to any restrictions that
may be imposed by the Company's lenders.
Penny Stock Regulation. The Commission has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks". Penny
stocks are generally equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system). The penny stock rules require a broker-dealer, prior to a transaction
in a penny stock not otherwise exempt from those rules, deliver a standardized
risk disclosure document prepared by the Commission, which (i) contained a
description of the nature and level of risk in the market for penny stocks in
both public offerings and secondary trading; (ii) contained a description of the
broker's or dealer's duties to the customer and of the rights and remedies
available to the customer with respect to violation to such duties or other
requirements of Securities' laws; (iii) contained a brief, clear, narrative
description of a dealer market, including "bid" and "ask" prices for penny
stocks and significance of the spread between the "bid" and "ask" price; (iv)
contains a toll-free telephone number for inquiries on disciplinary actions; (v)
defines significant terms in the disclosure document or in the conduct of
trading in penny stocks; and (vi) contains such other information and is in such
form (including language, type, size and format), as the Commission shall
require by rule or regulation. The broker-dealer also must provide, prior to
effecting any transaction in penny stock, the customer (i) with bid and offer
quotations for the penny stock; (ii) the compensation of the broker-dealer and
its salesperson in the transaction; (iii) the number of shares to which such bid
and ask prices apply, or other comparable information relating to the depth and
liquidity of the market for such stock; and (iv) month account statements
showing the market value of each penny stock held in the customer's account. In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from those rules; the broker-dealer must make a
special written determination that
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the penny stock is a suitable investment for the purchaser and receive the
purchaser's written acknowledgment of the receipt of a risk disclosure
statement, a written agreement to transactions involving penny stocks, and a
signed and dated copy of a written suitably statement. These disclosure
requirements may have the effect of reducing the trading activity in the
secondary market for a stock that becomes subject to the penny stock rules. If
any of the Company's securities become subject to the penny stock rules, holders
of those securities may have difficulty selling those securities.
As of December 31, 1999, there were no warrants to purchase common stock
outstanding.
Item 6. Management's Discussion and Analysis of Financial Condition or Plan of
Operation.
The following information specifies forward-looking statements of our
management. Forward-looking statements are statements that estimate the
happening of future events and are not based on historical fact. Forward-looking
statements may be identified by the use of forward-looking terminology such as
"may", "will", "could", "expect", "estimate", "anticipate", "probable",
"possible", "should", "continue", or similar terms, variations of those terms or
the negative of those terms. Actual results may differ materially from those
contemplated by the forward-looking statements.
Plan of Operation. The Company has not received revenue from operations during
any of the three fiscal years immediately prior to the filing of this Annual
Report on Form 10-KSB. As of December 31, 1999, the Company had cash reserves of
$1,071.00, which the Company believes will not satisfy its cash requirement for
the next one-hundred and twenty (120) days. The Company plans to raise
$1,500,000 through a private offering, or a series of private offerings, of its
$.001 par value common stock during the next year. The Company plans to use the
capital raised from such offering to finance the development and operation of a
website which will provide one-stop, online shopping for financial services. The
Company anticipates that its website will feature a variety of products and
services which will enable a customer to buy mutual funds, manage checking
accounts and credit cards, and buy and sell securities over the Internet. The
Company's primary marketing focus will be to offer a wide range of banking and
brokerage services to high net worth individuals seeking an offshore vehicle for
banking and investing. In addition, the Company will focus its marketing efforts
on retail investors, pension managers, Fortune 500 companies, portfolio
managers, banks and other financial institutions. Therefore, the Company's
business will not be dependent upon a single customer or a small group of
customers. Moreover, the Company does not anticipate seasonal fluctuations in
its business activities. The Company's operations will be primarily virtual and,
therefore, the Company does not anticipate that federal, state and local
provisions regulating the discharge of materials into the environment will have
a material affect upon the Company's capital expenditures, earnings or
competitive position.
The Company will offer a wide range of online investments by means of portfolio
managers and individual trading facilitated directly through the Company's
website. The Company will also offer access to offshore banking facilities and
related features. The Company plans to offer the following services: investment
consulting services; cash, margin and option accounts; managed accounts with a
particular emphasis on position trading for active investors; and access to
stocks, bonds, mutual funds and money market investments. Customers will be able
to deposit funds using wire transfers, or registered mail, and will be able to
withdraw cash from automated teller machines, using credit cards, or by wire
transfer.
The Company has reserved six domain names: www.networthusa.com,
www.networthusa.net, www.networthworld.com, www.networthworld.net,
www.networtheurope.com, and www.networtheurope.net. The Company has reserved the
right to register such domain names until March 25, 2001. The Company may
register or reserve additional domain names and will vigorously enforce its
brand name rights.
In order to execute its business plan, the Company plans to lease commercial
office space and commence development of its website. To that end, the Company
has entered into negotiations with two companies to assist the Company in
leasing computer equipment and developing its Internet operations. The Company
has entered into an oral agreement with Adria Capital ("Adria") whereby the
Company will pay Adria approximately $15,000 to develop a website which the
Company would use for general corporate purposes. Adria has reserved the
above-listed domain names on the Company's behalf and, once the Company has
leased the necessary computer equipment, Adria will begin development
8
<PAGE>
of the Company's general corporate website. The Company is also negotiating an
agreement with Kenil International Limited in Luxemburg ("Kenil"), formerly
Kelward Overseas Corporation. The Company anticipates it will enter into a final
written agreement with Kenil pursuant to which the Company anticipates it will
pay Kenil approximately $300,000 to develop the operational structure of a
website the Company will use for its online banking and brokerage services.
Pursuant to the terms of the anticipated agreement, Kenil will develop an
Internet website with the banking infrastructure and operational capability to
offer the financial services contemplated by the Company. Kenil will be
responsible for the development of a balanced investment portfolio which will
include banking, trust services, insurance, stock brokerage services, legal
services, education and accounting. Kenil has proposed a system that would offer
savings accounts, checking accounts, credit cards, ATM access, international
business company formation, 7 x 24 trading of brokerage accounts, high yield
certificates of deposit and numbered account access to the Company's customers.
In addition, Kenil will provide complete insurance coverage of all managed
accounts maintained on the Company's website. Moreover, Kenil will be
responsible for recruiting and engaging qualified industry professionals from
the fields of financial operations, investment banking and brokerage systems to
complete the Company's current management and to develop and operate the
Company's website. It will be the joint responsibility of the Company and Kenil
to develop the Company's customer base. For an additional fee not yet
determined, Kenil will continue to provide maintenance services to the Company.
Successful implementation of the Company's business plan depends on raising
additional capital and the performance by Kenil of its obligations. The failure
of the Company to raise the necessary capital or failure of Kenil or other third
parties to perform their obligations pursuant to agreements with the Company
would significantly affect the Company's prospects for successfully developing,
operating and commercially exploiting its proposed Internet banking and
securities services. Moreover, the failure of the Company to attract additional
management with securities and online banking experience would adversely affect
the Company's prospects for its proposed business operations.
Results of Operations. The Company has not yet realized any revenue from
operations, nor does it expect to in the foreseeable future. The Company's only
source of liquidity in the next 12 months will be the sale of its securities.
The Company has limited cash reserves and is dependent on raising significant
funds in order to develop and commercially exploit its financial services
website. In the event the Company is unable to raise significant funds, the
Company will be unable to implement its business plan.
Our success is materially dependent upon our ability to satisfy additional
financing requirements. We are reviewing our options to raise substantial equity
capital. We cannot estimate when we will begin to realize positive gross
revenue. In order to satisfy our requisite budget, management has held and
continues to conduct negotiations with various investors. We anticipate that
these negotiations will result in additional investment income for us. To
achieve and maintain competitiveness, we may be required to raise additional
substantial funds. We anticipate that we will need to raise significant capital
to develop, promote and conduct its operations. Such capital may be raised
through public or private financing as well as borrowing and other sources.
There can be no assurance that funding for our operations will be available
under favorable terms, if at all. If adequate funds are not available, we may be
required to curtail operations significantly or to obtain funds by entering into
arrangements with collaborative partners or others that may require us to
relinquish rights to certain products and services that we would not otherwise
relinquish.
The Company's Plan of Operations for Next 12 Months. The Company has continued
to review its business plan and evaluate various and opportunities. We are
actively pursuing our goal to establish a financial portal, able to carry out
the various aspects of banking and brokerage. Our initial focus will be to
assess entrance through asset management operations. The Company is reviewing
potential acquisition of asset management operations, developing a new operation
or some combination of these alternatives on an offshore basis.
Asset management would require the Company to develop and provide a wide range
of client financial services such as stock trading, banking, insurance,
mortgages and other related functions. The company estimates that it will
require
9
<PAGE>
$500,000 in working capital to achieve beginning operations during the next 6
months. The Company has identified potential investors for a new private
placement on terms to be negotiated.
The Company's newly created subsidiary, NETWORTHEUROPE.COM.S.A., in Luxembourg,
will be utilized to initiate asset management activities for the Company. To
effectively operate and fulfill the capital requirements of operations,
management believes that an additional $1,500,000 working capital will have to
be raised in the subsequent 6 month's period.
Liquidity and Capital Resources. We have been in the development stage since
July 17, 1992 (inception). AS of December 31, 1999, we have not realized any
revenues from our operations. The Statement of Cash Flows for the year ended
December 31, 1999, indicate a net loss of $32,490.00, compared to a net loss of
$120,450.00 during the same period in 1999. We cannot predict when we will begin
realizing positive revenue. For the year ended December 31, 1999, we had total
expenses of $32,490.00. During the same period in 1998, we had total expenses of
$120,450.00. The expenses resulted from payments made for: consulting services;
legal fees; and general and administrative expenses. We are not aware of any
trends, demands, commitments or uncertainties that will result in our liquidity
decreasing or increasing in a material way.
Item 7. Financial Statements
Copies of Financial Statements specified in Regulation 228.310 (Item 310) are
filed with this Annual Report on Form 10-KSB.
Item 8. Changes in and Disagreements with Accountants.
There have been no changes in or disagreements with the Company's accountants
since the formation of the Company required to be disclosed pursuant to Item 304
of Regulation S-B.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons.
Executive Officers and Directors. We are dependent on the efforts and abilities
of certain of our senior management. The interruption of the services of key
management could have a material adverse effect on our operations, profits and
future development, if suitable replacements are not promptly obtained. We
anticipate that we will enter into employment agreements with each of our key
executives; however, no assurance can be given that each executive will remain
with us during or after the term of his or her employment agreement. In
addition, our success depends, in part, upon our ability to attract and retain
other talented personnel. Although we believe that our relations with our
personnel are good and that we will continue to be successful in attracting and
retaining qualified personnel, there can be no assurance that we will be able to
continue to do so. All officers and directors of the Company will hold office
until their resignation or removal.
Our directors and principal executive officers are as specified on the following
table:
- --------------------------------------------------------------------------------
Name and Address Age Position
- --------------------------------------------------------------------------------
Robert C. Lockwood 39 President, and a director
- --------------------------------------------------------------------------------
Andre Pierrard Director
- --------------------------------------------------------------------------------
James Davis 57 Director
- --------------------------------------------------------------------------------
David Miller Secretary, Treasurer and a director
- --------------------------------------------------------------------------------
Robert C. Lockwood is the President and a director of the Company. From 1980 to
1985 Mr. Lockwood was the owner of Squeeky Clean window washing in the province
of Ontario, Canada. From 1985 to 1990, Mr. Lockwood was the owner of Garfield's
Snack Bar & Grill in Vancouver, British Columbia, Canada. From 1990 to 1995 Mr.
Lockwood was the owner of Garfield's Snack Bar & Grill located in Kamlope,
British Columbia, Canada. From 1995
10
<PAGE>
to the present Mr. Lockwood has been the owner and operator of Dream Development
& Landscape, located in Surrey, British Columbia, Canada.
Andre Pierrard is a director of the Company. Mr. Pierrard has experience in
international banking with a focus on European business. Mr. Pierrard began his
25-year banking career with the Banque Generale du Luxembourg ("Banque
Generale") in 1973. His responsibilities at Banque Generale included 9 years
with the Stock Exchange Department and 8 years with the Investment Fund
Department. In 1990, Mr. Pierrard became a Senior Dealer of the Money Market &
Exchange Department and was asked to sit on the Board of Directors of Banque
Generale, where he served until 1998, when he retired. Among the many
achievements throughout his Banque Generale career, Mr. Pierrard has served as:
Judge Assessor at the Social Court of Arbitration in Luxembourg; Member of the
Commission at the Social Security for Employees for Luxembourg; and as a Member
of the Commission at the Pension Fund for Employees, Luxembourg.
James Davis is a director of the Company. Mr. Davis received a Bachelor of
Sciences degree in 1964 and a Bachelor of Arts degree in Communications in 1966
from St. Dunstans University in Canada. In 1970, Mr. Davis was designated a
Certified General Accountant. Mr. Davis worked for Revenue Canada as a tax
auditor from 1966 to 1975. From 1975 to 1991, Mr. Davis was a self-employed
business consultant. MR. Davis spent several years with the government of the
Northwest Territories and spent the past 15 years with the Canada Department of
Indian and Northern Development as an auditor. Mr. Davis retired from government
work in late 1996.
David R. Miller is the Secretary and Treasurer of the Company as well as a
director. Mr. Miller brings experience in International Finance. Mr. Miller's
focus in recent years has been on bringing European and North American companies
together. Mr. Miller has extensive knowledge in American and Western European
Financial Institutions.
There is no family relationship between any of the officers and directors of the
Company. Other than the officers, there are no significant employees expected by
the Company to make a significant contribution to the business of the Company.
There are no orders, judgments or decrees of any governmental agency or
administrator, or of any court of competent jurisdiction, revoking or suspending
for cause any license, permit or other authority to engage in the securities
business or in the sale of a particular security or temporarily or permanently
restraining any officer or director of the Company from engaging in or
continuing any conduct, practice or employment in connection with the purchase
or sale of securities, or convicting such person of any felony or misdemeanor
involving a security, or any aspect of the securities business or of theft or of
any felony, nor are any officer or director of the Company so enjoined.
Item 10. Executive Compensation
Any compensation received by our officers, directors, and management personnel
will be determined from time to time by our Board of Directors. Our officers,
directors, and management personnel will be reimbursed for any out-of-pocket
expenses incurred on our behalf.
Summary Compensation Table. The table set forth below summarizes the annual and
long-term compensation for services in all capacities to the Company payable to
our Chief Executive Officer and our other executive officers whose total annual
salary and bonus is anticipated to exceed $50,000 during the year ending
December 31, 2000. Our Board of Directors may adopt an incentive stock option
plan for our executive officers which would result in additional compensation.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Annual Other Annual All Other
Name and Principal Position Year Salary ($) Bonus ($) Compensation ($) Compensation
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert Lockwood, President 2000 None None None None
- -----------------------------------------------------------------------------------------------------
David Miller, Secretary, 2000 None None None None
- -----------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
Compensation of Directors. Our directors who are also employees receive no extra
compensation for their service on our Board of Directors.
Compensation to Officers and Directors of the Company. In January 1999 and prior
to Robert C. Lockwood's appointment as the President and a director of the
Company, the Company paid Mr. Lockwood $94,000 for consulting services rendered
to the Company. In addition, during the year 1999, the Company reimbursed Robert
E. Gove, the Secretary and a director of the Company, approximately $285.00 for
out-of-pocket expenses incurred on behalf of the Company. As of December 31,
1997 and with the exception of the two payments disclosed supra, no compensation
has been paid or accrued to any of the officers or directors of the Company.
Employment Contracts. We have not entered into any employment contracts.
Item 11. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of December 31, 1999 by (i) each person or
entity known by us to be the beneficial owner of more than 5% of the outstanding
shares of common stock, (ii) each of our directors and named executive officers,
and (iii) all of our directors and executive officers as a group.
<TABLE>
<CAPTION>
Name and Address of Amount and Nature of
Title of Class Beneficial Owner Beneficial Owner Percent of Class
- -------------- ------------------- -------------------- ----------------
<S> <C> <C> <C>
$.001 Par Value Common Robert Lockwood, 12746 900,000 shares, President, Director 10.6%
Stock Campbell Place
Surrey, British Columbia,
Canada V3V 6C8
$.001 Par Value Common James Davis, 15 Davis Lane, 100,000 shares, Director 1.2%
Stock Kiersteadville, New Brunswick,
Canada E5T 3M4
$.001 Par Value Common All directors and named executive 11.8%
Stock officers as a group
</TABLE>
Beneficial ownership is determined in accordance with the rules of the
Commission and generally includes voting or investment power with respect to
securities. In accordance with Commission rules, shares of our common stock
which may be acquired upon exercise of stock options or warrants which are
currently exercisable or which become exercisable within 60 days of the date of
the table are deemed beneficially owned by the optionees. Subject to community
property laws, where applicable, the persons or entities named in the table
above have sole voting and investment power with respect to all shares of our
common stock indicated as beneficially owned by them.
Changes in Control. Management of the Company is not aware of any arrangements
which may result in "changes in control" as that term is defined by the
provisions of Item 403 of Regulation S-B.
Item 12. Certain Relationships and Related Transactions.
Transactions with Promoters. There were no transactions with promoters, except
for the following.
The Company authorized and issued 975,000 shares of common stock to Mark J.
Bryn, Esq., the incorporator and initial promoter of the Company, as
compensation for his management and organizational services provided to the
Company. In July 1998, Mr. Bryn transferred 900,000 shares to Robert C.
Lockwood, the President and a director of the Company. Mr. Bryn currently owns
75,000 shares of the common stock of the Company.
12
<PAGE>
Related Party Transactions. There have been no related party transactions which
would be required to be disclosed pursuant to Item 404 of Regulation S-B, except
for the following:
In July 1998, Mark J. Bryn, Esq., the Company's incorporator and initial
promoter, transferred 900,000 shares of his common stock pursuant to a private
transaction to Robert L. Lockwood, the President and a director of the Company.
In addition, Karl J. Harz was the Company's President, Secretary, Treasurer and
sole director from January 1999 to April 1999. In September 1999, the Company
paid Mr. Harz $1,000 for consulting services regarding general corporate
matters.
An officer of the Company loaned the Company $5,000.00 on or about April 29,
1999. The note carries and annual interest rate of 8% and is due on demand.
Item 13. Exhibits and Reports on Form 8-K
3.1 Articles of Incorporation dated July 17, 1992* (Charter document)
3.2 Reinstatement of Corporation dated June 4, 1998* (Charter document)
3.3 Articles of Amendment to Articles of Incorporation dated June 5, 1998*
(Charter document)
3.4 Articles of Amendment to Articles of Incorporation dated October 26, 1998*
(Charter document)
3.5 Articles of Amendment to Articles of Incorporation dated January 11, 1999*
(Charter document)
3.6 Articles of Amendment to Articles of Incorporation dated April 1, 1999*
(Charter document)
27 Financial Data Schedule
* Previously filed as exhibits to Registration Statement on Form 10-SB filed
on October 13, 1999.
13
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
December 31, 1999, 1998 and 1997
<PAGE>
/Letterhead/
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, Suite #300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell T. Schvaneveldt, C.P.A.
Independent Auditors Report
Board of Directors
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
I have audited the accompanying balance sheets of NETWORTHUSA.Com., Inc. (a
development stage company), as of December 31, 1999, 1998 and 1997, and the
related statements of operations, stockholders' equity, and cash flows for the
years ended December 31, 1999, 1998 and 1997. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statements presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of NETWORTHUSA.Com., Inc., (a
development stage company), as of December 31, 1999, 1998 and 1997, and the
results of its operations and its cash flows for the years ended December 31,
1999, 1998 and 1997, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has no operating capital or
operation from which to obtain operating capital. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also discussed in Note #5. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
/S/ Schvaneveldt & Company
Salt Lake City, Utah
March 16, 2000
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
Balance Sheets
December 31, 1999, 1998 and 1997
December December December
31, 1999 31, 1998 31, 1997
--------- --------- ---------
Assets
Current Assets
Cash $ 1,071 $ 124,990 $ -0-
--------- --------- ---------
Other Assets
Domain Name 420 -0- -0-
--------- --------- ---------
Total Assets $ 1,491 $ 124,990 $ -0-
========= ========= =========
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $ 3,606 $ 124,615 $ -0-
Note Payable - Shareholder 5,000 -0- -0-
--------- --------- ---------
Total Current Liabilities 8,606 124,615 -0-
Stockholders' Equity
Common Stock; 50,000,000 Shares
Authorized at $0.001 Par Value;
8,500,000; 3,500,000 Shares
& 1,000,000 Shares Issued &
Outstanding Retroactively Restated 8,500 3,500 1,000
Paid In Capital 139,825 119,825 1,500
Deficit Accumulated in the
Development Stage (155,440) (122,950) (2,500)
--------- --------- ---------
Total Stockholders' Equity (7,115) 375 -0-
--------- --------- ---------
Total Liabilities &
Stockholders' Equity $ 1,491 $ 124,990 $ -0-
========= ========= =========
The accompanying notes are an integral part of these financial statement
3
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
Statements of Operations
Accumulatedfrom July 17, 1992 (Inception) to December
31, 1999 (Unaudited) for the Years Ended
December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
December December December
Accumulated 31, 1999 31, 1998 31, 1997
----------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
Expenses
Consulting Services 107,500 13,500 94,000 -0-
Legal Fees 28,730 8,730 20,000 -0-
General & Administrative 19,210 10,260 6,450 -0-
----------- ----------- ----------- ----------
Total Expenses 155,440 32,490 120,450 -0-
----------- ----------- ----------- ----------
Net Loss ($ 155,440) ($ 32,490) ($ 120,450) $ -0-
=========== =========== =========== ==========
Loss Per Share ($ .00) ($ .10) $ -0-
Weighted Average
Shares Outstanding 7,388,888 1,208,000 1,000,000
</TABLE>
The accompanying notes are an integral part of these financial statement
4
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
From July 17, 1992 (Inception) to December 31, 1999
<TABLE>
<CAPTION>
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
---------------------------------------------------
<S> <C> <C> <C> <C>
Balance, July 17, 1992 (Inception) -0- $ -0- $ -0- $ -0-
Shares Issued for Services
Retroactively Restated 1,000,000 1,000 1,500
Loss for Year Ended
December 31, 1992 (2,500)
---------------------------------------------------
Balance, December 31, 1992 1,000,000 1,000 1,500 (2,500)
No Activity from January 1, 1993
to January 1, 1998
Shares Issued for Cash at
$0.05 Per Share 2,500,000 2,500 122,500
Cost of Shares Sold (5,675)
Contributed Capital 1,500
Loss for Year Ended
December 31, 1998 (120,450)
---------------------------------------------------
Balance, December 31, 1998 3,500,000 3,500 119,825 (122,950)
Shares Issued for Cash at
$0.005 Per Share 5,000,000 5,000 20,000
Loss for Year Ended
December 31, 1999 (32,490)
---------------------------------------------------
Balance, December 31, 1999 8,500,000 $ 8,500 $ 139,825 ($ 155,440)
===================================================
</TABLE>
The accompanying notes are an integral part of these financial statement
5
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
Statements of Cash Flows
Accumulated from July 17, 1992 (Inception) to
December 31, 1999
and for the Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended
December December December
Accumulated 31, 1999 31, 1998 31, 1997
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities
Net Loss ($155,440) ($ 32,490) ($120,450) $ -0-
Non Cash Expenses 2,500 -0- -0- -0-
(Decrease) Increase in Operating
Liabilities;
Accounts Payable 3,606 (121,009) 124,615 -0-
--------- --------- --------- ---------
Net Cash Provided (Used)
by Operating Activities (149,334) (153,499) 4,165 -0-
Cash Flows from Investing Activities
Domain Name (420) (420) -0- -0-
Cash Flows from Financing Activities
Loans from Shareholders 5,000 5,000 -0- -0-
Cash from Sale of Common Shares 144,325 25,000 119,325 -0-
Cash Contributed by Shareholders 1,500 -0- 1,500 -0-
--------- --------- --------- ---------
Net Cash Provided by
Financing Activities 150,825 30,000 120,825 -0-
--------- --------- --------- ---------
Net Increase (Decrease) in
Cash 1,071 (123,919) 124,990 -0-
Cash at Beginning of Period -0- 124,990 -0- -0-
--------- --------- --------- ---------
Cash at End of Period $ 1,071 $ 1,071 $ 124,990 $ -0-
========= ========= ========= =========
Disclosure from Operating Activities
Interest Expense $ -0- $ -0- $ -0- $ -0-
Taxes -0- -0- -0- -0-
</TABLE>
The accompanying notes are an integral part of these financial statement
6
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Organization
The Company was organized on July 17, 1992 under the laws of the state of
Florida, as American Financial Seminars, Inc. On October 26, 1998, the Company
filed an Amendment to the Articles of Incorporation changing its name to
Environmental Oil Technologies, Inc. On January 11, 1999, the Articles of
Incorporation were amended changing its name to American Industrial Minerals
Group, Inc. On April 1, 1999, Articles of Amendment were filed changing the name
to NETWORTHUSA.Com., Inc.
The Company is currently considered to be a development stage company.
NOTE #2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period when
the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Shares are computed by dividing income available to
common stockholders by the weighted average number of common shares
outstanding during the period. Diluted Earnings Per Share shall be computed
by including contingently issuable shares with the weighted average shares
outstanding during the period. When inclusion of the contingently issuable
shares would have an antidilutive effect upon earnings per share no diluted
earnings per share shall be presented.
E. Inventories: Inventories are stated at the lower of cost, determined by the
FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. The cost of leasehold
improvements is amortized over the lesser of the length of the lease of the
related assets of the estimated lives of the assets. Depreciation and
amortization is computed on the straight line method.
G. Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
H. New Technical Pronouncements; In February 1997, SFAS No. 129, "Disclosure
of Information about Capital Structure" was issued effective for periods
ending after December 15, 1997. The Company has adopted the disclosure
provisions of SFAS No. 129 effective with the fiscal year ended December
31, 1998.
The accompanying notes are an integral part of these financial statement
7
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #2 - Significant Accounting Policies -Continued-
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" was issued
effective for fiscal years beginning after December 31, 1997, with earlier
application permitted. The Company has elected to adopt SFAS No. 130
effective with the fiscal year ended December 31, 1998. Adoption of SFAS
No. 130 is not expected to have a material impact on the Company's
financial statements.
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information" was issued for fiscal year beginning after
December 31, 1997, with earlier application permitted. The Company has
elected to adopt SFAS No. 131, effective with the fiscal years ended
December 31, 1998. Adoption of SFAS No. 131 is not expected to have a
material impact on the Company's financial statements.
In February 1998, SFAS No. 132, "Employer's Disclosure about Pensions and
Other Post-Retirement Benefits" was issued for fiscal years beginning after
December 15, 1998. Adoption of SFAS 132 did not have a material impact on
the Company financial statements.
In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities" was issued for fiscal years beginning after June 15,
1999. It is anticipated that SFAS No. 133, will have no effect upon the
Company's financial statements.
NOTE #3 - Income Taxes
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax assets in
future years. Due to the uncertainty as to the utilization of net operating loss
carryforwards an evaluation allowance has been made to the extent of any tax
benefit that net operating losses may generate.
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal revenue Codes are met. These losses are
as follows:
Year of Loss Amount Expiration Date
-----------------------------------------------------------------
1992 $ 2,500 2012
1993 -0- 2013
1994 -0- 2014
1995 -0- 2015
1996 -0- 2016
1997 -0- 2017
1998 120,450 2018
1999 32,490 2019
8
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #3 - Income Taxes -Continued-
1999
Current Tax Asset Value of Net Operating Loss Carryforwards ---------
at Current Prevailing Federal Tax Rate $ 52,849
Evaluation Allowance (52,849)
---------
Net Tax Asset $ -0-
=========
Current Income Tax Expense $ -0-
Deferred Income Tax Benefit -0-
NOTE #4 - Stockholders' Equity
Common Stock;
The Company currently has 50,000,000 shares of common stock, with a par
value of $0.001 authorized.
Non Cash Financing Activities;
In 1992, the Company issued 1,000,000 shares for services valued at $2,500.
Stock Split;
Pursuant to actions of the Sole Director taken on June 1, 1998 the 1,000
issued and outstanding shares of the Company were split on a 1,000 for 1
basis. Retroactive restatement of the issued shares have been made on the
balance sheets, statement of stockholders' equity, and in the computation
of earnings (loss) per share.
Issuance of Common Shares for Cash;
On December 30, 1998, the Company issued in a Private Placement under Reg
D.-Rule 504, 2,500,000 shares of its common stock at a unit price of $0.05
per unit (see common stock warrants below). The Company realized gross
proceeds from the sale of the shares of $125,000. From the gross proceeds
the Company paid $5,675 in legal fees incidental to the issuance of the
shares.
Common Stock Warrants;
The shares of common stock issued on December 30, 1998, were issued at a
unit price of $0.05. Included in the unit were stock warrants for 5,000,000
shares at an exercise price of $0.175 per share. The warrants entitle the
holder to purchase one additional share of common stock for each warrant
held at any time on or before one year from the date of acquisition of the
units by the purchaser.
Contributed Capital;
On June 1, 1998, the Company was reinstated in the state of Florida. The
Sole Director, an Officer of the Company paid $1,500 in costs, fees and
delinquencies to accomplish the reinstatement. The Company issued no shares
as compensation and will make no reimbursement to the Director/Officer for
the cost of reinstatement.
9
<PAGE>
NETWORTHUSA.Com., Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #5 - Going Concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has little uncommitted cash and has experienced
losses from inception. Without realization of additional adequate financing, it
would be unlikely for the Company to pursue and realize its objectives. The
Company is currently negotiating a Private Placement of its common stock to
provide working capital for its domestic and foreign operations.
NOTE #6 - Related Party Transactions
An Officer of the Company loaned to the Company $5,000 on April 29, 1999. The
note carries an annual interest rate of 8% and is due on demand.
NOTE #7 - Subsequent Events
In January 2000, the Board of Directors approved a Private Placement in the
amount of $500,000. On February 9, 2000, the Company received in subscription
funds $500,000. In March 2000, the Company elected not to complete the $500,000
Private Placement by issuing the subscribed shares and returned to the
subscribers $425,778 and committed to return the balance of $74,222, no later
than April 27, 2000, no interest is to be paid or accrued on the remaining
balance due. In the event the Company is unable to return the funds by April 27,
2000 an officer and director has agreed to loan sufficient funds to the Company
to repay the full amount due.
In March 2000, the Company formed a corporation in Luxembourg as a wholly owned
subsidiary. The Luxembourg corporation is NetworthEurope.Com S.A.
10
<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 in the City of Newport Beach, California, on April 12, 2000.
NetworthUSA.com, Inc.,
a Florida corporation
By: /S/ Randy Miller
---------------------------
Randy Miller
Its: Secretary and Treasurer
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<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> DEC-31-1999 DEC-31-1998
<CASH> 1,071 124,990
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<OTHER-EXPENSES> (32,490) (120,450)
<LOSS-PROVISION> 0 0
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<INCOME-PRETAX> (32,490) (120,450)
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<INCOME-CONTINUING> (32,490) (120,450)
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<NET-INCOME> (32,490) (120,450)
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