<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 March 31, 2000
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______________to_____________
Commission file number 000-28311
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
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
INERIM FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
<PAGE> 3
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
March 31,
----------------------------------------
2000 1999
------------------ -------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 9,345 $ 705
------------------ -------------------
Total current assets $ 9,345 $ 705
================== ===================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 89,943 $ -
Loan payable (Note 4) 45,000 -
------------------ -------------------
Total current liabilities 134,943 -
------------------ -------------------
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 (242,931) (113,856)
Stock subscriptions - (2,772)
------------------ -------------------
Total Stockholder's Deficit $ (125,598) $ 705
================== ===================
Total liabilities and Stockholders Deficit $ 9,345
</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>
Cumulative
For the Three months Total
Ended March 31 Since
2000 1999 Inception
---------------- ------------------- -------------------
<S> <C> <C> <C>
Revenue $ - $ - $ -
Expenses
Accounting and legal 14,732 - 37,229
Consulting fees 23,200 - 141,922
Office expenses 5,371 - 12,397
Rental expense 6,420 - 8,560
Transfer agent and filing fees 5,054 - 5,054
Travel and accommodation 7,636 - 37,769
---------------- ------------------- -------------------
62,413 - 242,931
---------------- ------------------- -------------------
Loss for the period $ (62,413) $ - $ (242,931)
================ =================== ===================
Net loss per share $ (0.01) $ -
================ ===================
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
Additional During the
Common Stock 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 - - - (62,413)
--------------- --------------- --------------- ----------------
Balances, March 31, 2000 6,335,600 $ 634 $ 116,699 $ (242,931)
=============== =============== =============== ================
</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>
Cumulative
For the Three Months Total
Ended March 31 Since
2000 1999 Inception
------------------ ----------------- ------------------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Loss for the period $ (62,413) $ - $ (242,931)
Items not involving an outlay of cash: - - -
Changes in non-cash working capital items:
Increase in accounts payable 23,281 - 89,943
Increase in loan payable 45,000 - 45,000
------------------ ----------------- ------------------
Net cash provided (used) in operating activities 5,868 - (107,988)
------------------ ----------------- ------------------
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 5,868 - 9,345
Cash, beginning of period 705 705 -
------------------ ----------------- ------------------
Cash, end of period $ 6,573 $ 705 $ 9,345
================== ================= ==================
</TABLE>
Supplemental Cash Flow Information:
<TABLE>
<S> <C> <C>
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
MARCH 31, 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 but has remained dormant until its reactivation in March
1997. In June 1997, the Company changed its name to Net Master
Consultants, Inc.
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7 and is currently focusing
its attention on raising capital in order to pursue its business plan.
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.
e. 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 believe 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 acquire, 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.
<PAGE> 8
NET MASTER CONSULTANTS, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 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 formal documentation being
completed within sixty days from signing.
7. Subsequent Event
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.
<PAGE> 9
PART I
ITEM 2: MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following discussion is based on the Company's financial statements
included elsewhere in this filing. Such financial statements have been prepared
in accordance with generally accepted accounting principles.
This Quarterly Report on Form 10-QSB contains statements relative to
(i) estimates, (ii) future research plans and expenditures, (iii) potential
collaborative arrangements, (iv) opinions of management and (v) the need for and
availability of additional financing which may be considered "forward-looking
statements."
The forward-looking statements included herein are based on current
expectations that involve a number of risks and uncertainties. These
forward-looking statements are based on assumptions regarding the Company's
business and technology, which involve judgments with respect to, among other
things, future scientific, economic and competitive conditions, and future
business decisions, all of which are difficult or impossible to predict
accurately and many of which are beyond the control of the Company. Although the
Company believes that the assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could prove inaccurate and, therefore,
there can be no assurance that the results contemplated will be realized and
actual results may differ materially.
Readers are urged to carefully review and consider the various
disclosures made by the Company in this report and in the Company's other
reports filed with the Securities and Exchange Commission that attempt to advise
interested parties of the risks and factors that may affect the Company's
business. Historical results and percentage relationships will not necessarily
be indicative of the operating results of any future period.
A. PLAN OF OPERATIONS
As of March 31, 2000, the Company has not been engaged in any business
operations and has not generated any revenues. The Company's plan of
operations is to acquire an operating business in the e-commerce industry
during the next twelve months.
In January 2000 the Company effected a two for one forward split of its
common stock and NASD confirmed that trading on the basis of post-split
shares was effective January 31, 2000. Effective February 6, 2000 the
Company became a fully reporting company. A new trading symbol has been
assigned to the Company (NTMS).
On March 28, 2000, the Company signed a letter of intent for the
acquisition of two related companies. The first company is a Swedish
company with an Internet shopping mall and other Internet related
intellectual property. This company will be acquired in exchange for
2,000,000 shares of the Company's common stock. The second company is a
Nevada corporation that has entered into a contract with an international
not-for-profit organization granting it the right to market e-commerce
business and related activities to the organization's approximately 500,000
members world-wide. This company will be acquired in exchange for up to
1,500,000 shares of the Company's common stock, including shares to be
issued to the not-for-profit organization.
<PAGE> 10
Closing of these acquisitions will only take place after completion of due
diligence and evaluation, securing of necessary financing for the
development, expansion and operation of the new businesses and negotiation
of definitive acquisition agreements. This process started March 28, 2000
and is still ongoing. Subject to completion of due diligence to the
satisfaction of management, closing of these acquisitions will likely occur
before the end of July 2000.
There can be no assurance that the Company will be able to consummate the
acquisitions. If the acquisitions are not completed, the Company intends to
seek other potential acquisition targets in the e-commerce or Internet
industry.
1) CASH REQUIREMENTS
The Company believes that it has the capacity to obtain what limited
funding is needed for current corporate operations for the next twelve
months from current shareholders or through advances by its
consultants. These advances can be repaid in cash at a later date or by
compensation in common stock.
In the event the Company consummates the acquisition of the e-commerce
businesses described above, the Company will require substantial
financial requirements in the near future. Management anticipates that
$5,000,000 will be required for development and operation of the
acquired companies during the twelve months following the acquisition.
The Company plans to raise the necessary capital through a private
placement of common stock. 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 completion of the
acquisition of the e-commerce businesses described above and other
conditions.
Financing activities are influenced by many factors, including
financial market conditions, technological progress and the Company's
projected funding requirements. Significant future financing activities
will be required to fund future operating activities and to maintain
debt service. While the Company is engaged in continuing negotiations
to secure additional capital and financing, there is no assurance such
funding will be available or if received will be adequate.
2) MATERIAL CHANGES IN FINANCIAL CONDITIONS
Because the Company was not engaged in any business, the only material
change to the financial condition of the Company is reflected in the
increase in expenses incurred by the Company, with a corresponding
increase to the reported accounts payable. The Company had no revenues
during the first fiscal quarter ending March 31, 2000 and financed its
expenditures for this period which totaled $62,413 from loans received
($45,000) Stock Subscriptions ($2,772) and by increasing its Accounts
Payable by $23,281, thereby adding $8,640 to the Cash Balance of $705
on December 31, 1999 for current Cash on Hand balance of $9,345.
Accumulated Deficit during the development stage period increased by
the operational loss of $62,413 to $242,931. The loss during the
reporting period ending March 31, 2000 was due to Corporate Maintenance
Cost (accounting, legal, management, rent, service charges, office
expense, filing fees) of $39,777 as well as consulting fees and travel
expenses in connection with the exploration of business opportunities
and financing possibilities of $22,636.
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
In January 2000, the Company effected a two for one forward split of
its common shares increasing the issued and outstanding shares from
3,167,800 to 6,335,600. NASD confirmed that trading on the basis of
post-split shares was effective January 31, 2000. Since every
shareholder received 2 shares for 1 held previous to the forward split,
no rights of any shareholder have been effected.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - None.
On January 25, 2000 a Meeting of Shareholders was called to vote on a
proposal to approve, authorize and ratify a two for one forward split
of the common stock of the Company. Of the total number of shares
entitled to vote as per the shareholder list at record date
(3,167,800), 2,113,427 (or 66.72%) of shares were present. The quorum
required for the meeting was 1,583,901 shares (or 50% + 1 share). Of
the shares present at the meeting, 2,112,926 (or 99.98%) voted in favor
of the proposal.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
(27) Financial Data Schedule for period ended March 31, 2000.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the Company's quarter
ended March 31, 2000.
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
Nora Coccaro
President and Treasurer
Date: May 15, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-1-2000
<PERIOD-END> MAR-31-2000
<CASH> 9,345
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9,345
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,345
<CURRENT-LIABILITIES> 134,943
<BONDS> 0
0
0
<COMMON> 634
<OTHER-SE> (126,232)
<TOTAL-LIABILITY-AND-EQUITY> 9,345
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 62,413
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (62,413)
<INCOME-TAX> 0
<INCOME-CONTINUING> (62,413)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (62,413)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
