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 MARCH 31, 2000
[ ] Transition report under section 13 or 15(d)
of the Exchange Act.
COMMISSION FILE NUMBER 0-28755
COMMUNICATION VENTURES, INC.
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(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4737492
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
22147 PACIFIC COAST HIGHWAY, SUITE 4, MALIBU CALIFORNIA 90265
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(310) 317-6939
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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 May 8, 2000, there were 1,018,400 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>
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements
BALANCE SHEET AS OF MARCH 31, 2000 2
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 2000 AND FOR THE PERIOD FROM
SEPTEMBER 15, 1998 (INCEPTION) TO MARCH 31, 2000 3
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
ENDED MARCH 31, 2000 AND FOR THE PERIOD FROM
SEPTEMBER 15, 1998 (INCEPTION) TO MARCH 31, 2000 4
NOTES TO FINANCIAL STATEMENTS 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
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
March 31,
December 31, 2000
1999 (Unaudited)
--------------- -------------
TOTAL ASSETS $ - $ -
- ------------ =============== =============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Loan payable - related party $ 95 $ 8,245
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TOTAL LIABILITIES 95 8,245
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STOCKHOLDERS' DEFICIENCY
Preferred stock, $.001 par value,
8,000,000 shares authorized, none
issued and outstanding - -
Common stock, $.001 par value,
100,000,000 shares authorized,
1,018,400 issued and outstanding 1,018 1,018
Accumulated deficit during
development stage (1,113) (9,263)
--------------- -------------
TOTAL STOCKHOLDERS' DEFICIENCY (95) (8,245)
--------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS'
- -----------------------------------
DEFICIENCY $ - $ -
---------- =============== =============
See accompanying notes to financial statements.
2
<PAGE>
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
(UNAUDITED)
3
For the
September 15, Three Months
1998 Ended
(Inception) to March 31,
March 31, 2000 2000
---------------- --------------
INCOME $ - $ -
---------------- --------------
EXPENSES
Accounting fees 2,500 2,000
Bank service charge 95 -
Consulting fees 18 -
Legal fees 3,500 3,000
Office and postage expense 750 750
Rent 2,400 2,400
---------------- --------------
NET LOSS $ (9,263) $ (8,150)
- -------- ================ ==============
NET LOSS PER SHARE - BASIC AND
DILUTED $ (0.0141) $ (0.0080)
================ ==============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING DURING THE
PERIOD - BASIC AND DILUTED 654,925 1,018,400
================ ==============
See accompanying notes to financial statements
3
<PAGE>
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
4
September 20, For the Three
1998 Months Ended
(Inception) to March 31, 2000
March 31, 2000
---------------- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (9,263) $ (8,150)
Adjustments to reconcile net loss
to net cash
used in operating activities:
Stock issued for consulting services 18 -
---------------- ---------------
Net cash used in operating
activities (9,245) (8,150)
---------------- ---------------
CASH FLOWS FROM INVESTING
ACTIVITIES: - -
---------------- ---------------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Loan payable - related party 8,245 8,150
Proceeds from issuance of common
stock 1,000 -
---------------- ---------------
Net cash provided by financing
activities 9,245 8,150
---------------- ---------------
INCREASE IN CASH AND CASH
EQUIVALENTS - -
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD - -
---------------- ---------------
CASH AND CASH EQUIVALENTS - END OF
PERIOD $ - $ -
------
================ ===============
See accompanying notes to financial statements.
4
<PAGE>
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2000
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
Communication Ventures, Inc. (a development stage company) ("the Company")
was incorporated in Delaware on September 15, 1998 to engage in an
internet-based business. At March 31, 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.
In addition, the accompanying financial statements do not include the
statement of operations or cash flows for the three months ended March 31,
1999 since the Company was inactive during this period.
For further information, refer to the financial statements and footnotes
included the Company's Form 10-KSB for the year ended December 31, 1999.
5
<PAGE>
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31, 2000
(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.
(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
three months ended March 31, 2000.
(F) Loss Per Share
Net loss per common share for the three months ended March 31, 2000 and
for the period from September 15, 1998 (inception) to March 31, 2000 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 March 31, 2000.
6
<PAGE>
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF MARCH 31,2000
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.
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. In addition, the Company was originally authorized to issue
10,000,000 shares of common stock at $.01 par value. The Company issued
909,200 and 109,200 shares to Appletree Investments Company, Ltd. and
PageOne Business Productions, LLC, respectively.
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 common and preferred shares
to $.001 per share. The financial statements at March 31, 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 $9,263 since inception, a working capital deficiency
of $8,245 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 growing 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 being 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
March 31, 2000, during the Company's development stage, the Company has a zero
cash balance and has generated a net loss of ($9,263).
FINANCIAL CONDITION AND LIQUIDITY
The Company has a working capital deficiency of $8,245 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 1,018,400 shares of
Common Stock for net proceeds of $1,018.00. 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.
COMMUNICATION VENTURES, INC.
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Registrant
May 15, 2000 By: /s/ James P. Walters
------------------ --------------------------------
James P. Walters
Chief Financial Officer
(Principal Financial Officer)
9
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
27 Financial Data Schedule
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<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> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 8,245
<BONDS> 0
0
0
<COMMON> 1,018
<OTHER-SE> (9,263)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 8,150
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (8,150)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,150)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
