<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________to_____________
Commission file number 000-28311
NET MASTER CONSULTANTS, INC.
(Exact Name of Registrant as specified in its charter)
Texas 76-027334
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
1818-1177 West Hastings Street, Vancouver, B.C. V6E 2K3
(Address of principal executive offices)
604-602-1717
(Issuer's telephone number)
Check whether the issuer (1) filed all reports
required to be filed by Section 13 or 15(d) of the
Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file
such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
State number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 6,335,600
<PAGE> 2
PART I
Item 1. Financial Statements
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
INTERIM FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
<PAGE> 3
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
June 30,
------------------------
2000 1999
--------- ---------
<S> <C> <C>
ASSETS
CURRENT
Cash $ 2,938 $ 705
Prepaid expense 2,675 --
--------- ---------
Total current assets $ 5,613 $ 705
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities $ 202,403 $ --
Loan payable (Note 4) 80,000 --
--------- ---------
Total current liabilities 282,403 --
--------- ---------
STOCKHOLDERS' EQUITY
Capital stock
Authorized
100,000,000 common shares with a par value of $0.0001
Issued and outstanding
6,335,600 common shares with a par value of $0.0001 $ 634 $ 634
Additional paid-in capital 116,699 116,699
Deficit accumulated during the development stage (394,123) (113,856)
Stock subscriptions -- (2,772)
--------- ---------
Total stockholders' deficit (276,790) 705
--------- ---------
Total liabilities and stockholders' deficit $ 5,613 $ 705
========= =========
</TABLE>
ON BEHALF OF THE BOARD:
/s/ NORA COCCARO Director
--------------------
The accompanying notes are an integral part of these financial statements
<PAGE> 4
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Cumulative
Ended June 30 Total
--------------------------- Since
2000 1999 Inception
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ -- $ -- $ --
Expenses
Accounting and legal 109,384 -- 131,881
Consulting fees 52,725 -- 171,447
Interest expense 1,859 -- 1,859
Office expenses 7,211 -- 14,237
Rental expense 12,840 -- 14,980
Transfer agent and filing fees 11,141 -- 11,141
Travel and accommodation 18,445 -- 48,578
----------- ----------- -----------
213,605 -- 394,123
----------- ----------- -----------
Loss for the period $ (213,605) $ -- $ (394,123)
=========== =========== ===========
Net loss per share $ (0.03) $ --
=========== ===========
Weighted average shares outstanding 6,335,600 6,335,600
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 5
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
---------------------------- Paid-in Development
Shares Amount Capital Stage
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Inception at December 28, 1988 $ -- $ -- $ --
Shares issued for services 66,000,000 6,600 (6,567) --
Loss for the years ended
December 31, 1988 - 1996 -- -- -- (33)
----------- ----------- ----------- -----------
Balances, December 31, 1996 66,000,000 6,600 (6,567) (33)
Canceled 60,000,000 shares (60,000,000) (6,000) 6,000 --
Issuance of stock at $2.50 per share
on June 17, 1997 40,000 4 99,996 --
Loss for the year -- -- -- (80,025)
----------- ----------- ----------- -----------
Balances, December 31, 1997 6,040,000 604 99,429 (80,058)
Stock issued at $0.05 for services 190,000 19 9,481 --
Stock issued for subscription agreement 105,600 11 7,789 --
Loss for the year -- -- -- (33,798)
----------- ----------- ----------- -----------
Balances, December 31, 1998 6,335,600 634 116,699 (113,856)
Loss for the year -- -- -- (66,662)
----------- ----------- ----------- -----------
Balances, December 31, 1999 6,335,600 634 116,699 (180,518)
Loss for the period -- -- -- (213,605)
----------- ----------- ----------- -----------
Balances, June 30, 2000 6,335,600 $ 634 $ 116,699 $ (394,123)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 6
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Six Months Cumulative
Ended June 30 Total
------------------------ Since
2000 1999 Inception
--------- --------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Loss for the period $(213,605) $ -- $(394,123)
Items not involving an outlay of cash: -- -- --
Changes in non-cash working capital items:
Increase in prepaid expense (2,675) (2,675)
Increase in accounts payable 135,741 -- 202,403
Increase in loan payable 80,000 -- 80,000
--------- --------- ---------
Net cash provided (used) in operating activities (539) -- (114,395)
--------- --------- ---------
Cash Flows from Investing Activities
Net cash provided (used) in investing activities -- -- --
--------- --------- ---------
Cash Flows from Financing Activities
Stock subscriptions received 2,772 -- 7,800
Stock issued for organization cost -- -- 33
Issued common stock for cash -- -- 100,000
Issued common stock for services -- -- 9,500
--------- --------- ---------
Net cash provided (used) in financing activities 2,772 -- 117,333
--------- --------- ---------
Net increase in cash 2,233 -- 2,938
Cash, beginning of period 705 705 --
--------- --------- ---------
Cash, end of period $ 2,938 $ 705 $ 2,938
========= ========= =========
Supplemental Cash Flow Information:
Cash paid for:
Interest $ -- $ --
Taxes $ -- $ --
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 7
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
1. Summary of Significant Accounting Policies
a. Organization
Net Master Consultants, Inc. (the "Company") was incorporated as
Houston Produce Corporation under the laws of the State of Texas on
December 28, 1988. The Company was organized primarily for the purpose
of importing fruits and vegetables from Latin America for sale in the
United States market, however, it has remained dormant until its
reactivation in March 1997. In June 1997, the Company changed the name
to Net Master Consultants, Inc.
The Company is in the development stage according to Financial
Accounting Standards Board Statement No. 7 and is currently focusing
its attention on raising capital in order to pursue its goals.
b. Accounting Method
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the
financial statements.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
c. Provision for Income Taxes
No provision for income taxes has been recorded due to net operating
loss carryforwards that will be offset against future taxable income.
No tax benefit has been reported in the financial statements because
the Company believes there is a 50% or greater chance the carryforward
will expire unused.
2. Going Concern
The financial statements have been prepared assuming that the Company will
continue as a going concern. The Company has few tangible assets and has
had recurring operating losses for the past few years and is dependent upon
financing to continue operations. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
It is management's plan to find an operating company to merge with, thus
creating necessary operating revenue.
3. Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating
substantially all of its efforts in raising capital and developing its
business operations in order to generate significant revenues.
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NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
4. Loan payable
The loan is payable on demand and bears interest at 8% per annum.
5. Stock Split
In 1997, the Company's Board of Directors authorized a 1,000 for one
forward stock split and the cancellation of 30,000,000 shares as part of
the reorganization and reincorporation.
In January 2000, it authorized a two for one forward stock split. The
Company's financial statements have been retroactively restated to show the
effects of these stock splits.
6. Letter of Intent
On March 28, 2000, the Company signed a letter of intent to acquire two
international e-commerce companies, the consideration for which will be the
issuance of 3,500,000 common shares of the Company. A finder's fee of
300,000 common shares of the Company is payable upon completion of the
acquisitions.
These acquisitions are subject to due diligences and the companies to be
acquired meeting certain conditions and the formal documentation being
completed within 60 days. After 30 day extension, this Letter of Intent has
expired on June 28, 2000.
7. Agent Agreement
On April 24, 2000, the Company has entered into an agent agreement to raise
$5,000,000 through the sale of 1,000,000 common shares of the Company, with
an option ("overallotment option") to sell an additional 500,000 shares at
$5.00 per share (the "Private Placement"). The securities offered under the
Private Placement will not be and have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold in the
United States absent registration or an appropriate exemption from
registration requirements. The minimum offering is 400,000 shares or
$2,000,000. The agent will be paid a commission of $0.50 per share plus
750,000 warrants exercisable at $5.50 for three years from the date of
closing. An additional warrant will be granted to the agent for every 2
shares sold (up to 250,000 warrants) if it exercises its overallotment
option. The closing date for the financing is July 31, 2000. The closing of
the financing is subject to the Company's acquisition of the e-commerce
companies described in Note 6 above and other closing conditions
(Note 10-a).
8. Consulting Agreement
On May 17, 2000, the Company signed a consulting services agreement for a
term of six months ending September 30, 2000. In consideration of the
services rendered, the Company agreed to issue 300,000 common shares of the
Company. The shares are to be issued in six equal installments of 50,000
shares; upon completion of initial status and evaluation report, on May 31,
2000, June 30, 2000, July 31, 2000, August 31, 2000 and September 30,
2000. No shares have been issued as at June 30, 2000 (Note 10-b).
<PAGE> 9
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000
(Unaudited)
9. Related Party Transactions
During the six months ended June 30, 2000, the Company paid $16,225 to a
director of the Company.
10. Subsequent Events
(a) On July 31, 2000, the closing date for the financing under the agent
agreement has been extended for 45 days to allow the Company to seek
alternate e-commerce companies (Note 7).
(b) The total number of shares to be issued under the consulting service
agreement (300,000) were issued; and 150,000 shares due and released to
the consultant as per the agreement by June 30, 2000. The remaining
150,000 shares are held by the Company and will be released according
to the terms of the agreement ending September 30, 2000.
<PAGE> 10
Item 2: Management Discussion and Analysis
A. BUSINESS OPERATIONS
The Company has no current business.
Negotiations to extend the deadline of the expired letter of intent for the
purchase of "Global Direct" and "Global Direct 2000, Inc." have been
discontinued. The search for the acquisition of a potentially profitable
business is ongoing.
1) PLAN OF OPERATIONS
With the discontinuation of the proposed acquisition of the "Global
Direct" companies the Company renewed its efforts towards the
acquisition and/or implementation of e-commerce projects to secure
profitability for its shareholders. On May 17, 2000, the Company signed
and agreement for consulting services. The consultant will, on the next
six months, assist with the implementation of a Business Plan with
respect to providing e-commerce services. The Business Plan will address
strategic planning, marketing programs, key personnel recruitment,
acquisition strategies and ongoing management plans.
2) CASH REQUIREMENTS
The Company is confident that it has the capacity to obtain what limited
funding is needed for corporate maintenance and the evaluation of
projects from current shareholders or through advances by its
consultants. The considerations for the consulting contract is 300,000
shares of the Company's common stock to be issued in installments of
50,000 each between June 30 and September 30, 2000. Filing of the
required Form S-8 Registration Statement was done on June 20,2000.
The Agent Agreement with MFC Merchant Bank S.A. of Switzerland to raise
US$5,000,000 has been extended for 45 days on July 31, 2000 to September
15, 2000 to allow the Company to seek alternate e-commerce and other
business opportunities.
3) FINANCING CONDITIONS AND RESULTS OF OPERATIONS
The Company had no revenues during the second fiscal quarter ending June
30, 2000 and financed its expenditures which totaled $351,192 from loans
received ($35,000) Stock issued for services ($200,000) and by
increasing its Accounts Payable by $112,460, as well as reducing the
Cash Balance by $6,407 to $2,938 as of June 30, 2000. $2,675 was
utilized to prepay expenses.
Accumulated Deficit during the development stage period increased by the
operational loss of $351,192 to $594,123. The loss during the reporting
period ending June 30, 2000 was due to Corporate Maintenance Cost
(accounting, legal, management, rent, service charges and interests,
office expense, travel and filing fees) of $121,667 as well as
consulting fees in connection with the exploration of business
opportunities and financing possibilities of $229,525 ($200,000 of which
pertain to the consulting contract signed June 20, 2000 and referred to
in paragraph 1, above).
<PAGE> 11
PART II - OTHER INFORMATION
Item 1) Legal Proceedings
None
Item 2) Changes in Security
On June 20, 2000 the Company filed a Form S-8 Registration Statement for
the issuance of 300,000 shares of its common stock in consideration for
payment of certain consulting services, of which 150,000 shares were
issued at $2.00 per share subsequently to fiscal quarter ending June 30,
2000 on July 5, 2000.
Item 3) Defaults upon Senior Securities
None
Item 4) Submissions of Matters to a Vote of Security Holders
None
Item 5) Other Information
None
Item 6) Exhibits and Reports on form 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
None
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 of the
undersigned thereunto duly authorized.
Net Master Consultants Inc.
(Registrant) By: /s/ Nora Coccaro
President
Date: August 9, 2000
