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 July 31, 2000
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-27865
AUCTIONANYTHING.COM, INC.
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(Exact name of small business issuer as specified in it charter)
DELAWARE 13-264091
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(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
35 WEST PINE STREET, SUITE 211, ORLANDO, FLORIDA 32801
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(Address of principal executive offices)
(407) 481-2140
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(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 September 11, 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 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
As a result of the Company's focus on the business development of its Internet
Business Solutions (IBS) suite of products, significant decreases in sales of
company-owned inventory and Internet service (ISP) have been realized during the
three months ended July 31, 2000. During the three months ended July 31, 2000,
the Company sold all remaining inventory and has no plans to purchase any
additional inventory. 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 July 31, 2000 and July 31, 1999
Auction Sales
4
<PAGE>
Auction sales decreased from $129,584 during the three months ended July 31,
1999 to $7,251 during the three months ended July 31, 2000. This decrease
resulted principally from decreased volume of sales transactions as a result of
the Company's planned discontinuation of this portion of its business.
Internet Service Revenue
Internet service revenue decreased from $20,240 during the three months ended
July 31, 1999 to $8,083 during the three months ended July 31, 2000. This
decrease resulted principally from decreased volume of ISP clients as a result
of the Company's planned discontinuation in this portion of its business.
Internet Business Solutions
Internet Business Solutions revenue increased from $0 during the three months
ended July 31, 1999 to $23,240 during the three months ended July 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
July 31, 1999 to $4,325 during the three months ended July 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.
Commission Sales
Commission Sales revenue decreased from $197 during the three months ended July
31, 1999 to $0 during the three months ended July 31, 2000. This decrease was
due to the fact that no consignment sales were realized during the three months
ended July 31, 2000.
Cost of Sales and Cost of Internet Connections
Cost of sales decreased from $92,550 during the three months ended July 31, 1999
to $3,824 during the three months ended July 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 $11,862 for the three months ended July 31, 1999 to
$6,833 for the three months ended July 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 71% during the three months ended July 31, 1999 to
53% during the three months ended July 31, 2000. The decrease is principally due
to the increase in margin of items offered for sale.
Operating Expenses
Operating expenses decreased from $217,059 during the three months ended July
31, 1999 to $143,470 during the three months ended July 31, 2000.
5
<PAGE>
The decrease resulted principally from the decrease in salaries and employee
benefits from $108,241 during the three months ended July 31, 1999 to $77,079
during the three months ended July 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 July 31, 1999
there were 14 employees and as of July 31, 2000 there were 7 employees.
Advertising fees decreased from $18,908 during the three months ended July 31,
1999 to $7,352 during the three months ended July 31, 2000. Professional fees
decreased from $25,198 during the three months ended July 31, 1999 to $19,846
during the three months ended July 31, 2000. Insurance expense decreased from
$9,259 during the three months ended July 31, 1999 to $4,517 during the three
months ended July 31, 2000. Each of these decreases is due to the
discontinuation of the auction sales portion of the business and the associated
administrative costs.
Depreciation and amortization expense increased from $21,836 during the three
months ended July 31, 1999 to $23,214 during the three months ended July 31,
2000. This increase is primarily due to additional equipment purchased after
July 31, 1999, resulting in additional depreciation expense.
Other Income
Other income decreased from $6,305 during the three months ended July 31, 1999
to $722 during the three months ended July 31, 2000. This decrease was the
result of a reduced amount of Company funds deposited in interest bearing
checking accounts.
Comparison of six months ended July 31, 2000 and July 31, 1999
Auction Sales
Auction sales decreased from $245,743 during the six months ended July 31, 1999
to $74,151 during the six months ended July 31, 2000. This decrease resulted
principally from decreased volume of sales transactions as a result of the
Company's planned discontinuation of this portion of its business.
Internet Service Revenue
Internet service revenue decreased from $36,880 during the six months ended July
31, 1999 to $20,206 during the six months ended July 31, 2000. This decrease
resulted principally from decreased volume of ISP clients as a result of the
Company's planned discontinuation in this portion of its business.
Internet Business Solutions
Internet Business Solutions revenue increased from $250 during the six months
ended July 31, 1999 to $29,861 during the six months ended July 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.
6
<PAGE>
Custom Development Fees
Custom Development Fees revenue increased from $0 during the six months ended
July 31, 1999 to $4,325 during the six months ended July 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.
Commission Sales
Commission Sales decreased from $2,868 during the six months ended July 31, 1999
to $0 during the six months ended July 31, 2000. This decrease was due to the
fact that no consignment sales were realized during the six months ended July
31, 2000.
Cost of Sales and Cost of Internet Connections
Cost of sales decreased from $193,078 during the six months ended July 31, 1999
to $58,077 during the six months ended July 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 $15,280 for the six months ended July 31, 1999 to
$14,716 for the six months ended July 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 79% during the six months ended July 31, 1999 to
78% during the six months ended July 31, 2000. The decrease is principally due
to the increase in margin of items offered for sale.
Operating Expenses
Operating expenses increased from $289,055 during the six months ended July 31,
1999 to $380,009 during the six months ended July 31, 2000. The increase
resulted principally from the increase in salaries and employee benefits from
$115,840 during the six months ended July 31, 1999 to $192,223 during the six
months ended July 31, 2000. The number of employees grew to 14 in June and July
1999. That number was scaled back to 7 during the six months ended July 31, 2000
due to the discontinuation of the auction portion of the business.
Professional fees increased from $62,445 during the six months ended July 31,
1999 to $80,269 during the six months ended July 31, 2000. Advertising fees
increased from $20,138 during the six months ended July 31, 1999 to $20,559
during the six months ended July 31, 2000. Insurance expense increased from
$9,643 during the six months ended July 31, 1999 to $18,291 during the six
months ended July 31, 2000. Each of these increases is due to additional
administrative costs associated with the public status of the Company.
Depreciation and amortization expense increased from $36,708 during the six
months ended July 31, 1999 to $46,499 during the six months ended July 31, 2000.
This increase is primarily due to amortization of the goodwill realized for the
six months ended July 31, 2000 and for March through July 1999 as a result of
the TISH acquisition in February 1999. Also, additional equipment was purchased
after July 31, 1999, resulting in additional depreciation expense.
7
<PAGE>
Other Income
Other income decreased from $6,305 during the six months ended July 31, 1999 to
$2,170 during the six months ended July 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 July 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 $40,259
at July 31, 2000. This decrease resulted primarily from the net loss incurred
during the six months ended July 31, 2000.
Accounts Receivable
Accounts receivable increased from $6,288 at January 31, 2000 to $22,780 at July
31, 2000. This increase is primarily the result of the increases in revenue
generated from Internet Business Solutions.
Inventory
Inventory decreased from $58,077 at January 31, 2000 to $0 at July 31, 2000.
This decrease was the result of sales during the six months ended July 31, 2000
and the discontinuation of inventory purchases. The Company has discontinued
auctioning its own merchandise.
Other Assets
Other assets decreased from $18,041 at January 31, 2000 to $5,041 at July 31,
2000. The decrease resulted principally from the amortization of prepaid
insurance during the six months ended July 31, 2000.
Due from Related Parties
Due from related parties was $3,487 at January 31, 2000 and at July 31, 2000.
This did not change as no payments were made during the six months ended July
31, 2000.
Equipment
Equipment decreased from $78,467 at January 31, 2000 to $64,053 at July 31,
2000. The decrease is the result of depreciation recorded during the six months
ended July 31, 2000 and to the sale of some fixed assets during the six months
ended July 31, 2000.
8
<PAGE>
Goodwill, net
Goodwill, net decreased from $139,931 at January 31, 2000 to $106,347 at July
31, 2000 as a result of amortization recorded during the six months ended July
31, 2000.
Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses increased from $31,153 at January 31, 2000
to $72,271 at July 31, 2000. The increase resulted primarily to increased
administrative costs during the six months ended July 31, 2000.
Unearned Revenue
Unearned revenue decreased from $3,000 at January 31, 2000 to $2,890 at July 31,
2000. The decrease is the result of IBS client sales commission recognized as
revenue during the six months ended July 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 July 31, 2000. The increase resulted from a private placement
of 468,750 shares of the Company's common stock sold at $0.16 per share.
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 filed in the Company's annual report on Form 10-KSB for the fiscal
year ended January 31, 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
Since inception, the Company's operating and investing activities have used more
cash than they have generated. Because of the continued need for substantial
amounts of working capital to fund the growth of the business, the Company
expects to continue to experience significant negative operating and investing
cash flows for the foreseeable future. A private placement of funds was
completed during the quarter ended July 31, 2000. The Company raised $75,000 in
exchange for 468,750 shares, with a par value of $.001, sold at $.16 per share.
Subsequently the Company may need to raise additional capital in the form of
another private placement to meet the immediate operating and investing cash
requirements. The Company is actively seeking outside funding to meet the
Company's immediate cash requirements as well as the Company's long-term growth
requirements. If additional funds are raised through the issuance of equity,
equity-related or debt securities, these securities may have rights, preferences
or privileges
9
<PAGE>
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
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
decline, 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 July 31, 2000, the Company entered into a contract with Fantasy
Team Sports to provide an auction site for them. Other new clients include
Numismatic Consultants and Hockey America, which cater to the
business-to-consumer market, Electrospec, Inc., which caters to the
business-to-business market and Seafoods.com, which is a site for both the
business-to-business and business-to-consumer markets.
As of the quarter ended July 31, 2000, the Company no longer sells any of its
own inventory on the SportsAuction.com website. This portion of the business has
been licensed out to Memories and Memorabilia, an Orlando Florida based company.
They will sell their own inventory through the auction format and be responsible
for all shipments, receive all payments and handle any customer correspondence.
The Company will receive a commission based on successful sales for the
privilege of the license.
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:
10
<PAGE>
Exhibit No. Exhibit
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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 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)
11 Statement re: computation of per share
earnings (included in financial statements
in Part I, Item 1, hereof)
11
<PAGE>
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
The Company filed a Form 8-K on June 22, 2000 to report the termination of
Dennis A. Kurir as an employee and officer of the Company. However, Mr. Kurir
remains a director of the Company.
12
<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: September 13, 2000
<PAGE>
AUCTIONANYTHING.COM, INC. AND SUBSIDIARY
Condensed Consolidated Balance Sheets
July 31, 2000 and January 31, 2000
Unaudited
<TABLE>
<CAPTION>
July 31, January 31,
2000 2000
----------- -----------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 40,259 144,011
Accounts receivable 22,780 6,288
Inventory -- 58,077
Other assets 5,041 18,041
Due from related parties 3,487 3,487
----------- -----------
Total current assets 71,566 229,904
Equipment, less accumulated depreciation of $49,178
in 2000 and $38,877 in 1999 64,053 78,467
Goodwill, net 106,347 139,931
----------- -----------
$ 241,967 448,302
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 72,271 31,153
Unearned revenue 2,890 3,000
----------- -----------
Total current liabilities 75,161 34,153
----------- -----------
Stockholders' equity:
Common stock, par value $.001; 50,000,000 shares
authorized, 28,707,730 issued and outstanding
at July 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 (1,117,986) (795,643)
----------- -----------
Total stockholders' equity 166,806 414,149
----------- -----------
$ 241,967 448,302
=========== ===========
</TABLE>
See accompanying notes to financial statements.
F-1
<PAGE>
AUCTIONANYTHING.COM, INC.
Condensed Consolidated Statements of Operations
Three months ended July 31, 2000 and three months ended July 31, 1999
Six months ended July 31, 2000 and six months ended July 31, 1999
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
July 31, July 31,
2000 1999 2000 1999
----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Auction sales $ 7,251 129,584 74,151 245,743
Internet service revenue 8,083 20,240 20,206 36,880
Internet business solutions 23,240 -- 29,861 250
Custom development fees 4,325 -- 4,325 --
Commission sales -- 197 -- 2,868
----------------------------------------------------------------------------
42,899 150,021 128,544 285,740
Cost of sales 3,824 92,550 58,077 193,078
Cost of services 6,833 11,862 14,716 15,280
----------------------------------------------------------------------------
10,657 104,412 72,793 208,358
----------------------------------------------------------------------------
Gross profit 32,242 45,609 55,750 77,382
Operating expenses:
Salaries and employee benefits 77,079 108,241 192,223 115,840
Professional fees 19,846 25,198 80,269 62,445
Other selling, general and administrative 11,462 33,617 22,168 44,282
Depreciation and amortization 23,214 21,836 46,499 36,708
Advertising 7,352 18,908 20,559 20,138
Insurance 4,517 9,259 18,291 9,643
----------------------------------------------------------------------------
Total operating expenses 143,470 217,059 380,009 289,055
----------------------------------------------------------------------------
Operating loss (111,228) (171,450) (324,259) (211,673)
Other income 722 6,305 2,170 6,305
Loss on disposal of equipment (254) -- (254) --
Interest expense -- (12) -- (1,461)
----------------------------------------------------------------------------
Net loss $ (110,760) (165,157) (322,343) (206,828)
============================================================================
Weighted average shares outstanding 28,446,946 28,321,946 28,384,101 26,732,000
============================================================================
Loss per share $ (0.004) (0.006) (0.011) (0.008)
============================================================================
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
AUCTIONANYTHING.COM, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
Six months ended July 31, 2000, and July 31, 1999
Unaudited
<TABLE>
<CAPTION>
Six months Six months
ended ended
July 31, July 31,
2000 1999
---------- ---------
<S> <C> <C>
Cash flows used in operating activities:
Net loss $ (322,343) (206,828)
Adjustments to reconcile net loss to net cash used in
Operating activities:
Depreciation and amortization 46,499 36,708
Loss on disposal of equipment 254 --
Cash provided by (used in) changes in assets
Accounts receivable (16,492) (4,466)
Inventory 58,077 (260,934)
Other assets 13,000 (52,612)
Accounts payable and accrued expenses 41,118 19,988
Unearned revenue (110) --
Due to/from related parties -- (3,234)
---------- ---------
Net cash used in operating activities (179,997) (471,378)
---------- ---------
Cash flows used in investing activities:
Capital expenditures 1,245 (86,598)
---------- ---------
Net cash used in investing activities 1,245 (86,598)
---------- ---------
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 (103,752) 343,012
---------- ---------
Cash and cash equivalents at beginning of period 144,011 2,804
---------- ---------
Cash and cash equivalents at end of period $ 40,259 345,816
========== =========
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.
F-3
<PAGE>
AuctionAnything.com, Inc.
Notes to Condensed Consolidated Financials Statements
Six months ended July 31, 2000 and six months ended July 31, 1999
unaudited
Summary of Significant Accounting Policies
General
The accompanying unaudited condensed consolidated financial statements as of
July 31, 2000 and for the six months ended July 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 ($1,117,986) as of July 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 independently owned companies and in return the
Company receives commission fees based on successful sales.
Revenue Recognition
The Company sells merchandise to customers under one of two types of sales
transactions. The Company either purchases merchandise and sells it to customers
or sells merchandise to customers under consignment arrangements and earns a
commission. Revenue from sales of purchased merchandise is recognized and title
passes when the Company receives
F-4
<PAGE>
verification of the credit card transaction or verification of the check
clearing and the related merchandise is shipped. Commission income from
consignment sales is calculated as a percentage of the final sales value at the
close of the auction and recognized when the Company receives verification of
the credit card transaction or verification of the check. Commission is paid to
the consignor after the merchandise has been shipped. The Company earns revenues
for IBS services as a percentage of all successful sales. These revenues are
recognized when the Company receives verification of a successful sale. Custom
development fees are earned when an IBS client requests additional website
development done to enhance their site. This revenue is recognized at the
inception of development. Internet service revenue is recognized on a pro rata
basis over the term of the contract.
F-5
<PAGE>
Exhibits Index
Exhibit No. Exhibit
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 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)
10.4 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)
10.5 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)
10.6 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)
11 Statement re: computation of per share
earnings (included in financial statements
in Part I, Item 1, hereof)
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)
