As Filed on January 12, 2001
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission file number 0-28833
NetWeb OnLine.Com, Inc.
-----------------------
Name of Small Business Issuer in Its Charter)
Texas 75-2767933
----------------- --------------
State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1450 S. Dixie Highway, Suite 101-A
Boca Raton, Florida 33432
--------------------- ------
(Address of Principal (Zip Code)
Executive Offices)
(561) 289-5775
--------------
(Issuer's Telephone Number,
Including Area Code)
www.netwebonline.com
--------------------
(Issuer's Website)
Securities registered under Section 12(b)of the Exchange Act: NONE
Securities registered under Section 12(g) of the Exchange Act: Common Stock,
$0.001 par value
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 past 90 days.
Yes X No
------ --------
Check if disclosure of delinquent filers in response to Item 405 of Regulation
S-B is not contained herein and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.
----------
Revenues for the year ended September 30, 2000: $-0-.
As of November 30, 2000, there were outstanding 6,348,658 shares of registrant's
Common Stock, $.001 par value, and 13,940 shares of registrant's Series I
Preferred Stock, $.001 par value. As of that date, the aggregate market value
of the outstanding shares of Common Stock held by non-affiliates, based on the
average of the closing bid and asked price of such Common Stock as quoted in the
OTC Bulletin Board, was $209,900.
Transitional Small Business Disclosure Format (check one):
Yes X No
---- ------
1
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
None.
2
<PAGE>
NETWEB ONLINE.COM, INC.
FORM 10-KSB
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
PART I
ITEM 6. DESCRIPTION OF BUSINESS 4
ITEM 7. DESCRIPTION OF PROPERTY 6
ITEM 8. DIRECTORS, EXECUTIVE OFFICERS AND
SIGNIFICANT EMPLOYEES 6
ITEM 9. REMUNERATION OF DIRECTORS AND OFFICERS 7
ITEM 10. SECURITY OWNERSHIP OF MANAGEMENT AND
CERTAIN SECURITY HOLDERS 7
ITEM 11. INTEREST OF MANAGEMENT AND OTHERS IN
CERTAIN TRANSACTIONS 8
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON
THE REGISTRANT'S COMMON EQUITY
AND OTHER SHAREHOLDER MATTERS 9
ITEM 2. LEGAL PROCEEDINGS 9
ITEM 3. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 9
ITEM 5. COMPLIANCE WITH SECTION 16(A) OF
THE EXCHANGE ACT 10
ITEM 6. REPORTS ON FORM 8-K 10
PART F/S F-1 - F-17
PART III
ITEM 1. INDEX TO EXHIBITS 11
ITEM 2. DESCRIPTION OF EXHIBITS 11
SIGNATURES 12
</TABLE>
3
<PAGE>
PART I
ITEM 6. DESCRIPTION OF BUSINESS.
(A) BUSINESS DEVELOPMENT:
1. FORMATION OF NETWEB TEXAS
----------------------------
NETWEB ONLINE.COM INC. (the "Company") was incorporated in the State of
Texas on November 5, 1997 under the name GEAC Inc. On July 26, 1999, it amended
its Articles of Incorporation to change its name to The Golfing Network.Com Inc.
On December 14, 1999, it amended its Articles of Incorporation to change its
name to NetWeb OnLine.Com Inc.
2. ACQUISITION OF SHARES OF
NETWEB ONLINE.COM (FLORIDA)
-----------------------------
On December 13, 1999, the Company purchased all the outstanding shares of
NETWEB ONLINE.COM INC., a Florida corporation ("NetWeb Florida"), in exchange
for the issuance of 2,300,000 shares of common stock and 700,000 shares of its
Series I Preferred Stock to the shareholders of NetWeb Florida in a tax-free
exchange of shares.
NetWeb Florida was incorporated in Florida on October 5, 1999 for the
purposes of engaging in the business of developing, acquiring and operating
proprietary, content- based Internet web sites. It has not conducted any
business operations to date. Its sole activities have consisted of the purchase
of six (6) Internet world wide web addresses (URL's) and related web sites, a
U.S. Trademark Registration for the mark The Fans Choice7 and the shares of
www.SpectraTV.Net, Inc., a Florida corporation formed to develop audio and video
Internet applications, including specialty content programming. All of these
assets were purchased from a corporation affiliated with a principal shareholder
and director of the Company in exchange for shares of NetWeb Florida (see
"Certain Transactions").
3. FORMATION OF THE GOLFING NETWORK.COM (FLORIDA)
---------------------------------------------------
The Golfing Network.Com Inc. (TGNC-Florida) was incorporated in Florida on
December 10, 1999 as a wholly-owned subsidiary of the Company. The Company
transferred all of the assets related to WonderStickJ golf training product and
related golf Internet sites to TGNC-Florida. In June 2000, the Company
transferred all of the shares of TGNC-Florida to Bryan Efimov and Theodore
Efimov in exchange for 500,000 shares of the Company's Common Stock, 15,026
shares of the Company's Series I Preferred Stock and 200,000 shares of the
Company's Series II Preferred Stock owned by them.
(B) BUSINESS OF ISSUER:
(B)(1) PRINCIPAL PRODUCTS AND SERVICES AND THEIR MARKETS.
GOLF PRODUCTS AND SERVICES
-----------------------------
The Company was originally formed for the purpose of manufacturing,
marketing, promoting and distributing the WonderStick7 golf swing training aid
and other golf related products and services.
In June 2000, the Company sold its interest in all of the golf-related
assets to Bryan Efimov and Theodore Efimov, the founders of the Company. The
Company no longer operates any golf-related activities.
4
<PAGE>
WEBSITE DEVELOPMENT AND OPERATION
------------------------------------
The overall focus of the business changed during 1999 to developing and
operating a variety of proprietary commercial Internet worldwide websites. To
that end, the Company purchased the assets of NetWeb-Florida in December 1999.
NetWeb-Florida is a development-stage entity that was engaged in the creation,
development and operation of proprietary Internet websites. NetWeb-Florida
currently owns the following Internet domain names:
FanVote.com
MallConcepts.com
NetWebCollectibles.com
Classics4Lease.com
AmericasHeroes.com
Roswell2Space.com
Expo-NewProduct.com
NetWeb Online.com.
The Company does not have any present intention to expend any resources for
the development or expansion of these potential websites.
CURRENT BUSINESS FOCUS
------------------------
The current focus of the Company's business activity is to seek out
potential acquisition targets among companies engaged in active business
operations, without regard to industry sector.
(C) REPORTS TO SHAREHOLDERS:
NetWeb became subject to the information and reporting requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") in
January 2000, upon the effective date of its registration statement on Form
10-SB. As such, NetWeb is required to and will file reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed with
the Commission by Meridian may be inspected and copied at the public reference
facilities maintained by the Commission at its principal offices at Judiciary
Plaza, 450 5th Street NW, Washington, D.C. 20549. Such reports, proxy
statements and other information may also be obtained from the web site
maintained by the Commission at http://www.sec.gov. Copies of these materials
can also be obtained at prescribed rates from the public reference section of
the Commission at its principal offices in Washington D.C., as set forth above.
5
<PAGE>
(D) MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION:
Plan of Operations:
---------------------
On June 30, 2000, the Company transferred ownership of its operating
subsidiary, The Golfing Network.Com, Inc., to NetWeb's former president, Bryan
Efimov, and members of his family, in exchange for all shares in NetWeb owned by
such individuals. That subsidiary represented the Company's sole operating
entity. As a result of that transfer, the Company no longer has any active
business operations. All shares, common and preferred, were retired or
cancelled by the Company.
Management's current business plan is to seek out potential
acquisitions of one or more companies with operating revenues, without regard to
specific industry sectors. In addition, the Company intends to continue to seek
financing in the form of equity, debt or strategic partnering to carry out its
business plan and enhance shareholder value.
ITEM 7. DESCRIPTION OF PROPERTY.
NetWeb's executive offices are located at 1450 S. Dixie Highway,
Suite 101-A, Boca Raton, Florida 33432. The offices are occupied under an
office sharing arrangement for nominal rent.
ITEM 8. DIRECTORS, EXECUTIVE OFFICERS
AND SIGNIFICANT EMPLOYEES.
The Company's executive officers and directors are as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
NAME AGE POSITION
---- --- --------
Paul M. Galant 59 Secretary, Treasurer and Director
Harvey Judkowitz 56 Chief Executive Officer and
Chairman of the Board of Directors
</TABLE>
The principal occupation, title and business experience of the Company's
executive officers and directors during the last five years is indicated below:
PAUL M. GALANT, 59, is the Secretary/Treasurer and Director of the Company. Mr.
Galant was the founder of NetWeb OnLine.Com Inc., a Florida corporation ("NetWeb
Florida"). He has been a consultant and advisor to the Company since its
inception. He was a registered NASD General Securities Principal until August
1997. He has been a business development consultant since 1970. Mr. Galant is
currently a director of Meridian USA Holdings Inc. (OTCBB). From time to time,
Mr. Galant has been a director and officer of non-affiliated developmental stage
enterprises. He was a practicing attorney in the State of New York from 1966
6
<PAGE>
until 2000. Between 1975 and 1986, Mr. Galant was a founding partner of a
Long Island (NY) based full service brokerage firm. Subsequently, he was
co-founder, and served as an officer, director and/or registered principal of
several NASD member securities/brokerage firms in the New York Metropolitan
Area. Since 1981, he has been the President of PR Sources Inc, a private entity
engaged in corporate development services. From 1966 to 1968, he served in the
United States Army. Mr. Galant is a 1965 graduate of Brooklyn Law School (J.D.)
and received a Bachelor of Business Administration degree from Adelphi College
in 1962.
HARVEY JUDKOWITZ, 56, is the Chairman and CEO of the Company. He has
served as Director of NetWeb Florida since its formation in October 1999. Mr.
Judkowitz is currently the CFO of HBOAC.Com (Ft. Lauderdale, FL) and Capital
International SBIC (Miami, FL). He was the CFO of New Millennium Communications
Corp. from August 1998 to March 1999. He was a director of Utilicore Corp., a
start-up telecommunications company based in Florida, for which he was the
interim CEO from September 1998 to January 1999. Mr. Judkowitz is a certified
public accountant licensed in Florida and New York and since 1988, has been
conducting his own accounting practice in Florida. He received a BBA-Accounting
degree from Pace University (NY) in 1967.
ITEM 9. REMUNERATION OF DIRECTORS AND
OFFICERS.
(A) COMPENSATION:
The Company paid no compensation to its executive officers in its last
fiscal year.
(B) OPTION/SAR GRANTS IN LAST
FISCAL YEAR (INDIVIDUAL GRANTS):
No stock option or stock appreciation rights were granted by the Company in
its last fiscal year.
ITEM 10. SECURITY OWNERSHIP OF MANAGEMENT
AND CERTAIN SECURITY HOLDERS.
The following table sets forth information as of November 30, 2000 with
respect to the beneficial ownership of NetWeb's securities by officers and
directors, individually and as a group. To NetWeb's knowledge, on November
30, 2000, there were no holders of more than 5% of its Common Stock other than
First Financial Network, Inc., Paul M. Galant and Harvey Judkowitz. Unless
otherwise indicated, all shares are beneficially owned and sole investment and
voting power is held by the beneficial owners indicated. On November 30, 2000,
there were 6,348,658 shares of Common Stock, and 13,940 shares of Series I
Preferred Stock outstanding. No shares of any other class of capital stock are
outstanding.
7
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER TITLE OF CLASS BENEFICIAL OWNERSHIP OF CLASS
<S> <C> <C> <C> <C>
First National Network, Common 1,300,000 20.5
Inc. (Direct)
2431 Bimini Lane
Ft. Lauderdale, FL 33312
Paul M. Galant Common 1,700,000 26.8
470 N.E. 25th Terrace (Direct)
Boca Raton, FL 33431
Harvey Judkowitz Common 550,000 8.7
10220 S.W. 124th Street (Direct)
Miami, FL 33176
Officers and Directors as a Common 2,250,000 35.5
Group (2 persons) (Direct)
</TABLE>
ITEM 11. INTEREST OF MANAGEMENT AND OTHERS
IN CERTAIN TRANSACTIONS
On or about March 20, 1998, the Company issued 150,000 shares of its
Common Stock to PR Sources Inc., a Florida corporation controlled by Paul M.
Galant, in consideration for business development and consulting services
performed for the Company. During 1999, the Company issued an additional
100,000 shares of Common Stock to PR Sources Inc. for business development
and consulting services rendered by Mr. Galant and PR Sources Inc. On or about
October 7, 1999, prior to the Company's acquisition of NetWeb Florida, NetWeb
Florida purchased certain assets from PR Sources Inc. In that transaction,
NetWeb Florida issued 700,000 shares of its Common Stock in consideration
for the transfer of: (i) six (6) existing World Wide Web addresses and websites;
(ii) two (2) proposed websites; (iii) the registered service mark, The Fans
Choice7; and (iv) all shares of www.SpectraTV.net Inc., a Florida corporation.
Prior to becoming an officer or director of the Company, Mr. Galant transferred
the shares in NetWeb Florida to unaffiliated third parties. After the Company's
acquisition of NetWeb Florida, the consulting arrangement between PR Sources
Inc. and the Company was terminated and Mr. Galant was elected a Director
and Officer of the Company.
Other than the above, there are no relationships or transactions
required to be disclosed in this Item.
8
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS.
(A) MARKET PRICE:
NetWeb's Common Stock is traded over-the-counter on the
electronic bulletin board operated by the National Association of Securities
Dealers under the trading symbol NWOL. The following table sets forth the high
and low bid prices for the Common Stock since the inception of its quotation on
the Bulletin Board during the first quarter of 2000:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR QUARTER HIGH LOW
---- ------------------ ----- ----
2000 First 1.375 1.25
2000 Second 1.375 .25
2000 Third .375 .10
2000 Fourth .10 .07
(through 11/30/00)
</TABLE>
(B) HOLDERS:
As of November 30, 2000, there were 115 record holders of NetWeb's
Common Stock. Based on information from brokers and other sources, NetWeb
estimates that as of November 30, 2000, there were approximately 165 beneficial
holders of NetWeb's Common Stock.
(C) DIVIDENDS:
The Company has never declared or paid cash dividends on its
Common Stock and has no current intention to pay any dividends.
ITEM 2. LEGAL PROCEEDINGS.
NetWeb is not a party to any lawsuit, litigation, or regulatory
proceeding of any kind, filed, pending or threatened.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS.
There were no matters submitted to a vote of security holders
during the year ended September 30, 2000.
9
<PAGE>
ITEM 5. COMPLIANCE WITH SECTION 16(A)
OF THE EXCHANGE ACT
NetWeb has no information to report with respect to Section 16(A)
of the Exchange Act.
ITEM 6. REPORTS ON FORM 8-K
The Company filed a current report on Form 8-K dated June 30, 2000
to report the sale of all of the issued and outstanding shares of common stock
of its subsidiary, The Golfing Network.Com, Inc., to Bryan Efimov and Theodore
Efimov in exchange for all of the shares of Common Stock and Preferred Stock of
NetWeb owned by them.
10
<PAGE>
PART F/S
NETWEB ONLINE.COM, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Independent Auditors' Reports F-2
Balance Sheets F-4
Statements of Operations F-6
Statements of Changes in Stockholders' Equity F-7
Statements of Cash Flows F-12
Notes to Financial Statements F-13
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Board of Directors
NetWeb OnLine.Com, Inc.
Fort Lauderdale, Florida
We have audited the accompanying balance sheet of NetWeb OnLine.Com, Inc. as of
September 30, 2000 and the related statements of operations, changes in
stockholders' equity, and cash flows for the year ended September 30, 2000.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit. The financial statements of NetWeb OnLine.Com, Inc. as of
September 30, 1999 were audited by other auditors whose report, dated December
29, 1999, contained a going concern paragraph.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of NetWeb OnLine.Com, Inc. as of
September 30, 2000, and the results of its operations, and its cash flows for
the year ended September 30, 2000, in conformity with generally accepted
accounting principles in the United States of America.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 7 to the financial
statements, the Company has no established source of revenue, recurring losses
from operations, negative working capital, and stockholders' equity deficiency.
This raises substantial doubt about its ability to continue as a going concern.
Management's plan in regard to these matters is also described in Note 7. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
SEWELL AND COMPANY, P.A.
Hollywood, Florida
November 30, 2000
F-2
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
To the Shareholders of NetWeb OnLine.Com Inc.
We have audited the accompanying balance sheet of NetWeb OnLine.Com Inc. as of
September 30, 1999 and the related statement of operations, changes in
shareholders' equity (deficit) and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of NetWeb OnLine.Com Inc. as of
September 30, 1999 and the results of its operations and its cash flows for the
year then ended, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 7 to the
financial statements, the Company has incurred losses since its inception, and
has had negative cash flows since its inception. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to those matters are also described in Note 7. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
KING GRIFFIN & ADAMSON P.C.
Dallas, Texas
December 29, 1999
F-3
<PAGE>
NETWEB ONLINE.COM, INC.
BALANCE SHEETS
SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
------ --------
ASSETS
------
<S> <C> <C>
Current assets
Cash $2,281 $ 883
Investments 6,000 -
Note receivable stockholder - 1,250
Inventory - 51,830
Deferred advertising costs - 181,791
Prepaid expenses - 2,189
------ --------
Total current assets 8,281 237,943
Patents net of accumulated amortization
of $5,605 - 61,656
------ --------
Total $8,281 $299,599
====== ========
</TABLE>
See notes to financial statements.
F-4
<PAGE>
NETWEB ONLINE.COM, INC.
BALANCE SHEETS (CONTINUED)
SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current liabilities
Accounts payable $ 15,545 $ 7,326
Current portion of note payable,
stockholder - 40,000
---------- -----------
Total current liabilities 15,545 47,326
Note payable, stockholder - 35,000
---------- -----------
Stockholders' equity
Preferred stock, $0.001 par value, 5
million shares authorized
Series I convertible 13,940 and 28,966
shares issued and outstanding 14 29
Series II Redeemable, 0 and 200,000
shares issued and outstanding - 200
Common stock, $0.001 par value 30 million
shares authorized, 6,348,658 and
4,058,447 issued and outstanding 6,349 4,058
Additional paid in capital 422,237 1,121,287
Less: Subscriptions receivable (634,000)
Accumulated other comprehensive loss (6,500) -
Retained deficit (429,364) (274,301)
---------- -----------
(7,264) 217,273
---------- -----------
$ 8,281 $ 299,699
========== ===========
</TABLE>
See notes to financial statements.
F-5
<PAGE>
NETWEB ONLINE.COM, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Revenue $ - $ -
Expenses
General and administrative 122,672 -
Realized losses on investments 4,500 -
---------- ----------
127,172 -
---------- ----------
Loss from continuing operations (127,172) -
Discontinued operations
Loss from operation of discontinued golf
business (27,891) (132,047)
---------- ----------
(27,891) (132,047)
---------- ----------
Net loss $(155,063) $(132,047)
========== ==========
Basic net loss per common share
Loss from continuing operations $ (0.0277) $ -
Discontinued operations (0.0061) (0.0387)
---------- ----------
Net loss $ (0.0338) $ (0.0387)
========== ==========
</TABLE>
See notes to financial statements.
F-6
<PAGE>
NETWEB ONLINE.COM, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
ADDITIONAL
PREFERRED STOCK COMMON STOCK PAID IN
SHARES AMOUNT SHARES AMOUNT CAPITAL
------------------- --------------------- ----------
<S> <C> <C> <C> <C> <C>
Balance at October 1, 1998 213,940 $ 214 2,882,185 $ 2,882 $ 354,564
Issuance of series I
preferred stock for cash,
December 28, 1998 15,026 15 65,803
Issuance of common stock
for services, January 31, 1999. 100,000 100 9,900
Exercise of stock warrants
for subscriptions
receivable on or before
April 6, 1999 650,000 650 649,350
Issuance of common stock
for acquisition of patents,
May 1, 1999 87,606 88 8,673
Issuance of common stock
for services, May 1, 1999 338,656 338 33,527
Payments received on
subscriptions receivable,
July 23, 1999
Payment of subscriptions
receivable
Canceled warrant
subscriptions (530)
Net Loss
-------------------------------------------------------
Balance, September 30,
1999 228,966 $ 229 4,058,447 $ 4,058 $1,121,287
</TABLE>
See notes to financial statements.
F-7
<PAGE>
NETWEB ONLINE.COM, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)(CONTINUED)
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
ACCUMULATED
SUBSCRIPTIONS OTHER
AND NOTES COMPREHENSIVE RETAINED COMPREHENSIVE
RECEIVABLE LOSS DEFICIT LOSS TOTAL
<S> <C> <C> <C> <C> <C>
Balance at October 1, 1998 $ (5,500) $ - $ (142,254) $ - $ 209,906
Issuance of series I
preferred stock for cash,
December 28, 1998 65,818
Issuance of common stock
for services, January 31, 1999. 10,000
Exercise of stock warrants
for subscriptions
receivable on or before
April 6, 1999 (650,000) -
Issuance of common stock
for acquisition of patents,
May 1, 1999 8,761
Issuance of common stock
for services, May 1, 1999 33,865
Payments received on
subscriptions receivable,
July 23, 1999 16,000 16,000
Payment of subscriptions
receivable 4,970 4,970
Canceled warrant
subscriptions 530 -
Net Loss (132,047) (132,047)
--------------------------------------------------------------------
Balance, September 30,
1999 $ (634,000) $ - $ (274,301) $ - $ 217,273
</TABLE>
See notes to financial statements.
F-8
<PAGE>
NETWEB ONLINE.COM, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
ADDITIONAL
PREFERRED STOCK COMMON STOCK PAID IN
SHARES AMOUNT SHARES AMOUNT CAPITAL
------------------- ---------------------- ----------
<S> <C> <C> <C> <C> <C>
Balance October 1,
1999 228,966 $ 229 4,058,447 $ 4,058 $1,121,287
Shares issued in
connection with the
purchase of the
website E-trade
golf.Com on December 6,
1999 33,737 34 67,439
Shares contributed in
connection with the
acquisition of NetWeb
OnLine.Com, Inc. on
December 13, 1999 (1,721,000) (1,721) 1,721
Shares issued in
connection with the
acquisition of NetWeb
Online.Com, Inc. on
December 13, 1999 700,000 700 2,310,000 2,310 54,740
Payments received on
subscriptions
receivable, including
the reduction of
exercise price, on June
30, 2000 (485,595)
Shares retired in
conjunction with
disposition of golf
related net assets on
June 30, 2000 (215,026) (215) (500,000) (500) (335,887)
Conversion of
preferred stock to
common stock on
August 30, 2000 (733,737) (734) 2,201,211 2,202 (1,468)
Payments received on
subscriptions receivable
including the reduction
of exercise price, on
September 30, 2000
Net Loss
Unrealized loss on
marketable securities
Balance, September 30,
2000 13,940 $ 14 6,348,658 $6,349 $ 422,237
==========================================================
</TABLE>
See notes to financial statements.
F-9
<PAGE>
NETWEB ONLINE.COM, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)(CONTINUED)
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
ACCUMULATED
SUBSCRIPTIONS OTHER
AND NOTES COMPREHENSIVE RETAINED COMPREHENSIVE
RECEIVABLE LOSS DEFICIT LOSS TOTAL
<S> <C> <C> <C> <C> <C>
Balance October 1,
1999 $(634,000) $ - $(274,301) $ - $217,273
Shares issued in
connection with the
purchase of the
website E-trade
golf.Com on December 6,
1999 67,473
Shares contributed in
connection with the
acquisition of NetWeb
OnLine.Com, Inc. on
December 13, 1999 -
Shares issued in
connection with the
acquisition of NetWeb
Online.Com, Inc. on
December 13, 1999 57,750
Payments received on
subscriptions
receivable, including
the reduction of
exercise price, on June
30, 2000 629,095 143,500
Shares retired in
conjunction with
disposition of golf
related net assets on
June 30, 2000 (336,602)
Conversion of
preferred stock to
common stock on
August 30, 2000 -
Payments received on
subscriptions receivable
including the reduction
of exercise price, on
September 30, 2000 4,905 4,905
Net Loss (155,063) (155,063) (155,063)
Unrealized loss on
marketable securities (6,500) (6,500) (6,500)
---------
$(161,563)
==========
--------------------------------------------- -------------
Balance, September 30,
2000 $ - $ (6,500) $(429,3645) $ (7,264)
============================================= ==============
</TABLE>
See notes to financial statements.
F-10
<PAGE>
NETWEB ONLINE.COM, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(155,063) $(132,047)
---------- ----------
Adjustments to reconcile net loss to net
cash used by operating activities:
Realized losses on investments 4,500 -
(Increase) decrease in note receivable,
stockholder - (1,491)
(Increase) decrease in inventories - (12,301)
(Increase) decrease in prepaid expenses - (2,189)
Increase (decrease) in accounts payable 20,556 7,326
Amortization - 5,605
Common stock issued for services - 43,865
---------- ----------
Total adjustments 25,056 40,815
---------- ----------
Net cash used by operating activities (130,007) (91,232)
---------- ----------
Cash flows from investing activities:
Cash payments for investments (7,000) -
---------- ----------
Net cash used by investing activities (7,000) -
---------- ----------
Cash flows from financing activities:
Proceeds from subscriptions receivable 138,405 -
Proceeds from issuance of common and
preferred stock - 86,788
---------- ----------
Net cash provided by financing activities 138,405 86,788
---------- ----------
Net increase (decrease) in cash 1,398 (4,444)
Cash, beginning of period 883 5,327
---------- ----------
Cash, end of period $ 2,281 $ 883
========== ==========
</TABLE>
See notes to financial statements.
F-11
<PAGE>
NETWEB ONLINE.COM, INC.
STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
Supplemental disclosure, 2000, of non-cash financing activities:
----------------------------------------------------------------------
On December 6, 1999, in exchange for the website, E-Trade Golf.Com, the Company
issued 33,737 shares of its series I convertible preferred stock. Each share is
convertible into three shares of its common stock on or after October 1, 2000.
The Website, E-trade was subsequently disposed of in conjunction with the golf
related net assets (See Note 6).
On December 13, 1999 the Company issued 700,000 shares of series I convertible
preferred stock, and 2,310,000 shares of common stock, in connection with the
acquisition of NetWeb OnLine.Com, Inc., valued at $57,750. The value was
established according to the net assets at book value. Each share of series I
convertible preferred stock is convertible into three shares of common stock at
any time after 12 months from the date of issuance at the option of the
preferred stockholder, and pays no dividends.
On June 28, 2000 the Company received 50,000 shares of BizNet, Inc. as payment
for subscriptions receivable of $10,000.
On June 30, 2000 the Company retired 15,026 shares of series I convertible
preferred stock, 200,000 shares of series II redeemable preferred stock, and
500,000 shares of common stock, in conjunction with the disposition of the golf
related net assets at a value of for $336,602 (See Note 6).
On June 30, 2000, the Company reduced the price of remaining shares subscribed
for from $1 to $0.001, for a total value of $485,595, from the subscriptions
receivable of $634,000.
Supplemental disclosure, 1999, of non-cash financing activities:
----------------------------------------------------------------------
Issuance of common stock for acquisition of patent, May 1, 1999 in the amount of
$8,761.
Issuance of common stock for services during 1999 in the amount of $43,865.
Common stock sold for notes on April 6, 1999 in the amount of $650,000.
See notes to financial statements.
F-12
<PAGE>
NETWEB ONLINE.COM, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business
--------
NetWeb Online.Com, Inc. (the "Company") was incorporated, in the
State of Texas, under the name GEAC, Inc., on November 5, 1997.
In July, 1999, the name was changed to The Golfing Network.Com,
Inc. In December, 1999, in conjunction with the acquisition of
NetWeb Online.Com, Inc., the Company changed to that name.
The Company was formed for the purpose of engaging in the
marketing and sale of golf related products, including the
purchase of the patent rights to the Wonderstick. The Company
subsequently expanded its business purposes to include the
development, acquisition and operation of a variety of Internet web
sites. On June 30, 2000, the Company transferred its golf related
net assets to two stockholders (See Note 6) and, at September
30, 2000, was inactive. The underlying operations of the golf-
related net assets have been accounted for as discontinued
operations.
Use of Estimates
------------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make certain estimates and assumptions that directly affect the
results of reported assets and liabilities and disclosure of
contingent assets and liabilities as of the balance sheet date,
and the reported amounts of revenues and expenses for the
period presented. Actual results could differ from these
estimates.
Investments
-----------
The Company classifies its investments as available-for-sale, which
are reported at market value.
Unrealized holding gains and losses are excluded from earnings and
reported as a separate component of comprehensive income.
Realized gains and losses are reported in earnings based on the
adjusted cost of the specific security sold.
Advertising
-----------
There was no advertising expense for the year ended September
30, 2000. At September 30, 1999, the Company had deferred
$181,791 related to the final version of an infomercial, which was
never aired. At June 30, 2000, the Company disposed of its golf
related net assets, including the deferred advertising cost (See
Note 6).
Cash and Cash Equivalents
----------------------------
The Company considers all cash and cash equivalents highly liquid
investments with an original maturity of three months or less
to be cash equivalents.
F-13
<PAGE>
NETWEB ONLINE.COM, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
Basic Earnings (Loss) per Share
-----------------------------------
Basic earnings (loss) per share for each year is computed by
dividing income (loss) for the year by the weighted average
number of common shares outstanding during the year.
2000 1999
---- ----
Weighted average number of
shares outstanding during
the year 4,587,344 3,412,842
Dilutive earnings (loss) per share were not given because
they would be anti-dilutive.
NOTE 2 INVESTMENTS
Investments consist of the following:
Unrealized Market Realized
Cost Losses Value Losses
---- ------ ----- ------
Equity $14,500 $6,500 $3,500 $4,500
Securities
Options 2,500 0 2,500 0
------- ------ ------ ------
Totals $17,000 $6,500 $6,000 $4,500
======= ====== ====== ======
NOTE 3 RELATED PARTY TRANSACTIONS
During the year ended September 30, 1999, the Company issued
150,000 shares of the Company's common stock, for services
rendered to a corporation controlled by a director. During
the year ended September 30, 1999, the Company paid
approximately $18,000 for consulting services to a director
and shareholder of the Company.
Note payable to a related party consists of an amount due from
a significant shareholder. The note is unsecured, bears interest
at 7.5%, and matures in February 2003 at which time both
principal and interest will be due. The note was subsequently
disposed of in conjunction with the golf related net assets
(See Note 6).
NOTE 4 COMMON AND PREFERRED STOCK
On December 6, 1999, in exchange for the website,
E-Trade Golf.Com, the Company issued 33,737 shares of its series I
convertible preferred stock. Each share is convertible into three
shares of its common stock on or after October 1, 2000. The
website, E-Trade, was subsequently disposed of in conjunction with
the golf related net assets (See Note 6).
F-14
<PAGE>
NETWEB ONLINE.COM, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 4 COMMON AND PREFERRED STOCK - CONTINUED
On December 13, 1999, majority stockholders contributed
1,721,000 shares of common stock, in connection with the
acquisition of NetWeb Online.Com, Inc.
On December 13, 1999, the Company issued 700,000 shares of series
I convertible preferred stock, and 2,310,000 shares of common
stock in connection with the acquisition of NetWeb Online.Com, Inc.
(a Florida corporation), at $57,750. The value was established
according to the net assets at book value. Each share of series I
convertible preferred stock is convertible into three shares of
common stock at any time after 12 months from the date of issuance
at the option of the preferred stockholder, and pays no dividends.
On June 30, 2000, the Company retired 15,026 shares of series
I convertible preferred stock, 200,000 shares of series II
redeemable preferred stock, and 500,000 shares of common stock,
in conjunction with the disposition of golf related net assets at
a value of $336,602 (See Note 6).
On June 30, 2000, the Company reduced the price of remaining
shares subscribed for from $1 to $0.001, for a total value of
$485,595, from the subscriptions receivable of $634,000.
On August 30, 2000, various stockholders exercised their
rights to convert 733,737 shares of series I preferred
stock into 2,201,211 shares of common stock.
NOTE 5 INCOME TAXES
Deferred tax assets and liabilities consist of the following:
<TABLE>
<CAPTION>
September 30, September 30,
2000 1999
--------------- ---------------
<S> <C> <C>
Current deferred tax asset
$ 0 $ 67,208
Valuation allowance 0 (67,208)
--------------- ---------------
$ 0 $ 0
=============== ===============
Non-current tax asset $ 159,000 $ 101,000
Valuation allowance (159,000) (101,000)
--------------- ---------------
$ 0 $ 0
=============== ===============
</TABLE>
F-15
<PAGE>
NETWEB ONLINE.COM, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 5 INCOME TAXES - CONTINUED
The current deferred tax asset at September 30, 1999 resulted
from deferred advertising costs, which were previously
deducted for income tax purposes.
The non-current deferred tax asset results from the net
operating loss carryforward, which approximates $429,000 at
September 30, 2000, and $456,000 at September 30, 1999. The net
operating loss carryforward, which is subject to annual limitations
prescribed by the Internal Revenue Code, is available to offset
future taxable income through 2020. A 100% valuation allowance has
been recorded to offset the net deferred tax asset due to
uncertainty of the Company generating future taxable income.
The Company's income tax expense for the years ended September 30,
2000 and 1999 differed from the statutory federal rate of 34%
as follows:
<TABLE>
<CAPTION>
September 30, September 30,
2000 1999
--------------- ---------------
<S> <C> <C>
Statutory rate applied
to loss before income
taxes $ (53,000) $ (44,896)
State income taxes, net
of federal income tax
effect (4,600) (3,922)
Increase in valuation
allowance 57,600 49,369
Other 0 (551)
--------------- ---------------
Income Tax Expense $ 0 $ 0
=============== ===============
</TABLE>
NOTE 6 DIVESTITURE
On June 30, 2000 the Company transferred its golf related net
assets including all royalty agreements, to two stockholders
for the return of the following equity:
15,026 shares of series I convertible preferred stock
200,000 shares of series II redeemable preferred stock
500,000 shares of common stock
F-16
<PAGE>
NETWEB ONLINE.COM, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2000 AND 1999
NOTE 6 DIVESTITURE - CONTINUED
A summary of financial data of discontinued operations at
September 30, 1999 is as follows:
Financial Position
Current assets $47,240
Note receivable, stockholder 30,150
Deferred advertising costs 181,791
Patents 156,136
Total current liabilities (3,715)
Note payable, stockholder 75,000
---------
$336,602
=========
The 1999 balance sheet has not been restated. At September 30,
2000, there were no assets related to discontinued operations.
The golf business had net sales of $23,668 and a net loss of
$27,891 through June 30, 2000, and net sales of $32,957 and
a net loss of $132,047 through September 30, 1999. The prior
year statement of operations has been restated for comparison
purposes.
NOTE 7 GOING CONCERN UNCERTAINTY
These financial statements are presented assuming the Company
will continue as a going concern. The Company has no
established source of revenue, recurring losses from operations,
negative working capital, and stockholders' equity deficiency.
This raises substantial doubt about its ability to continue as a
going concern. Management's plan in regard to these matters
includes raising working capital to assure the Company's
viability, through private or public equity offerings and/or debt
financing; and/or through the acquisition of new business or
private ventures.
F-17
<PAGE>
PART III
EXHIBITS
The following exhibits are being filed with this report:
3.1 Articles of Incorporation, as amended.*
3.2 By-Laws.*
23.1 Consent of Sewell and Company, PA, independent auditors.
----------------------------
* Previously filed.
11
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereto duly
authorized on the _____ day of January, 2001.
NetWeb OnLine.Com, Inc.
By: /s/ Harvey Judkowitz
-------------------------
Harvey Judkowitz, Chairman
and CEO
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities and on
the ____ day of January, 2001.
Principal Executive Officer:
/s/ Harvey Judkowitz
----------------------
Harvey Judkowitz
Chairman and CEO
Principal Financial Officer and
Principal Accounting Officer:
/s/ Paul M. Galant
-------------------
Paul M. Galant
Secretary and Treasurer
12
<PAGE>
