U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
( X ) QUARTERLY REPORT UNDER SECTION 13 0R 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 0-30544
SCHIMATIC CASH TRANSACTIONS NETWORK.COM, INC
d/b/a IC ONE, INC
(Exact name of small business issuer as specified in its charter)
FLORIDA 88-0415947
(State of other jurisdiction (IRS Employer
of incorporation or organization) identification No.)
205 WEST 700 SOUTH, SUITE 200, SALT LAKE CITY, UTAH 84101
(Address of principal executive offices)
(801) 355-0066
(Issuer's telephone number)
-----------------------------------------------------
(Former name,former address and former fiscal year,if changed since last report)
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_____
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
OUTSTANDING AS OF
May 19, 2000
CLASS
___________________
Par value $.01 per share 54,373,638
Transitional Small Business Disclosure Format (check one)
Yes/_/ No/X/
<PAGE>
SCHIMATIC CASH TRANSACTIONS NETWORK.COM, INC.
d/b/a IC ONE, INC
FORM 10-QSB
FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
PART 1 - FINANCIAL INFORMATION
Page
Item 1. Financial Statements:
Balance Sheet as of March 31, 2000 1
Statements of Operations for the three months ended March 31,
2000 and 1999 and from February 26, 1997
(inception) through March 31, 2000 2
Statements of Cash Flow for the three months ended March 31,
2000 and 1999 and from February 26, 1997
(inception) through March 31, 2000 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis or Plan
of Operation 5
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 6
Item 2. Changes in Securities 6
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of
Securities Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
<PAGE>
SCHIMATIC CASH TRANSACTIONS NETWORK.COM, INC. D/B/A IC ONE, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEET
MARCH 31, 2000
(UNAUDITED)
ASSETS
CASH $ 16,945
PROPERTY AND EQUIPMENT, less accumulated
depreciation and amortization of $185,426 169,884
PATENTS, net of accumulated amortization of $7,333 39,521
INVESTMENT IN REAL ESTATE JOINT VENTURE 400,000
------------------
$ 625,350
==================
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable $ 1,707,454
Accrued expenses and other liabilities 454,833
Notes payable 375,000
Loans payable - shareholder 300,325
------------------
TOTAL CURRENT LIABILITIES 2,837,612
------------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' DEFICIT:
Common stock - $.001 par value; 200,000,000 shares
authorized; 53,605,714 shares issued and outstanding. 53,604
Additional paid-in capital 10,028,050
Deficit accumulated during the
development stage (12,292,916)
------------------
TOTAL SHAREHOLDERS' DEFICIT (2,211,262)
------------------
$ 626,350
==================
See notes to consolidated financial statements
1
<PAGE>
SCHIMATIC CASH TRANSACTIONS NETWORK.COM, INC. D/B/A IC ONE, INC.
( A DEVELOPMENT STAGE ENTERPRISE)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
February 26, 1997
Three months ended (Inception)
March 31, through
------------------- ------------------ March 31,
2000 1999 2000
------------------- ------------------ ---------------------
<S> <C> <C> <C>
REVENUES: $ - $ - $ -
COSTS AND EXPENSES:
Research and development 275,000 270,340 3,014,352
Selling, general and administrative 844,745 519,370 5,610,667
Interest expense 17,661 59,217 295,975
Depreciation and amortization 21,837 22,000 192,759
Loss on settlement of vendor liability - - 1,533,333
------------------- ------------------ ---------------------
TOTAL COSTS AND EXPENSES 1,159,243 870,927 10,647,086
------------------- ------------------ ---------------------
LOSS BEFORE EXTRAORDINARY ITEM (1,159,243) (870,927) (10,647,086)
EXTRAORDINARY ITEM - LOSS ON
EXTINGUISHMENT OF DEBT - - (300,000)
------------------- ------------------ ---------------------
NET LOSS $ (1,159,243) $ (870,927) $ (10,947,086)
=================== ================== =====================
NET LOSS PER SHARE - BASIC AND DILUTED:
LOSS BEFORE EXTRAORDINARY ITEM $ (0.02) $ (0.05) $ (0.75)
EXTRAORDINARY ITEM - - (0.02)
------------------- ------------------ ---------------------
NET LOSS - BASIC AND DILUTED $ (0.02) $ (0.05) $ (0.78)
=================== ================== =====================
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 60,392,342 17,052,000 14,118,617
=================== ================== =====================
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
SCHIMATIC CASH TRANSACTIONS NETWORK.COM, INC. D/B/A IC ONE, INC.
( A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
February 26, 1997
(Inception)
Three months ended March 31 to
---------------------------------------- March 31,
2000 1999 2000
------------------- ------------------ -------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,159,243) $ (870,927) $ (10,947,086)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 21,837 22,000 192,759
Stock issued for services 89,662 - 440,489
Loss on extinguishment of debt - - 300,000
Loss on settlement of vendor liability - - 1,533,333
Changes in assets and liabilities:
Increase in inventory - - -
Decrease in other assets - 30,018 -
Increase in accounts payable and accrued expenses 17,188 167,385 3,578,195
------------------- ------------------ -------------------
NET CASH USED IN OPERATING ACTIVITIES (1,030,556) (651,524) (4,902,310)
------------------- ------------------ -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment (12,672) (30,387) (355,310)
Acquisition of patents - (3,148) (46,854)
------------------- ------------------ -------------------
NET CASH USED IN INVESTING ACTIVITIES (12,672) (33,535) (402,164)
------------------- ------------------ -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes and loans - - 375,000
Repayments of notes (40,000) (40,000)
Sales of common stock 1,094,171 669,750 4,986,419
------------------- ------------------ -------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 1,054,171 669,750 5,321,419
------------------- ------------------ -------------------
NET INCREASE (DECREASE) IN CASH 10,943 (15,309) 16,945
CASH AT BEGINNING OF PERIOD 6,002 30,837 -
------------------- ------------------ -------------------
CASH AT END OF PERIOD $ 16,945 $ 15,528 $ 16,945
=================== ================== ===================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB and
rule 10-01 of Regulation S-X. Accordingly they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal accruals) considered
necessary for a fair presentation have been included. Operating results
for the three months ended March 31, 2000 are necessarily indicative of
the results that may be expected for the full fiscal year ended
December 31, 2000. For further information, refer to the financial
statements and footnotes included on Form 10-SB for the year ended
December 31, 1999.
2. GOING CONCERN
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company incurred
losses of $10,947,086 since inception. Additionally, the Company had a
working capital and a total capital deficiency of $2,820,667 and
$2,211,262 at March 31, 2000. These conditions raise substantial doubt
about the Company's ability to continue as a going concern.
Management's plans with respect to these matters include restructuring
its existing debt, raising additional capital through future issuances
of stock and or debentures and ultimately developing a viable business.
The accompanying financial statements do not include any adjustments
that might be necessary should the Company be unable to continue as a
going concern.
3. STOCKHOLDERS EQUITY
During the three months ended March 31, 2000, the Company issued
2,828,475 shares of common stock for cash with proceeds of $1,094,171.
Pursuant to a motion by the Company's Board of Directors and advise of
legal counsel, the Company cancelled 12,664,239 shares of common stock
in which a certain shareholder has a beneficial interest but were never
delivered to such shareholder. The Company is disputing the amount of
shares to which the shareholder is entitled to and has determined that
it will commence negotiations with such shareholder with the
expectation that substantially less shares will be reissued to the
shareholder at a future date.
4
<PAGE>
Item 2- Management's Discussion and Analysis or Plan Operation
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. This discussion should be read in
conjunction with the financial statements and notes thereto appearing elsewhere
herein.
Statements in this form 10QSB that are not statements of historical or current
fact constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other unknown factors that
could cause the actual results of the company to be materially different from
the historical results or from any future results expressed or implied by such
forward-looking statements. In addition to statements that explicitly describe
such risks and uncertainties, readers are urged to consider statements lableled
with the terms "believes," "belief," "expects," "intends," "anticipates" or
"plans" to be uncertain and forward-looking. The forward looking statements
contained herein are also subject generally to other risks and uncertainties
that are described from time to time in the Company's reports and registration
statements filed with the Securities and Exchange Commission.
Results of Operations
The Company is a development-stage stage Company with no operating revenue to
date.
Total costs and expenses increased $288,316 in the first quarter of the year
2000 as compared to the first quarter of the year 1999. Total costs and expenses
for the three months ended March 31, 2000 were $1,195,745 as compared to
$870,927 for the three months ended March 31, 1999. The increase is primarily
due to increased selling, general and administrative expenses.
The increase in selling general and administrative expenses of $330,375 in the
first quarter of the year 2000 as compared to the first quarter of 1999 resulted
from increased strategic planning and management including the addition of new
members of management headed by a new Chief Executive Officer previously with
Pacific Care, James Williams.
5
<PAGE>
James Williams was the Chief Information Officer at Pacific Care. He has
assembled new members of the management team including an executive to take
charge of strategic planning, John Hipsley. Richard Hauge has been added to
increase opportunities both domestically and internationally with his knowledge
and expertise in Smart Cards in addition to his knowledge of the Company's
patent as one of the authors of the patent. In addition, the Company has added
Joseph Diamond to take charge of both the legal department and act as the
interim Chief Financial Officer until the Company recruits an experienced Chief
Financial Officer to take charge of finances and work with James Williams in
leadership of the Company in it's relations with the financial and capital
markets.
Liquidity and Capital Resources
During the three months ended March 31, 2000, the Company raised $950,660
through the sale of common stock. These funds have been used in current
operations.
As the Company is still in the development stage it's resources are directed to
the development of applications for it's patent and to the development of
software to provide processing for the applications as well as to develop a data
base from the information that will be processed.
Historically the Company's liquidity has been provided by private placements of
common stock which reached approximately $10,070,000 cumulatively from the date
of the Company's inception through March 31, 2000.
The Company believes that it will require additional cash infusions of
approximately $9,000,000 over the next twelve months to meet its operating
needs, which it intends to raise through private placements of its common stock.
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The cash needs of the Company were met through private
placement sales of common stock. During the three months ended
March 31, 2000, the Company issued 2,828,475 shares of common
stock for cash proceeds of $1,094,171. An additional 51,200
shares were issued for services.
6
<PAGE>
Item 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
Item 5. OTHER INFORMATION
Not Applicable.
Item 6. EXHIBITS AND REPORTS ON FROM 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31,
2000.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SCHIMATIC CASH TRANSACTIONS NETWORK.COM, INC
(Registrant)
By: /s/ James Williams
---------------------------
James William, President/CEO
Date: May 19, 2000
8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 16,945
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 16,945
<PP&E> 355,310
<DEPRECIATION> (185,426)
<TOTAL-ASSETS> 626,350
<CURRENT-LIABILITIES> 2,837,612
<BONDS> 0
0
0
<COMMON> 53,604
<OTHER-SE> (2,264,866)
<TOTAL-LIABILITY-AND-EQUITY> 626,350
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,141,582
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,661
<INCOME-PRETAX> (1,159,243)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,159,243)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,159,243)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
