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 JUNE 30, 2000
[ ] Transition report under section 13 or 15(d)
of the Exchange Act.
COMMISSION FILE NUMBER 0-28639
PANGAEA COMMUNICATIONS, INC.
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(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4719021
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
104 PROSPECT HILL STREET, NEWPORT, RI 02840
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(401) 848-0646
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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 August 15, 2000, there were 1,018,800 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>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements
BALANCE SHEET AS OF JUNE 30, 2000 (UNAUDITED)
AND DECEMBER 31, 1999 2
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
AND SIX MONTHS ENDED JUNE 30, 2000 AND JUNE
30, 1999 AND FROM SEPTEMBER 15, 1998
(INCEPTION) TO JUNE 30, 2000 (UNAUDITED) 3
STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS
ENDED JUNE 30, 2000 AND JUNE 30, 1999 AND FOR
THE PERIOD FROM SEPTEMBER 15, 1998
(INCEPTION) TO JUNE 30, 2000 (UNAUDITED) 4
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30,
2000 (UNAUDITED) 5-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports filed on Form 8-K 8
Signatures 9
1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
June 30,
2000 December 31,
(unaudited) 1999
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TOTAL ASSETS $ - $ -
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LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Loan payable - related party $ 16,395 $ 95
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TOTAL LIABILITIES 16,395 95
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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,
1,018,800 issued and outstanding 1,019 1,019
Accumulated deficit during
development stage (17,414) (1,114)
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TOTAL STOCKHOLDERS' DEFICIENCY (16,395) (95)
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TOTAL LIABILITIES AND STOCKHOLDERS'
------------------------------------
DEFICIENCY $ - $ -
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See accompanying notes to financial statements
2
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<TABLE>
<CAPTION>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the
For the For the For the For the Period From
Three Three Six Six September 15,
Months Months Months Months 1998
Ended Ended Ended Ended (Inception) to
June 30, June 30, June 30, June 30, June 30,
2000 1999 2000 1999 2000
---------- --------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
---------- --------- ---------- ---------- --------------
EXPENSES
Accounting fees 2,000 500 4,000 500 4,500
Bank charges - 30 - 30 95
Consulting fees - 19 - 19 19
Legal fees 3,000 500 6,000 500 6,500
Office & postage expense 750 - 1,500 - 1,500
Rent 2,400 - 4,800 - 4,800
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NET LOSS $ (8,150) $(1,049) $(16,300) $ (1,049) $ (17,414)
-------- ========== ========= ========== ========== ==============
Net loss per share - basic and
diluted $(0.0080) $(0.0011) $(0.0160) $(0.0022) $ (0.0247)
========== ========= ========== ========== ==============
Weighted average number of
shares outstanding during the
period - basic and diluted 1,018,800 941,877 1,018,800 482,888 705,823
========== ========= ========== ========== ==============
</TABLE>
See accompanying notes to financial statements
3
<PAGE>
<TABLE>
<CAPTION>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the For the
six six September
months months 15, 1998
ended ended (inception)
June 30, June 30, to June
2000 1999 30, 2000
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (16,300) $ (1,049) $ (17,414)
Adjustments to reconcile net loss to
net cash used in operating activities: - - -
Stock issued for consulting services - 19 19
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Net cash used in operating
activities (16,300) (1,030) (17,395)
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Cash flows from financing activities
Proceeds from issuance of common stock - 1,000 1,000
Loan proceeds - related party 16,300 770 16,395
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Net cash provided by financing
activities 16,300 1,770 17,395
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Net increase in cash - 740 -
Cash and cash equivalents - Beginning - - -
----------- ----------- -----------
Cash and cash equivalents - ending $ - $ 740 $ -
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</TABLE>
See accompanying notes to financial statements
4
<PAGE>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
AS OF JUNE 30, 2000
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
Pangaea Communications, Inc. (a development stage company) ("the
Company") was incorporated in Delaware on September 15, 1998 to
engage in an internet-based business. At June 30, 2000, the Company
had not yet commenced any revenue-generating 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) 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-KSB for the year ended
December 31, 1999.
(C) 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.
5
<PAGE>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
AS OF JUNE 30, 2000
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(D) 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.
(E) 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
expenses or benefits due to the Company not having any material
operations for the six months ended June 30, 2000.
(F) Loss Per Share
Net loss per common share for the periods presented 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
June 30, 2000.
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.
6
<PAGE>
PANGAEA COMMUNICATIONS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
AS OF JUNE 30, 2000
(UNAUDITED)
NOTE 3 STOCKHOLDERS' DEFICIENCY
The Company was originally 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. It was also originally
authorized to issue 10,000,000 shares of common stock at $.001 par
value.
The Company issued 909,400 and 109,400 common shares to Appletree
Investment Company Ltd. and PageOne Business Productions, LLC
respectively. No preferred shares have been issued as of June 30,
2000.
Management filed a restated certificate of incorporation with the
State of Delaware which increased the number of authorized common
shares to 100,000,000, increased the number of authorized preferred
shares to 8,000,000 and decreased the par value of the preferred
shares to $.001 per share. The financial statements at June 30, 2000
give effect to common and preferred stock amounts and par values
enumerated in the restated certificate of incorporation.
NOTE 4 GOING CONCERN
As reflected in the accompanying financial statements, the Company
has accumulated losses of $17,414 since inception, a working capital
deficiency of $16,395 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.
7
<PAGE>
Item 2. 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 report. For the period since inception (September 15, 1998) through
June 30, 2000, during the Company's development stage, the Company has a zero
cash balance, and has accumulated losses of ($17,414).
FINANCIAL CONDITION AND LIQUIDITY
The Company has a working capital deficiency of $16,395 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, in addition to cash
advances from its current stockholders, and has issued 1,000,000 shares of
Common Stock for net proceeds of $1,000.00. The Company expects to fund its
immediate needs through private placements of its securities and may seek a
suitable business combination. Operating costs for the current period were
funded by a loan from a stockholder.
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.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports filed on Form 8-K
(a) Exhibits
Exhibit No. Description
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27 Financial Data Schedule
(b) Reports on Form 8-K
None.
8
<PAGE>
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.
PANGAEA COMMUNICATIONS, INC.
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Registrant
August 23, 2000 By: /s/ James Walters
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James Walters
Chief Financial Officer
(Principal Financial Officer)
9
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EXHIBIT INDEX
Exhibit No. Description
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27 Financial Data Schedule
