<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2000.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ___________ to ____________.
Commission file number: 000-27821
2-INFINITY.COM, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 58-1891761
---------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
4828 Loop Central Drive, Suite 150 Houston, Texas 77081
------------------------------------------------ -----
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (713) 838-8853
LAKOTA TECHNOLOGIES, INC.
(Former name, former address and former fiscal year, if changes
since last report)
The number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
As of May 4, 2000, 83,601,339 shares of the issuer's common stock
were outstanding.
Transitional Small Business Disclosure Format (check one): Yes __ No _X_
<PAGE>
2-INFINITY.COM, INC.
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
<TABLE>
<CAPTION>
PAGE
------
<S> <C> <C>
PART I. FINANCIAL INFORMATION..........................................................1
ITEM 1.
a) Consolidated Financial Statements..............................................1
b) Consolidated Balance Sheet - March 31, 2000....................................1
c) Consolidated Statements of Operations -
Three months ended March 31, 2000 and 1999.....................................3
d) Consolidated Statements of Cash Flows -
Three months ended March 31, 2000 and 1999.....................................4
e) Notes to Consolidated Financial Statements.....................................6
ITEM 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations..................................11
PART II. OTHER INFORMATION..............................................................13
ITEM 1. Legal Proceedings............................................................13
ITEM 2. Changes in Securities and Use of Proceeds....................................14
ITEM 3. Defaults upon Senior Securities..............................................18
ITEM 4. Submission of Matters to a Vote of Securities Holders........................18
ITEM 5. Other Information............................................................18
ITEM 6. Exhibits.....................................................................18
SIGNATURES...............................................................................19
EXHIBIT INDEX............................................................................20
</TABLE>
<PAGE>
PART I
Item 1. Financial Statements.
2-INFINITY.COM, INC.AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheet
ASSETS
<TABLE>
<CAPTION>
March 31,
2000
----------------
<S> <C>
CURRENT ASSETS
Cash $ 1,123,622
Accounts receivable, net of allowance for doubtful accounts
of $1,268 64,752
Accounts receivable - employee 102,597
Accounts receivable - other 15,921
Prepaid expenses 10,786
Security deposit 39,114
----------------
Total Current Assets 1,356,792
----------------
PROPERTY AND EQUIPMENT
Furniture and fixtures 49,709
Equipment 97,349
Less: accumulated depreciation (18,495)
----------------
Total Property and Equipment 128,563
----------------
OTHER ASSETS
CLEC license 387,300
Net assets held for sale 5,168
----------------
Total Other Assets 392,468
----------------
TOTAL ASSETS $ 1,877,823
================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
2-INFINITY.COM, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Balance Sheet (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
March 31,
2000
----------------
<S> <C>
CURRENT LIABILITIES
Accounts payable $ 31,601
Notes payable 65,000
Accrued expenses 215,010
Accrued compensation 4,728,652
Other liabilities 657,365
----------------
Total Current Liabilities 5,697,628
----------------
STOCKHOLDER' EQUITY (DEFICIT)
Preferred stock 25,000,000 shares authorized,
no par value; no shares outstanding -
Common stock 300,000,000 shares authorized, no par
value; 83,501,339 shares issued and outstanding 12,716,948
Deficit accumulated during the development stage (16,536,753)
----------------
Total Stockholders' Equity (Deficit) (3,819,805)
----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 1,877,823
================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
2-INFINITY.COM, INC.AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
From
Inception on
For the Quarter November 14,
Ended March 31, 1995 Through
--------------------------------------- March 31,
2000 1999 2000
---------------- ---------------- ----------------
<S> <C> <C> <C>
REVENUES $ 150,129 $ - $ 398,680
COST OF SALES 86,263 - 237,758
---------------- ---------------- ----------------
GROSS MARGIN 63,866 - 160,922
EXPENSES
Depreciation expense 6,232 - 18,177
Amortization expense 503,200 - 2,662,200
Loss from oil and gas activities 109,467 266,418 7,354,443
General and administrative 1,804,144 - 6,631,237
---------------- ---------------- ----------------
Total Expenses 2,423,043 266,418 16,666,057
---------------- ---------------- ----------------
Loss before other income (expense) (2,359,177) (266,418) (16,505,135)
---------------- ---------------- ----------------
OTHER INCOME (EXPENSE)
Interest expense (2,548) - (2,646)
Inerest income 1,442 - 2,028
Loss on disposal of oil and gas assets (31,000) - (31,000)
---------------- ---------------- ----------------
Total Other Income (Expense) (32,106) - (31,618)
---------------- ---------------- ----------------
NET LOSS $ (2,391,283) $ (266,418) $(16,536,753)
================ ================ ================
BASIC AND DILUTED LOSS PER SHARE $ (0.04) $ (0.01)
================ ================
BASIC AND DILUTED WEIGHTED AVERAGE
NUMBER OF SHARES OUTSTANDING 59,765,860 22,538,437
================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
2-INFINITY.COM, INC.AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception on
For the Quarter November 14,
Ended March 31, 1995 Through
---------------------------------- March 31,
2000 1999 2000
--------------- ---------------- ----------------
<S> <C> <C> <C>
CASH FLOWS FROM DEVELOPMENT STAGE ACTIVITIES
Net loss $ (2,391,283) $ (266,418) $(16,536,753)
Adjustments to reconcile net loss to net cash flows
from development stage activities:
Depreciation expense 6,232 300 23,081
Loss on disposal of oil and gas assets 31,000 - 34,520
Amortization expense 503,200 720 2,677,356
Common stock issued for services and compensation 695,561 111,852 9,383,980
Common stock issued to acquire CLEC license 170,300 - 170,300
Changes in assets and liabilities
(Increase) decrease in accounts and other receivable (164,935) (23,000) (181,979)
Increase (decrease) in accounts payable (79,194) - 31,601
Increase (decrease) in accrued expenses and other liabilities 574,805 40,339 781,544
(Increase) decrease in prepaid expenses and other assets (33,710) (36,859) (67,718)
--------------- ---------------- ----------------
Net Used by Development Stage Activities (688,024) (173,066) (3,684,068)
=============== ================ ================
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of CLEC license (387,300) - (387,300)
Purchase of property and equipment (62,967) - (146,958)
--------------- ---------------- ----------------
Net Cash Used by Investing Activities $ (450,267) $ - $ (534,258)
=============== ================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
2-INFINITY.COM, INC. AND SUBSIDIARIES
(A Development Stage Company)
Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
From
For the Quarter Inception on
Ended March 31, November 14,
-------------------------------------- 1995 Through
2000 1999 March 31, 2000
----------------- --------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES
Payment on notes payable $ - $ - $ (95,132)
Proceeds from notes payable and debentures 20,000 99,000 1,262,414
Conversion of preferred stock to common stock - - 812,500
Proceeds from issuance of common stock and warrant 2,176,500 13,400 3,362,166
----------------- --------------- -----------------
Net Cash Provided by Financing Activities 2,196,500 112,400 5,341,948
----------------- --------------- -----------------
NET INCREASE (DECREASE) IN CASH 1,058,209 (60,666) 1,123,622
CASH AT BEGINNING OF PERIOD 65,413 92,090 -
----------------- --------------- -----------------
CASH AT END OF PERIOD $ 1,123,622 $ 31,424 $ 1,123,622
================= =============== =================
CASH PAID DURING THE PERIOD FOR:
Interest $ 1,463 $ - $ 6,202
NON-CASH TRANSACTIONS
Common stock and debt issued for services $ 695,561 $ 111,852 $ 9,383,980
Common stock issued to acquire CLEC license 170,300 - 170,300
Organization costs paid by related party - - 5,472
Issuance of preferred stock for oil and gas properties - - 812,500
Common stock issued for business acquisition 503,200 - 2,603,200
Common stock issued for debt and interest 919,500 - 1,567,000
----------------- --------------- -----------------
Total non-cash transaction $ 2,288,561 $ 111,852 $ 14,542,452
================= =============== =================
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE>
2-INFINITY.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements included herein have been prepared by
2-Infinity.com (formerly Lakota Technologies, Inc.), which, together with its
wholly-owned subsidiaries, is referred to herein as the "Company," without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of the Company, all adjustments consisting only of
normal recurring adjustments, necessary to present fairly the financial
position of the Company as of March 31, 2000, and the results of its
operations and its cash flows for the three months ended March 31, 2000 and
1999, and from inception on November 14, 1995 through March 31, 2000 have been
included. Certain information in footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles has been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate
to make the information presented not misleading. These consolidated financial
statements should be read in conjunction with the financial statements for the
year ended December 31, 1999, and the footnotes thereto, included in the
Company's Annual Report on Form 10-KSB, filed with the Securities and Exchange
Commission. The revenues of operations for the three months ended March 31,
2000 are not necessarily indicative of the results to be expected for the full
year.
1. Basis of Presentation:
Principles of consolidation - The consolidated financial statements include
the accounts of Lakota Technologies, Inc. and its wholly owned subsidiaries.
All inter-company balances and transactions have been eliminated in the
consolidation.
Change of name - On April 12, 2000, the shareholders of the Company approved
an amendment to the Company's Articles of Incorporation that changed the
Company's name from Lakota Technologies, Inc. to 2-Infinity.com, Inc.
2. Revenue Recognition:
The Company has recorded revenues from its 2-I Voice Solutions products, which
include business telephone and voice mail systems products and services.
Business telephone and voice mail systems products are recorded when shipped
and any related services revenue are recorded when the services are rendered
to the customer.
3. Basic and Diluted Loss Per Share:
Basic loss per share excludes dilution and was computed by dividing net loss
by the weighted average number of shares of common stock outstanding during
the period. Dilutive loss per share reflects the potential dilution that could
occur if securities or other obligations to issue common stock were exercised
or converted into common stock or resulted in the issuance of common stock
that then shared in the earnings or losses of the Company. For all periods
presented, basic and diluted loss per share were equal, as the inclusion of
dilutive securities would be antidilutive. Warrants to acquire 14,432,500
shares of common stock were outstanding as of March 31, 2000. There were no
warrants outstanding at March 31, 1999.
4. Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
5. Goodwill:
The Company assesses long-lived assets for impairment under FASB Statement No.
121, Accounting for the Impairment of long-Lived Assets. Under those rules,
goodwill associated with assets acquired in a purchase business combination
where determined to be impaired because circumstances exist that indicate the
carrying amount of
<PAGE>
those assets may not be recoverable. The total goodwill of $2,662,200 has been
amortized because of the impairment, $2,159,000 of which was amortized in 1999
relating to the AirNexus and 2-Infinity acquisitions and $503,200 of which was
amortized for the period ending March 31, 2000 relating to the AGM, Inc.
acquisition.
6. Business Combinations:
On May 28, 1999, the Company acquired all of the outstanding shares of
2-Infinity, a provider of high-speed Internet access products and services,
for 3,000,000 shares of the Company's common stock. 2-Infinity had only been
in existence for a short period of time and had minimal prior operations. The
acquisition has been accounted for as a purchase. The agreement previously
provided for additional consideration of up to 6,000,000 shares to be issued
upon achieving certain revenue performance goals. In January 2000, the former
owner of 2-Infinity waived the additional consideration.
On June 9, 1999, the Company acquired all of the outstanding shares of Air
Nexus, a retail provider of commercial voice and data products and services.
The Company issued 3,000,000 shares of common stock in exchange for all of the
outstanding shares of Air Nexus. The acquisition has been accounted for as a
purchase. The agreement previously provided for additional consideration up to
3,000,000 shares to be issued upon achieving certain revenue performance
goals. In January 2000, the former owner of AirNexus waived the additional
consideration.
In January 2000, the Company acquired all of the outstanding shares of AGM,
Inc. (AGM), a Nevada corporation, a reporting public company with no prior
operations. The Company elected successor issuer status to become a reporting
public entity upon the acquisition of AGM. The purchase price was 2,200,000
shares of the Company's common stock at a fair market value of $.136 per
share. The acquisition has been accounted for as a purchase. In connection
with this transaction, the Company also issued 1,500,000 shares of common
stock, also at a fair market value of $.136 per share, and $50,000 for
consulting services to another corporation that assisted in the negotiation
and completion of the transaction.
Allocation of the purchase price for the acquisitions is as follows:
<TABLE>
<CAPTION>
2-Infinity AirNexus AGM
------------- ------------ -----------
<S> <C> <C> <C>
Goodwill $ 1,139,000 $ 1,020,000 $ 503,200
Cash 104,479 515
Property and equipment 5,731 --
Other assets 1,669 9,238
Liabilities assumed (50,879) (129,753)
----------- ----------- -----------
Total Purchase Price $ 1,200,000 $ 900,000 $ 503,200
=========== =========== ===========
</TABLE>
As discussed in notes above, goodwill was fully amortized as of March 31, 2000.
The following pro forma financial information gives effect to the 2-Infinity,
AirNexus and AGM acquisitions as if they had been acquired at January 1, 1999.
The pro forma results were prepared for comparative purposes only and are not
indicative of the results of operations which actually would result had the
acquisitions occurred on the date indicated, or which may result in the future:
<TABLE>
<CAPTION>
For the quarters ended March 31,
------------------------------------
2000 1999
------------------ ----------------
<S> <C> <C>
Revenues $ 150,129 $ 48,992
Loss before other income (expense) (2,359,177) (256,308)
Net loss (2,391,283) (256,417)
Basic and diluted loss per share $ (.04) $ (.01)
Basic and diluted weighted average
common shares outstanding 59,765,860 22,538,437
</TABLE>
7. Assets Held for Sale:
On April 18, 2000, the Company approved a plan to sale all remaining assets
relating to the oil and gas exploration projects and where necessary, plug and
abandon all other non-producing wells that cannot be sold. The Company is in
contact with three entities to sell its interest in the Union Central Life
Insurance Co. Well No. 1, and all other non-producing wells, are to be plugged
and abandoned. The Company expects to complete this process by June 30, 2000.
The Company has recorded a provision for estimated losses to be incurred on
the sale and disposal of the assets of $31,000. The amounts the Company will
ultimately realize, if any, could differ from the amounts assumed in arriving
at the loss anticipated on disposal of the oil and gas assets.
Included in loss from oil and gas activities for the three months ended March
31, 2000 is $5,896 of revenues from its percentage interest in the oil
production from one remaining producing oil and gas well. There were no
revenues for the three months ended March 31, 1999 and the total cumulative
revenue from inception on November 14, 1995 through March 31, 2000 is $14,661.
All costs associated with oil and gas activities have been included in "Loss
from Oil and Gas Activities" for all periods presented.
8. Going Concern:
Since inception through May 1999, the Company devoted substantially all of its
efforts to invest with joint partners in oil and gas exploration projects.
However, as a result of minimal revenue and continued losses from these
ventures, the Company decided to diversify into other markets, primarily
technology and the Internet. The Company's acquisition of 2-Infinity and
AirNexus provided the ability to enter into the technology, Internet markets.
However, the Company has not operated profitably to date and there are no
assurances that future operations will be profitable.
The Company incurred net losses of ($2,391,283) and ($266,418) for the
quarters ended March 31, 2000 and 1999, respectively. The Company's ability to
operate as a going concern is contingent upon its ability to effectively
market its newly acquired technology products and services and get it to the
marketplace. Future success is also dependent on the Company's ability to
obtain additional equity financing. The aforementioned factors raise
substantial doubt about the Company's ability to continue as a going concern.
In January 2000, new board members and senior management were appointed in
connection with running operations and raising additional capital through the
private placement (Note 13). The new management adopted new strategies for the
Company and developed a plan of action as follows:
- The Company is completing it's plan to sale all remaining
assets relating to the oil and gas exploration projects and
where necessary, plug and abandon all other non-producing
wells that cannot be sold. The Company is in contact with
three entities to sell it's interest in the Union Central Life
Insurance Co. Well No. 1, all other non-producing wells are to
be plugged and abandoned.
- The Company is pursuing additional strategic alliances to
expand the development and marketing of it's core
technological products and services surrounding high-speed
Internet access.
- The Company is obtaining customers and adding to its monthly
revenue stream by waiving activation fees and hardware costs
in return for long-term contracts.
- The Company is implementing an aggressive marketing and sales
program, targeting commercial customers to sell them DSL
("Digital Subscriber Line"), high-speed Internet access and
other related products and services.
- The Company is obtaining additional equity funding to cover
the initial marketing plan and infrastructure to acquire and
maintain anticipated revenue stream.
<PAGE>
Management believes the successful completion of its plans, will produce
revenues and cash flows. However, no assurance can be given that the Company
will be successful in the implementation of its plans or that the Company will
be able to raise additional funds. In the event the Company's activities do
not result in increased revenues and cash flows and the Company is not able to
raise additional financing to meet its operating needs, the Company may no
longer be able to continue as a going concern. The financial statements do not
include any adjustments that might be necessary should the Company be unable
to continue as a going concern.
9. Related Party Transactions:
In February 1999, the Company issued 1,000,000 shares of restricted common
stock to an entity controlled by the President of Lakota Oil, as consideration
for services valued at $100,000 related to the negotiation and consummation of
a transaction with an oil and gas project.
In January and February 2000, the Company mutually separated from three
officers and directors, its CEO, CFO and the President of Lakota Oil. Included
in the settlement agreements with the former CEO, the Company issued 4,000,000
shares and $100,000 to compensate him for past service and the Company paid
$40,000 for execution of the settlement agreement and consulting services
during the transition to new management. Each party mutually discharged any
indebtedness owed to the other and Cam Am Resources, Inc, a related party of
the CEO. As a result, the Company had accrued at December 31, 1999, $500,000
for compensation of past services at the fair market value of the shares and
cash issued as a result of this agreement. In addition, included in the
settlement agreements with the former CFO and the former President of Lakota
Oil, the Company issued an aggregate of 5,500,000 shares and $100,000 to
compensate them for past services and the Company paid an aggregate of $65,000
for the execution of the agreements and consulting services during the
transition to new management. As a result, the Company accrued at December 31,
1999, $2,760,500 of compensation expense at the fair market value of the
shares and cash issued as a result of these agreements.
Effective August 1, 1999, the Company approved and implemented an Omnibus
Stock Option Plan ("the Plan") and the board of directors granted 2,000,000
options to purchase the Company's common stock under the plan. In January
2000, the options granted under the plan were cancelled as part of the
settlement and separation agreements with the option holders and the Plan was
terminated.
In April 2000, the board of directors approved the issuance of 4,040,000
common shares to employees and directors of the Company as compensation for
services performed from June 1999 through January 2000. The shares were valued
at fair market value on the date the board was authorized to grant the shares,
which was $1.156. In the first quarter of 2000, the Company accrued the
remaining pro-rata portion of the compensation expense of $528,281.
10. Notes Payable:
Notes payable consisted of the following:
<TABLE>
<CAPTION>
March 31, 2000
---------------------
<S> <C>
Notes payable to individuals; convertible to stock
at the option of the holder within one to three
years; interest at 9.75%, paid quarterly until
converted;unsecured. $ 60,000
Notes payable; due on demand; unsecured,
non-interest bearing. 5,000
--------------------
Total notes payable $ 65,000
====================
</TABLE>
<PAGE>
11. Convertible Debentures:
In August 1999, the Company issued $750,000 of 8% convertible debentures
exercisable at 75% of fair market value of the Company's common stock on the
date of conversion. In addition, the Company issued 5,000,000 warrants at an
exercise price of 50% of the fair market value of the Company's stock on the
date of exercise. The Company incurred a fee of $40,000 for the transaction.
In addition, $250,000 of the $750,000 was held in escrow until all
requirements under the agreements were met, including obtaining an effective
registration statement for the resale of underlying shares of common stock,
which the Company defaulted as of January 1, 2000. Effective January 18, 2000,
the Company completed a settlement with the debenture holders, canceling all
previous agreements in exchange for 1,500,000 shares of the Company's common
stock and $324,750 of 8% convertible debentures exercisable at 50% of the fair
market value of the Company's stock. The debentures were subsequently
converted into 3,392,857 shares. Total cash received, net of the original
$40,000 fee, was $460,000 relating to the transaction. The Company recorded
the transaction as if the settlement occurred prior to December 31, 1999. The
convertible debentures of $500,000 and accrued interest of $419,500 were
recorded as equity at March 31, 2000 as a result of the conversion to common
stock.
12. Warrants:
A summary of the status of the Company's warrants as of March 31, 2000 and
changes during the quarter ending March 31, 2000:
<TABLE>
<CAPTION>
Average
Exercise
Shares Price
-----------------------------------
<S> <C> <C>
Outstanding at March 31, 2000 5,002,500 $ 0.25
Granted 10,500,000 0.50
Expired -
Exercised (1,070,000) 0.14
-----------------------------------
Outstanding at March 31, 2000 14,432,500 $ 0.43
Exercisable at March 31, 2000 14,432,500 $ 0.43
</TABLE>
13. Common Stock Transactions:
In January 2000, the Company sold to an accredited investor 750,000 shares of
common stock at an exercise price of $.067 per share, together with a warrant
to purchase 500,000 shares of common stock at a purchase price of $.125 per
share for a period of one year.
In January 2000, the Company issued in exchange for prior services an
aggregate of 775,000 shares of common stock to four professionals and
consultants. The aggregate amount of $206,150, representing the fair market
value of the stock on the date of issuance, was expensed in the quarter ended
March 31, 2000. In addition, the Company issued 605,000 shares of common stock
to a professional for legal services performed in 1999 and 2000. The total
amount of $160,930, representing the fair market value of the stock on the
date of issuance, was expensed half in 1999 and the remainder in the first
quarter of 2000.
In the first quarter of 2000, the Company completed a private placement
raising $2,000,000 by offering 20,000,000 shares of the Company's common stock
at $.10 per share. The offering also includes for every two shares purchased,
a warrant to acquire an additional share of common stock at $.50, exercisable
for a period of one year from the date of issuance.
<PAGE>
In February 2000, the Company agreed to issue 175,000 shares of common stock
valued at $0.17 per share for public relations services performed by a services
firm. In addition, the Company entered into an agreement with that firm to
continue their services for a monthly fee of $5,000 and 60,000 shares of common
stock. The Company has included in accrued expense in the first quarter ended
March 31, 2000, $80,000 representing the fair market value of the stock to be
issued per the agreement. On May 2, 2000, the Company gave its 30-day notice to
terminate the contract in accordance with the agreement. The shares will be
issued in the second quarter of 2000.
Item 2. Management's Discussion and Analysis or Plan of Operation.
2-INFINITY.COM, INC. AND SUBSIDIARIES
IN ACCORDANCE WITH THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995, THE COMPANY NOTES THAT CERTAIN STATEMENTS IN
THIS FORM 10-QSB WHICH ARE FORWARD-LOOKING AND WHICH PROVIDE OTHER THAN
HISTORICAL INFORMATION, INVOLVE RISKS AND UNCERTAINTIES THAT MAY IMPACT THE
COMPANY'S RESULTS OF OPERATIONS. THESE FORWARD-LOOKING STATEMENTS INCLUDE,
AMONG OTHERS, STATEMENTS CONCERNING THE COMPANY'S GENERAL BUSINESS STRATEGIES,
FINANCING DECISIONS, AND EXPECTATIONS FOR FUNDING CAPITAL EXPENDITURES AND
OPERATIONS IN THE FUTURE. WHEN USED HEREIN, THE WORDS "BELIEVE," "PLAN,"
"CONTINUE," "HOPE," "ESTIMATE," "PROJECT," "INTEND," "EXPECT," AND SIMILAR
EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. ALTHOUGH
THE COMPANY BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING
STATEMENTS ARE BASED ON REASONABLE ASSUMPTIONS, NO STATEMENTS CONTAINED IN
THIS FORM 10-QSB SHOULD BE RELIED UPON AS PREDICTIONS OF FUTURE EVENTS. SUCH
STATEMENTS ARE NECESSARILY DEPENDENT ON ASSUMPTIONS, DATA OR METHODS THAT MAY
BE INCORRECT OR IMPRECISE AND MAY BE INCAPABLE OF BEING REALIZED. THE RISKS
AND UNCERTAINTIES INHERENT IN THESE FORWARD-LOOKING STATEMENTS COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN OR IMPLIED BY
THESE STATEMENTS.
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE FORWARD-LOOKING
STATEMENTS CONTAINED HEREIN, WHICH SPEAK ONLY AS OF THE DATE HEREOF. THE
INFORMATION CONTAINED IN THIS FORM 10-QSB IS BELIEVED BY THE COMPANY TO BE
ACCURATE AS OF THE DATE HEREOF. CHANGES MAY OCCUR AFTER THAT DATE, AND THE
COMPANY WILL NOT UPDATE THAT INFORMATION EXCEPT AS REQUIRED BY LAW IN THE
NORMAL COURSE OF ITS PUBLIC DISCLOSURE PRACTICES.
IMPORTANT RISK FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THE EXPECTATIONS REFLECTED IN ANY FORWARD-LOOKING STATEMENT HEREIN
INCLUDE AMONG OTHER THINGS: (1) THE ABILITY OF THE COMPANY TO QUICKLY
PENETRATE THE MARKET WITH ITS CURRENT METHOD OF TECHNOLOGY AGAINST LARGER,
WELL-FINANCED COMPETITORS WITHIN THE MARKETPLACE; (2) THE ABILITY OF THE
COMPANY TO GENERATE REVENUES IS SUBSTANTIALLY DEPENDENT UPON CONTINUED GROWTH
IN THE USE OF THE INTERNET AND THE INFRASTRUCTURE FOR PROVIDING INTERNET
ACCESS AND CARRYING INTERNET TRAFFIC; (3) THE ABILITY OF THE COMPANY TO
ATTRACT AND RETAIN KEY OFFICERS, KNOWLEDGEABLE SALES AND MARKETING PERSONNEL
AND HIGHLY TRAINED TECHNICAL PERSONNEL; (4) TO THE EXTENT THAT OUR ACTIVITIES
OR THIRD-PARTY CONTRACTORS INVOLVE THE STORAGE AND TRANSMISSION OF PROPRIETARY
INFORMATION, SUCH AS CREDIT CARD NUMBERS, OR PERSONAL DATA INFORMATION, THE
ABILITY OF THE COMPANY TO REDUCE EXPOSURE TO A RISK OF LOSS OR LITIGATION AND
POSSIBLE LIABILITY; (5) THE ABILITY OF THE COMPANY TO MINIMIZE EXPENSES AND
EXPOSURES RELATED TO OIL AND GAS PROPERTIES IN WHICH OTHER COMPANIES HAVE
CONTROL OVER THE MANNER IN WHICH OPERATIONS ARE CONDUCTED ON SUCH PROPERTIES,
INCLUDING COMPLIANCE WITH SAFETY AND ENVIRONMENTAL STANDARDS; (6) THE ABILITY
OF THE COMPANY TO OBTAIN ADDITIONAL FINANCING FROM PUBLIC AND PRIVATE EQUITY
MARKETS TO FUND OPERATIONS AND FUTURE
<PAGE>
GROWTH; AND (7) THE ABILITY OF THE COMPANY TO GENERATE REVENUES TO COVER
OPERATING LOSSES AND POSITION THE COMPANY TO ACHIEVE POSITIVE CASH FLOW.
General
Since inception through May 1999, the Company devoted substantially all of its
efforts to invest with joint partners in oil and gas exploration projects.
However, as a result of minimal revenue and continued losses from these
ventures, the Company decided to diversify into other markets, primarily
technology and the Internet. The Company's acquisition of 2-Infinity and
AirNexus provided the ability to enter into the technology and Internet
markets. On April 18, 2000, the Company approved a plan to dispose of all
remaining assets relating to the oil and gas exploration projects and where
necessary, plug and abandon all other non-producing wells that cannot be sold.
In January 2000, new board members and senior management were appointed in
connection with running operations and raising additional capital. The new
management adopted new strategies for the Company and developed a plan of
action as follows:
-- The Company is in contact with three entities to sell it's
interest in the Union Central Life Insurance Co. Well No. 1,
all other non-producing wells are to be plugged and abandoned.
-- The Company is pursuing additional strategic alliances to
expand the development and marketing of its core technological
products and services surrounding high-speed Internet access.
-- The Company is obtaining customers and a monthly revenue
stream by waiving activation fees and hardware costs in return
for long-term contracts.
-- The Company is implementing an aggressive marketing and sales
program, targeting commercial customers to sell them DSL
high-speed Internet access and other related products and
services.
-- The Company is raising additional equity funding to cover
costs associated with its initial marketing plan and the
necessary infrastructure to effect its business plan.
Management believes the successful completion of its plans, will produce
increased revenues and cash flows. However, no assurance can be given that the
Company will be successful in the implementation of its plans or that the
Company will be able to raise additional funds.
Results of Operations
Revenues for the quarter ended March 31, 2000 increased to $150,129 from no
revenues reported for the quarter ended March 31, 1999. This increase was due
to the acquisition of AirNexus and the sales of commercial voice and data
products and services.
Cost of Sales for the quarter ended March 31, 2000 increased to $86,263 from
no such costs reported for the quarter ended March 31, 1999. This increase was
due to the acquisition of AirNexus and the cost of the commercial voice and
data products the Company resells.
Amortization expense for the quarter ended March 31, 2000 increased to
$503,200 from no such costs reported for the quarter ended March 31, 1999.
This increase is due to the write-off of goodwill associated with AGM
acquisition, which was determined to be impaired because of the carrying
amount of the assets acquired may not be recoverable. The total goodwill was
amortized because of the impairment.
Loss from oil and gas activities for the quarter ended March 31, 2000,
decreased by ($156,951) or (59 %) to $109,467 from $266,418 in the quarter
ended March 31, 1999. The decrease is due to the Company's diversification
into technology and the decision to discontinue oil and gas activities. Costs
include management and consulting fees to the former management.
<PAGE>
General and administrative expenses for the quarter ended March 31, 2000,
increased to $1,804,144 from no such costs reported for the quarter ended
March 31, 1999. The increase is due to the acquisition of 2-Infinity and
AirNexus in June 1999 to enter the technology markets. The general and
administrative expenses include employee compensation of $1,058,000 relating
to salary and stock awards; marketing costs of $100,000; consulting and
professional fees of $421,000; and $225,000 of other general and
administrative expenses.
Other income (expense) for the quarter ended March 31, 2000, increased to
($32,106) from no such costs reported for the quarter ended March 31, 1999.
The increase is primarily due to the estimated loss on disposal of oil and gas
assets.
Net loss for the quarter ended March 31, 2000 increased by $2,124,865 to
($2,391,283) from ($266,418) for the comparable period in the prior quarter.
The Company expects to incur additional losses until its revised business
strategy results in sufficient revenues to offset operating expenses and
infrastructure costs required to get the technology to the marketplace.
Liquidity and Capital Resources
In the fiscal quarter ended March 31, 2000, the Company raised $2,030,000 in
private placement transactions. In addition, the Company raised $146,500 from
the exercise of common stock warrants and $20,000 from issuance of a
convertible note.
The Company is currently operating at a loss and expects to continue to depend
on cash generated from the sale of debt and equity securities to fund its
operating deficit. There can be no assurance that the Company will be able to
generate sufficient revenues to meet its operating cash and growth needs or
that any equity or debt funding will be available or at terms acceptable to
the Company in the future to enable it to continue operating in its current
form.
The Company's loss for the fiscal quarter ended March 31, 2000 was
($2,391,283). The Company expects to incur losses for the foreseeable future
due to the ongoing activities of the Company to develop a network operations
center and continue its strategy of installing and maintaining DSL equipment
in facilities such as commercial buildings and multi-tenant dwellings. The
Company believes that this strategy, while initially requiring additional cash
outlays, will result in higher margins and longer customer retention. The
Company expects its existing operations to continue to result in negative cash
flow and working capital deficiencies that will require the Company to
continue to obtain additional capital.
Based on current commitments and on going working capital needs, the Company
believes that it will require substantial additional debt or equity funding to
continue to implement its revised business strategy, including acquisitions.
The Company's cash needs and usage may vary based on the outcome of these
initiatives. There can be no assurance that the necessary financing will be
available to the Company or, if available, that the same will be on terms
satisfactory or favorable to it. It is possible that additional equity
financing will be highly dilutive to existing shareholders.
PART II
Item 1. Legal Proceedings.
The Company filed a complaint in December 1999 in the 80th District Court of
Harris County, Texas against Tiger Petroleum, Inc. and Mr. Kenny Vincent. This
claim is based on a breach of a settlement agreement entered into by the
Company and the defendants on March 25, 1999. The Company is seeking the
return of 300,000 shares of common stock, plus attorneys' fees and court
costs. Discovery has been commenced and it is anticipated that if this case is
not resolved in mediation, it will be docketed for trial in the last quarter
of 2000.
Item 2. Changes in Securities.
<PAGE>
In January 2000, the Company issued 925,300 shares of common stock upon
exercise of outstanding warrants as follows:
<TABLE>
<CAPTION>
Investor Shares Price per share
- --------- ------ ------------------
<S> <C> <C>
Joseph Antoci 10,000 0.10
Harvey Bolkema 22,800 0.10
Ray E. Egli 30,000 0.10
Walter Weldon 10,000 0.10
John David Clarke 10,000 0.10
Douglas S. Chadwick 10,000 0.10
Steve Fletcher 20,000 0.10
Ron and Pauline Barber 50,000 0.10
Steve D. Morrison 125,000 0.10
Michael Hancock 125,000 0.10
Michael & Diana Erdman 92,500 0.10
Jeffrey A. Runner 400,000 0.10
James Hodgson 20,000 0.10
</TABLE>
In August 1999, the Company issued $750,000 aggregate principal amount of 8%
convertible debentures exercisable at 75% of the fair market value of the
Company's common stock on the date of conversion. In addition, the Company
issued 5,000,000 warrants at an exercise price of 50% of the fair market value
of the Company's stock on the date of exercise. In addition, $250,000 of the
$750,000 of proceeds were held in escrow until all covenants under the
subscription agreements were met, including obtaining an effective
registration statement for the resale of the underlying shares of common
stock, which the Company did not fulfill. Effective January 18, 2000, the
Company completed a settlement with the debenture holders, canceling all
previous agreements in exchange for 1,500,000 shares of the Company's common
stock to the investors listed below and $324,750 aggregate principal amount of
8% convertible debentures exercisable at 50% of the fair market value of the
Company's stock on the date of conversion. The debentures were subsequently
converted into 3,392,857 shares of common stock and issued to the investors
listed below. Total proceeds to the Company were $500,000 relating to the
transaction.
<TABLE>
<CAPTION>
Investor Shares Price per Share
- -------- ------ ---------------
<S> <C> <C>
HLKT Holdings, LLC 500,000 .17
HLKT Holdings, LLC 1,328,571 .081
DVH Holdings, LLC 500,000 .17
DVH Holdings, LLC 1,033,334 .105
M&B Trading 500,000 .17
M&B Trading 1,030,952 .105
</TABLE>
In January 2000, the Company issued 2,200,000 shares of common stock to former
shareholders of AGM, Inc. to acquire all of the outstanding shares of AGM,
Inc. (AGM), a Nevada corporation, a reporting public company with no
operations. In connection with this transaction, the Company also issued
1,500,000 shares of stock to MRC Legal Services Corporation, as a result of
their assistance in the negotiation and completion of the transaction. The
Company also issued 200,000 additional shares to MRC Legal Services
Corporation for past legal services.
<PAGE>
In January and February 2000, the Company mutually separated from three
officers and directors, its CEO, CFO and the President of Lakota Oil. As part
of the separation agreements and compensation for past services, the Company
issued 4,000,000 shares of common stock to Ken Honeyman, former CEO, and
2,000,000 shares of common stock to Howard Wilson, former CFO. An additional
2,000,000 shares were held in escrow subject to a payment to each party for
$100,000. The payments were made in March 2000 and the shares will be
canceled. In addition, the Company issued 3,500,000 shares of common stock to
John B. Hayes, former President of Lakota Oil.
In January 2000, the Company issued to Daniel Siefer, an accredited investor,
750,000 shares of common stock at an purchase price of $.067 per share,
together with a warrant to purchase 500,000 shares of common stock at a
purchase price of $.125 per share for a period of one year.
In January 2000, the Company issued an aggregate of 1,380,000 shares of common
stock for services provided to the Company as follows:
Michael Omer 475,000
Brent Cavazos 605,000
Pat Morgan 100,000
Vencent Jalali 100,000
Al Cooper 100,000
In the first quarter of 2000, the Company completed a private placement
raising $2,000,000 by offering 20,000,000 shares of the Company's common stock
at $.10 per share. The offering was exempt from registration provided by
section 4(2) and/or 3(b) of the 1933 Act, and Rule 506 under Regulation D.
The offering also includes for every two shares purchased, a warrant to
acquire an additional share of common stock at $.50, exercisable for a period
of one year from the date of issuance. The Company paid an aggregate of
$48,000 in finders fees as follows: $8,000 to Mike Kelly and $40,000 to Rick
Methaney. The shares of common stock were issued to the following investors:
Accredited investors:
Kevin McCormack 131,300
Mustafa Jalali 225,100
Michael S. Webb 3,500
Yahya AG Solara 10,000
Jennifer Longbotham 8,000
Dipak N. Bhatt 130,000
Milton Smith 35,000
F. Thomas Siskron 6,500
Leo Paul Black 6,500
Fremont Binder 70,000
J. Michael Jaynes 5,000
Manzoor Hasan 30,000
Robert K. Gibbs 100,000
Patrizia Gentile 25,000
Dorothy Fancett 5,000
Naila Elkassas 5,000
Hazem F. Elkassas 5,000
Danny Duzich 30,000
David Drake 4,000
<PAGE>
Mark Dodd 10,000
Sharon Boone 10,000
Narmadashaker Bhatt 50,000
Ahmad B Ben-Naji 2,000
Jeff Austin III 25,000
Ali Alsaad 21,500
Zubair A. Alqadi 10,000
Billy Scott 15,000
Thomas Schoeve 50,000
Ken Samford 15,000
Duane Carl Radtke 7,500
Walter Putnam 30,000
Daryll Parrott 2,000
Scott Nash 25,000
Lori Nash 10,000
Mohammad Naseem 5,000
Jim McCanna 10,000
Thomas Marano 5,000
Strother Timberlands 10,000
Lee Magness 15,000
Howard Loyd III 15,000
Linda M. Long 10,000
Richard Lewins 9,000
Stephen Kerns 10,000
David Jolly 5,000
John Goodman 2,000
Robert Sanz 20,000
Matthew Hensley 100,000
Brian Brinkman 20,000
Nazar Jamsheer 5,500
Mohamed Jamsheer 11,000
Laura Landry 10,000
Jack Wilson 2,000
Yousef Yousri 5,000
Raymond Landry 10,000
David Michael Ballard 15,000
Ahmed Altwaijri 6,000
Diane Duzich 130,000
Eugene Lindsey 10,000
Glen Terrell 1,200
Jukka Tolonen 20,000
Jack Walker 10,000
AndreVan Walleghem 5,000
Scott Smith 25,000
Todd Smith 6,000
Salman Alhasan 2,000
Mohammed Y. Aldoseri 6,000
Robert D. Patman 1,000
Douglas Robertson 5,000
Steven Clark 5,000
<PAGE>
Daniel Railey 5,000
Virgil McCall 5,000
James Rountree 30,000
Unaccredited investors:
Paul D. Pendergraft 5,000
Michael A. Kelly 7,000
Mitchell A. Weigand 10,000
Sohail Alam 10,000
Jill N. Boullion 10,000
David Michael Sanders 1,200
Dan J. Pulaski 1,000
Norma L. Mills 1,000
Paul J. Kolisch 6,000
Matthew B. Kock 5,000
Christine L. Hsing 10,000
Abe Hakim 5,000
George A. Dearing III 5,000
Richard Cash Cooper 20,000
Daren H. Collymore 17,000
Manaf Mannai 4,000
Dewayne L. Weatherford 5,000
Vernita J. Gonzales 100
Roy Shultz 1,500
Cheryl A. Mik 3,000
Jason Jobst 100
Christopher V. Bures 88,500
Byron B. Jones 12,000
Charles K. Ward 12,000
Sharon Garrett 30,000
Virgilio T. Virata 4,000
Mark Alfred Siebert 3,000
Khalid Nabi 4,000
Jason McCall 11,000
Otis Carlisle, Jr. 5,000
Laha 3,000
John M. Butler 3,000
Juan Valdez 10,000
Patrick Segosebe 3,000
For all securities transactions discussed above, except where otherwise
indicated:
- No underwriter or placement agent was used in connection with
any of the above-referenced securities transactions, and no
underwriting commissions were paid.
- No means of general solicitation was used in offering the
securities.
- The securities in each transaction were sold to a limited
group of accredited investors in private placement
transactions, exempt from registration under Section 4(2) of
the Securities Act.
- All purchasers of the Company's securities were sophisticated
investors who qualified as accredited
<PAGE>
investors within the meaning of Rule 501(a) of Regulation D
under the Securities Act.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
On April 12, 2000, the Company held a Special Meeting of Shareholders in order
to allow the shareholders to vote to approve two proposed amendments to the
Company's Articles of Incorporation. In the first proposal, the Company sought
approval of an amendment to Section 1 of Article V of the Articles of
Incorporation in order to increase the authorized capital stock of the Company
from 100,000,000 shares to 300,000,000 shares of common stock. The proposed
amendment did not alter the number of authorized shares of preferred stock. In
the second proposal, the Company sought approval of an amendment to Article I
of its Articles of Incorporation in order to change the Company's name from
Lakota Technologies, Inc. to "2-Infinity.com, Inc."
On March 3, 2000, the record date for the Special Meeting of Shareholders held
on April 12, 2000, there were 63,501,339 shares of the Company's common stock
issued and outstanding. All outstanding shares were entitled to vote on the
two proposals. The first proposal was approved by the shareholders, with
47,949,544 shares voting for, 2,608,680 shares voting against and with 123,845
shares abstaining. The second proposal was approved by the shareholders, with
50,619,668 shares voting for, 121,701 shares voting against and 53,875 shares
abstaining. Immediately after the Special Meeting of Shareholders, the Company
submitted documentation to the Colorado Secretary of State in order to effect
the foregoing amendments to its Articles of Incorporation.
In addition, the Company's ticker symbol on the Nasdaq Bulletin Board has been
changed to "TWIC." .
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) EXHIBITS.
3.1 Articles of Incorporation of Chancellor Trading Group, Inc.
filed July 14, 1995 (incorporated herein by reference to
Exhibit 3.1 of the Company's Registration Statement on Form
S-8 (File No. 333-95021), filed with the Commission on
January 20, 2000 (the "Company's Form S-8").
3.2 Articles of Merger between Lakota Energy, Inc. and Chancellor
Trading Group, Inc. filed December 27, 1996 (incorporated
herein by reference to Exhibit 3.2 of the Company's Form S-8).
3.3 Articles of Amendment to the Articles of Incorporation of
Lakota Energy, Inc. filed August 4, 1999 (incorporated herein
by reference to Exhibit 3.3 of the Company's Form S-8).
3.4 Bylaws of Lakota Energy Inc.(incorporated herein by reference
to Exhibit 3.4 of the Company's Form S-8).
3.5 Articles of Amendment to the Articles of Incorporation of
Lakota Technologies, Inc.
27 Financial Data Schedule
(b) Reports on Form 8-K.
The Company filed the following documents with the Securities
and Exchange Commission:
A report on Form 8-K was filed April 27, 2000 relating to the
approval by the Shareholders of two amendments to the
Company's Articles of Incorporation: (1) increasing the
Company's authorized common stock from 100,000,000 shares to
300,000,000 shares, and (2) changing the Company's name from
Lakota Technologies, Inc. to 2-Infinity.com, Inc. No financial
statements were required to be filed with this form.
A report on Form 8-K was filed May 10, 2000 relating to a
change in the Company's independent public accountants. No
financial statements were required to be filed with this form.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
2-INFINITY.COM, INC.
Date: May 12, 2000 By: /s/ Majed Jalali
-------------------------
Name: Majed Jalali
Title: President and Chief Executive
Officer
Date: May 12, 2000 By: /s/ Kelly Nispel
-------------------------
Name: Kelly Nispel
Title: Chief Financial Officer and
Treasurer
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C>
3.1 Articles of Incorporation of Chancellor Trading Group, Inc.
filed July 14, 1995 (incorporated herein by reference to
Exhibit 3.1 of the Company's Registration Statement on Form
S-8 (File No. 333-95021), filed with the Commission on
January 20, 2000 (the "Company's Form S-8").
3.2 Articles of Merger between Lakota Energy, Inc. and Chancellor
Trading Group, Inc. filed December 27, 1996 (incorporated
herein by reference to Exhibit 3.2 of the Company's Form S-8).
3.3 Articles of Amendment to the Articles of Incorporation of
Lakota Energy, Inc. filed August 4, 1999 (incorporated herein
by reference to Exhibit 3.3 of the Company's Form S-8).
3.4 Bylaws of Lakota Energy Inc.(incorporated herein by reference
to Exhibit 3.4 of the Company's Form S-8).
3.5 Articles of Amendment to the Articles of Incorporation of
Lakota Technologies, Inc.
27 Financial Data Schedule
</TABLE>
<PAGE>
Articles of Amendment
To The
Articles of Incorporation
Of
Lakota Technologies, Inc.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
FIRST: The name of the corporation is Lakota Technologies, Inc.
SECOND: The following amendment to the Articles of Incorporation was
adopted on April 12th, 2000, as prescribed by the Colorado
Business Corporation Act. Such amendment was adopted by a vote
of the shareholders. The number of shares voted for the
amendment was sufficient for approval.
THIRD: Article I of the Articles of Incorporation is amended to read
as follows:
"Article I
Name
The name of the Corporation is 2-Infinity.com, Inc."
FOURTH: Article V, Section I of the Articles of Incorporation is
amended to read as follows:
"Article V
Capital Structure
Section I. Authorized Capital. The aggregate number of shares and the
amount of total authorized capital of said Corporation shall
consist of 300,000,000 shares of common stock, no par value
per share, and 25,000,000 shares of preferred, no par value
per share."
/s/ Majed Jalali
- --------------------------------
Majed Jalali, Director
/s/ Patrick C. Morgan
- --------------------------------
Patrick "Cody" Morgan, Director
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
2-INFINITY.COM, INC. AND SUBSIDIARIES, CONSOLIDATED BALANCE SHEET AND
CONSOLIDATED STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,123,622
<SECURITIES> 0
<RECEIVABLES> 66,020
<ALLOWANCES> (1,268)
<INVENTORY> 0
<CURRENT-ASSETS> 1,356,792
<PP&E> 147,058
<DEPRECIATION> (18,495)
<TOTAL-ASSETS> 1,877,823
<CURRENT-LIABILITIES> 5,697,628
<BONDS> 0
0
0
<COMMON> 12,716,948
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,877,823
<SALES> 150,129
<TOTAL-REVENUES> 150,129
<CGS> 86,263
<TOTAL-COSTS> 86,263
<OTHER-EXPENSES> 2,359,177
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,548
<INCOME-PRETAX> (2,391,283)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,391,283)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,391,283)
<EPS-BASIC> (.04)
<EPS-DILUTED> (.04)
</TABLE>
