UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _____ TO _____.
COMMISSION FILE NUMBER: 000-29107
Multinet International Corporation, Inc.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 88-0441388
---------------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8100 West Sahara, Suite 200
Las Vegas, Nevada 89117
---------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
N/A
---------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant: 1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
At September 30, 2000, there were outstanding 4,432,000 shares of the
Registrant's Common Stock, $.001 par value.
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
Table of Contents
Contents Page
-------- ----
PART I - FINANCIAL INFORMATION .................................. 1
Item 1. Financial Statements ................................... 1
Item 2. Management's Discussion and Analysis .................. 14
PART II - OTHER INFORMATION .................................... 17
Item 6. Exhibits and Reports on Form 8-K ...................... 17
SIGNATURES ..................................................... 18
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
MULTINET INTERNATIONAL CORPORATION, INC.
Contents
INDEPENDENT AUDITOR'S REPORT ON THE CONSOLIDATED FINANCIAL
STATEMENTS ........................................................... 1
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets ....................................... 2
Consolidated Statements of Income ................................. 3-4
Consolidated Statements of Stockholders' Equity ................... 5
Consolidated Statements of Cash Flows ............................. 6-9
Notes to Consolidated Financial Statements ........................ 10-13
<PAGE>
Independent Auditor's Report
To the Board of Directors
Multinet International Corporation, Inc.
Las Vegas, Nevada
I have audited the accompanying consolidated balance sheet of Multinet
International Corporation, Inc. as of September 30, 2000 and the related
consolidated statements of income, stockholders' equity, and cash flows for the
nine months then ended. I have also audited the accompanying balance sheets as
of December 31, 1999 and 1998 and the related statements of income,
stockholders' equity, and cash flows for each of the years then ended. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Multinet
International Corporation, Inc. as of September 30, 2000 and the results of its
operations and cash flows for the nine months then ended, in conformity with
generally accepted accounting principles. The consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of Multinet International Corporation, Inc. as of December 31, 1999 and
1998 and the results of its operations and cash flows for each of the years then
ended, in conformity with generally accepted accounting principles.
Kyle L. Tingle
Certified Public Accountant
October 27, 2000
Henderson, Nevada
-1-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
CONSOLIDATED BALANCE SHEETS
September 30, 2000 and December 31, 1999 and 1998
<TABLE>
<CAPTION>
September 30, December 31, December 31,
2000 1999 1998
-------------- ------------- --------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 497 $ 2,284 $ 5,506
Prepaid expenses 1,159 159 0
------------- ------------- -------------
Total current assets $ 1,656 $ 2,443 $ 5,506
============= ============= =============
Total assets $ 1,656 $ 2,443 $ 5,506
============= ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Outstanding checks in excess of bank balance $ 1,345 $ 0 $ 0
Accounts payable and accrued expenses 730 700 220
Federal and state income tax payable 0 0 676
Due to related parties (Note 1) 10,868 0 0
------------- ------------- -------------
Total current liabilities $ 12,943 $ 700 $ 896
============= ============= =============
STOCKHOLDERS' EQUITY
Common stock: $.001 par value;
authorized 25,000,000 shares;
issued and outstanding
4,425 shares at December 31, 1998 $ $ $ 4
4,425,500 shares at December 31, 1999; 4,426
4,432,000 shares at September 30, 2000; 4,432
Additional Paid In Capital 6,993 499 4,421
Accumulated deficit (22,712) (3,182) 185
-------------- -------------- -------------
Total stockholders' equity $ (11,287) $ 1,743 $ 4,610
============== ============== ==============
Total liabilities and
stockholders' equity $ 1,656 $ 2,443 $ 5,506
============== ============== ==============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-2-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
CONSOLIDATED STATEMENTS OF INCOME
Nine Months Ended September 30, 2000 and
Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
September 30, September 30, December 31, December 31,
2000 1999 1999 1998
-------------- ------------- ------------- -------------
(unaudited)
<S> <C> <C> <C> <C>
Revenues (Notes 1 and 3) $ 103,523 $ 90,821 $ 133,394 $ 78,000
Cost of revenue 0 0 0 0
-------------- ------------- -------------- -------------
Gross profit $ 103,523 $ 90,821 $ 133,394 $ 78,000
Operating, general and administrative expenses
Salaries and payroll taxes $ 87,035 $ 54,552 $ 88,083 $ 0
Management fees 12,150 21,192 25,692 51,179
Other operating expenses 23,868 17,715 22,986 29,723
-------------- ------------- -------------- -------------
Operating, general and
administrative expenses $ 123,053 $ 93,459 $ 136,761 $ 80,902
-------------- ------------- -------------- -------------
Operating (loss) $ (19,530) $ (2,638) $ (3,367) $ (2,902)
Nonoperating income (expense) 0 0 0 0
-------------- ------------- -------------- -------------
Net (loss) before income taxes $ (19,530) $ (2,638) $ (3,367) $ (2,902)
-------------- ------------- -------------- -------------
Federal and state income taxes 0 0 0 676
-------------- ------------- -------------- -------------
Net (loss) $ (19,530) $ (2,638) $ (3,367) $ (3,578)
============== ============= ============== =============
Net (loss) per share (Note 2) $ (0.0044) $ (0.0035) $ (0.0020) $ (0.8086)
============== ============= ============== =============
Average Number of Shares
of Common Stock Outstanding 4,429,978 749,284 1,675,801 4,268
============== ============= ============== =============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-3-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
September 30, September 30,
2000 1999
------------- ------------
<S> <C> <C>
Revenues (Notes 1 and 3) $ 27,761 $ 32,847
Cost of revenue 0 0
------------- ------------
Gross profit $ 27,761 $ 32,847
Operating, general and administrative expenses
Salaries and payroll taxes $ 28,008 $ 26,456
Management fees 1,150 4,500
Other operating expenses 14,996 4,647
------------- ------------
Operating, general and
administrative expenses $ 44,504 $ 35,603
------------- ------------
Operating (loss) $ (16,743) $ (2,756)
Nonoperating income (expense) 0 0
------------- ------------
Net (loss) before income taxes $ (16,743) $ (2,756)
------------- ------------
Federal and state income taxes 0 0
------------- ------------
Net (loss) $ (16,743) $ (2,756)
============= ============
Net (loss) per share (Note 2) $ (0.0038) $ (0.0012)
============= ============
Average Number of Shares
of Common Stock Outstanding 4,431,696 2,214,713
============= ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-4-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
Nine Months Ended September 30, 2000 and
Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
Common Stock Additional
------------------------------- Paid-In Accumulated
Shares Amount Capital (Deficit)
------------- ------------- ------------- -----------------
<S> <C> <C> <C> <C>
Balance at December 31, 1997 4,000 $ 4 $ 3,996 $ 3,763
Director Compensation 425 0 425
Net (Loss), December 31, 1998 (3,578)
------------- ------------ ------------- -------------
Balance at December 31, 1998 4,425 $ 4 $ 4,421 $ 185
August 15, 1999, thousand
for one stock split 4,422,575 4,423 (4,421)
Sale of stock, December 16, 1999 500 1 499
Net (Loss), December 31, 1999 (3,367)
------------- ------------ ------------- -------------
Balance at December 31, 1999 4,425,500 $ 4,426 $ 499 $ (3,182)
Sale of stock, March 9, 2000 500 0 500
Sale of stock, March 31, 2000 5,000 5 4,995
Sale of stock July 28, 2000 1,000 1 999
Net (Loss), September 30, 2000 (19,530)
------------- ------------ ------------- -------------
Balance at September 30, 2000 4,432,000 $ 4,432 $ 6,993 $ (22,712)
============= ============ ============= =============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-5-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2000 and
Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
September 30, September 30, December 31, December 31,
2000 1999 1999 1998
------------- ------------ ------------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
Cash Flows From Operating Activities
Cash received from customers $ 103,523 $ 90,821 $ 133,394 $ 78,000
Cash paid to suppliers and vendors (122,678) (93,874) (137,116) (81,613)
------------- ------------ ------------- ------------
Net cash (used in) operating
activities $ (19,155) $ (3,053) $ (3,722) $ (3,613)
------------- ------------ ------------- ------------
Cash Flows From Investing Activities
Net borrowings (payments to)
related parties $ 10,868 $ 0 $ 0 $ 0
Capital expenditures 0 0 0 0
Issuance of common stock 6,500 0 500 0
------------- ------------ ------------- ------------
Net cash provided by investing
activities $ 17,368 $ 0 $ 500 $ 0
------------- ------------ ------------- ------------
Cash Flows From Financing Activities
Proceeds from notes payable $ 0 $ 0 $ 0 $ 0
Principal payments on notes payable 0 0 0 0
------------- ------------ ------------- ------------
Net cash (used in) financing
activities $ 0 $ 0 $ 0 $ 0
------------- ------------ ------------- ------------
Net increase (decrease) in cash
and cash equivalents $ 1,787 $ (3,053) $ (3,222) $ (3,613)
Cash and cash equivalents at
beginning of year 2,284 5,506 5,506 9,119
------------- ------------ ------------- ------------
Cash and cash equivalents at end of year $ 497 $ 2,453 $ 2,284 $ 5,506
============= ============ ============= ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-6-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 2000 and
Years Ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
September 30, September 30, December 31, December 30,
2000 1999 1999 1998
------------- ------------ ------------- ------------
(Unaudited)
<S> <C> <C> <C> <C>
Reconciliation of Net Loss to Net Cash (Used
In) Operating Activities
Net (Loss) $ (19,530) $ (2,638) $ (3,367) $ (3,578)
Adjustments to reconcile net (loss) to cash
(used in) operating activities:
Director stock compensation 0 0 0 425
Change in assets and liabilities
(Increase) decrease in prepaid expenses (1,000) (159) (159) 0
Increase (decrease) in accounts payable 1,375 (256) (196) (460)
------------- ------------ ------------- ------------
Net cash (used in)
operating activities $ (19,155) $ (3,053) $ (3,722) $ (3,613)
============== ============ ============= ============
Supplemental schedule of non-cash
investing and financing activities
Issue common stock to directors $ 0 $ 0 $ 0 $ 425
============= ============ ============= ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-7-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
STATEMENTS OF CASH FLOWS
Three Months Ended
September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
September 30, September 30,
2000 1999
------------- ------------
<S> <C> <C>
Cash Flows From Operating Activities
Cash received from customers $ 27,761 $ 32,847
Cash paid to suppliers and vendors (43,809) (35,156)
------------- ------------
Net cash (used in) operating
activities $ (16,048) $ (2,309)
------------- ------------
Cash Flows From Investing Activities
Net borrowings (payments to)
related parties $ 10,868 $ 0
Capital expenditures $ 0 $ 0
Issuance of common stock 1,000 0
------------- ------------
Net Cash provided by investing
activities $ 11,868 $ 0
------------- ------------
Cash Flows From Financing Activities
Proceeds from notes payable $ 0 $ 0
Principal payments on notes payable 0 0
------------- ------------
Net Cash (used in) financing
activities $ 0 $ 0
------------- ------------
Net increase (decrease) in cash
and cash equivalents $ (4,180) $ (2,309)
Cash and cash equivalents at
beginning of period 4,677 4,762
------------- ------------
Cash and cash equivalents at end of period $ 497 $ 2,453
============= ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-8-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
STATEMENTS OF CASH FLOWS
Three Months Ended
September 30, 2000 and 1999
(Unaudited)
<TABLE>
<CAPTION>
September 30, September 30,
2000 1999
------------- ------------
<S> <C> <C>
Reconciliation of Net Loss to Net Cash (Used
In) Operating Activities
Net (Loss) $ (16,743) $ (2,756)
Adjustments to reconcile net (loss) to cash
(used in) operating activities:
Director stock compensation 0 0
Change in assets and liabilities
(Increase) decrease in accounts receivable 0 0
Increase (decrease) in accounts payable 695 447
------------- ------------
Net cash (used in)
operating activities $ (16,048) $ (2,309)
============== ============
Supplemental schedule of non-cash
investing and financing activities
Issue common stock to directors $ 0 $ 0
============= ============
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-9-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999 and 1998
Note 1. Nature of Business and Significant Accounting Policies
Nature of business
------------------
Multinet International Corporation, Inc. ("Company") was organized May
17, 1996 under the laws of the State of Nevada. The Company was formed
to provide experienced management to companies through management
contracts or through merger or acquisition. Currently, it manages one
convenience store in the Phoenix, Arizona through Nikky D Corporation,
a wholly owned subsidiary.
A summary of the Company's significant accounting policies is as
follows:
----------------------------------------------------------------------
Estimates
---------
The preparation of 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.
Interim Financial Statements
----------------------------
The financial statements for the three months and nine months ended
September 30, 1999 are unaudited and should be read in conjunction with
the Company's annual financial statements for the years ended December
31, 1999 and 1998 and the nine months ended September 30, 2000. Such
interim statements have been prepared in conformity with the rules and
regulations of the Securities and Exchange Commission. Certain
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations pertaining
to interim financial statements. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) necessary for
a fair presentation have been included. The results of operations of
any interim period are not necessarily indicative of the results of
operations for the full year.
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of the
Company and Nikky D Corporation, a wholly owned subsidiary. All
significant intercompany accounts and transactions have been
eliminated.
-10-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999 and 1998
Note 1. Nature of Business and Significant Accounting Policies (continued)
Business Combination
--------------------
Business combinations which have been accounted for under the
pooling-of-interests method of accounting combine the assets,
liabilities , and stockholders' equity of the acquired entities with
the respective accounts of the Company. Prior period financial
statements have been restated to give effect to the acquisition (see
Note 3).
Cash
----
For the Statements of Cash Flows, all highly liquid investments with
maturity of three months of less are considered to be cash equivalents.
There were no cash equivalents as of September 30, 2000, December 31,
1999, and December 31, 1998.
Income taxes
------------
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and
operating loss and tax credit carryforwards and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets
and liabilities and their tax basis. Deferred tax assets are reduced by
a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted
for the effect of changes in tax laws and rates on the date of
enactment.
Due to the inherent uncertainty in forecasts of future events and
operating results, the Company has provided for a valuation allowance
in an amount equal to gross deferred tax assets resulting in no net
deferred tax assets at September 30, 2000, December 31, 1999, and 1998.
Due to Related Parties
----------------------
Companies affiliated through common ownership have advanced funds for
the ongoing operations of the company. These are anticipated to be
repaid through current operations of the company.
Revenue Recognition
-------------------
The Company reports income and expenses on the accrual basis of
accounting, whereby income is recorded when it is earned and expenses
recorded when they are incurred.
-11-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999 and 1998
Note 2. Stockholders' Equity
Common stock
------------
The authorized common stock of the Company consists of 25,000,000
shares with par value of $0.001.. On August 15, 1999, the Company's
shareholders approved a thousand for one stock split of the existing
shares. On June 15, 2000, the Company authorized and issued 2,000,000
shares to acquire Nikky D Corporation.
The Company has not authorized any preferred stock.
Net loss per common share
-------------------------
Net loss per share is calculated in accordance with SFAS No. 128,
"Earnings Per Share." The weighted-average number of common shares
outstanding during each period is used to compute basic loss per share.
Diluted loss per share is computed using the weighted averaged number
of shares and dilutive potential common shares outstanding. Dilutive
potential common shares are additional common shares assumed to be
exercised.
Basic net loss per common share is based on the weighted average number
of shares of common stock outstanding of 4,429,978 during 2000;
1,675,801 during 1999, and 4,268 during 1998. As of September 30, 2000
and December 31, 1999, and 1998, the Company had no dilutive potential
common shares.
Note 3. Acquisitions
On July 1, 2000, the Company completed its acquisition of Nikky D
Corporation ("Nikky D"), in which Nikky D became a wholly owned
subsidiary of the Company, The Company exchanged 2,000,000 shares of
common stock for all the outstanding shares of Nikky D. The acquisition
was a recorded using the pooling method of accounting and accordingly,
the accompanying financial statements and footnotes have been restated
to include the operations of Nikky D for all periods ended. Nikky D's
revenues for the six months ended June 30, 2000 (date of acquisition)
and years ended December 31, 1999 and 1998 were $75,762, $133,394, and
$78,000, respectively. Nikky D's net loss for the six months ended June
30, 2000 (date of acquisition) and years ended December 31, 1999 and
1998 were $(371), $(1,384), and $(2,948), respectively.
-12-
<PAGE>
MULTINET INTERNATIONAL CORPORATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2000 and December 31, 1999 and 1998
Note 4. Going Concern
The Company's financial statements are prepared in accordance with
generally accepted accounting principles applicable to a going concern.
This contemplates the realization of assets and the liquidation of
liabilities in the normal course of business.
On July 1, 2000, the Company acquired Nikky D. Corporation. Nikky D.
Corporation, through a management contract with a Company affiliated
through common ownership and management, manages a convenience store in
the Phoenix, Arizona area. Revenues are provided for by a management
agreement with the convenience store.
The business plan contemplates equity funding or financing to acquire
other business or operating enterprises. The Company also seeks to
acquire additional management agreements to manage convenience stores
in the Phoenix, Arizona region.
As of September 30, 2000, the Company's revenues are not sufficient to
cover expenses of the Company. Shortfalls have been covered by advances
from parties related by common ownership. Without the realization of
increased revenues or additional capital through financing or sale of
securities, it would be unlikely for the Company to continue as a going
concern.
-13-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
STATEMENT ON FORWARD-LOOKING INFORMATION
This Quarterly Report contains forward-looking statements about the
Company's business, financial condition and prospects that reflect the Company's
assumptions and beliefs based on information currently available. Words such as
"believes", "expects", "intends", "plans", "anticipates", "estimates" and
similar expressions are intended to identify forward-looking statements,
although there may be certain forward-looking statements not accompanied by such
expressions. The Company can give no assurance that the expectations indicated
by such forward-looking statements will be realized.
If any of the Company's assumptions should prove incorrect, or if any
of the risks and uncertainties underlying such expectations should materialize,
actual results may differ materially from those indicated by the forward-looking
statements. The key factors that are not within the Company's control and that
may have a direct bearing on operating results include, but are not limited to,
acceptance of the Company's services, the Company's ability to acquire
additional management contracts, the Company's ability to raise capital in the
future, the retention of its management staff, and changes in the need for the
Company's management services.
GENERAL OVERVIEW
Multinet International Corporation, Inc. (the "Company") provides
integrated management services for newly and fully operating automotive service
stations, dealerships, and convenience stores. The Company's corporate office is
based in Las Vegas, Nevada.
The integrated management package provided by the Company includes
consulting services for general accounting and management matters. The Company
intends to continue and improve its services, which will include the development
of a central accounting and management system known as "the Multinet
Connection", which will provide management and accounting services via the
Internet and telecommunications, offering a centralized organization of
inventory, accounting and sales records. The Company's management services
include the following:
o hiring and training of managerial staff ranging from general managers to
cashiers and attendants
o general site management and employee retention
o training employees to use computer equipment for full service
station operations, including credit card and lottery sales transactions
o general accounting, including daily inventory, revenues, and payroll
records, and maintenance of financial statements
-14-
<PAGE>
The Company provides these services through its subsidiary, Nikky D.
Corporation, to Fernando's Mobile Station located in Phoenix, Arizona. The
Company intends to expand its client base by acquiring additional management
service contracts with automotive service stations, dealerships, and convenience
stores, primarily targeting newly operating stations in the Phoenix, Arizona
area. The Company anticipates great need for its specialized management services
by these newly operating stations, so that they can concentrate on their core
operations. The Company also plans to expand its client base and management team
through strategic acquisitions, in order to continue developing and enhancing
the scope of its managerial services.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1999
REVENUES. For the three months ended September 30, 2000, revenues were
approximately $28,000, a decrease of approximately $5,000, or 15%, versus
revenues of approximately $33,000 for the three months ended September 30, 1999.
The decrease in revenues for the 2000 period was due primarily to a decrease in
the amount of management services provided to the Company's client, Fernando's
Mobile Station, located in Phoenix, Arizona.
OPERATING EXPENSES. Operating expenses, as a percentage of revenues,
increased to 160% for the three months ended September 30, 2000 as compared to
108% for the three months ended September 30, 1999. This increase in operating
expenses for the three months ended September 30, 2000 occurred primarily due to
expansion of the Company in acquiring its wholly-owned subsidiary, Nikky D.
Corporation, including accounting and legal fees.
NET LOSSES. For the three months ended September 30, 2000, net losses
were approximately $17,000, compared to $3,000 for the three months ended
September 30, 1999. This increase was due primarily to the Company's increased
operating, general and administrative expenses associated with its increased
management consulting services.
NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 1999
REVENUES. For the nine months ended September 30, 2000, revenues were
approximately $104,000, an increase of approximately $13,000, or 14%, versus
revenues of approximately $91,000 for the nine months ended September 30, 1999.
The increase in revenues for the 2000 period was due primarily to an increase of
management consulting services, including service station management, to the
Company's client, Fernando's Mobile Station, located in Phoenix, Arizona.
OPERATING EXPENSES. Operating expenses, as a percentage of revenues,
increased to 119% for the nine months ended September 30, 2000 as compared to
103% for the nine months ended September 30, 1999. This increase in operating
expenses for the nine months ended September 30, 2000 occurred primarily due to
expansion of the Company in acquiring its wholly-owned subsidiary, Nikky D.
Corporation, including accounting and legal fees. Additional operating expenses
were incurred in April of 1999, when the Company's subsidiary began incurring
payroll expenses, including salaries and payroll taxes, for provision of its
management services.
-15-
<PAGE>
NET LOSSES. For the nine months ended September 30, 2000, net losses
were approximately $20,000, compared to $3,000 for the nine months ended
September 30, 1999. This increase was due primarily to the Company's increased
operating, general and administrative expenses associated with its increased
management consulting services.
LIQUIDITY AND CAPITAL RESOURCES
The ability of the Company to satisfy its obligations depends in part
upon its ability to reach a profitable level of operations, securing short and
long-term financing to continue development of its management services, and the
acquisition of additional management contracts and subsidiaries. There is no
assurance that short and long-term financing can be obtained to fulfill the
Company's capital needs. Without the short or long-term financing, the Company
will attempt to sell additional common stock to meet its current and future
capital needs. If the Company is not able to obtain either short or long-term
funding, additional management contracts, or funding through the sale of its
common stock, the Company would be unlikely to continue its operations.
-16-
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit No. Description
----------- ----------------------------------------------------
2.1 Plan of Acquisition
(Incorporated by reference from Exhibit 2.1
of Form 8-K filed July 21, 2000).
3.1 Articles of Incorporation
of Multinet International Corporation, Inc.
(Incorporated by reference from Exhibit 3.1
of Form 8-K filed October 27, 2000).
3.2 Bylaws
of Multinet International Corporation, Inc.
(Incorporated by reference from Exhibit 3.2
of Form 8-K filed July 21, 2000).
27.1 Financial Data Schedule
For period ending September 30, 2000.
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on October 27, 2000 regarding
expansion of the Company's business.
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act of 1934, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Multinet International Corporation, Inc.
-----------------------------------------
(Registrant)
Date: November 7, 2000
/s/ GLEN BROW
---------
GLEN BROW
PRESIDENT
Date: November 7, 2000
/s/ SHERRI HENDERSON
----------------
SHERRI HENDERSON
SECRETARY
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