<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For Quarter Ended: APRIL 30, 2000
Commission File Number: 0-29671
GOLDONLINE INTERNATIONAL, INC.
(Exact name of small business issuer as specified in its charter)
DELAWARE 13-3986493
(State of Incorporation) (IRS Employer ID No)
111 RHODES STREET, CONROE, TX 77301
(Address of principal executive office)
409-756-6888
(Issuer's telephone number)
BENTON VENTURES, INC.
(Former name of small business issuer)
7633 E 63RD PLACE, SUITE 220, TULSA, OK 74133
(Former address of small business issuer)
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 No X .
---- ----
The number of shares outstanding of registrant's common stock, par value $.0001
per share, as of April 30, 2000 was 89,984,408.
Transitional Small Business Disclosure Format (Check one): Yes No X .
---- ----
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GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
No.
<S> <C> <C>
Part I. Financial Information
Item 1. Condensed Consolidated Balance Sheets - 3
April 30, 2000 and July 31, 1999
Condensed Consolidated Statements of Operations - 4
Three and Nine Months Ended April 30, 2000 and 1999
Condensed Consolidated Statement of Stockholders' Equity - 5
Nine Months Ended April 30, 2000
Condensed Consolidated Statements of Cash Flows - 6-7
Three and Nine Months Ended April 30, 2000 and 1999
Notes to Condensed Consolidated Financial Statements - 8-11
Nine Months Ended April 30, 2000 and 1999
Item 2. Managements Discussion and Analysis of Financial Condition 12-13
and Results of Operations
Part II. Other Information 14
</TABLE>
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GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 30, JULY 31,
2000 1999
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 470,012 $ 34,426
Trade accounts receivable 101,958 30,999
Inventory 611,890 413,208
Prepaid expenses and other assets 500 500
Deferred income taxes - 31,648
------------- -----------
1,184,360 510,781
Property and equipment, net 168,340 154,597
Goodwill, net of amortization of $6,116 and $1,112, respectively 94,004 99,008
Deferred income taxes 39,000 -
Other assets 6,141 6,141
------------- -----------
$ 1,491,845 $ 770,527
============= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term debt and notes payable 221,794 202,146
Accounts payable 129,014 86,901
Bank overdraft - 52,555
Accrued expenses 13,859 10,568
Income taxes payable - 5,384
Due to shareholder 4,647 8,012
------------- -----------
369,314 365,566
Deferred income taxes 10,004 10,004
Long-term debt less current installments 63,816 76,674
Stockholders' equity
Common stock, $.0001 par value, 200,000,000 shares authorized, 8,998 8,700
89,984,408 and 86,996,408 shares issued and outstanding at April 30, 2000 and
July 31, 1999, respectively
Additional paid-in capital 1,076,947 217,420
Retained earnings (deficit) (37,234) 92,163
------------- -----------
1,048,711 318,283
------------- -----------
$ 1,491,845 $ 770,527
============= ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
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GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED APRIL 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
APRIL 30, APRIL 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Sales and revenues $ 332,844 $ 334,902 $ 1,243,805 $ 1,193,073
Cost of sales 201,472 181,836 755,842 641,802
------------ ------------ ------------ ------------
Gross profit 131,372 153,066 487,963 551,271
Selling, general and administrative expense 227,446 184,740 608,914 525,581
------------ ------------ ------------ ------------
Loss from operations (96,074) (31,674) (120,951) 25,690
Other income (expense):
Interest expense (8,106) (4,216) (19,860) (13,654)
Interest and other income 4,062 20 4,062 163
------------ ------------ ------------ ------------
(4,044) (4,196) (15,798) (13,491)
------------ ------------ ------------ ------------
Net earnings (loss) before income taxes (100,118) (35,870) (136,749) 12,199
Income tax expense (benefit) 5,103 (13,699) (7,352) 2,644
------------ ------------ ------------ ------------
Net earnings (loss) $ (105,221) $ (22,171) $ (129,397) $ 9,555
============ ============ ============ ============
Net earnings (loss) per share $ (0.001) $ (0.000) $ (0.001) $ 0.000
============ ============ ============ ============
Weighted average shares outstanding, in millions 88.5 75.0 87.6 75.0
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
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GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCK PAID-IN RETAINED
SHARES PAR VALUE CAPITAL EARNINGS TOTAL
------ --------- ------- -------- -----
<S> <C> <C> <C> <C> <C>
BALANCE, August 1, 1999 86,996,408 $ 8,700 $ 217,420 $ 92,163 $ 318,283
Exercise of common stock options 50,000 5 1,695 1,700
for cash
Exercise of common stock options 58,000 5 18,120 18,125
for services rendered
Sale of common stock for cash 80,000 8 39,992 40,000
Exercise of common stock warrants 1,600,000 160 799,840 800,000
Benton Ventures, Inc. merger 1,200,000 120 (120) -
Net earnings (loss) (129,397) (129,397)
---------------------------------------------------------------------------------------
BALANCE, April 30, 2000 89,984,408 $ 8,998 $ 1,076,947 $ (37,234) $ 1,048,711
=======================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
5
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GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED APRIL 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $(129,397) 9,555
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 34,351 26,671
Deferred income taxes (7,352) -
Common stock issued for services 18,125 -
Provision for bad debts 24,413 -
Changes in assets and liabilities:
Accounts receivable (95,371) (4,422)
Inventory (198,682) (21,885)
Other assets - (3,576)
Accounts payable and accrued expenses 40,022 3,807
Bank overdraft (52,556) 30,746
--------- ---------
Net cash provided by operating activities (366,447) 40,896
--------- ---------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES
Capital expenditures (23,628) (11,519)
--------- ---------
Net cash provided by investing activities (23,628) (11,519)
--------- ---------
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES
Proceeds from sales of common stock 841,700 -
Loan proceeds 50,000 21,000
Repayment of notes payable and long-term debt (62,674) (45,326)
Increase (decrease) in amount due stockholder (3,365) -
--------- ---------
Net cash provided by financing activities 825,661 (24,326)
--------- ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS 435,586 5,051
CASH AND CASH EQUIVALENTS, beginning of period 34,426 1,668
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 470,012 $ 6,719
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
Continued
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GOLDONLINE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS, CONTINUED
NINE MONTHS ENDED APRIL 30, 2000 AND 1999
(UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
2000 1999
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<S> <C> <C>
Interest paid $ 19,860 $ 13,654
========= ========
Income taxes paid $ 5,384 $ 2,740
========= ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Acquisition of transportation equipment for long-term debt $ 19,462 $ 42,145
</TABLE>
See accompanying notes to consolidated financial statements.
7
<PAGE> 8
GOLDONLINE INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 2000 AND 1999
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of
Goldonline International, Inc. (formerly Transun International
Airways, Inc.) ("GDOL") and its wholly owned subsidiaries Con-Tex
Silver Imports, Inc. ("Con-Tex") and Gold Online.com, Inc.
("GO.com") (collectively referred to as the "Company"). All
material intercompany accounts and transactions have been
eliminated.
(b) ORGANIZATION
GDOL was incorporated May 22, 1996 in Delaware and until June 1999
was a development stage company with plans to establish itself as
an air transport company providing non-scheduled air service
(charter flights) for tour operators, charter brokers, cruise line
casinos, theme parks and theme attractions.
Con-Tex was incorporated September 12, 1994 in Texas. GO.com was
incorporated on February 3, 1999 in Delaware.
On June 10, 1999, GDOL acquired all of the issued and outstanding
common stock of Con-Tex and GO.com. For accounting purposes, the
acquisitions have been treated as the acquisition of Con-Tex and
GO.com by GDOL with Con-Tex as the acquiror (reverse acquisition).
The historical financial statements prior to June 10, 1999 are
those of Con-Tex.
(c) NATURE OF BUSINESS
GDOL is now a holding company principally engaged in acquiring and
developing businesses. Con-Tex is a company involved in both the
wholesale and retail jewelry business. GO.com is establishing an
Internet jewelry business, and commencing in the late fall of
1999, the Company began selling through e-commerce sites, located
at http://www.GoldOnline.com and http://yahoo.com/goldonline on
Yahoo! and offers a wide selection of discounted gold and silver
jewelry as well as diamonds and watches.
(d) GENERAL
The financial statements included in this report have been
prepared by the Company pursuant to the rules and regulations of
the Securities and Exchange Commission for interim reporting and
include all adjustments (consisting only of normal recurring
adjustments) that are, in the opinion of management, necessary for
a fair presentation. These financial statements have not been
audited.
Certain information and footnote 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 for interim reporting. The
Company believes that the disclosures contained herein are
adequate to make the information presented not misleading.
However, these financial statements should be read in conjunction
with the financial statements and notes thereto included in the
Company's Annual Report for the period ended July 31, 1999, which
is included in the Company's Form 8-K dated April 26, 2000 and
filed April 28, 2000. The financial data for the interim periods
presented may not necessarily reflect the results to be
anticipated for the complete year. Certain reclassifications
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of the amounts presented for the comparative period have been made
to conform to the current presentation.
2. MERGER
On April 20, 2000, pursuant to an agreement and plan of reorganization
dated April 11, 2000, GDOL acquired 100% of the issued and outstanding
common stock of Benton Ventures, Inc. ("Benton or Registrant"), a
Delaware corporation, in exchange for 1,2000,000 newly issued common
shares of GDOL. On April 25, 2000, the Board of Directors of GDOL elected
to merge Benton, Registrant, into GDOL pursuant to Section 253 of
Delaware's General Corporate Laws. As a result of the merger, GDOL will
be the surviving company.
3. RELATED PARTY TRANSACTIONS
Con-Tex leases its corporate headquarters from the principal shareholder
of the Company at the rate of $2,200 per month. This amounted to $19,800
during each of the nine months periods ended April 30, 2000 and 1999.
The Company had received loans from its principal shareholder. The
balance owed was $4,647 at April 30, 2000 and $8,012 at July 31, 1999.
4. PROPERTY AND EQUIPMENT
Property and equipment consist of the following at April 30, 2000 and
July 31, 1999:
<TABLE>
<CAPTION>
APRIL 30, JULY 31,
2000 1999
<S> <C> <C>
Equipment and store furnishings $ 55,725 $ 46,322
Transportation equipment 156,125 133,663
Web site 37,225 26,000
Leasehold improvements 1,035 1,035
--------- ---------
250,110 207,020
Less accumulated depreciation (81,770) (52,423)
--------- ---------
$ 168,340 $ 154,597
========= =========
</TABLE>
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5. LONG-TERM DEBT AND NOTES PAYABLE
Long-term debt and notes payable at April 30, 2000 consist of the
following:
<TABLE>
<S> <C>
Note payable to bank with interest at 10% payable on $136,400
demand or July 1, 2000 if no demand is made; accrued interest
payable monthly; collateralized by all assets of Con-Tex and
guaranteed by the principal shareholder of the Company
Note payable to the brother of the principal shareholder of the
Company due on July 23, 2000 with interest at 8%, unsecured,
convertible into common stock of the Company at $.01 per share
50,000
Notes payable to companies in monthly installments aggregating
$2,534, including interest at 9.8% to 11.6% ; collateralized by
transportation equipment 99,210
--------
285,610
Current installments of long-term debt and notes payable 221,794
--------
Long-term debt less current installments $ 63,816
========
</TABLE>
6. INCOME TAXES
Federal income tax expense (benefit) for the nine months ended April 30,
2000 and 1999 consists of:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
Federal income taxes $ $ 2,644
Deferred income tax benefit (7,352) -
------- ------
$ (7,352) $ 2,644
======= ======
</TABLE>
For the nine months ended April 30, 2000 and 1999, actual income tax
expense (benefit) applicable to earnings (loss) before income taxes is
reconciled with the "normally expected" federal income tax expense
(benefit) as follows:
<TABLE>
<CAPTION>
2000 1999
<S> <C> <C>
"Normally expected" income tax expense $ (46,495) $ 4,148
Change in valuation allowance 39,143 -
Other - (1,504)
--------- ------
$ (7,352) $ 2,644
========= ======
</TABLE>
10
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The deferred income tax assets and liabilities at April 30, 2000 are
comprised of the following:
<TABLE>
<CAPTION>
CURRENT NONCURRENT
<S> <C> <C>
Net operating loss carryforwards $ 78,143 -
Less valuation allowance (39,143) -
------- -------
Deferred income tax asset 39,000 -
Deferred income tax liability - asset basis - (10,004)
------- -------
Net deferred income tax assets (liabilities) $ 39,000 ($10,004)
========= ========
</TABLE>
7. CAPITAL STOCK
The Company sold 200,000 units (The "Units") at $1.00 per Unit. Each Unit
consisted of 4 shares of common stock, par value $.001, and 1 warrant.
Each warrant entitled the holder to purchase eight shares of the common
stock of the Company at a purchase price of $.50 per share.
Under the terms of the initial offering, the warrants were scheduled to
expire on September 30, 1999. The exercise period for the warrants was
extended until February 29, 2000.
At April 30, 2000, warrants for the purchase of 1,600,000 shares of the
Company's common stock at $.50 per share had been issued and all had been
exercised.
On September 1,1999, the Company established a stock option plan, which
reserved 10,000,000 shares of the Company's common stock for issue to
certain employees, directors and consultants. The Plan provides that
options may be granted for no less than fair market value at the date of
the option grant. As of April 30, 2000, options to acquire 108,000 shares
had been granted and exercised at prices which ranged from $.034 per
share to $.3125 per share and averaged $.184 per share.
8. SUBSEQUENT EVENTS
On May 8, 2000, the Company received $5,937,500 in net proceeds from the
sale of 5,000,000 shares of its restricted common stock. In addition, the
purchaser of the common stock received stock purchase warrants which
entitle them to acquire up to 1,000,000 shares of the Company's common
stock at a price of $3.00 per share.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
From time to time, the Company may publish forward-looking statements
relative to such matters as anticipated financial performance, business
prospects, technological developments and similar matters. The Private
Securities Litigation Reform Act of 1995 provides a safe harbor for
forward-looking statements. All statements other than statements of
historical fact included in this section or elsewhere in this report are,
or may be deemed to be, forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Exchange
Act of 1934. Important factors that could cause actual results to differ
materially from those discussed in such forward-looking statements
include: 1. General economic factors including, but not limited to,
changes in interest rates, trends in disposable income; 2. Information
and technological advances; 3. Cost of products sold; 4. Competition; and
5. Success of marketing, advertising and promotional campaigns.
The Company has historically sold jewelry, principally silver, in its own
retail outlets and wholesale to other jewelry stores. Commencing in the
late fall of 1999, the Company began selling through e-commerce sites,
located at http://www.GoldOnline.com and http://yahoo.com/goldonline on
Yahoo! and offers a wide selection of discounted gold and silver jewelry
as well as diamonds and watches.
A. LIQUIDITY AND CAPITAL RESOURCES
The Company increased working capital from $145,215 at July 31, 1999 to
$815,046 at April 30, 2000. The increase of $669,831 includes an increase
of cash in the amount of $435,586, an increase of inventory in the amount
of $198,682 and a net increase in other items in the amount of $35,563.
The principal source of the working capital was net proceeds from the
sale of common stock in the amount of $841,700.
On May 8,2000, the Company received $5,937,500 in net proceeds from the
sale of 5,000,000 shares of its restricted common stock. In addition, the
purchaser of the common stock received stock purchase warrants which
entitle them to acquire up to 1,000,000 shares of the Company's common
stock at a price of $3.00 per share.
B. RESULTS OF OPERATIONS
SALES AND COST OF SALES - During the nine months ended April 30, 2000
sales increased $50,732 (4%) from $1,193,073 to $1,243,805 from the same
year earlier period. During the three months ended April 30, 2000 sales
remained flat as compared to the same year earlier period. Gross profit
margins were 46% during both periods ended April 30, 1999 and 39% during
both periods ended April 30, 2000. The primary reason for the decline in
gross profit is due to closing one retail outlet during the fall of 1999,
which resulted in a decline in higher gross margin retail sales. In
addition, the Company began expanding its inventory through assembly of
jewelry for resale, which increased cost of sales.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE - During the nine months
ended April 30, 2000, selling, general and administrative expense
increased $83,333 (16%) from the same year earlier period. During the
three months ended April 30, 2000, selling, general and administrative
expense increased $19,636 (11%) from the same year earlier period. The
16% increase during the nine months ended April 30,2000 consists of 5%
relating to the additional costs associated with being a public company,
5% relates to costs associated with the start-up of
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the internet sales and 6% relates to costs associated with expansion of
the wholesale sales and distribution operations.
INTEREST EXPENSE - Interest expense increased 45% and 92% during the nine
and three-month periods ended April 30, 2000, respectively, as compared
to the same year earlier periods. The increase is attributed to the
higher equipment debt level during the current period.
INTEREST AND OTHER INCOME - Interest and other income of the Company
increased during the nine and three-month periods ended April 30, 2000
from the same year earlier periods to $4,062 from $163 and to $4,062 from
$20, respectively. The increase is attributed to the higher cash balances
during the quarter ended April 30, 2000, which were due to the sale of
common stock through exercise of stock options and warrants.
INCOME TAXES - The Company recorded a valuation allowance in the amount
of $39,143 during the nine month period ended April 30, 2000, which
reduced the expected income tax benefit of $46,495 to a benefit of
$7,352. The Company's policy is to establish a valuation allowance to
reduce the amount of tax benefit currently recognized from net operating
losses when there exists some uncertainty about realization of the tax
benefit.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Not applicable
(b) Reports on Form 8-K -
(1) Form 8-K dated April 20, 2000 which reported the acquisition
of Benton Ventures, Inc. ("Registrant") by GDOL and included
the stock purchase agreement. No financial statements were
included.
(2) Form 8-K dated April 26, 2000 which reported the merger of
Benton Ventures, Inc. ("Registrant") into GDOL with GDOL
being the surviving company. The report included: audited
financial statements of GDOL at July 31, 1999 and for the
period then ended; unaudited financial statement of GDOL at
January 31, 2000 and 1999 and for the six months then ended;
and pro forma financial statements giving effect to the
merger.
SIGNATURE
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.
GOLDONLINE INTERNATIONAL, INC.
Date: June 13, 2000 By: /s/ James G. Gordon
-------------------------------
James G. Gordon, President and
Principal Accounting Officer
14
