U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
[ ] Transition report under section 13 or 15(d) of
the Exchange Act.
COMMISSION FILE NUMBER 0-28437
INTECHNOLOGIES, INC.
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(Exact Name of Small Business Issuer as Specified in its Charter)
DELAWARE 95-4702570
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
321 NORTH MALL DRIVE, SUITE K-102, ST. GEORGE, UT 84790
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(435) 656-3677
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(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
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As of September 30, 2000, there were 17,000,000 shares of Common Stock,
$0.001 par value, of the issuer outstanding.
Transitional Small Business Disclosure Format (check one)
YES NO X
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<PAGE>
INTECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements
BALANCE SHEET AS OF SEPTEMBER 30, 2000 (UNAUDITED) 2
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND FOR THE PERIOD
FROM SEPTEMBER 24, 1999 (INCEPTION) TO SEPTEMBER
30, 2000 (UNAUDITED) 3
STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2000 AND FOR PERIOD FROM SEPTEMBER 24,
1999 (INCEPTION) TO SEPTEMBER 30, 2000 (UNAUDITED) 4
NOTES TO FINANCIAL STATEMENTS 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports filed on Form 8-K 10
Signatures 11
1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (and notes)
INTECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
ASSETS
------
CURRENT ASSETS
Other receivable $ 15
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TOTAL ASSETS $ 15
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY
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CURRENT LIABILITIES
Accounts payable and accrued expenses $ 9,007
Due to affiliated company 23,073
Consulting fees payable 240,000
Loan payable - stockholder 7,245
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Total Liabilities 279,325
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STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.001 par value, 8,000,000 shares
authorized, none issued and outstanding -
Common stock, $0.001 par value, 100,000,000 shares
authorized, 17,000,000 issued and
outstanding 17,000
Common stock subscribed (8,000,000 shares) 8,000
Additional paid-in capital 64,967,818
Accumulated deficit during development stage (272,080)
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64,720,738
Less subscriptions receivable (65,000,048)
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TOTAL STOCKHOLDERS' DEFICIENCY (279,310)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 15
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See accompanying notes to financial statements.
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<TABLE>
<CAPTION>
INTECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
Cumulative
from
September
Three Months Nine Months 24, 1999
Ended Ended (Inception) To
September 30, September 30, September 30,
2000 2000 2000
------------ ------------ -------------
<S> <C> <C> <C>
REVENUES $ - $ - $ -
------------ ------------ -------------
EXPENSES
Consulting fees 26,667 240,000 240,000
Legal and professional fees 4,688 27,007 27,007
General and administrative 600 5,073 5,073
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TOTAL EXPENSES 31,955 272,080 272,080
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NET LOSS $ (31,955) $ (272,080) $ (272,080)
-------- ============ ============ ==============
Net loss per share - basic and diluted $ - $ (0.01) $ (0.02)
============ ============ ==============
Weighted average number of shares
outstanding during the period -
basic and diluted 25,000,000 24,084,249 18,672,715
============ ============ ==============
</TABLE>
See accompanying notes to financial statements.
3
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<TABLE>
<CAPTION>
INTECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Cumulative from
Ended September 24, 1999
September 30, (Inception) to
2000 September 30, 2000
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<S> <C> <C>
Cash flows from operating activities
Net loss $ (272,080) $ (272,080)
Adjustments to reconcile net loss to net cash
used in operating activities:
Expenses paid by affiliate 20,573 20,573
(Increase) decrease to:
Accounts payable and accrued expenses 11,507 11,507
Consulting fees payable 240,000 240,000
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Net cash provided by (used in) operating activities - -
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Cash flows from financing activities
Proceeds from issuance of common stock 15 15
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Net cash provided by financing activities 15 15
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Net increase in cash 15 15
Cash and cash equivalents - Beginning of period - -
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Cash and cash equivalents - End of period $ 15 $ 15
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</TABLE>
See accompanying notes to financial statements.
4
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INTECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles and the rules
and regulations of the Securities and Exchange Commission for interim
financial information. Accordingly, they do not include all the
information necessary for a comprehensive presentation of financial
position and results of operations.
It is management's opinion, however that all material adjustments
(consisting of normal recurring adjustments) have been made which are
necessary for a fair financial statements presentation. The results
for the interim period are not necessarily indicative of the results
to be expected for the year.
For further information, refer to the financial statements and
footnotes included in the Company's Form 10-QSB for the quarter ended
June 30, 2000.
NOTE 2 GOING CONCERN
As reflected in the accompanying financial statements, the Company had
a net loss of $272,080 for the nine months ended September 30, 2000
and has a working capital deficiency and stockholders' deficiency of
$279,310 and has not generated any revenues since it does not yet have
an operating business. 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 become quoted in the OTCBB and has begun
negotiations with target acquisitions. Management believes that
actions presently being taken provide the opportunity for the Company
to continue as a going concern.
NOTE 3 CONTINGENT LEGAL FEES
A legal firm has been retained to represent the Company in its
proposed purchase of common shares of a technology company with an
approximate purchase price of $24,000,000 (see Note 4). The attorney's
fee for representing the Company in this transaction is $65,000 of
which a retainer fee of $15,000 was paid in May 2000 and charged to
operations as of September 30, 2000 for services performed. If for any
reason prior to purchase of any of the shares pursuant to a signed
purchase contract the Company cancels this transaction, the attorneys'
fee will be limited to the amount of the initial retainer.
5
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INTECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2000
(UNAUDITED)
NOTE 4 AGREEMENTS
On April 11, 2000 the Company executed agreements with a private
investor (the "investor") to fund the acquisition by the Company of
3,000,000 shares of common stock of a publicly held company through a
loan of up to $30,000,000. Simultaneously, the Investor executed an
agreement to purchase up to 3,000,000 shares of the Company's common
stock at $10.00 per share. The loan agreement stipulates that 80% of
the loan proceeds are to be applied by the Company to the purchase of
stock. The Investor has the option of delivering the Company's
promissory note in payment of the subscription.
On May 26, 2000 the Company entered into agreements to acquire up to
3,000,000 common shares and 3,000,000 common stock warrants (together
the "unit") of the publicly held company for $8.00 per unit subject to
certain stipulated terms and conditions. The Company may terminate
this stock purchase agreement at any time.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The following discussion of the results of operations and financial condition
should be read in conjunction with the financial statements and related notes
appearing in this report.
Merger
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On January 25, 2000, Jetco, Inc. ("Jetco" or the "Registrant"), a development
stage Delaware Corporation, entered into a Merger Agreement (the "Merger
Agreement") with AmeriStar Corp. ("AmStar"), a recently formed Nevada
corporation. Pursuant to the terms of the Merger Agreement, and subject to the
conditions set forth therein (including approval of the transactions by the
stockholders), AmStar was merged with and into Jetco (the "Merger"). The Merger
was effective as of January 25, 2000. The separate existence of AmStar ceased.
Jetco is the surviving corporation, the name of which was changed to
"InTechnologies, Inc."
Plan of Operation, Liquidity and Capital Resources
--------------------------------------------------
Registrant intends to make investments in early stage companies that have
developed computer, communication and Internet technologies that can be
distributed through businesses in which Registrant holds an interest or can
benefit from the expertise of Registrant's management or the management of one
of such acquired businesses. Senior executives of Registrant have identified a
number of companies which have developed cutting edge technologies in the fields
of computer, internet and telephone technologies; although discussions now
underway with such companies are in preliminary stages. The identity of these
target businesses has been approved by the investor.
Up to $65 million of the financing for Registrant's intended acquisitions,
investments and working capital may be obtained from a Florida resident. The
entire amount of the loan is dependent upon the happening of certain conditions.
The loan agreement requires the advance to Registrant of $3.5 million upon
either (a) Registrant's common stock closing at a price of at least $5.00 per
share on at least 20 days out of 30 days with an average trading volume of at
least 15,000 shares per day, or (b) when Registrant has agreements with at least
three companies approved by the investor with the only remaining condition to
closing with such companies being the actual advance to Registrant of $3.5
million.
Subsequent to this first advance, the loan agreement provides for three closings
in the amount of $10,500,000 each and, then, three closings each in the amount
of $10,000,000 scheduled in sequence. Each closing is subject to the daily
closing market price of Registrant's common stock being at least $5.00 per share
and trading at an average volume of at least 15,000 shares per day for at least
20 out of the preceding 30 days. The individual loans funded in this manner bear
interest at the rate of 6% per annum (18% per annum after maturity) and each is
for a term of one year.
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Simultaneously with the execution of the loan agreement, the investor subscribed
to shares of Registrant's common stock. Under the subscription agreement, the
investor is required to purchase 5,000,000 shares at a price of $7.00 per share
and 3,000,000 shares at a price of $10.00 per share, for an aggregate investment
of $65 million. As each loan is closed (after the first loan), the investor is
obligated to deliver to Registrant the note received by the investor at the
preceding loan closing. Therefore, in order to obtain cancellation of the loans
made to Registrant and receive the Registrant's shares to which the investor
subscribed, Registrant's common stock must continue to trade at a price of $5.00
per share with an average trading volume of at least 15,000 shares for at least
20 out of 30 days between each loan closing. In the event the closing price of
Registrant's common stock does not reach $5.00 for the required period of time
prior to the maturity of an outstanding loan (approximately one year),
Registrant would be required to pay such outstanding loan. In such case, it is
not likely that Registrant will have sufficient funds with which to meet the
obligation, resulting in Registrant being forced to sell assets at below market
prices or allow the loan obligation to go into default.
The Company is actively pursuing establishing a market for its common equity.
In this quarter, Registrant has executed agreements with a Florida investor to
fund its investment in a certain technology company. The details of this
transaction will be disclosed in a forthcoming 8-K Current Report upon funding.
The Company remains in the development stage and for the period September 24,
1999 (inception) to September 30, 2000 has accumulated a net loss of ($272,080)
and has a working capital deficiency of $279,310. The net loss consisted
primarily of consulting fees incurred in the nine month period ended September
30, 2000 of $240,000 and $27,007 in legal and professional fees. Consulting fees
were incurred in connection with the Merger, discussed above and are payable to
PageOne Business Productions, LLC, a stockholder of the Company. Legal and
professional fees were incurred in connection with acquisition activities.
RISK FACTORS RELATED TO THE MARKET FOR REGISTRANT'S SECURITIES
NO CURRENT TRADING MARKET FOR THE COMPANY'S SECURITIES. There is currently no
established public trading market for the securities of the Company. The Company
intends to apply for admission to quotation of its securities on the NASD OTC
Bulletin Board and, if and when qualified, it intends to apply for admission to
quotation on the NASDAQ SmallCap Market. There can be no assurance that an
active or regular trading market for the common stock will develop or that, if
developed, will be sustained. Various factors, such as the Company's operating
results, changes in laws, rules or regulations, general market fluctuations,
changes in financial estimates by securities analysts and other factors may have
a significant impact on the market price of the Company's securities. The market
price for the securities of public companies often experience wide fluctuations
which are not necessarily related to the operating performance of such public
companies such as high interest rates or impact of overseas markets.
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PENNY STOCK REGULATION. Upon commencement of trading in the Company's stock, if
such occurs (of which there can be no assurance) the Company's common stock may
be deemed a penny stock. Penny stocks generally are equity securities with a
price of less than $5.00 per share other than securities registered on certain
national securities exchanges or quoted on the NASDAQ Stock Market, provided
that current price and volume information with respect to transactions in such
securities is provided by the exchange or system. The Company's securities may
be subject to "penny stock rules" that impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together
with their spouse). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the "penny stock rules" require the delivery, prior to the
transaction, of a disclosure schedule prescribed by the Commission relating to
the penny stock market. The broker-dealer also must disclose the commissions
payable to both the broker-dealer and the registered representative and current
quotations for the securities. Finally, monthly statement must be sent
disclosing recent price information on the limited market in penny stocks.
Consequently, the "penny stock rules" may restrict the ability of broker-dealers
to sell the Company's securities. The foregoing required penny stock
restrictions will not apply to the Company's securities if such securities
maintain a market price of $5.00 or greater. There can be no assurance that the
price of the Company's securities will reach or maintain such a level.
PRESENT FUNDING ARRANGEMENTS
As earlier described (see discussion on pages 7-8, the Registrant entered
into an agreement with a Florida investor for the loan of a maximum of $65
million. The initial advance ($3.5 million) is for one year and depends on
either the existence of a stable market for the Registrant's shares (trading for
15 days during any 20 trading days for $5.00 per share at volumes of at least
15,000 shares) or the completion of negotiations and entrance into definitive
contracts for the acquisition of or investment in three companies having
information technology businesses, upon terms acceptable to the investor.
Further advances are to be made if Registrant's shares maintain a market price
and duration described above. At the maturity of each advance, the loan is to be
converted into shares of Registrant's stock (at a predetermined price per
share), each subsequent loan advance is made when, but only if, the market price
for such shares is in excess of $5.00 per share, which market has been
maintained for the periods and in the trading depth described above. As a
result, Registrant is now entirely dependent upon not only the development of a
market for its shares, but a trading market of the foregoing character and
extent. It is possible, for example, for Registrant to have received initial and
some subsequent fundings, all of which were used to acquire target companies or
interests therein. Those shares or interests would be illiquid. If one or more
of the target companies does poorly, the market price of Registrant's stock
might become adversely impacted. Since each advance is due in one year, unless
9
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the market price of Registrant's stock is at or above $5.00 per share for a
period of time and in an average trading volume as described above, the debt
represented by the last loan made by the investor will not be exchanged for
common stock thereunder, and the Registrant may be in default of its obligation.
Under those circumstances, unless the Registrant obtained further financing or
sold its interests in one or more of its investments or holdings, the holder of
the debt could foreclose, with the result that the other stockholders may suffer
a loss of all of their investment.
MARKET PRICE MAY BE ADVERSELY AFFECTED BY EXISTING CONTRACT ARRANGEMENTS.
The former holders of Registrant's stock will have the right to sell their
shares during the first year subsequent to the merger date. In addition, the
subscription agreement pursuant to which the Florida investor is required to
exchange Registrant's shares for matured debt borrowed from the investor
provides for the registration of such shares upon the happening of certain
events, including the investor's demand. Even if a substantial trading market
for Registrant's common stock develops, the mere existence of these shares as
potential additions to the supply of shares at any time may adversely affect
both the market price of the shares or the ability to attract a sufficient
number of investors to maintain the market price and trading range and volume
necessary to require the conversion of the investor's debt into Registrant's
common stock.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports filed on Form 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
None
10
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SIGNATURES
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In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
INTECHNOLOGIES, INC.
Registrant
November 10, 2000 By: /s/ William Noe
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William Noe
President
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INTECHNOLOGIES, INC
10-QSB QUARTERLY REPORT
EXHIBIT INDEX
The following exhibits are filed herewith.
Exhibit No. Description
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27 Financial Data Schedule
12
