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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended Sept. 30, 2000.
[_] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______ to ______.
Commission File Number: 0-27919
XRAYMEDIA.COM, INC.
(Exact name of small business issuer as specified in its charter)
Minnesota 52-2248689
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
555 Burrard Street, Suite 900, Vancouver, B. C., Canada V7X 1M9
(Address of principal executive office) (Zip Code)
(888) 777-0658
(Registrant's telephone number)
E-BIDD.COM, INC.
(Former Name, former address and former fiscal year,
if changed since last report)
Check whether the issuer: (1) Filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 XX No
The number of outstanding shares of the issuer's common stock, $0.001 par
value (the only class of voting stock), as of Sept. 30, 2000 was 43,030,778.
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<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance sheets at Sept. 30, 2000, Sept. 30, 1999 (both unaudited) and
(audited) December 31, 1999.................................................. 2
Statements of operations for the nine months ended
Sept. 30, 2000 and Sept. 30, 1999 and the three months ended Sept. 30, 2000
and Sept. 30, 1999 and cumulative since inception of the
development stage (March 1, 1994)............................................ 3
Statement of Stockholders' Equity for nine months ended Sept. 30, 2000....... 4
Statement of cash flows for the nine months ended
Sept. 30, 2000 and Sept. 30, 1999 and cumulative since inception of the
development stage (March 1, 1994)............................................ 5
Notes to the Financial Statements............................................ 6
1
<PAGE>
XRAYMEDIA.COM, INC.
(FORMERLY E-BIDD.COM, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
BALANCE SHEET (UNAUDITED)
AS AT SEPT. 30, 2000
COMPARATIVES AS OF DECEMBER 31, 1999,(AUDITED)AND SEPT. 30, 1999 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Sept. 30 Sept. 30 Dec. 31
ASSETS 2000 1999 1999)
(Unaudited) (Unaudited) (Audited)
----------- ----------- -----------
<S> <C> <C> <C>
CURRENT ASSETS
Cash $ 117,549 $ 25,905 $ 7,824
Account Receivable 68,095 -- --
Pre-paids and deposits 12,255 -- --
----------- ----------- -----------
TOTAL CURRENT ASSETS 197,899 25,905 7,824
----------- ----------- -----------
FIXED ASSETS
Furniture and office equipment 50,754 -- --
Accumulated amortization (4,927) -- --
----------- ----------- -----------
45,827 -- --
----------- ----------- -----------
Website equipment 150,281 -- --
Accumulated amortization (11,492) -- --
----------- ----------- -----------
138,789 -- --
----------- ----------- -----------
Net Fixed Assets 184,616 -- --
OTHER ASSETS
Software license 290,000 -- 290,000
Accumulated amortization (34,033) -- (12,083)
----------- ----------- -----------
Net 255,967 -- 277,917
----------- ----------- -----------
TOTAL ASSETS $ 638,482 $ 25,905 $ 285,741
=========== =========== ===========
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 46,713 $ 6,877 $ 5,000
Notes Payable -- 160,422 --
----------- ----------- -----------
TOTAL CURRENT LIABILITIES 46,713 167,299 5,000
----------- ----------- -----------
LONGTERM LIABILITIES
Advances from shareholders 150,043 -- --
----------- ----------- -----------
TOTAL L/T LIABILITY 150,043 -- --
----------- ----------- -----------
TOTAL LIABILITIES 196,756 167,299 5,000
----------- ----------- -----------
STOCKHOLDERS EQUITY (DEFICIT)
Common Stock, par value $.001; 100,000,000
shares authorized; issued and outstanding
43,030,778 at Sept. 30, 2000 and 16,620,778 at
Sept. 30, 1999 and Dec.31, 1999, respectively 43,031 16,621 16,621
Additional paid in capital 3,677,755 2,480,165 2,770,165
Deficit at inception date (746,875) (746,875) (746,875)
Accumulated deficit during development stage (2,532,185) (1,891,305) (1,759,170)
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY 441,726 (141,394) 280,741
----------- ----------- -----------
(DEFICIT)
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 638,482 $ 25,905 $ 285,741
=========== =========== ===========
</TABLE>
2
<PAGE>
XRAYMEDIA.COM, INC.
(FORMERLY E-BIDD.COM, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT (UNAUDITED)
THREE MONTH AND NINE MONTHS ENDED SEPT. 30, 2000 AND 1999, AND
THE PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE), TO SEPT. 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Period from
March 1, 1994
(Inception
Three Months of the
and Development
Three Months Nine Months Nine Months Stage)
Ended Ended Ended Through
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2000 2000 1999 2000
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
COSTS AND EXPENSES
Personnel Costs $ 45,749 $ 45,749 $ 82,729 $ 414,921
Occupancy Costs 18,097 44,464 3,000 124,315
Professional Fees 32,306 245,008 147,271 537,186
Computer Costs 10,500 45,020 -- 69,234
Marketing 6,986 40,742 39,707 49,993
Travel 20,689 75,009 8,502 121,561
Consulting 16,242 94,784 -- 167,344
Interest / Bank Charges 950 1,840 233 6,555
Office Supplies/Supervision 12,441 68,601 3,237 75,722
Communication 5,378 8,451 3,647 72,579
Insurance 4,711 26,890 5,138 48,648
Miscellaneous 2,958 6,206 2,105 15,805
Transfer Fees 1,238 2,870 -- 10,620
Depreciation / Amortization 17,552 38,369 -- 69,663
Bad Debt Expense -- -- 18,766 5,400
Website/Internet Expense 9,763 68,667 54,500 139,913
Investor Relations 14,467 34,539 -- 34,539
----------- ----------- ----------- -----------
TOTAL EXPENSES 220,027 847,209 350,069 1,964,098
----------- ----------- ----------- -----------
OTHER INCOME (LOSS)
Revenue 41,144 74,194 -- 74,194
Dissolution of Corp Reports -- -- -- (503,507)
Other -- -- -- (138,774)
----------- ----------- ----------- -----------
41,144 74,194 -- (578,087)
NET EARNINGS (LOSS) (178,883) (773,015) (350,069) (2,532,185)
ACCUMULATED DEFICIT:
Beginning (3,100,177) (2,506,045) (2,288,111) (746,875)
----------- ----------- ----------- -----------
Ending $(3,279,060) $(3,279,060) $(2,638,180) $(3,279,060)
=========== =========== =========== ===========
BASIC/DILUTED
LOSS PER SHARE $ (0.01) $ (0.02) $ (0.01)
=========== =========== ===========
</TABLE>
3
<PAGE>
XRAYMEDIA.COM, INC.
(FORMERLY E-BIDD.COM, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED)
PERIOD FROM MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE),
TO SEPT. 30, 2000
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<TABLE>
<CAPTION>
Existing Deficit
Common Stock Deficit at Accumulated
--------------------------- Additional Inception of During Total
Number of Paid Development Development Stockholders'
Shares Amount in Capital Stage Stage Equity
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BEGINNING BALANCE
At inception of
development,
March 1, 1994 201 $ -- $ 746,875 $ (746,875) $ -- $ --
Shares issued 720 1 1,799
Net loss for period
ending 12/31/94 (1,800)
----------- ----------- ----------- ----------- ----------- -----------
BALANCES
December 31, 1994 921 1 748,674 (746,875) (1,800) --
Shares issued
Net loss for period
ending 12/31/95
----------- ----------- ----------- ----------- ----------- -----------
BALANCES
December 31, 1995 921 1 748,674 (746,875) (1,800) --
Shares issued 90 -- 28,500
Net loss for period
ending 12/31/96 (50,165)
----------- ----------- ----------- ----------- ----------- -----------
BALANCES
December 31, 1996 1,011 1 777,174 (746,875) (51,965) (21,665)
Shares issued 14,492 15 258,536
Net loss for period
ending 12/13/97 (174,022)
<CAPTION>
Existing Deficit
Common Stock Deficit at Accumulated
--------------------------- Additional Inception of During Total
Number Paid Development Development Stockholders'
of Shares Amount in Capital Stage Stage Equity
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCES
December 31, 1997 15,503 16 1,035,710 (746,875) (225,987) 62,864
Shares issued 15,275 15 1,237,445
Net loss for
period ending
12/31/98 (1,315,249)
----------- ----------- ----------- ----------- ----------- -----------
BALANCES
December 31, 1998 30,778 31 2,273,155 (746,875) (1,541,236) (14,925)
Shares issued:
Net loss for
period ending
3/31/99
----------- ----------- ----------- ----------- ----------- -----------
BALANCES
March 31, 1999 30,778 31 2,273,155 (746,875) (1,541,236) (14,925)
Shares issued
Shares issued to
acquire license 10,000,000 10,000 290,000
Shares issued for
cash 6,590,000 5,590 207,010
Net loss for period
ending 12/31/99 (217,934)
----------- ----------- ----------- ----------- ----------- -----------
BALANCES
December 31, 1999 16,620,778 $ 16,521 $ 2,770,165 $ (746,875) $(1,759,170) $ 280,741
<CAPTION>
Existing Deficit
Common Stock Deficit at Accumulated
--------------------------- Additional Inception of During Total
Number Paid Development Development Stockholders'
of Shares Amount in Capital Stage Stage Equity
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares issued
Shares issued in exchange
for extended business
model 20,000,000 20,000 --
Shares issued in Exchange
for services 210,000 210 71,790
Shares issued for cash 4,200,000 4,200 835,800
Shares issued under
Stock performance Plan 2,000,000 2,000 --
Net loss for period
ending 9/30/00 (773,015)
----------- ----------- ----------- ----------- ----------- -----------
BALANCES
Sept. 30, 2000 43,030,778 $ 43,031 $ 3,677,755 $ (746,875) $(2,532,185) $ 441,726
=========== =========== =========== =========== =========== ===========
</TABLE>
4
<PAGE>
XRAYMEDIA.COM, INC.
(FORMERLY E-BIDD.COM, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
STATEMENT OF CASH FLOW (Unaudited)
NINE MONTHS ENDED SEPT. 30, 2000 AND 1999, AND
THE PERIOD MARCH 1, 1994 (INCEPTION OF THE DEVELOPMENT STAGE), TO SEPT. 30, 2000
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months Ended Sept. 30, Period From March 1, 1994
---------------------------- (Inception of the Development
2000 1999 Stage) through Sept. 30, 2000
----------- ----------- -----------------------------
<S> <C> <C> <C>
CASH FLOW FROM OPERATING
ACTIVITIES:
Net earnings (loss) $ (773,015) $ (350,069) $(2,532,185)
Adjustment to reconcile net earnings
(loss) to net cash used by operating
activities
Depreciation and amortization 38,369 -- 69,663
Shares issued in exchange for extended
business model charged to
Website/Internet expenses 20,000 -- 20,000
Shares issued in exchange for services
charged to Professional fees 72,000 -- 72,000
Abandonment of furniture and office
equipment -- -- 30,809
Write-off goodwill -- -- 464,831
CHANGES IN CURRENT ASSETS
AND CURRENT LIABILITIES:
(Increase) decrease in current assets:
Pre-paids, deposits and accounts
receivable (80,350) (18,766) (80,350)
(Increase) decrease in current liabilities
Accounts payable and accrued expenses 41,713 -- 46,713
----------- ----------- -----------
NET CASH USED FOR OPERATING
ACTIVITIES (681,283) (368,835) (1,908,519)
----------- ----------- -----------
<CAPTION>
Nine Months Ended Sept. 30, Period From March 1, 1994
---------------------------- (Inception of the Development
2000 1999 Stage) through Sept. 30, 2000
----------- ----------- -----------------------------
<S> <C> <C> <C>
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of website equipment (150,281) -- (150,281)
Acquisition of furniture and equipment (50,754) -- (100,774)
Acquisition of software license -- -- --
(Purchase) of goodwill (464,831)
----------- ----------- -----------
NET CASH (USED) FOR INVESTING ACTIVITIES (201,035) -- (715,886)
----------- ----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Sale of common stock 842,000 223,600 2,591,911
Advances from shareholders 150,043 -- 150,043
----------- ----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 992,043 223,600 2,741,954
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH 109,725 (145,235) 117,549
CASH, beginning of period 7,824 -- --
----------- ----------- -----------
CASH, end of period $ 117,549 $ (145,235) $ 117,549
=========== =========== ===========
</TABLE>
Supplemental Disclosure:2000
Noncash investing and financing activities
20,000,000 shares of the Company's common stock issued to our President, Raymond
Dabney, in exchange for our business plan, were previously valued at $1,400,000.
The valuation of those shares has been adjusted to par value to present an
aggregate value of $20,000. The adjustment was made because we believe the value
of the business plan to us is not $1,400,000; but, rather, $20,000.
Shares issued in exchange for services
162,000 shares of the Company's common stock were issued in exchange for
services charged for professional fees.
No significant amounts of interest or taxes were paid during the periods shown
above.
See Notes to Financial Statements
5
<PAGE>
XRAYMEDIA.COM, INC.
(FORMERLY E-BIDD.COM, INC.)
(A COMPANY IN THE DEVELOPMENT STAGE)
REPORT ON REVIEW OF FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPT. 30, 2000 AND 1999
--------------------------------------------------------------------------------
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared by management
in accordance with the instructions in Form 10-QSB and, therefore, do not
include all information and footnotes required by generally accepted accounting
principals and should, therefore, be read in conjunction with the Company's
Annual Report to shareholders on Form 10-KSB for the fiscal year ended December
31, 1999. These statements include all normal recurring adjustments, which the
Company believes necessary for a fair presentation of the statements. The
interim operations results are not necessarily indicative of the results for the
full year ended December 31, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
XRAYMEDIA.COM, Inc. is a Minnesota corporation formerly named E-BIDD. Because we
became aware of another company with a similar name that also operates an
Internet auction site, we changed our name to XRAYMEDIA.COM, INC. as of June 28,
2000.
Our principal business is an Internet Media SuperPortal that is currently under
development at the website address www.xraymedia.com. Our website, when
completed, will be comprised of a general Media SuperPortal that branches out
into three media specific portals: Corporate Culture; Media Commerce; and
Community Resources. We intend to sell conventional media advertising space,
online advertising, and advertising and public relations services via our
Internet site.
We intend to gear our general Media SuperPortal towards the business of selling
conventional media advertising space, online advertising, advertising agency
services and public relations services. Clients will be able to access various
services using our website, including the purchase of radio and television
advertising time, creative advertising services and public relations services
that cater to financial, technology and real estate clients. As we develop our
website further, registered users will be able to buy media online in a larger
selection of markets, online banner advertising, added interactivity functions,
and a range of other content and media related services. We intend to host
real-time Internet-based auctions that provide media buyers and sellers with an
online exchange of advertising space at market driven prices.
Because we are still developing our website, we have not produced a steady
revenue stream. We launced our original website on April 24, 2000 and, after six
months of development, we launched a new Media SuperPortal and Media Auction
test site on October 24, 2000. We plan to complete testing of our media auction
capabilities on our website by the end of 2000, but we realize that this website
may not operate as anticipated. Even if the media auction operates successfully,
the software that our website uses may become obsolete quickly, as the software
industry in general, and the type of software we are using in particular, is a
rapidly changing technology.
Plan of Operation
Our plan of operation for the remainder of the year 2000 is to continue to test
our website and auction software, while we continue to investigate new
opportunities and potential partners who are in the business of selling
conventional media advertising space and online advertising. We will continue to
develop our new Internet Media SuperPortal.
6
<PAGE>
Results of Operations
Sales. We have generated minor revenues from operations including media service
sales since June 2000.
Losses. Net losses for the nine months ended Sept. 30, 2000, increased to
$773,015 from $350,069 for the nine months ended Sept. 30, 1999. The increase in
losses was primarily attributable to the purchase of website and computer
equipment and services related to website development. We expect to continue to
incur losses at least through fiscal year 2000 and there can be no assurance
that we will achieve or maintain profitability, generate revenue or sustain
future growth.
Expenses. General and administrative expenses for the nine months ended Sept.
30, 2000, increased to $847,209 from $350,069 for the nine months ended Sept.
30, 1999. The substantial increase in general and administrative expenses were
the result of continued website development.
Depreciation and amortization expenses for the nine months ended Sept. 30, 2000
and Sept. 30, 1999 was $38,369 and $0, respectively.
Liquidity and Capital Resources. Cash flow used by operations was $681,283 for
the nine months ended Sept. 30,2000, and $368,833 for the nine months ended
Sept. 30, 1999. The increase in negative cash flow for the nine months ended
Sept. 30, 2000 was primarily attributable to website development expenses.
Cash flow used for investing activities was $201,035 for the nine months ended
Sept. 30, 2000, and $0 for the nine months ended Sept. 30, 1999. The negative
cash flow for the nine months ended Sept. 30, 2000 is primarily attributable to
the acquisition of website-developing equipment.
Cash flow generated from financing activities was $992,043 for the nine months
ended Sept. 30, 2000 and $223,600 for the nine months ended Sept. 30, 1999. Our
financing activities primarily consisted of proceeds from our private placements
discussed below and advances from our shareholders.
We have funded our cash needs over the periods covered by this Form 10-QSB
through the issuance of our equity securities and advances from shareholders.
Our auditors have qualified their opinion to express doubt about our ability to
continue as a going concern. We will require substantial additional capital
infusions in the near future in order to accomplish our business plan. There can
be no guarantee that we will be able to secure the capital necessary to carry
out our business plan on acceptable terms, or at all. As discussed in more
detail below, we intend to raise funds through a private placement of our equity
securities.
On January 18, 2000, we conducted a private placement of our securities, which
were offered and sold to twenty-two non-U.S. residents and four U.S. residents,
in the amounts of $500,000 and $352,000 for total gross proceeds of $852,000,
which is to be used as general working capital. We sold a total of 4,260,000
units at a price of $0.20 per unit. Each unit consists of one share of our
common stock and one warrant to purchase an additional share of our common stock
at a price of $0.30 for a period of one year from the date of issuance ("First
Hold Period") and at a price of $0.50 for a period of one year from the end of
the First Hold Period.
We are currently offering our equity securities through a private placement that
is scheduled to close by November 30, 2000. The offering is a best effort, no
minimum, consisting of 2,000,000 units at $0.50 per unit. Each unit consists of
one share of our common stock and one warrant to purchase an additional share of
common stock at a price of $0.75 for a period of one year from the date of
issuance ("First Hold Period") and at a price of $1.00 for a period of one year
from the end of the First Hold Period. The common stock offered will not be
registered under the Securities Act of 1933 and may not be offered or sold in
the United States absent registration or an applicable exemption from
registration requirements.
7
<PAGE>
This disclosure is not an offer to sell securities and is not a solicitation of
an offer to buy securities. Sales will be made only to accredited investors or
to persons that are not U.S. residents. No money or other consideration is being
solicited or will be accepted by way of this disclosure. The common stock
offered has not been registered with or approved by any state securities agency
or the United States Securities and Exchange Commission and will be offered and
sold pursuant to exemptions from registration. If all the units are sold, then
the net proceeds to XRAYMEDIA will be approximately $980,000. The proceeds will
be used for general working capital.
Proposed Acquisition of Assets. Pursuant to an Agreement dated May 30, 2000, the
Company agreed to purchase assets of Multi-Com Enterprises, Inc. Both parties
have agreed not to proceed with the aforementioned Agreement. Details of this
Agreement were reported in the quarterly report on Form 10-QSB which we filed
with the Securities and Exchange Commission on or about June 30, 2000.
Capital Expenditures. XRAYMEDIA made significant capital expenditures on
property or equipment for the development of our website, computer equipment and
servers over the periods covered by this and earlier reports. Our only planned
capital expenditure is related computer equipment. We are budgeting $200,000 for
this expenditure.
As of September 2000, we have completed our Phase 1 website testing and
development, announced April 24,2000, our Phase 2 website testing and
development, announced May 19,2000, and have entered into our Phase 3 website
testing, announced as a new Media SuperPortal and Media Auction test site. Our
estimated cash requirements are approximately $700,000 annually. The majority of
our cash requirements will be used for an office lease, personnel
costs,professional fees and equipment.
Income Tax Expense (Benefit). We have net operating loss carry forwards of
approximately $1,000,000, which will expire in 2013 and 2014.
8
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings. Not applicable
Item 2. Changes in Securities. Not applicable.
Item 3. Defaults Upon Senior Securities. Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders. Not applicable.
Item 5. Other Information. On or about August 4, 1999, we issued 10,000,000
shares of our common stock to Laurier Limited to acquire a license for certain
computer software related to our auction website. Because we never received the
computer software from Laurier Limited, our management has decided to cancel
those 10,000,000 shares of our common stock.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required by Item 601 of Regulation S-B.
Exh. 2 - not applicable
Exh. 3 - previously filed with Commission
Exh. 4 - previously filed with Commission
Exh. 10 - previously filed with Commission
Exh. 11 - included in financial statements filed in Part I
Exh. 15 - not applicable
Exh. 18 - not applicable
Exh. 19 - not applicable
Exh. 22 - not applicable
Exh. 23 - not applicable
Exh. 24 - not applicable
Exh. 27 - Financial Data Schedule
(b) Reports on Form 8-K. No reports on Form 8-K were filed by us during
this quarter.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this Report on Form 10-QSB to be signed on its behalf by
the undersigned thereunto duly authorized.
XRAYMEDIA.COM, INC.
DATED: November 15, 2000 By: /s/ Raymond C. Dabney
---------------------
Raymond C. Dabney,
President and CEO
10
