SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1999
Commission File Number 000-27995
EINSURE NETWORKS CORPORATION
----------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-4714549
---------------------- -------------------
(State of organization) (I.R.S. Employer
Identification No.)
14724 Ventura Blvd. Floor 2, Sherman Oaks, CA 91403
-----------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code (818) 971-5184
Securities registered pursuant to Section 12(b) of the Act,
None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class
Common Stock, $0.001 par value per share
<PAGE>
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes [ ] No [ X ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Issuer's revenues for its most recent fiscal year. $0.00
The aggregate market value of the Common Stock held by non-affiliates of the
registrant, based on the average of the high and low prices of the Common Stock
on the OTC Bulletin Board on March 1, 2000, was $0.00. For purposes of this
computation, all officers, directors, and 5% beneficial owners of the registrant
(as indicated in Item 12) are deemed to be affiliates. Such determination should
not be deemed an admission that such directors, officers, or 5% beneficial
owners are, in fact, affiliates of the registrant.
Number of shares of Common Stock, $0.001 Par Value, outstanding at March 1,
2000, was 1,000,000.
Documents incorporated by reference: None
2
<PAGE>
TABLE OF CONTENTS - 1999 FORM 10-KSB REPORT
Page
Numbers
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PART I
Item 1. Business 4
Item 2. Properties 5
Item 3. Legal Proceedings 5
Item 4. Submission of Matters to a Vote of Security Holders 5
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 5
Item 6 Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Item 7. Financial Statements 7
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 7
PART III
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act 7
Item 10. Executive Compensation 10
Item 11. Security Ownership of Certain Beneficial Owners
and Management 11
Item 12. Certain Relationships and Related Transactions 12
Item 13. Exhibits and Reports on Form 8-K 12
Signatures 13
3
<PAGE>
PART I
Item 1. Business
eInsure Networks Corporation ("eInsure" or the "Company") was incorporated on
November 25, 1998 under the laws of the State of Delaware. The Company's
principal business is to provide a portal for the Insurance industry; clients,
brokers and insurance agency staff, with technological advances to expand their
business, increase productivity, and lower operational costs while providing
better customer service. eInsure will develop the latest open architecture,
standards based information technology concepts for an industry lacking the
ability to process high volumes of information in a rapid manner, while
maintaining data integrity and compatibility for reporting without additional
data entry or manipulation. The competitive advantage lies in the ability to
integrate the insurance tasks of underwriting, pricing, policy issuance, and
premium accounting into a centrally maintained application interface which
easily integrates into other systems.
Rating systems
eInsure will emulate the structure of current rating systems by downloading
rates and rating methodology into distributed relational databases. Centralizing
the rating system information will streamline data management and allow users to
access information online rapidly and efficiently with basic Internet access.
Rating data will be intelligently organized allowing firms to increase
productivity by internally rating policies with fast user friendly applications
accessible via the secured online rating system. The online rating system will
store and transmit the completed policy form to the policy proposal system, and
if the policy is bound, then transmit to the policy issuance system. These
procedures will be automated by scaleable, distributed, reliable, and secure
network applications sharing policy and rating information. eInsure will begin
developing a competitive advantage by offering liability and workers
compensation rating systems in an integrated, enterprise environment.
Policy Issuance system
The competitive advantage of eInsure lies in the ability to issue small premium
policies efficiently. Policy issuance will be an integrated application allowing
a single point of management for brokers and agents to conduct policy
transactions online via the Internet. The completed policy information will be
transposed into the policy issuance system and either printed at the host
location and mailed or sent back in a data file to be issued by the recipient.
Currently a website performing policy charges a 3% transaction fee of each
policy issued. Current gross policy volume of this website with one carrier is
approx. $70 million. The shortcoming of this system is that it will not upload
accounting data to the WINS accounting system. eInsure will look into developing
a robust application with the ability to transmit accounting information to the
appropriate data centers and electronically collect the transaction fees.
4
<PAGE>
Projects
It is imperative that eInsure integrate the entire range of policy issuance
functions into applications remotely accessible via web browsers connected to
the Internet. This implementation will allow companies to increase productivity,
offer better customer service, and provide real-time transactions while lowering
operating costs by forgoing the purchase of costly computer hardware, software,
and IT staffing of a traditional client/server implementation. The concept
behind eInsure is to become the Insurance industry portal for managing data and
transactions utilizing the customizable applications accessible from any
Internet connection, in addition to providing middleware for data transactions
between legacy systems. eInsure can manage and centralize the data of insurance
companies, brokers, and clients by standardizing the layers of information flow
between buyers and sellers.
Item 2. Properties
The Company's executive and administrative offices are located at 14724 Ventura
Blvd, Floor 2, Sherman Oaks, CA 91403. The Company pays no rent for use of the
office and does not believe it will require any additional office space in the
foreseeable future in order to carry out its plan of operations described
herein. The owner of the premises, a shareholder, has agreed to continue this
arrangement until such time as the Company receives profits
Item 3. Legal Proceedings
There are no pending legal proceedings to which the Company is a party.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The Company registered its common stock on a Form 10-SB Registration Statement
on a voluntary basis, which became effective on January 8, 2000. The Company's
Common Stock is not presently traded on an established public trading market.
The Company anticipates that it will submit its Common Stock for listing on the
OTC Electronic Bulletin Board.
5
<PAGE>
The approximate number of record holders of the Company's Common Stock
as of December 31,1999 was 2. The aggregate number of shares of Common Stock
outstanding as of December 31,1999 was 1,000,000.
The Company has not declared or paid any cash dividends on its Common
Stock and does not intend to declare any dividends in the foreseeable future.
The payment of dividends, if any, is within the discretion of the Board of
Directors and will depend on the Company's earnings, if any, its capital
requirements and financial condition, and such other factors as the Board of
Directors may consider. In addition, if the Company is able to negotiate new
credit facilities, such facilities may include restrictions on the Company's
ability to pay dividends.
RECENT SALES OF UNREGISTERED SECURITIES
In April 1999, the Company issued unregistered securities to the initial
shareholders of the Company resulting in the issuance and delivery of 100,000
shares and 900,000 shares of the Company's Common Stock to PageOne Business
Productions, LLC, and Appletree Investment Company, Ltd., respectively. Such
securities were issued for aggregate consideration totaling $1,000 pursuant to
the exemptions from registration provided under the Delaware General Corporation
Law and the exemption provided by Section 4(2) of the Securities Act of 1933, as
amended, for issuances of securities not involving any public offering.
The following table sets forth the names of the recipients and amounts
received in connection with said transactions:
Number of Shares of
Name of Stockholder Common Stock Acquired
------------------ ---------------------
PageOne Business 100,000
Productions, LLC
Appletree Investment 900,000
Company, Ltd.
Item 6 Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
The following discussion and analysis below should be read in
conjunction with the financial statements, including the notes thereto,
appearing elsewhere in this Registration Statement. For the period since
inception (November 25, 1998) through December 31, 1999, during the Company's
development stage, the Company has a positive cash balance of $350.00, and has
generated a net loss of ($9,578.00).
PLAN OF OPERATION
The Company has registered a dot.com name and has determined it can begin
conducting its business with limited financing that it has arranged.
6
<PAGE>
FINANCIAL CONDITION AND LIQUIDITY
The Company has limited liquidity and has an ongoing need to finance its
activities. To date, the Company currently has funded these cash requirements by
offering and selling its Common Stock, and has issued 1,000,000 shares of Common
Stock for net proceeds of $1,000. The Company expects to fund its immediate
needs through private placements of its securities and may seek a suitable
business combination.
Item 7. Financial Statements
The financial statements and supplemental data required by this Item 7 follow
the index of financial statements appearing at Item 13 of this Form 10-KSB.
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
of the Exchange Act
The names of the directors and executive officers of the Company, as well
as their respective ages and positions with the Company, are as follows:
Name Age Position
- ---- --- --------
George A. Todt 46 Chairman of the Board of
Directors, Chief Executive
Officer, President and
Secretary
James F. Walters 45 Vice President, Treasurer
and Chief Financial Officer
7
<PAGE>
George A. Todt has been the Chairman of the Company's Board of Directors
and Chief Executive Officer since its inception. Prior to founding the Company,
Mr. Todt has been a managing member of PageOne Business Productions, LLC, since
March 1996. Mr. Todt's experience over the past 15 years includes working with
10 start-up companies, raising venture capital, and arranging strategic
partnerships and initial public offerings. He has researched, developed and
implemented marketing and sales training programs in several industries.
From 1990 to 1995, Mr. Todt was Chief Executive Officer of REPCO, a
start-up company based in St. Louis, Missouri, where his responsibilities
included product selection, market research and implementation, from large
contracts to small industrial products. REPCO's largest project included a
turn-key tire recycling plant built in Japan. Mr. Todt traveled extensively in
China, Japan, India, Russia and Europe, establishing manufacturing contracts,
marketing and distribution programs, and bidding on and managing government
contracts. Mr. Todt also has consulted internationally on technology exchanges
and rights.
From 1989 to 1991, Mr. Todt was an investor/director of FLEXWARE, an
accounting and networking software company located in Los Angeles, which was a
leader in the field of networking language for MAC, DOS, UNIX and DEC computers.
Mr. Todt assisted in obtaining financing, restructuring and establishing a
marketing strategy for FLEXWARE.
In June 1986, Mr. Todt began working full-time in sales with Todt
Industrial Supply, and in December 1986, he acquired the company and Todt Sheet
Metal Company (collectively, the "Todt Companies" in Cape Girardeau, Missouri).
From 1987 to 1990, Mr. Todt served as Chief Executive Officer of the Todt
Companies, reorganized the companies, implemented new marketing and sales
programs, automated accounting and developed the business into eight divisions,
four of which he created. Under Mr. Todt's leadership, the Todt Companies grew
from 29 to 130 employees, and annual sales grew from $2 million to $8 million.
From 1985 to 1986, Mr. Todt served as Vice President of Administration
at HOH Water Technology, Los Angeles, California. As Vice President, he
reorganized the Company's structure, developed an engineering department, was
responsible for redesigning its product, developing a marketing plan and
negotiating strategic alliances with General Electric, Du Pont, and Mitsui.
Eventually, he succeeded in taking HOH public.
From 1979 to 1983, Mr. Todt was the founder and Managing Director of
Todt & Associates, a marketing and investment partnership in Malibu, California,
raising financing for several start-up companies and projects, developing mining
and refining equipment for the precious metal industry, and setting up a sales
and distribution network. In addition, Mr. Todt managed an international
precious metal arbitrage company and researched a book on precious metals which
spent 22 weeks on England's "best seller" list. Mr. Todt also designed,
coordinated and managed three hundred employees in the construction of a
$4,000,000 multi-purpose building.
8
<PAGE>
James F. Walters has served as the Vice President, Treasurer and Chief
Financial Officer of the Company since its inception. Mr. Walters joined Kellogg
& Andelson as an accountant in 1976, was elected a partner in 1980, was promoted
to Managing Partner in 1984, and elected Chairman of the Board of Kellogg &
Andelson Accountancy Corporation in 1995. As Chairman, Mr. Walters is currently
responsible for the overall management of the 80-person firm. Mr. Walters has
assisted the firm's clients in connection with the preparation of their initial
public offerings, private finance, merger, acquisition and restructuring
strategies. He continues to be an active consultant in the many phases of client
business operations, such as operational control systems, general management and
capital funding, servicing middle market companies in many different industries,
including aerospace, mail order, entertainment, high tech, retail,
import/export, graphic design, business management, plastics and publishing.
Mr. Walters previously served as a member of the Board of Directors of
Kistler Aerospace, a manufacturer of reusable rockets that deliver satellites
into orbit, and was instrumental in the initial financing of that company. Mr.
Walters also serves as a member of the Board of Directors of California Fitnuts,
Inc., a start-up company which produces, through a patented process, nuts that
have 50% less fat. In addition, Mr. Walters has founded, owned and managed
companies in the commercial photography, corporate events, auto repair and
concrete molding industries.
Mr. Walters received an M.B.A. degree from Pepperdine University (Malibu,
California) in 1981, and a B.S. degree in Accounting from California State
University, Northridge (CSUN) in 1976.
Directors of the Company are elected annually by the stockholders of the
Company to serve for a term of one year or until their successors are duly
elected and qualified. Officers serve at the pleasure of the Board of Directors
subject to any rights under employment agreements. All directors will receive
reimbursement of reasonable out-of-pocket expenses incurred in connection with
meetings of the Board. No other compensation is, or will be, paid to directors
for services rendered as directors. From the Company's inception to the date of
this filing, there have been no meetings of the Company's Board of Directors.
Other actions of the Company's Board of Directors were taken pursuant to
unanimous written consents. There are no family relationships between any
directors or officers of the Company.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires that the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, file reports of ownership
and changes in ownership with the Securities and Exchange Commission. The
Company was not subject to the reporting requirements of Section 16(a) during
fiscal 1999.
9
<PAGE>
Item 10. Executive Compensation
No director or executive officer of eInsure presently receives compensation
for services rendered to the company. Payment of salaries will occur once
proceeds are available for payment through financing and sufficient cash flow.
However, such persons are entitled to be reimbursed for expenses incurred by
them in pursuit of eInsure's business.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUE
The Company does not have an officer or director stock option plan. The
Company intends to incorporate one after a public offering. The Company does not
have an employee stock option plan. (ESOP). The Company intends to incorporate
one after a public offering.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
There were no option/SAR Grants in the last fiscal year.
COMPENSATION OF DIRECTORS
The Company's directors serve without compensation.
10
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners
and Management
The following table sets forth information regarding the beneficial ownership of
the Company's Common Stock as of the date hereof by (i) each person known by the
Company to be the beneficial owner of more than five percent of its Common
Stock; (ii) each director; (iii) each executive officer listed in the Summary
Compensation Table in Item 6 of this Form 10; and (iv) all directors and
executive officers as a group. Unless otherwise indicted, each of the following
stockholders has sole voting and investment power with respect to the shares
beneficially owned, except to the extent that such authority is shared by
spouses under applicable law.
Name and Address of Amount and Nature of Percent of
Beneficial Owner (1) Beneficial Ownership (2) Class (2)
- -------------------- ------------------------ ----------
Appletree Investment Company, Ltd 1,000,000(3) 100.0%
PageOne Business Productions, LLC 100,000(3) 10.0%
George Todt 100,000(4) 10.0%
James Walters 100,000(4) 10.0%
All officers and directors as a group 100,000(4) 10.0%
(2 persons)
(1) Unless otherwise indicated, the address of each beneficial owner is in the
care of EINSURE NETWORKS CORPORATION, 14724 Ventura Blvd. Floor 2, Sherman Oaks,
CA 91403. (2) Percent of Class assumes a base of 1,000,000 shares of common
stock outstanding as of December 31, 1999.
(3) Consists of 900,000 shares held of record by Appletree Investment Company,
Ltd., an Isle of Man corporation, and 100,000 shares held of record by PageOne
Business Productions, LLC, a Delaware limited liability company, of which
Appletree is a managing member.
(4) Consists solely of 100,000 shares of common stock held by PageOne Business
Productions, LLC, a Delaware limited liability company, of which Mr. Todt and
Mr. Walters are managing members.
11
<PAGE>
Item 12. Certain Relationships and Related Transactions
In April 1999, eInsure issued 100,000 shares to PageOne Business Productions,
LLC, of which George Todt and James Walters are managing members.
Item 13. Exhibits and Reports on Form 8-K
(a)(1) The following financial statements are contained on Pages F-1 through
F-7:
REPORT OF INDEPENDENT AUDITORS WEINBERG & COMPANY, P.A., CERTIFIED
PUBLIC ACCOUNTANTS, DATED APRIL 6, 2000.
BALANCE SHEET AS OF DECEMBER 31, 1999
STATEMENTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR
THE PERIOD FROM NOVEMBER 25, 1998 (INCEPTION) TO DECEMBER 31, 1999
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY FOR THE PERIOD FROM
NOVEMBER 25, 1998 (INCEPTION) TO DECEMBER 31, 1999
STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1999 AND FOR
THE PERIOD FROM NOVEMBER 25, 1998 (INCEPTION) TO DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999
(a)(3) Exhibits
The following exhibits are filed with this report.
3.1.1 Amended and Restated Articles of Incorporation of Registrant
(incorporated herein by reference to the Company's Registration
Statement on Form 10-SB 12(g), File No. 000-27995)
3.2.1 ByLaws of Registrant (incorporated herein by reference to the
Company's Registration Statement on Form 10-SB 12(g), File No.
000-27995)
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
12
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of:
eInsure Networks Corporation
(A Development Stage Company)
We have audited the accompanying balance sheet of eInsure Networks Corporation
(a development stage company) as of December 31, 1999 and the related statements
of operations, changes in stockholders' deficiency and cash flows for the year
then ended and for the period from November 25, 1998 (inception) to December 31,
1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the financial position of eInsure Networks Corporation (a
development stage company) as of December 31, 1999, and the results of its
operations and its cash flows for the year then ended and for the period from
November 25, 1998 (inception) to December 31, 1999, in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company is a development stage company without
operations and has an operating loss of $9,578 and a working capital deficiency
of $8,578. These factors raise substantial doubt about its ability to continue
as a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
WEINBERG & COMPANY, P.A.
Boca Raton, Florida
April 6, 2000
F-1
<PAGE>
EINSURE NETWORKS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF DECEMBER 31, 1999
ASSETS
Cash $ 350
-------
TOTAL ASSETS $ 350
=======
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Loan payable - related party $ 8,928
-------
TOTAL LIABILITIES 8,928
-------
STOCKHOLDERS' DEFICIENCY
Preferred stock, $.01 par value, 100,000 shares
authorized, none issued and outstanding -
Common stock, $.001 par value, 10,000,000 shares
authorized, 1,000,000 issued and outstanding 1,000
Accumulated deficit during development stage (9,578)
-------
TOTAL STOCKHOLDERS' DEFICIENCY (8,578)
-------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 350
-------
=======
See accompanying notes to financial statements.
F-2
<PAGE>
EINSURE NETWORKS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
November 25, 1998
For the Year (Inception) to
Ended December December
31, 1999 31, 1999
------------- ---------------
INCOME $ - $ -
--------- ---------
EXPENSES
Accounting fees 500 500
Bank service charge 120 120
Consulting fees 388 388
Legal fees 7,000 7,000
Licenses, fees and permits 362 362
Office expense 1,208 1,208
--------- ---------
NET LOSS $ (9,578) $ (9,578)
========= =========
NET LOSS PER SHARE
BASIC AND DILUTED $ (0.0130) $ (0.0144)
========= =========
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING DURING THE PERIOD
BASIC AND DILUTED 734,247 666,667
========= =========
See accompanying notes to financial statements.
F-3
<PAGE>
EINSURE NETWORKS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
FOR THE PERIOD FROM NOVEMBER 25, 1998 (INCEPTION) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock During
--------------------- Development
Shares Amount Stage Total
--------- --------- --------- -------
<S> <C> <C> <C> <C>
Common stock issuance for cash 1,000,00$ $1,000 $ - $ 1,000
Net loss for the year ended December 31, 1999 - - (9,578) (9,578)
--------- ------ ------- -------
BALANCE AT DECEMBER 31, 1999 1,000,000 $1,000 $(9,578) $(8,578)
========= ====== ======= =======
</TABLE>
F-4
See accompanying notes to financial statements.
<PAGE>
EINSURE NETWORKS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
November
For the Year 25, 1998
Ended (Inception)
December To December
31, 1999 31, 1999
---------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(9,578) $(9,578)
Adjustments to reconcile net loss to net
cash used in operating activities: - -
------- -------
Net cash used in operating activities (9,578) (9,578)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES: - -
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan payable - related party 8,928 8,928
Proceeds from issuance of common stock 1,000 1,000
------- -------
Net cash provided by financing activities 9,928 9,928
------- -------
INCREASE IN CASH AND CASH EQUIVALENTS
350 350
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD - -
------- -------
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 350 $ 350
======= =======
See accompanying notes to financial statements.
F-5
<PAGE>
EINSURE NETWORKS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
eInsure Networks Corporation (a development stage company) ("the
Company") was incorporated in Delaware on November 25, 1998 to engage
in an internet-based business. At December 31, 1999, the Company had
not yet commenced any revenue-generated operations, and all activity
to date relates to the Company's formation, proposed fund raising and
business plan development.
The Company's ability to commence revenue-generating operations is
contingent upon its ability to implement its business plan and raise
the capital it will require through the issuance of equity securities,
debt securities, bank borrowings or a combination thereof.
(B) Use of Estimates
The preparation of the 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.
(C) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all
highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
(D) Income Taxes
The Company accounts for income taxes under the Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("Statement 109"). Under Statement 109,
deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered
or settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the
period that includes the enactment date. There were no current or
deferred income tax expense or benefits due to the Company not having
any material operations for the year ended December 31, 1999.
F-6
<PAGE>
EINSURE NETWORKS CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(E) Loss Per Share
Net loss per common share for the year ended December 31, 1999 and for
the period from November 25, 1998 (inception) to December 31, 1999 is
computed based upon the weighted average common shares outstanding as
defined by Financial Accounting Standards No. 128 "Earnings Per Share".
There were no common stock equivalents outstanding at December 31,
1999.
NOTE 2 - LOAN PAYABLE - RELATED PARTY
The loan payable - related party is a non-interest-bearing loan payable
to PageOne Business Productions, LLC arising from funds advanced to the
Company. The amount is due and payable upon demand.
NOTE 3 - STOCKHOLDERS' DEFICIENCY
(A) Preferred Stock
The Company is authorized to issue 100,000 shares of preferred stock at
$.01 par value, with such designations, preferences, limitations and
relative rights as may be determined from time to time by the Board of
directors. No preferred shares have been issued as of December 31,
1999.
(B) Common Stock
The Company is authorized to issue 10,000,000 shares of common stock at
$.001 par value. The Company issued 900,000 and 100,000 shares to Apple
Tree Investment Company, Ltd. and PageOne Business Productions, LLC,
respectively.
NOTE 4 - GOING CONCERN
As reflected in the accompanying financial statements, the Company had
a net loss of $9,578, a working capital deficiency of $8,578, and has
not generated any revenues since it has not yet implemented its
business plan. The ability of the Company to continue as a going
concern is dependent on the Company's ability to raise additional
capital and implement its business plan. The financial statements do
not include any adjustments that might be necessary if the Company is
unable to continue as a going concern.
The Company intends to implement its business plan and is seeking
funding through the private placement of its equity or debt securities
or may seek a combination with another company already engaged in its
proposed business. Management believes that actions presently taken
provide the opportunity for the Company to continue as a going
concern.
F-7
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
EINSURE NETWORKS CORPORATION
/s/ George A. Todt
By: -----------------------
George A. Todt
Director, Chief Executive
Officer
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Signature Title Date
/s/ George A. Todt Director, Chief Executive April 13, 2000
Officer, Secretary
/s/ James F. Walters Chief Financial Officer April 13, 2000
13
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