UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A
[X] QUARTERLY REPORT UNDER 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 000-29929
COMMUNICATE.COM INC.
(Exact name of small business as specified in its charter)
Nevada 33-0786959
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
#360-220 Cambie Street, Vancouver, B.C. V6B 2M9
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(Address of principal executive offices)
(604) 687-2142
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(Issuer's telephone number)
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Common Stock 9,300,000 shares outstanding
$.001 Par Value as of June 30, 2000
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
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COMMUNICATE.COM INC.
REPORT ON FORM 10-QSB
QUARTER ENDED JUNE 30, 2000
TABLE OF CONTENTS
PART I. Financial Information
Item 1. Financial Statements
Balance sheets as of June 30, 2000 and December 31, 1999
Statements of Operations for the three months and six months ended June
30, 2000 and June 30, 1999
Statements of Cash Flows for the six months ended June 30, 200 and June
30, 1999
Notes to the Financial Statements
Item 2. Management's discussion and analysis of financial condition and results
of operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Item 2. Changes in Securities.
Item 3. Defaults Upon Senior Securities.
Item 4. Submission of Matters to a Vote of Security Holders.
Item 5. Other Information.
Item 6. Exhibits and Reports on Form 8-K.
Signatures
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PART I
ITEM 1: FINANCIAL STATEMENTS.
The response to Item 1 has been submitted as a separate section of this Report
beginning on page F-1.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Information contained in this Report contains forward-looking statements such as
statements of the Company's plans, objectives, expectations and intentions, that
can often be identified by the use of forward-looking terminology, such as
"may," "will," "expect," "anticipate," "believe," "plan," "intend," "could,"
"estimates," "is being," "goal" or other variations of these terms or comparable
terminology. All forward-looking statements involve risks and uncertainties, and
actual results could differ materially from those set forth in the
forward-looking statements. Factors that could cause actual results to
materially differ include known and unknown risks, including, without
limitation, the early stage of the e-commerce market, the Company's ability to
manage its growth, the ability of the Company to develop and successfully market
new products, the Company's ability to acquire control of and successfully
integrate the operations of Communicate.com Inc., an Alberta corporation
("Communicate Alberta"), the attraction and retention of key technical and other
personnel, rapid technological change and intense competition. The cautionary
statements made in this Report should be read as being applicable to all
forward-looking statements wherever they appear in this Report. The Company's
actual results could differ materially from those discussed herein.
Plan of Operation
The Company's plan of operation is to seek, investigate, and if such
investigation warrants, acquire an interest in one or more business
opportunities presented to it. Although the Company is not required to restrict
its search to any specific business, industry, or geographical location, it has
recently decided to focus its search on companies engaged in the electronic
commerce ("e-commerce") industry. Management is currently in the process of
identifying suitable candidates for acquisition and, as previously reported,
entered into a share exchange agreement to acquire a controlling interest in
Communicate.com Inc., an Alberta corporation ("Communicate Alberta"), and in
anticipation of the acquisition the Company changed its name from "Troyden
Corporation" to Communicate.com Inc. Subsequently, the parties to the share
exchange agreement were unable to consummate the acquisition; however, since
that time, the Company recommenced negotiations with Bryan Liew, the holder of a
majority of the outstanding capital stock of Communicate Alberta, and on
November 8, 2000, entered into an agreement to acquire the capital stock of
Communicate Alberta held by Mr. Liew. See "Acquisition of Communicate Alberta,"
below. However, if management subsequently decides that any other companies
under consideration are not suitable acquisition candidates, or if a suitable
candidate in another industry is located, management may complete transactions
with another company or companies including those in other industries.
Since its inception on October 10, 1995, the Company has engaged in no
significant operations other than undertaking organizational activities, filing
a registration statement for small business issuers on Form 10-SB with the SEC,
complying with periodical SEC
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reporting requirements and attempting to identify suitable merger or acquisition
candidates. During the period ended June 30, 2000, the Company entered into an
agreement to acquire control of Communicate.com Inc., an Alberta corporation.
However, that agreement was terminated and the Company subsequently entered into
an agreement pursuant to which it acquired a majority interest in such company.
See, "Acquisition of Communicate Alberta." Except for such agreements, the
Company had not signed any letters of intent or entered into any agreements with
suitable acquisition candidates. Except for an aggregate of $132,000 in
management fees recognized more than two years ago, the Company has generated no
revenue from operations since its inception.
In the coming quarters, the Company intends to continue its efforts to identify
suitable acquisition candidates, and, when a suitable candidate is found, to
complete a business acquisition. The Company anticipates incurring a loss for
the fiscal year as a result of expenses associated with (1) locating and
evaluating acquisition candidates; (2) completing one or more business
acquisitions; (3) complying with the reporting requirements of the Securities
Exchange Act of 1934; and (4) attending to general and administrative matters.
Other than through the operations of Communicate Alberta, the Company does not
expect to generate revenues until additional business acquisitions have been
completed. Further, the Company may continue to operate at a loss after
completing any acquisitions, depending on the performance of the acquired
businesses.
In order to cover the costs described above, the Company believes that it will
require substantial additional capital. This additional capital will be required
whether or not the Company is able to complete any additional business
acquisition during the current fiscal year. Further, once additional
acquisitions are completed, the Company's need for additional financing is
likely to increase substantially. The Company expects to raise additional
capital through the sale or issuance of additional securities. To the extent
that additional funds are required to cover Company expenses, the Company may
seek additional funds in the form of loans from financial institutions and other
sources. However, there can be no assurance that any additional funds, whether
generated through the issuance of securities or through borrowings, will be
available to the Company to allow it to cover its expenses.
Since inception, the Company has financed its operations almost exclusively from
the original sale of shares, from shareholder loans, and from a loan in the
amount of $150,000 from Pacific Capital Markets Inc. to the Company in September
2000.
Acquisition of Communicate Alberta
Acquisition. Pursuant to a Purchase Agreement entered into on November 8, 2000
(the "Purchase Agreement"), the Company acquired 11,714,080 shares of the
capital stock of Communicate Alberta, from Bryan Liew. In consideration for the
Communicate Alberta shares, the Company (i) issued an aggregate of 1,000,000
shares of its Common Stock to the Mr. Liew, (ii) made a cash payment of $400,000
to Mr. Liew, and (iii) agreed to either (a) make additional cash payments
totaling an aggregate of $1,100,000 to Mr. Liew, or (b) if the Company is unable
or fails to make such payments, to issue up to an
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additional 2,200,000 shares of Common Stock to Mr. Liew. The Company financed
the acquisition through a loan provided by Pacific Capital Markets Inc.
providing for up to $1,500,000 to be used solely for the acquisition of the
shares from Mr. Liew.
Business. Communicate Alberta owns and operates a network of websites and
uniform resource locators ("URLs") that share a common technology platform and
infrastructure. Communicate Alberta is assembling its roster of more than 30
intuitive, generic domains in such categories as Health & Beauty (such as
Makeup.com and Perfume.com) and Sports & Recreation (such as Wrestling.com and
Boxing.com) into a network of online businesses built with the Internet's best
technologies from providers such as Oracle, Sun, BEA and Interwoven. The
operating businesses in the Communicate Alberta network share a common platform
and infrastructure, creating a highly scalable, adaptable and efficient way for
Communicate Alberta's partners to add branding and e-commerce channels to their
online strategy, while also capitalizing on the generic domain names' ability to
intuitively attract customers. Through the network's economies of scale,
Communicate Alberta can enable its strategic partners to quickly and easily
participate in e-commerce much faster and more cost effectively. Communicate
Alberta's business model for these operating businesses include multiple revenue
streams via e-commerce, data mining, infrastructure/shared services, and
sponsorships/advertising. Communicate Alberta is also creating a ventures group
designed to maximize value within its portfolio of 400 other domain names by
strategically participating and investing these assets into other companies'
business plans and operations.
Communicate Alberta had revenues generated during its last two fiscal years from
its previous business operations as an Internet consulting firm, prior to
selling its Internet consulting contracts in January of 2000. Communicate
Alberta is now in the early stages of operating a network of related online
businesses.
Key targets for Communicate Alberta's products are established non-Internet
businesses that are leaders in their respective industries, where Communicate
Alberta will offer a long-term, strategic partnership in exchange for
commitments which could include cash, marketing exposure, access to limited
products, and business development activities. Another related target for
Communicate Alberta's products are end-consumers who will purchase the
diversified products and services that are represented by Communicate Alberta's
various operating online businesses.
Distribution Methods. Communicate Alberta will distribute its products and
services over the Internet, and through distribution partners. The main product,
the technology platform and infrastructure, is centrally available to strategic
partners and is accessed by end-consumers through web sites which are housed and
monitored in a secure data center in Vancouver, Canada. The end-consumer
products sold through Communicate Alberta's operating businesses will be
distributed and fulfilled either directly by the operating business itself or
through distribution partners around the world.
As a result of the acquisition of Communicate Alberta, the Company currently has
full-time employees.
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PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
The Company is not a party to any material pending legal proceedings and, to the
best of its knowledge, no such action by or against the Company has been
threatened.
Item 2. Changes in Securities.
On June 16, 2000, the Board of Directors of the Company approved a forward 30-1
split of the outstanding shares of the Company's common stock. The split became
effective on June 28, 2000.
Following the end of the period ending June 30, 2000, on November 8, 2000, the
Company issued an aggregate of 1,000,000 shares of its Common Stock to Bryan
Liew in partial compensation for the acquisition of 11,714,080 shares of
Communicate Alberta. The issuance of the shares was exempt from registration
pursuant to Section 4(2) of the Securities Act of 1933. See, "Managements
Discussion and Analysis of Financial Condition and Results of Operations -
Acquisition of Communicate Alberta."
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of security holders during the period ended
June 30, 2000. Following the end of such period, on July 17, 2000, the
shareholders of the Company, by written consent, amended the charter of the
Company to change the name of the Company from "Troyden Corporation" to
"Communicate.com Inc." The vote in favor was 5,860,480, constituting
approximately 63% of the outstanding shares. The change in name became effective
August 24, 2000.
Item 5. Other Information.
Funding Activities. On September 14, 2000, the Company executed a promissory
note in the principal amount of $150,000 in favor of Pacific Capital Markets
Inc. The proceeds of the promissory note were used to provide working capital
for the Company.
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On November 10, 2000, the Company entered into a Loan and Security Agreement
with Pacific Capital Markets Inc., providing a loan of up to $1,500,000 for the
acquisition of shares under the Purchase Agreement.
Changes in Directors. On October 17, 2000, Bryan Liew resigned as a director and
officer of the Company and the Company accepted such resignation. On October 18,
2000, Graham Heal was appointed as a director of the Company.
Acquisition of Communicate.com Alberta. On November 8, 2000, under a Purchase
Agreement dated November 8, 2000, the Company acquired a majority of the capital
stock of Communicate Alberta. For more information regarding this transaction,
see "Management's Discussion and Analysis of Results of Operations and Financial
Condition - Acquisition of Communicate Alberta."
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
10.1 Promissory Note, dated September 14, 2000, by Communicate.com Inc.
in favor of Pacific Capital Markets Inc.
10.2 Purchase Agreement, dated November 8, 2000, between Communicate.com
Inc. and Bryan Liew.
10.3 Loan and Security Agreement between Pacific Capital Markets Inc.
and Communicate.com.
(b) Reports on Form 8-K.
On June 29, 2000, the Company filed a current report on Form 8-K reflecting the
resignation of Larry Davis as a director and officer of the Company, the
appointment of Gerry Nel as a director and president, secretary and chief
financial officer of the Company, and a 30-1 forward stock split.
The following reports on Form 8K were filed by the Company subsequent to June
30, 2000 but prior to the date of this Quarterly Report on Form 10Q-SB:
(1) Form 8-K dated July 25, 2000 reporting under Item 8 a change in the
Company's fiscal year.
(2) Form 8-K dated November 2, 2000 reporting under Item 4 a change in the
Company's certifying accountants and a revision to the Company's
fiscal year under Item 8.
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PART II - SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
TROYDEN CORPORATION
Date: November 14, 2000 By: /s/ Graham Heal
------------------ ---------------------
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EXHIBITS
Financial Statements..................................................F-1
Exhibit 10.1 - Promissory Note, dated September 14, 2000,
by Communicate.com Inc. in favor of
Pacific Capital Markets Inc..................................
Exhibit 10.2 - Purchase Agreement, dated November 8, 2000,
between Communicate.com Inc. and Bryan Liew..................
Exhibit 10.3 - Loan and Security Agreement between
Pacific Capital Markets Inc. and Communicate.com.............
Financial Schedule....................................................
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TROYDEN CORPORATION
[A DEVELOPMENT STAGE COMPANY]
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- ------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS ................................................................. $ -- $ --
OTHER ASSETS
Organization Costs ...................................................... 25 75
-------- --------
TOTAL ASSETS ................................................................... $ 25 $ 75
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable ........................................................ $ 1,500 $ --
Stockholder Advance (Note 2) ............................................ 5,475 --
Accrued Income Tax ...................................................... 18,009 16,460
-------- --------
Total Liabilities ....................................................... 24,984 16,460
-------- --------
STOCKHOLDERS' EQUITY
Common Stock, $0.001 par value, ......................................... 310 310
50,000,000 shares authorized, 9,300,000 issued and outstanding
at June 30, 2000 and December 31, 1999. (Note 3)
Additional Paid-In Capital .............................................. 3,690 3,690
Deficit accumulated during development stage ............................ (28,959) (20,385)
-------- --------
Total Stockholders' Deficit ............................................. (24,959) (16,385)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................................... $ 25 $ 75
======== ========
</TABLE>
F-1
<PAGE>
TROYDEN CORPORATION
[A DEVELOPMENT STAGE COMPANY]
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Cumulative Amounts
October 1995 Three Months Ended Six Months Ended
(Inception) to ------------------------------ -----------------------------
June 2000 June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
REVENUE
Management Fees ....................... $ 132,000 $ -- $ -- $ -- $ --
OPERATING EXPENSES
Advertising ........................... 2,262 -- -- -- --
Amortization and Depreciation ......... 4,476 50 99 50 124
Automobile ............................ 33,768 -- -- -- --
Bank Charges .......................... 2,057 -- -- -- --
Compensation Expense .................. 1,000 -- -- -- --
Education ............................. 900 -- -- -- --
Meals and Entertainment ............... 13,151 -- -- -- --
Office ................................ 2,021 -- -- -- --
Penalties and Interest ................ 2,296 749 322 749 572
Professional Services ................. 14,848 6,975 -- 6,975 --
Rent .................................. 2,500 -- -- -- --
Telephone ............................. 11,412 -- -- -- --
Travel ................................ 44,337 -- -- -- --
----------- ----------- ---------- ----------- -----------
135,028 7,774 421 7,774 696
----------- ----------- ---------- ----------- -----------
LOSS BEFORE INCOME TAX EXPENSE ................ (3,028) (7,774) (421) (7,774) (696)
INCOME TAX EXPENSE ............................ 17,810 800 -- 800 --
----------- ----------- ---------- ----------- -----------
NET LOSS FOR THE PERIOD ....................... $ (20,838) $ (8,574) $ (421) $ (8,574) $ (696)
=========== =========== ========== =========== ===========
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and Diluted ..................... 9,300,000 9,000,000 9,300,000 9,000,000
----------- ---------- ----------- -----------
NET LOSS PER SHARE (NOTE 3)
Basic and Diluted ..................... $ (0.0009) $ (0.0001) $ (0.0009) $ (0.0001)
----------- ---------- ----------- -----------
</TABLE>
F-2
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TROYDEN CORPORATION
[A DEVELOPMENT STAGE COMPANY]
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2000 and 1999
And cumulative amounts for the period
October 10, 1995 (Inception) to June 30, 2000
<TABLE>
<CAPTION>
Cumulative
Amounts
October 1995 (Inception) to
June 2000 2000 1999
--------------- ----------- ----------
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss ......................................... $(20,838) $ (8,574) $ (696)
-------- -------- --------
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
PROVIDED BY (USED IN) OPERATING ACTIVITIES
Depreciation and Amortization .................... 4,402 50 50
Non-cash Compensation ............................ 1,000 -- --
Loss on Disposal of Assets ....................... 74 -- 74
Increase in Intangible Asset ..................... (500) -- --
Increase in Accounts Payable ..................... 1,500 1,500 --
Increase in Accrued Taxes ........................ 17,999 1,549 572
-------- -------- --------
24,475 3,099 696
-------- -------- --------
Net cash provided by (used in) operating activities .... 3,637 (5,475) --
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment ............... (4,001) -- --
-------- -------- --------
Net cash used in investing activities .................. (4,001) -- --
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of Common Stock ......................... 3,010 -- --
Advances Received from Stockholder ............... 5,475 5,475 8,121
Payment of Dividend .............................. (8,121) -- (8,121)
-------- -------- --------
Net cash from financing activities ..................... 364 5,475 --
-------- -------- --------
NET INCREASE / (DECREASE) IN CASH DURING THE PERIOD .... -- -- --
CASH, BEGINNING OF PERIOD .............................. -- -- --
-------- -------- --------
CASH, END OF PERIOD .................................... $ -- $ -- $ --
======== ======== ========
</TABLE>
SUPPLEMENTAL DISCLOSURES
No interest or income tax payments were made to date.
A stockholder advance of $8121 was converted to a dividend payment on
June 30, 1999
Property purchased during 1996 and 1997 of $4,001 was written off at the
book value of $74 and recorded as a loss on June 30, 1999.
On December 8, 1999, 10,000 shares of stock were issued at fair market
value of $1,000 to a director as compensation for board services.
F-3
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TROYDEN CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(UNAUDITED)
NOTE 1 - GENERAL MATTERS
THE COMPANY
Troyden Corporation has existed as a development stage company which is seeking
business acquisition opportunities.
GOING CONCERN
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern, which contemplates the realization of assets
and satisfaction of liabilities in the normal course of business. The carrying
amounts of assets and liabilities presented in the financial statements do not
purport to present realizable or settlement values. The Company incurred net
losses of $8,574 and $696 during the six month periods ended June 30, 2000 and
1999 respectively, and as of those dates, the Company's total liabilities
exceeded its total assets by $24,959. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
those uncertainties.
INTERIM FINANCIAL STATEMENTS
The accompanying interim financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, adjustments (consisting of normal recurring accruals)
considered necessary for a fair representation have been included. Operating
results for the six month period ending June 30, 2000, are not necessarily
indicative of the results that may be expected for the year ended December 31,
2000. For further information, refer to the financial statements and footnotes
included in the Company's report on Form 10-SB.
NOTE 2 - STOCKHOLDER ADVANCE
The Stockholder Advance represents amounts lent by the former President of the
Company. This advance is non-interest bearing and is due on demand.
F-4
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TROYDEN CORPORATION
[A DEVELOPMENT STAGE COMPANY]
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(UNAUDITED)
NOTE 3 - COMMON STOCK
On December 8, 1999, 10,000 shares of common stock were issued as compensation
to a director for services provided as a board member and was recorded at the
fair market value on that date of $1,000. The Company has no stock option plans,
warrants, or convertible debt, therefore, the basic net loss per share is equal
to the diluted net loss per share.
Effective June 27, 2000 the Company forward split its issued and outstanding
shares of common stock from 310,000 shares to 9,300,000 shares.
NOTE 4 - SUBSEQUENT EVENT
On August 24, 2000, the Company changed its name from Troyden Corporation to
Communicate.com, Inc.
Subsequent to the period end, the Company entered into an agreement to acquire
52% of the capital stock of Communicate.com Inc. ("Communicate Alberta"), in
consideration for 1,000,000 shares of the Company's common stock, and cash
payments totaling an aggregate of $1,500,000. If the Company fails to make these
cash payments it has agreed to issue up to an additional 2,200,000 shares of its
common stock to the vendor. The Company will finance the acquisition through a
loan provided by Pacific Capital Markets Inc., providing for up to $1,500,000 to
be used soley for the acquisition of the Communicate Alberta shares. Communicate
Alberta owns more than 400 web sites and is in the early stages of operating a
network of related online businesses.
F-5
