SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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
Commission File No.: 000-29107
MULTINET INTERNATIONAL CORPORATION, INC
(Exact name of registrant as it appears in its charter)
NEVADA 88-0441388
(State or jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
8100 West Sahara Ave, Suite 200, Las Vegas, NV 89129
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code: (702)-966-0600
Securities registered pursuant to Section 12 (b) of the Act: None
Class A Common Stock $0.001 Par Value
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months ( or 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. X Yes No
At the end of the quarter ending March 31, 2000 there were 2,431,000 issued
and outstanding shares of the registrants common stock.
There is no active market for the registrant's securities.
PART I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Attached.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
NOTE REGARDING PROJECTIONS AND FORWARD LOOKING STATEMENTS.
This statement includes projections of future results and "forward-looking
statements" as that term is defined in Section 27A of the Securities Act of
1933 as amended ( the "Securities Act" ), and Section 21E of the Securities
Exchange Act of 1934 as amended (the "Exchange Act"). All statements that are
included in this Registration Statement, other than statements of historical
fact, are forward-looking statements, Although Management believes that the
expectations reflected in these forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors that could cause actual results to differ materially from
the expectations are disclosed in this Statement, including, without
limitation, with those forward-looking statements contained in this Statement.
Plan of Operation-General
Multinet's International Corporation, Inc.'s plan is to seek, investigate, and
if such investigation warrants, acquire an interest in one or more business
opportunities presented to it by persons or firms desiring the perceived
advantages of a publicly held corporation. At this time, Multinet International
Corporation, Inc. has no plan, proposal, agreement, understanding, or
arrangement to acquire or merge with any specific business or company, and
Multinet International Corporation, Inc. has not identified any specific
business or company for investigation and evaluation. No member of Management
or any promoter of Multinet International Corporation, Inc., or an affiliate
of either, has had any material discussions with any other company with
respect to any acquisition of that company, Multinet International Corporation,
Inc. will not restrict its search to any specific business, industry, or
geographical location, and may participate in business ventures of virtually
any kind or nature. Discussion of the proposed business under this caption and
throughout this Registration Statement is purposefully general and is not meant
to restrict Multinet International Corporation, Inc.'s virtually unlimited
discretion to search for and enter into a business combination.
Multinet International Corporation, Inc. may seek a combination with a firm
which only recently commenced operations, or a developing company in need of
additional funds to expand into new products or markets or seeking to develop
a new product or service, or an established business which may be experiencing
financial or operating difficulties and needs additional capital which is
perceived to be easier to raise by a public company, In some instance, a
business opportunity may involve acquiring or merging with a corporation which
does not need substantial additional cash but which desired to establish a
public trading market for its common stock. Multinet International Corporation,
Inc. may purchase assets and establish wholly owned subsidiaries in various
businesses or purchase existing businesses as subsidiaries.
Selecting a business opportunity will be complex and extremely risky. Because
of federal economic condition, rapid technological advances being made in some
industries, and shortages of available capital, management believes that there
are numerous firms seeking the benefits of a publicly traded corporation. Such
perceived benefits of a publicly traded corporation may include facilitating
or improving the terms on which additional equity financing may be sought,
providing liquidity for the principals of a business, creating a means for
providing incentive stock options or similar benefits to key employees,
providing liquidity ( subject to restrictions of applicable statues ) for all
shareholders, and other items. Potentially available business opportunities
may occur in many different industries and at various stages of development,
all of which will make the task of comparative investigation and analysis of
such business opportunities extremely difficult and complex.
Management believes that Multinet International Corporation, Inc. may be able
to benefit from the use of "leverage" to acquire a target company. Leveraging
a transaction involves acquiring a business while incurring significant
indebtedness for a large percentage of the purchase price of that business.
Through leveraged transactions, Multinet International Corporation,Inc. would
be required to use less of its available funds to acquire a target company and,
therefore, could commit those funds to the operations of the business, to
combinations with other target companies, or the other activities. The
borrowing involved in a leveraged transaction will ordinarily be secured by
the assets of the acquired business. If that business is not able to generate
sufficient revenues to make payments on the debt incurred by Multinet
International Corporation, Inc. to acquire that business, the lender would be
able to exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that Multinet International
Corporation, Inc. must commit to acquire a business, may correspondingly
increase the risk of loss to Multinet International Corporation, Inc. Multinet
International Corporation, Inc. can give as to the terms or availability of
financing for any acquisition no assurance. During periods when interest rates
are relatively high, the benefits of leveraging are not as great as during
periods of lower interest rates, because the investment in the business held
on a leveraged basis will only be profitable if it generates sufficient
revenues to cover the related debt and other costs of the financing. Lenders
from which Multinet International Corporation, Inc. may obtain funds for
purposes of a leveraged buy-out may impose restrictions on the future borrowing,
distribution, and operating policies of Multinet International Corporation,
Inc. It is not possible at this time to predict the restrictions, if any, which
lenders any impose, or the impact thereof on Multinet International
Corporation, Inc.
Multinet International Corporation, Inc., Inc. has insufficient capital with
which to provide the owners of businesses significant currency or other assets.
Management believes Multinet International Corporation, Inc. will offer owners
of businesses the opportunity to acquire a controlling ownership interest in a
public company at substantially less cost than is required to conduct an
initial public offering, The owners of the businesses will, however, incur
significant post-merger or acquisition registration costs in the event they
wish to register a portion of their shares for subsequent sale. Multinet
International Corporation, Inc. will also incur significant legal and
accounting costs in connection with the acquisition of a business opportunity,
including the costs of preparing post - effective amendments, forms 8-K,
agreements, and related reports and documents. Nevertheless, the officers and
directors of Multinet International Corporation, Inc. have not conducted
market research and are not aware of statistical data, which would support the
perceived benefits of a merger or acquisition transaction for the owners of a
business. Multinet International Corporation, Inc. does not intend to make any
loans to any prospective merger or acquisition candidates or to unaffiliated
third parties.
Multinet Internet Corporation, Inc. will not restrict its search for any
specific kind of terms, but may acquire a venture which is in its preliminary
or developmental stage, which is already in operation, or in essentially any
stage of its corporate life. It is impossible to predict at this time the
status of any business in which Multinet International Corporation, Inc. may
become engaged, in that such business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek other perceived
advantages which the Company may offer. However, Multinet International
Corporation, Inc. does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business opportunity until
such time as Multinet International Corporation, Inc. has successfully
consummated such a merger or acquisition. Multinet International Corporation,
Inc. also has no plans to conduct any offerings under Regulation S.
Sources of Opportunities
Multinet International Corporation, Inc. will seek a potential business
opportunity from all known sources; but will rely principally on personal
contacts of its officers and directors as well as indirect associations
between them and other business and professional people. It is not presently
anticipated that Multinet International Corporation, Inc. will engage
professional firms specializing in business acquisitions or reorganizations.
Management, while not especially experienced in matters relating to the new
business of Multinet International Corporation, Inc. will rely upon their own
efforts and, to a much lesser extent, the efforts of Multinet International
Corporation, Inc.'s shareholders, in accomplishing the business purposes of
Multinet International Corporation, Inc. It is not anticipated that any
outside consultants or advisors, other than Multinet International Corporation,
Inc.'s counsel and accountants, will be utilized by Multinet International
Corporation, Inc., to effectuate its business purposes described herein.
However, if Multinet International Corporation, Inc. does retain such an
outside consultant or advisor, any cash fee earned by such party will need to
be paid by the prospective merger / acquisition candidate, as Multinet
International Corporation, Inc. has no cash assets with which to pay such
obligation. There have been no discussions, understandings, contracts or
agreements with any outside consultants and none are anticipated in the future.
In the past, Multinet International Corporation, Inc.'s management has never
used outside consultants or advisors in connection with a merger or acquisition.
As is customary in the industry, Multinet International Corporation, Inc.'s
may par a finder's fee for locating an acquisition prospect. If any such fee
is paid, it will be approved by Multinet International Corporation, Inc.'s
Board of Directors and will be in accordance with the industry standards. Such
fees are customarily between 1% and 5% of the size of the transaction, based
upon a sliding scale of the amount involved. Such fees are typically in the
range of 5% on a $1,000,000 transaction ratably down to 1% in a $4,000,000
transaction. Management has adopted a policy that such a finder's fee or real
estate brokerage fee could, in certain circumstances, be paid to any employee,
officer, director or 5% shareholder of Multinet International Corporation, Inc.
if such person plays a material role in bringing a transaction to Multinet
International Corporation, Inc.
Multinet International Corporation, Inc. will not have sufficient funds to
undertake any significant development, marketing, and manufacturing of any
products, which may be acquired. Accordingly, if it acquires the rights to a
product, rather than entering into a merger or acquisition, it most likely
would need to seek debt or equity financing or obtain funding from third
parties in exchange for which Multinet International Corporation, Inc. would
probably be required to give up a substantial portion of its interest in any
acquired product. There is no assurance that Multinet International Corporation
Inc. will be able either to obtain additional financing or to interest third
parties in providing funding for the further development, marketing, and
manufacturing of any products acquired.
Evaluation of Opportunities
The analysis of new business opportunities will be undertaken by or under the
supervision of the officers and directors Multinet International Corporation,
Inc. ( see "Management" ). Management intends to concentrate on identifying
prospective business opportunities, which may be brought to its attention
through present associations with management. In analyzing prospective business
opportunities, management will consider, among other factors, such matters as:
1. The available technical, financial, and managerial resources.
2. Working capital and other financial requirements.
3. History of operation, if any.
4. Prospects for the future.
5. Present and expected competition.
6. The quality and experience of management services which may be available and
the depth of that management.
7. The potential for further research, development, or exploration.
8. Specific risk factors not now foreseeable but which then may be anticipated
to impact the proposed activities of Multinet International Corporation, Inc.
9. The potential for growth or expansion.
10. The potential for profit.
11. The perceived public recognition or acceptance of products, services, or
trades.
12. Name identification.
Management will meet personally with management and key personnel of the firm
sponsoring the business opportunity as part of their investigation. To the
furthest extent possible, Multinet International Corporation, Inc. intends to
utilize written reports and personal investigation to evaluate the above
factors. Multinet International Corporation, Inc. will not acquire or merge
with any company for which audited financial statements cannot be obtained.
Opportunities in which Multinet International Corporation, Inc. participates
will present certain risks, many of which cannot be identified adequately
prior to selecting a specific opportunity. Multinet International Corporation,
Inc. shareholders must, therefore, depend on Management to identify and
evaluate such risks. Promoters of some opportunities may have been unable to
develop a going concern or may present a business in its development stage (in
that it has not generated significant revenues from its principal business
activities prior to Multinet International Corporation, Inc.'s participation.)
Even after Multinet International Corporation, Inc.'s participation, there is
a risk that the combined enterprise may not become a going concern or advance
beyond the development stage. Other opportunities may involve new and untested
products, processes, or market strategies, which may not succeed. Such risks
will be assumed by Multinet International Organization, and therefore, its
shareholders.
The investigation of specific business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents, and
other instruments will require substantial management time and attention as
well as substantial costs for accountants, attorneys, and others. If a decision
is made not to participate in a specific business opportunity the costs
incurred in the related investigation would not be recoverable. Furthermore,
even if an agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in the loss
by Multinet International Corporation, Inc., Inc. of the related costs incurred.
There is the additional risk that Multinet International Corporation, Inc. will
not find a suitable target. Management does not believe Multinet International
Corporation, Inc. will generate revenue without finding and completing a
transaction with a suitable target company. If no such target is found,
therefore, no return on an investment in Multinet International Corporation,
Inc. will be realized, and there will not, most likely, be a market for
Multinet International Corporation, Inc. stock.
Acquisition of Opportunities
In implementing a structure for a particular business acquisition, Multinet
International Corporation, Inc. may become a party to a merger, consolidation,
reorganization, joint venture, franchise, or licensing agreement with another
corporation or entity. It may also purchase stock or assets of an existing
business. Once a transaction is complete, it is possible that the present
management and shareholders of Multinet International Corporation, Inc. will
not be in control of Multinet International Corporation, Inc. In addition, a
majority or all of Multinet International Corporation, Inc. officers and
directors may, as part of the terms of the transaction, resign and be replaced
by new officers and directors without a vote of the Multinet International
Corporation, Inc. shareholders.
It is anticipated that securities issued in any such reorganization would be
issued in reliance on exemptions from registration under applicable Federal
and state securities laws. In some circumstances, however, as a negotiated
element of this transaction is consummated, under certain conditions, or at
specified time thereafter. The issuance of substantial additional securities
and their potential sale into any trading market which may develop in Multinet
International Corporation, Inc.'s Common Stock may have a depressive effect on
such market.
While the actual terms of a transaction to which Multinet International
Corporation, Inc. may be a party cannot be predicted, it may be expected that
the parties to the business transaction will find it desirable to avoid the
creation of a taxable event and thereby structure the acquisition in a so
called "tax free" reorganization under Sections 368 (a) (1) or 351 of the
Internal Revenue Code of 1986, as amended (the "Code"). In order to obtain tax-
free treatment under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of Multinet International Corporation,
Inc. including investors in this offering, would retain less than 20% of the
issued and outstanding shares of the surviving entity, which could result in
significant dilution in the equity of such shareholders.
As part of Multinet International Corporation,Inc.'s investigation: officers
and directors of Multinet International Corporation,Inc. will meet personally
with management and key personnel, may visit and inspect material facilities,
obtain independent analysis or verification of certain information provided,
check references of management and key personnel, and take other reasonable
investigative measures to the extent of the Multinet International Corporation,
Inc. limited financial resources and management expertise. The manner in which
Multinet International Corporation, Inc. participates in an opportunity, and
the relative negotiating strength of Multinet International Corporation, Inc.
and such other management.
With respect to any mergers or acquisitions, negotiations with target company
management will be expected to focus on the percentage of Multinet International
Corporation, Inc., which the target company's shareholders would acquire in
exchange for their shareholdings in the target company. Depending upon, among
other things, the target company's assets and liabilities, Multinet
International Corporation,Inc.'s shareholders will, in all likelihood, hold a
lesser percentage ownership interest in Multinet International Corporation,Inc.
following any merger or acquisition. The percentage ownership may be subject
of significant dilutive effect on the percentage of shares held by Multinet
International Corporation,Inc. then shareholders, including purchasers in this
offering.
Management has advanced, and will continue to advance, funds, which shall be
used by Multinet International Corporation, Inc. in identifying and pursuing
agreements with target companies. Management anticipates that these funds will
be repaid from the proceeds of any agreement with the target company, and that
any such agreement may, in fact, be contingent upon the repayment of those
funds.
Competition
Multinet International Corporation,Inc. is an insignificant participant among
firms which engage in business combinations with, or financing of, development-
stage enterprises. There are many established management and financial
consulting companies and venture capital firms who have significantly greater
financial and personal resources, technical expertise and experience than
Multinet International Corporation, Inc. In view of Multinet International
Corporation,Inc.'s limited financial resources and management availability,
Multinet International Corporation, Inc. will continue to be at significant
competitive disadvantage vis-a-vis the Multinet International Corporation,
Inc.'s competitors.
Year 2000 Compliance
Multinet International Corporation,Inc. is aware of the issues associated with
the programming code in existing computer systems as the year 2000 approaches,
Multinet International Corporation, Inc. has assessed these issues as they
relate to Multinet International Corporation, Inc., and since Multinet
International Corporation,Inc. currently has no operating business and does not
use any computer, and since it has no customers, suppliers or other
constituents, it does not believe that there are any material year 2000 issues
to disclose in this Form 10-SB.
Regulation and Taxation
The Investment Company Act of 1940 defines an "investment company" as an issuer,
which is or holds it out as being engaged primarily in the business of
investing, reinvesting, or trading securities. While Multinet International
Corporation,Inc. does not intend to engage in such activities, Multinet
International Corporation, Inc. may obtain and hold a minority interest in a
number of development stage enterprises. Multinet International Corporation,
Inc. could be expected to incur significant registration and compliance costs
if required to register under the Investment Company Act of 1940. Accordingly,
management will continue to review Multinet International Corporation, Inc.'s
activities from time to time with a view that toward reducing the likelihood
Multinet International Corporation,Inc. could be classified as an "investment
company".
Multinet International Corporation, Inc. intends to structure a merger or
acquisition in such manner as to minimize Federal and state tax consequences
to Multinet International Corporation,Inc. and to any target company.
Employees
Multinet International Corporation,Inc. has no full time or part-time employees.
None of the officers and directors anticipates devoting more than ten (10%) of
his or her time to Company activities. Multinet International Corporation,
Inc.'s President and Secretary have agreed to allocate a portion of said time
to the activities of Multinet International Corporation, Inc., without
compensation. These officers anticipate that the business plan of Multinet
International Corporation,Inc. can be implemented by their devoting minimal
time per month to the business affairs of Multinet International Corporation,
Inc. and consequently, conflicts of interest may arise with respect to the
limited time commitment by such officers. See "ITEM 5 Directors, Executive
Officers, Promoters And Control Persons
PART II. OTHER INFORMATION
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Item 1. Legal Proceedings.
None
Item 2. Changes in Securities
None
Item 3. Default Upon Senior Securities
None
Item 4. Submission of matters To a Vote of Security Holders
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
<TABLE>
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3.1 Articles of Incorporation. Incorporated
by Reference in form 10SB12G filing.
3.2 By Laws. Incorporated by Reference in
Form 10SB12G filing.
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Multinet International Corporation, Inc.
Dated: July 24, 2000 By: /S/
Sherri Kresser, Secretary
MULTINET INTERNATIONAL CORPORATION, INC.
(A Development Stage Company)
FINANCIAL REPORTS
(Reviewed)
MARCH 31, 2000
MULTINET INTERNATIONAL CORPORATION, INC.
(A Development Stage Company)
CONTENTS
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INDEPENDENT ACCOUNTANT'S REPORT ON THE
FINANCIAL STATEMENTS 1
FINANCIAL STATEMENTS
Balance Sheets 2
Statements of Income 3
Statements of Stockholders' Equity 4
Statements of Cash Flows 5-6
Notes to Financial Statements 7-9
</TABLE>
Independent Accountant's Report
To the Board of Directors
Multinet International Corporation, Inc.
Las Vegas, Nevada
I have reviewed the accompanying balance sheet of Multinet International
Corporation, Inc. (A Development Stage Company) as of March 31, 2000 and the
related statements of income, stockholders' equity, and cash flows for the
three - month period then ended. These financial statements are the
responsibility of the Company's management.
I conducted my review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, I do not express such an opinion.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 4 to the
financial statements, the Company has not been generating revenue and has
suffered recurring losses from operations which raises substantial doubt about
its ability to continue as a going concern. Management's plans in regard to
these matters are also described in Note 4. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Based on my review, I am not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
Kyle L. Tingle
Certified Public Accountant
July 17, 2000
<TABLE>
MULTINET INTERNATIONAL CORPORATION, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
MARCH 31, 2000 AND DECEMBER 31, 1999
(UNAUDITED)
<CAPTION>
March 31, December 31,
2000 1999
--------- ------------
<S> <C> <C>
Assets
Current Assets:
Cash $5,031 $167
Accounts Receivable 0 0
------- ------
Total Current Assets $5,031 $167
======= ======
Total Assets $5,031 $167
======= ======
Liabilities and
Stockholders' Equity
Current Liabilities:
Accounts Payable and
Accrued expenses $400 $220
----- -----
Total Current Liabilities $400 $220
===== =====
Stockholders' Equity
Common Stock: $.001 par value,
authorized 25,000,000 shares
issued and outstanding
2,425,500 and at December
31, 1999 $2,426
2,431,000 shares at March
31, 2000; 2,431
Additional Paid In Capital 5,994 499
Accumulated Deficit
During the Development Stage (3,794) (2,978)
-------- --------
Total Stockholders' Equity $4,631 $(53)
-------- --------
Total liabilities and
stockholders' equity $5,031 $167
======== ========
</TABLE>
See Accompanying Notes to Financial Statements.
<TABLE>
MULTINET INTERNATIONAL CORPORATION, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
<CAPTION>
May 17, 1996
(inception) to
March 31, March 31, March 31,
2000 1999 2000
---- ---- --------------
<S> <C> <C> <C>
Revenues $0 $0 $0
Cost of revenues 0 0 0
--- --- ---
Gross Profits $0 $0 $0
Operating, general and
administrative expenses 816 188 3,794
----- ----- -----
Operating (loss) $(816) $(188) $(3,794)
Nonoperating income (expense) 0 0 0
------ ------ ---------
Net (loss) $(816) $(188) $(3,794)
====== ====== =========
Net (loss) per share (Note 2) $(0.0003) $(0.0775) $(0.0096)
========= ========= =========
Average Number of Shares
of Common Stock Outstanding 2,427,209 2,425 394,698
========== ========= =========
</TABLE>
See Accompanying Notes to Financial Statements.
<TABLE>
MULTINET INTERNATIONAL CORPORATION, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF STOCKHOLDERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
(CAPTION)
Accumulated
(Deficit)
Additional During
Common Stock Paid-In Development
Shares Amount Capital Stage
------ ------ ---------- ------------
<S> <C> <C> <C> <C>
Sale of 2,000 shares
May 17, 1996 2,000 $2 $1,998 $0
Net (Loss)
December 31, 1996 (280)
------ --- ------ ------
Balance at
December 31, 1996 2,000 $2 $1,998 $(280)
Net (Loss)
December 31, 1997 (85)
------- --- ------- ------
Balance at
December 31, 1997 2,000 $2 $1,998 $(365)
Director Compensation 425 0 425
Net (Loss)
December 31, 1998 (630)
------- --- ------- -------
Balance at
December 31, 1998 2,425 $2 $2,423 $(995)
August 15, 1999
thousand for one
stock split 2,422,575 2,423 (2,423)
Sale of stock
December 16, 1999 500 1 499
Net (Loss)
December 31, 1999 (1,983)
---------- ------ -------- -------
Balance
December 31, 1999 2,425,500 $2,426 $499 $(2,978)
Sale of Stock
March 9, 2000 500 0 500
Sale of Stock
March 31, 2000 5,000 5 4,995
Net (Loss)
March 31, 2000 (816)
--------- ------- ---------- -------
Balance
March 31, 2000 2,431,000 $2,431 $5,994 $(3,794)
========= ====== ====== ========
</TABLE>
See Accompanying Notes to Financial Statements.
<TABLE>
MULTINET INTERNATIONAL CORPORATION, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
<CAPTION>
May 17, 1996
(inception) to
March 31, March 31, March 31,
--------------------------
2000 1999 2000
---- ---- ----
<S> <C> <C> <C>
Cash Flows From Operating Activities
Cash received from customers $0 $0 $0
Cash Paid to suppliers and vendors (636) (188) (2,969)
----- ----- -------
Net Cash (used in) operating activities $(636) $(188) $(2,969)
------ ------ --------
Cash Flows from Inversting Activities
Capital Expenditures $0 $0 $0
Issuance of common stock 5,500 0 8,000
----- --- ------
Net Cash provided by investing activities $5,500 $0 $8,000
------ ---- ------
Cash Flows From Financing Activities
Proceeds from notes payable $0 $0 $0
Principal payment on notes payable 0 0 0
--- --- ---
Net Cash (used in) financing activities $0 $0 $0
--- --- ---
Net increase (decrease) in cash and
cash equivalents $4,864 $312 $5,031
Cash and cash equivalents at
beginning of year 167 1,650 0
---- ----- -------
Cash and cash equivalents at end of period $5,031 $1,462 $5,031
====== ====== =======
</TABLE>
See Accompanying Notes to Financial Statements.
<TABLE>
MULTINET INTERNATIONAL CORPORATION, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
<CAPTION>
May 17, 1996
(inception) to
March 31, March 31, March 31,
2000 1999 2000
--------- --------- ----------
<S> <C> <C> <C>
Reconciliation of Net Loss to Net Cash
(Used in) Operating Activities
Net (loss) $(816) $(188) $(3,794)
Adjustments to reconcile net (loss) to cash
(used in) operating activities:
Director Stock Compensation 0 0 425
Change in assets and liabilities
(Increase) decrease in accounts receivable 0 0 0
Increase (decrease) in accounts payable 180 0 400
----- --- -----
Net cash (used in) operating activities $(636) $(188) $(2,969)
====== ====== ========
Supplemental schedule of non-cash
investing and financing activities
Issue common stock to directors $0 $0 $425
====== ====== =======
</TABLE>
See Accompanying Notes to Financial Statements.
MULTINET INTERNATIONAL CORPORATION, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. Nature of Business and Significant Accounting Policies
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Regulation S-B. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
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. The Company currently has no operations and, in
accordance with Statement of Financial Accounting Standard (SFAS) No. 7,
"Accounting and Reporting by Development Stage Enterprises," is considered a
development stage company.
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.
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 June 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.
MULTINET INTERNATIONAL CORPORATION, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 1. Nature of Business and Significant Accounting Policies
(continued)
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 March
31, 2000, December 31, 1999.
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 May 17, 1996, the Company authorized and issued
2,000 shares for $2,000. On May 15, 1998 the Company issued 425 shares, valued
at $1.00 per share to directors for services rendered. On August 15, 2000,
the Company's shareholders approved a thousand for one stock split of the
existing shares. In December 1999, the Company issued 500 shares at $1.00 per
share. In March 2000, the Company issued 5,500 shares at $1.00 per share.
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 2,427,209 and 2,425 for the three months
ended March 31, 2000 and 1999, respectively and 394,698 from inception through
March 31, 2000. As of March 31, 2000 and 1999, the Company had no dilutive
potential common shares.
Note 3. Related Party Transactions
During the formation and development of the Company, Shogun ("Shogun")
Investment Group, Ltd, a related party through common ownership and management,
paid for certain filings and expenses. Included in accounts payable and accrued
liabilities as of the end of March 31, 2000 and December 31, 1999, the Company
owed Shogun $220, related to these advances.
On June 15, 2000, the Company entered into the Acquisition Merger Agreement
with Nikky D. Corporation, a company affiliated through common ownership.
Pursuant to the Agreement, upon
MULTINET INTERNATIONAL CORPORATION, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note 3. Related Party Transactions (continued)
consummation of the Merger Acquisition, NIKKY D. CORPORATION will become a
Wholly-Owned Subsidiary of the Company.
Pursuant to the Acquisition Merger Agreement, at the effective time of the
Merger ("July 1st 2000"), each share of the NIKKY D. CORPORATION Common Stock
outstanding immediately prior to the Effective Time will be converted into the
right to receive, and will be exchangeable for one (1) share of the Company's
Common Stock. Based on 2,000,000 of NIKKY D. CORPORATION common stock
outstanding at June 30th 2000 the Company will issue 2,000,000 shares of its
authorized but unissued stock in the Acquisition Merger which will represent
45.14 % of the total shares of Common Stock to be outstanding immediately
following the Acquisition Merger.
Consummation of the Acquisition Merger is subject to the satisfaction of a
number of conditions, including the approval of the Acquisition Merger by the
shareholders of NIKKY D. CORPORATION and the Company. in connection with the
execution of the Acquisition Merger Agreement, holders of NIKKY D. CORPORATION
common stock owning in excess of 51% of NIKKY D. CORPORATION outstanding
common stock entered into an agreement to vote their shares in favor of the
Acquisition Merger on the same date, shareholders of the Multinet
International Corporation, Inc. Company holding in excess of 51% of the
Company's common stock entered into a voting agreement to vote their shares in
favor of the Acquisition Merger.
The Company believes that the Acquisition Merger will create a combined entity
that should help the Company's achieve the strategic goals that it has
established.
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. Currently, the Company has no operations or
source of revenue.
On June 15, 2000, the Company signed a definitive agreement to acquire Nikky D.
Corporation, effective July 1, 2000. 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 a private placement or merger with a larger
operating enterprise to increase its revenue base. Without the realization of
additional capital through a merger or sale of securities, it would be unlikely
for the Company to continue as a going concern.
