<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 2000
[_] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-27865
AUCTIONANYTHING.COM, INC.
(Exact name of small business issuer as specified in it charter)
DELAWARE 13-264091
-------- ---------
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
35 WEST PINE STREET, SUITE 211, ORLANDO, FLORIDA 32801
------------------------------------------------------
(Address of principal executive offices)
(407) 481-2140
--------------
(Issuer's telephone number)
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practicable date: 28,707,730 shares of common
stock, $0.001 par value as of December 1, 2000.
Transitional Small Business Disclosure Format (check one);
Yes [_] No [X]
<PAGE>
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
Basis of Financial Statements
-----------------------------
The unaudited condensed consolidated financial statements have been prepared in
conformity with generally accepted accounting principles and include all
adjustments which are, in the opinion of management, necessary for a fair
presentation of the results for the interim periods presented. All such
adjustments are, in the opinion of management, of a normal recurring nature.
The results of operations for the three months are not necessarily indicative of
those for the full year. In the opinion of management, the accompanying
unaudited financial statements contain all adjustments necessary to fairly
present the financial position and the results of operations for the periods
indicated.
Certain information and footnote disclosures normally included in condensed
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that these
condensed consolidated financial statements be read in conjunction with the
financial statements and notes thereto included in the Company's annual report
on Form 10-KSB for the fiscal year ended January 31, 2000.
Financial Statements
See pages F-1 - F-5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Forward Looking Statements
--------------------------
Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations constitute forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995, as amended,
including without limitation, statements regarding industry trends, strategic
business development, pursuit of new markets, competition, results from
operations, and are subject to the safe harbor provisions created by that
statute. Each forward looking statement involves known and unknown risks,
uncertainties and other factors which may cause the actual results, performance,
or achievements of the Company to be materially different from any future
results, performance, or achievements expressed or implied by such forward
looking statements.
These forward looking statements were based on various factors and were derived
utilizing numerous important assumptions and other important factors that could
cause actual results to differ materially from those in the forward-looking
statements. Important assumptions and other factors that could cause actual
results to differ materially from those in the forward looking statements,
include, but are not limited to: competition in the Company's existing and
potential future product lines of business; the Company's ability to obtain
financing on acceptable terms if and when needed; uncertainty as to the
Company's future profitability, uncertainty as to the future profitability of
acquired businesses, uncertainty as to any future expansion of the company.
Other factors and assumptions not identified above were also involved in the
derivation of these forward looking statements, and the failure of such
assumptions to be realized as well as other factors may also cause actual
results to differ materially from those projected. The Company assumes no
obligation to update these forward looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting such forward
looking statements.
Financial Condition and Changes in Financial Condition
------------------------------------------------------
To date, the Company has incurred substantial costs to create, introduce and
enhance its services, and to grow its business. Consequently, it has incurred
operating losses in each fiscal quarter since it was formed. The Company expects
operating losses and negative cash flows to continue for the foreseeable future.
It may also incur additional costs and expenses related to technology, marketing
or acquisitions of businesses and technologies to respond to changes in this
rapidly changing industry. These costs could have an adverse effect on the
Company's future financial condition or operating results. See "Liquidity and
Capital Resources."
As a result of the Company's focus on the business development of its Internet
Business Solutions (IBS) suite of products, the Company has experienced a
significant decrease in sales of company-owned inventory during the three month
period ending October 31,
<PAGE>
2000. As of July 31, 2000, the Company had sold its entire existing inventory.
As indicated in the Company's Form 10-QSB for the quarter ending July 31, 2000,
filed on September 14, 2000, the Company made no additional inventory purchases
during the quarter that ended October 31, 2000 and the Company currently has no
intention of purchasing additional inventory in the near future. Furthermore,
during the three months ended October 31, 2000, the Company continued its
planned de-emphasis on its Internet Service Provider (ISP) business leading to a
decline in revenue in this business line as discussed in this filing.
As a result of the Company's inability to generate positive cash flow, the
Company has depleted substantially all of its cash reserves and is facing
continuing losses. See "Liquidity and Capital Resources."
The Company's financial position and results of operations are subject to
fluctuations due to a variety of factors. The Company's historical results of
operations are not necessarily indicative of future results.
Comparison of three months ended October 31, 2000 and October 31, 1999
----------------------------------------------------------------------
Auction Sales
-------------
Auction sales decreased from $121,879 during the three months ended October 31,
1999 to $0 during the three months ended October 31, 2000. This decrease
resulted principally from the decreased volume of sales transactions as a result
of the Company's discontinuation of this portion of its business.
Internet Service Revenue
------------------------
Internet service revenue decreased from $18,950 during the three months ended
October 31, 1999 to $8,181 during the three months ended October 31, 2000. This
decrease resulted principally from decreased volume of ISP clients as a result
of the Company's planned discontinuation of this portion of its business.
Internet Business Solutions
---------------------------
Internet Business Solutions revenue increased from $1,354 during the three
months ended October 31, 1999 to $10,836 during the three months ended October
31, 2000. This increase resulted primarily from the introduction of the Internet
Business Solutions portion of the business in 1999 and the Company's focus on
the growth of this portion of its business.
Custom Development Fees
-----------------------
Custom Development Fees revenue increased from $0 during the three months ended
October 31, 1999 to $10,900 during the three months ended October 31, 2000. This
increase resulted primarily from the introduction of the Internet Business
Solutions and
<PAGE>
the increased need for site customization from the Company's clients.
Gold Memberships
----------------
Gold Memberships revenue decreased from $300 during the three months ended
October 31, 1999 to $0 during the three months ended October 31, 2000. This
decrease resulted primarily from the discontinuation in this portion of the
business.
Cost of Sales and Cost of Internet Connections
----------------------------------------------
Cost of sales decreased from $108,206 during the three months ended October 31,
1999 to $0 during the three months ended October 31, 2000. This decrease
resulted from the Company's discontinuance of the auction sales portion of its
business. Cost of services decreased from $8,577 for the three months ended
October 31, 1999 to $7,386 for the three months ended October 31, 2000. The
decrease resulted primarily from the cancellation of some line hook-ups no
longer necessary as the number of clients in this portion of the business has
decreased.
Operating Expenses
------------------
Operating expenses decreased from $237,818 during the three months ended October
31, 1999 to $90,215 during the three months ended October 31, 2000. The decrease
resulted principally from the decrease in salaries and employee benefits from
$134,455 during the three months ended October 31, 1999 to $63,216 during the
three months ended October 31, 2000. This decrease is due to the discontinuation
of the auction sales portion of the business and the elimination of personnel
necessary to manage the auctions and inventory. As of October 31, 1999 there
were 14 employees and as of October 31, 2000 there were 3 employees. General and
administrative costs decreased from $24,885 during the three months ended
October 31, 1999 to $8,372 during the three months ended October 31, 2000. This
decrease is due primarily to the discontinuation of the auction sales portion of
the business and the associated administrative costs.
Advertising fees decreased from $28,169 during the three months ended October
31, 1999 to ($3,410) during the three months ended October 31, 2000. This
decrease is due primarily to the discontinuation of the Company's advertising
campaigns. During the third quarter, the Company negotiated (and settled) a
reduction in advertising payables. These amounts had been accrued in the second
quarter, thereby resulting in a negative expense in the third quarter. Insurance
expense decreased from $13,764 during the three months ended October 31, 1999 to
$45 during the three months ended October 31, 2000. This decrease is due
primarily to the elimination of some insurance policies and the discontinuation
of the auction sales portion of the business and the associated administrative
costs.
Professional fees decreased from $12,638 during the three months ended October
31, 1999 to ($816) during the three months ended October 31, 2000. During the
third quarter, the Company negotiated a reduction in professional fee payables.
These amounts
<PAGE>
had been accrued in the second quarter, thereby resulting in a negative expense
in the third quarter.
Depreciation and amortization expense decreased from $23,907 during the three
months ended October 31, 1999 to $22,808 during the three months ended October
31, 2000. This decrease is primarily due to the sale of obsolete equipment no
longer necessary in the operation of the Company.
Other Income
------------
Other income decreased from $4,140 during the three months ended October 31,
1999 to $434 during the three months ended October 31, 2000. This decrease was
the result of a reduced amount of Company funds deposited in interest bearing
checking accounts.
Comparison of nine months ended October 31, 2000 and October 31, 1999
---------------------------------------------------------------------
Auction Sales
-------------
Auction sales decreased from $367,621 during the nine months ended October 31,
1999 to $74,151 during the nine months ended October 31, 2000. This decrease
resulted principally from the decreased volume of sales transactions as a result
of the Company's discontinuation of this portion of its business.
Internet Service Revenue
------------------------
Internet service revenue decreased from $55,830 during the nine months ended
October 31, 1999 to $28,387 during the nine months ended October 31, 2000. This
decrease resulted principally from decreased volume of ISP clients as a result
of the Company's planned discontinuation of this portion of its business.
Internet Business Solutions
---------------------------
Internet Business Solutions revenue increased from $1,604 during the nine months
ended October 31, 1999 to $40,697 during the nine months ended October 31, 2000.
This increase resulted primarily from the introduction of the Internet Business
Solutions portion of the business in 1999 and the Company's focus on the growth
of this portion of its business.
Custom Development Fees
-----------------------
Custom Development Fees revenue increased from $0 during the nine months ended
October 31, 1999 to $15,225 during the nine months ended October 31, 2000. This
increase resulted primarily from the introduction of the Internet Business
Solutions and the increased need for site customization from the Company's
clients.
<PAGE>
Gold Memberships
----------------
Gold Memberships revenue decreased from $300 during the nine months ended
October 31, 1999 to $0 during the nine months ended October 31, 2000. This
decrease resulted primarily from the discontinuation in this portion of the
business.
Commission Sales
----------------
Commission Sales decreased from $2,868 during the nine months ended October 31,
1999 to $0 during the nine months ended October 31, 2000. This decrease was due
to the fact that no consignment sales were realized during the nine months ended
October 31, 2000.
Cost of Sales and Cost of Internet Connections
----------------------------------------------
Cost of sales decreased from $301,284 during the nine months ended October 31,
1999 to $58,077 during the nine months ended October 31, 2000. This decrease
resulted from the corresponding reduction in auction sales revenue as part of
the Company's discontinuance of the auction sales portion of its business. Cost
of services decreased from $23,856 for the nine months ended October 31, 1999 to
$22,102 for the nine months ended October 31, 2000. The decrease resulted from
the cancellation of some line hook-ups no longer necessary as the number of
clients in this portion of the business is decreasing. Cost of sales as a
percentage of auction sales decreased from 82% during the nine months ended
October 31, 1999 to 78% during the nine months ended October 31, 2000. The
decrease is principally due to the increase in margin of items offered for sale.
Operating Expenses
------------------
Operating expenses decreased from $526,874 during the nine months ended October
31, 1999 to $470,225 during the nine months ended October 31, 2000. The decrease
resulted principally from the Company's decreases in advertising expenses and
general and administrative costs. The Company experienced an increase in
salaries and employee benefits from $250,295 during the nine months ended
October 31, 1999 to $255,440 during the nine months ended October 31, 2000. This
increase was due primarily to an increase in the average monthly number of
employees during these time frames. While the Company reduced the size of its
workforce to 3 employees during the nine months ended October 31, 2000, the
Company's average monthly staff size was slightly higher during the nine months
ended October 31, 2000 than during the nine months ended October 31, 1999.
Advertising fees decreased from $48,307 during the nine months ended October 31,
1999 to $17,149 during the nine months ended October 31, 2000. This decrease is
due primarily to the discontinuation of the Company's advertising campaigns.
General and administrative costs decreased from $69,167 during the nine months
ended October 31, 1999 to $30,540 during the nine months ended October 31, 2000.
This decrease is due primarily to the discontinuation of the auction sales
portion of the business and the associated administrative costs. Insurance
expense decreased from $23,407 during the nine months ended October 31, 1999 to
$18,337 during the nine
<PAGE>
months ended October 31, 2000. This decrease is due primarily to the elimination
of some insurance policies and the discontinuation of the auction sales portion
of the business and the associated administrative costs.
Professional fees increased from $75,083 during the nine months ended October
31, 1999 to $79,453 during the nine months ended October 31, 2000. This increase
is primarily due to additional administrative costs associated with the public
status of the Company.
Depreciation and amortization expense increased from $60,615 during the nine
months ended October 31, 1999 to $69,306 during the nine months ended October
31, 2000. This increase is primarily due to amortization of the goodwill
realized for the nine months ended October 31, 2000 and for March through
October 1999 as a result of the TISH acquisition in February 1999. Also,
additional equipment was purchased in 1999, resulting in additional depreciation
expense.
Other Income
------------
Other income decreased from $10,446 during the nine months ended October 31,
1999 to $2,605 during the nine months ended October 31, 2000. These decreases
were the result of a reduced amount of Company funds deposited in interest
bearing checking accounts
Comparison of Selected Balance Sheet Items as of October 31, 2000 to January 31,
--------------------------------------------------------------------------------
2000
----
As noted in the Company's registration statement on Form 10-SB/A filed May 9,
2000, the Company, in the first quarter ended April 30, 1999, raised
approximately $925,000 in capital through a private placement of securities.
That transaction had a significant impact on certain balance sheet accounts and
the effects are described below.
Cash and Cash Equivalents
-------------------------
Cash and cash equivalents decreased from $144,011 at January 31, 2000 to $10,951
at October 31, 2000. This decrease resulted primarily from the net loss incurred
during the nine months ended October 31, 2000.
Accounts Receivable
-------------------
Accounts receivable decreased from $6,288 at January 31, 2000 to $5,341 at
October 31, 2000. This decrease is resulted primarily from the decrease in
revenues from the Internet Service portion of the business.
Inventory
---------
Inventory decreased from $58,077 at January 31, 2000 to $0 at October 31, 2000.
This decrease was the result of sales during the nine months ended October 31,
2000 and the discontinuation of inventory purchases. The Company has
discontinued auctioning its own merchandise.
<PAGE>
Other Assets
------------
Other assets decreased from $18,041 at January 31, 2000 to $5,000 at October 31,
2000. This decrease resulted principally from the amortization of prepaid
insurance during the nine months ended October 31, 2000.
Due from Related Parties
------------------------
Due from related parties was $3,487 at January 31, 2000 and at October 31, 2000.
This did not change as no payments were made during the nine months ended
October 31, 2000.
Equipment
---------
Equipment decreased from $78,467 at January 31, 2000 to $56,956 at October 31,
2000. The decrease is the result of depreciation recorded during the nine months
ended October 31, 2000 and from the sale of some fixed assets during the nine
months ended October 31, 2000.
Goodwill, net
-------------
Goodwill, net, decreased from $139,931 at January 31, 2000 to $89,556 at October
31, 2000 as a result of amortization recorded during the nine months ended
October 31, 2000.
Accounts Payable and Accrued Expenses
-------------------------------------
Accounts payable and accrued expenses increased from $31,153 at January 31, 2000
to $69,343 at October 31, 2000. The increase resulted primarily from
approximately $22,000 in accrued salary expense not paid to executives. The
remaining increase is due primarily to increased administrative costs during the
nine months ended October 31, 2000.
Unearned Revenue
----------------
Unearned revenue decreased from $3,000 at January 31, 2000 to $2,890 at October
31, 2000. The decrease is the result of IBS client sales commission recognized
as revenue during the nine months ended October 31, 2000.
Common Stock and Additional Paid in Capital
-------------------------------------------
Common stock and additional paid in capital increased from $28,239 and
$1,181,553, respectively, at January 31, 2000 to $28,708 and $1,256,084,
respectively, at October 31, 2000. On July 7, 2000, the Company accepted a
subscription from Tailwalker Investments, LLC for the purchase of 468,750 shares
of its common stock, par value $0.001, for total consideration of $75,000 ($0.16
per share) in cash. The transaction was
<PAGE>
exempt from registration under the Securities Act of 1933, as amended (the
"Act"), pursuant to section 4(1) of the Act. The purchaser is an accredited
investor, and the transaction was an isolated sale with no public solicitation.
Risks Associated with the Year 2000
-----------------------------------
As of the date of filing, the Company has not realized any adverse effects from
the Year 2000 rollover.
Risk Factors that may Affect Results of Operation and Financial Condition
-------------------------------------------------------------------------
In addition to the other information in this Form 10-QSB, the risk factors
previously identified in the Company's annual report on Form 10-KSB for the
fiscal year ended January 31, 2000, filed on May 1, 2000 should be carefully
considered in evaluating the Company and the business because these factors may
have a significant impact on the business, operating results and financial
condition.
Liquidity and Capital Resources
-------------------------------
The Company continued to experience operating expenses that use more cash than
they generate in the three months ending October 31, 2000. These losses follow
the historic and documented inability of the Company to generate positive cash
flow (as discussed, for example, in the Company's Form 10-QSB for the quarter's
ending April 30, 2000 and July 31, 2000 filed on June 14, 2000 and September 14,
2000). Consequently, the Company has depleted substantially all of its cash
reserves and is facing continuing losses.
During the quarter ending October 31, 2000, the Company has conducted
discussions with a number of equity and debt financing sources, but has been
unable to arrange suitable financing on satisfactory terms. Consequently, the
Company has scaled back its operations (primarily payroll) and intends to
continue to operate as it actively pursues all financial alternatives, including
the sale of the Company. If additional funds are raised through the issuance of
equity, equity-related or debt securities, these securities may have rights,
preferences or privileges senior to those of the rights of the common stock, and
the stockholders may experience additional dilution to their equity ownership.
Part II - OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
<PAGE>
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
Plan of Operation
-----------------
As the auction sales and Internet service revenue portions of the Company have
declined, additional emphasis has been placed on IBS revenue increases.
Additional efforts continue to be made by the Company to enhance the sales and
marketing for IBS products and the AuctionAnything.com network. During the three
months ended October 31, 2000, the Company entered into contracts with Chicago
Sports, Cycle by Net, Jigsaw Holdings and eQwip.com, all of which cater to a
variety of business-to-consumer and/or business-to-business interests.
In order to streamline the Company's operations and decrease costs, the Company
reduced the size of its staff size from 7 employees to 3 employees during the
three months ending October 31, 2000. Barring some unpredictable action, the
Company believes that its current staff can continue to support the Company's
operations at least through the end of the current fiscal year, which ends on
January 31, 2001. However, the Company intends to continue its pursuit of all
financing alternatives, including the sale of the Company, as discussed in
"Liquidity and Capital Resources."
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following documents are filed herewith or have been included as exhibits to
previous filings with the Commission and are incorporated herein by this
reference:
Exhibit No. Exhibit
---------- -------
3.1 Certificate of Incorporation of the Company and all
Amendments thereto (filed as Exhibit 2.1 to registration
statement on Form 10-SB on October 28, 1999, and
incorporated herein by reference)
3.2 Bylaws of the Company (filed as Exhibit 2.2 to registration
statement on Form 10-SB on October 28, 1999, and
incorporated herein by reference)
4.1 Article Fourth of the Certificate of Incorporation of the
Company, as amended (filed as part of Exhibit 2.1 to
registration statement on Form 10-SB on October 28, 1999,
and incorporated herein by
<PAGE>
reference)
4.2 Articles II, V and VI of the Bylaws of the Company (filed as
part of Exhibit 2.1 to registration statement on Form 10-SB
on October 28, 1999, and incorporated herein by reference)
10.1 Office Lease dated May 10, 1999, between the Company and
Tradewinds Office Building (filed as Exhibit 6.1 to
registration statement on Form 10-SB on October 28, 1999,
and incorporated herein by reference)
10.2 Acquisition Agreement dated February 18, 1999, among the
Company, North Orlando Sports Promotions, Inc., and the
Shareholders of North Orlando Sports Promotions, Inc. (filed
as Exhibit 6.2 to registration statement on Form 10-SB on
October 28, 1999, and incorporated herein by reference)
10.3 Asset Purchase Agreement dated February 18, 1999, between
North Orlando Sports Promotions, Inc., and The Information
SuperHighway Corporation (filed as Exhibit 6.3 to
registration statement on Form 10-SB on October 28, 1999,
and incorporated herein by reference)
10.4 Form of Stock Purchase Warrant dated March 17, 1999 (filed
as Exhibit 6.4 to registration statement on Form 10-SB/A on
January 18, 2000, and incorporated herein by reference)
21 Subsidiaries of the registrant (filed as Exhibit 21 to
annual report on Form 10-KSB for fiscal ended January 31,
2000, and incorporated herein by reference)
27 Financial Data Schedule (filed herewith)
(b) Reports on Form 8-K
Not Applicable
<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, thereunto duly authorized.
AUCTIONANYTHING.COM, INC.
by /s/ Martin M. Meads.
--------------------------
Martin M. Meads, CEO, Chief Accounting Officer
Date: December 13, 2000
<PAGE>
AUCTIONANYTHING.COM, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
October 31, 2000 and January 31, 2000
Unaudited
<TABLE>
<CAPTION>
October 31, January 31,
2000 2000
-------------- ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 10,951 144,011
Accounts receivable 5,341 6,288
Inventory -- 58,077
Other assets 5,000 18,041
Due from related parties 3,487 3,487
------------ ---------
Total current assets 24,779 229,904
Equipment, less accumulated depreciation of
$54,563 in 2000 and $38,877 in 1999 56,956 78,467
Goodwill, net 89,556 139,931
------------ ---------
$ 171,291 448,302
============ =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 69,343 31,153
Unearned revenue 2,890 3,000
------------ ---------
Total current liabilities 72,233 34,153
------------ ---------
Stockholders' equity:
Common stock, par value $.001; 50,000,000 shares authorized,
28,707,730 issued and outstanding at October 31, 2000 and
28,238,980 issued and outstanding at January 31, 2000 28,708 28,239
Additional paid-in capital 1,256,084 1,181,553
Accumulated deficit (1,185,734) (795,643)
------------ ---------
Total stockholders' equity 99,058 414,149
------------ ---------
$ 171,291 448,302
============ =========
</TABLE>
See accompanying notes to financial statements.
AUCTIONANYTHING.COM, INC.
Condensed Consolidated Statements of Operations
Three months ended October 31, 2000 and October 31, 1999
Nine months ended October 31, 2000 and October 31, 1999
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
October 31, October 31,
2000 1999 2000 1999
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Auction sales $ -- 121,879 74,151 367,621
Internet service revenue 8,181 18,950 28,387 55,830
Internet business solutions 10,836 1,354 40,697 1,604
Custom development fees 10,900 -- 15,225 --
Gold memberships -- 300 -- 300
Commission sales -- -- -- 2,868
------------------------------------------------------------
29,917 142,483 158,460 428,223
Cost of sales -- 108,206 58,077 301,284
Cost of services 7,386 8,577 22,102 23,856
------------------------------------------------------------
7,386 116,783 80,179 325,140
------------------------------------------------------------
Gross profit 22,531 25,700 78,281 103,083
Operating expenses:
Salaries and employee benefits 63,216 134,455 255,440 250,295
Professional fees (816) 12,638 79,453 75,083
Other selling, general and
administrative 8,372 24,885 30,540 69,167
Depreciation and amortization 22,808 23,907 69,306 60,615
Advertising (3,410) 28,169 17,149 48,307
Insurance 45 13,764 18,337 23,407
------------------------------------------------------------
Total operating expenses 90,215 237,818 470,225 526,874
------------------------------------------------------------
Operating loss (67,684) (212,118) (391,944) (423,791)
Other income 434 4,140 2,605 10,446
Loss on disposal of equipment (498) -- (752) --
Interest expense -- -- -- (1,461)
------------------------------------------------------------
Net loss $ (67,748) (207,978) (390,091) (414,806)
============================================================
Weighted average shares outstanding 28,790,696 28,321,946 28,520,131 27,265,895
============================================================
Loss per share $ (0.002) (0.007) (0.014) (0.015)
============================================================
</TABLE>
See accompanying notes to financial statements.
AUCTIONANYTHING.COM, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
Nine months ended October 31, 2000, and October 31, 1999
Unaudited
<TABLE>
<CAPTION>
Nine months Nine months
ended ended
October 31, October 31,
2000 1999
-------------- ------------
<S> <C> <C>
Cash flows used in operating activities:
Net loss $ (390,091) (414,806)
Adjustments to reconcile net loss to net cash used in
Operating activities:
Depreciation and amortization 69,306 60,615
Loss on disposal of equipment (752) --
Cash provided by (used in) changes in assets
Accounts receivable 947 (3,699)
Inventory 58,077 (158,792)
Other assets 13,041 (41,414)
Accounts payable and accrued expenses 38,190 23,868
Unearned revenue (110) --
Due to/from related parties -- (3,234)
----------- ----------
Net cash used in operating activities (211,392) (537,462)
----------- ----------
Cash flows used in investing activities:
Proceeds from sale of fixed assets 3,332 --
Capital expenditures -- (91,531)
----------- ----------
Net cash used in investing activities 3,332 (91,531)
----------- ----------
Cash flows from financing activities:
Principal payments on notes payable to related parties -- (34,304)
Proceeds from issuance of common stock 75,000 935,292
----------- ----------
Net cash provided by financing activities 75,000 900,988
----------- ----------
Net increase (decrease) in cash and cash equivalents (133,060) 271,997
Cash and cash equivalents at beginning of period 144,011 2,804
----------- ----------
Cash and cash equivalents at end of period $ 10,951 274,801
=========== ==========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ -- 1,448
=========== ==========
Supplemental disclosure of non-cash investing and
financing activities:
Goodwill generated from stock issued in TISH acquisition $ -- 201,500
=========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
AuctionAnything.com, Inc.
Notes to Condensed Consolidated Financials Statements
Nine months ended October 31, 2000 and October 31, 1999
UNAUDITED
Summary of Significant Accounting Policies
------------------------------------------
General
-------
The accompanying unaudited condensed consolidated financial statements as of
October 31, 2000 and for the nine months ended October 31, 2000 should be read
in conjunction with the Company's audited financial statements for the year
ended January 31, 2000.
The accompanying unaudited condensed consolidated financial statements have been
prepared assuming that the Company will continue operations on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. However, the Company has incurred
an accumulated deficit of ($1,185,734) as of October 31, 2000. The Company's
ability to continue as a going concern is dependent upon the attainment of a
profitable level of operations. The Company's ability to attain profitable
operations is contingent upon its ability to grow its business.
Description of Business
-----------------------
AuctionAnything.com, Inc. (the "Company") operates a variety of internet-related
services. Currently, the Company has two main revenue generating operations,
which are provided collectively by AuctionAnything.com, Inc. and North Orlando
Sports Promotions, Inc. ("NOSP"), a wholly owned subsidiary of
AuctionAnything.com, Inc.: 1) Internet Business Solutions ("IBS"): a service
which establishes and hosts auction and/or E-commerce web sites for other
businesses and organizations primarily in both the business-to-business and
business-to-consumer markets; 2) an Internet service provider ("ISP") service,
known as Tish.net.
The Company no longer sells company-owned inventory through the auction sites
SportsAuction.com and AutographAuctions.com. All company-owned inventory was
liquidated during the quarter ended July 31, 2000. These sites have been
licensed out for management by outside companies and in return, the Company
receives commission and/or management fees.
Revenue Recognition
-------------------
The Company has not sold any of its own inventory in the quarter ending October
31, 2000 and has no intention of procuring or selling its own inventory in the
foreseeable future. While the Company currently does not sell any of its own
inventory, the Company has historically sold merchandise to customers under one
of two types of sales transactions. The Company either purchased merchandise and
sold it to customers or sold
<PAGE>
merchandise to customers under consignment arrangements and earns a commission.
Revenue from sales of purchased merchandise was recognized and title passed when
the Company received verification of the credit card transaction or verification
of the check clearing and the related merchandise was shipped. Commission income
from consignment sales was calculated as a percentage of the final sales value
at the close of the auction and recognized when the Company received
verification of the credit card transaction or verification of the check.
Commission was paid to the consignor after the merchandise had been shipped.
The Company earns revenues for IBS services either as a percentage of sales, as
a monthly management fee or as some combination of the two. These revenues are
recognized when the Company sends an invoice (typically monthly) to its customer
after receiving verification of successful sales or on a pro rata basis over the
term of the contract. Custom development fees are recognized consistently with
the terms of any contract with the Company's customers. In general, most custom
development contracts include an up-front or set-up fee which is recognized upon
executed contract, and recurring monthly revenues which are recognized on a pro
rata basis over the term of the contract. Internet service revenue is recognized
on a pro rata basis over the term of the contract.
Employee Stock Option Plan
--------------------------
The Company adopted a stock option plan on August 21, 2000. The exercise price
of the award options was the market price at the close of business on that date.
No expense has been recognized in the condensed consolidated statement of
operations for the nine months ended October 31, 2000.
The Company granted options to purchase up to 1,000,000 shares of the Company's
common stock, $0.001 par value, to four (4) employees during the nine month
period ending October 31, 2000. These options expire after three (3) years and
are subject to vesting requirements as defined in the option agreements. Since
the granting of these options, three of the four employees who received the
options have left the Company, thereby reducing the total number of shares that
could be issued upon option exercise to no more than 325,000 shares.
Exhibits Index
Exhibit No. Exhibit
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3.3 Certificate of Incorporation of the Company and all
Amendments thereto (filed as Exhibit 2.1 to registration
statement on Form 10-SB on October 28, 1999, and
incorporated herein by reference)
3.4 Bylaws of the Company (filed as Exhibit 2.2 to
registration
<PAGE>
statement on Form 10-SB on October 28, 1999, and
incorporated herein by reference)
4.1 Article Fourth of the Certificate of Incorporation of the
Company, as amended (filed as part of Exhibit 2.1 to
registration statement on Form 10-SB on October 28, 1999,
and incorporated herein by reference)
4.2 Articles II, V and VI of the Bylaws of the Company (filed
as part of Exhibit 2.1 to registration statement on Form
10-SB on October 28, 1999, and incorporated herein by
reference)
10.1 Office Lease dated May 10, 1999, between the Company and
Tradewinds Office Building (filed as Exhibit 6.1 to
registration statement on Form 10-SB on October 28, 1999,
and incorporated herein by reference)
10.2 Acquisition Agreement dated February 18, 1999, among the
Company, North Orlando Sports Promotions, Inc., and the
Shareholders of North Orlando Sports Promotions, Inc.
(filed as Exhibit 6.2 to registration statement on Form
10-SB on October 28, 1999, and incorporated herein by
reference)
10.3 Asset Purchase Agreement dated February 18, 1999, between
North Orlando Sports Promotions, Inc., and The Information
SuperHighway Corporation (filed as Exhibit 6.3 to
registration statement on Form 10-SB on October 28, 1999,
and incorporated herein by reference)
10.4 Form of Stock Purchase Warrant dated March 17, 1999 (filed
as Exhibit 6.4 to registration statement on Form 10-SB/A
on January 18, 2000, and incorporated herein by reference)
22 Subsidiaries of the registrant (filed as Exhibit 21 to
annual report on Form 10-KSB for fiscal ended January 31,
2000, and incorporated herein by reference)
27 Financial Data Schedule (filed herewith)
