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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
Amendment No. 1 to
FORM 10QSB/A
(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
( ) Transition report pursuant of Section 13 or 15(d) of the Securities
Exchange Act of 1939 for the transition period _____ to______
COMMISSION FILE NUMBER
DSTAGE.COM, INC.
-----------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 52-2195605
------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1600 Broadway, Suite 2400, Denver, Colorado 80202 (303) 542-1802
--------------------------------------------------------------------------------
(Address of Principal Executive Offices, including Registrant's zip code and
telephone number)
--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed
AMENDED FILING OF FORM 10-QSB FOR THE QUARTER ENDED JUNE 30, 2000
CHANGES TO CERTAIN DISPLAYED QUARTERLY INFORMATION FOR PURPOSES OF PRESENTATION
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 preceding 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 [ ]
The number of shares of the registrant's common stock as of June 30, 2000:
6,262,727 shares.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
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Table of Contents
-----------------
Part I 3
Item 1 3
Balance Sheet 3
Income Statement 4
Cash Flow Statement 5
Notes to Financial Statements 6
MD&A 8
Signature 12
2
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<TABLE>
DSTAGE.COM, INC.
(A Development Stage Company)
BALANCE SHEETS
Assets June 30, December 31,
2000 1999
------------------- ------------------
(Unaudited) (Audited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 5,755 $ 16,686
Prepaid expenses (Note 6) 75,858 1,347
------------------- ------------------
Total current assets 81,613 18,033
Computer equipment and software, net of depreciation 3,689 2,449
Office furniture and equipment, net of depreciation 1,205 1,106
Deposits 923 379
------------------- ------------------
Total assets $ 87,430 $ 21,967
=================== ==================
Liabilities and Stockholders' Equity
CURRENT LIABILITIES
Accounts payable $ 6,463 $ 72
Accrued expenses 2,500 0
Note payable - stockholder 6,186 0
------------------- ------------------
Total current liabilities 15,149 72
STOCKHOLDERS' EQUITY
Common stock, $.001 par value, 50,000,000 shares authorized;
issued and outstanding 6,262,727 at June 30, 2000 and 6,263 4,434
4,434,569 at December 31, 1999
Additional paid-in capital 195,587 84,257
(Deficit) accumulated during development stage (129,569) (66,796)
------------------- ------------------
Total stockholders' equity 72,281 21,895
------------------- ------------------
Total liabilities and stockholders' equity $ 87,430 $ 21,967
=================== ==================
</TABLE>
See accompanying summary of accounting policies
and notes to the financial statements
3
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<TABLE>
DSTAGE.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
(Unaudited)
(As amended see Note 8)
<CAPTION>
Cumulative
During Three Months Ended Six Months Ended
Development June 30 June 30,
Stage 2000 2000
------------------- ------------------- -------------------
<S> <C> <C> <C>
Revenue: $ - $ - $ -
Operating expenses:
Consulting 67,000 5,000 15,000
General and administrative 62,569 43,973 47,773
------------------- ------------------- -------------------
Total operating expenses 129,569 48,973 62,773
Net (loss) $ (129,569) $ (48,873) $ (62,773)
=================== =================== ===================
Net (loss) per common share
Basic and dilutive $ (0.021) $ (0.008) $ (0.01)
=================== =================== ===================
Weighted average shares outstanding
Basic and dilutive 6,188,699 6,190,420 6,196,271
=================== =================== ===================
</TABLE>
See accompanying summary of accounting policies
and notes to the financial statements
4
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<TABLE>
DSTAGE.COM, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
(Unaudited)
(As amended see Note 8)
<CAPTION>
Cumulative
During Six Months Ended
Development June 30,
Stage 2000
------------------- -------------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) $ (129,569) $ (62,773)
Adjustments to reconcile net (loss)
to cash provided (used) by operating activities:
Depreciation 460 460
Issuance of stock for services 67,000 15,000
Issuance of stock for expense reimbursement 18,962 7,159
Decrease in other current assets (55) (55)
Increase in accrued liabilities 8,686 8,686
Increase in accounts payable 6,463 6,391
------------------- -------------------
Net cash (used) by operating activities (28,053) (25,132)
Cash flows from investing activities:
Acquisition of fixed assets (2,192) (1,799)
------------------- -------------------
Net cash (used) by investing activities (2,192) (1,799)
Cash flows from financing activities:
Proceeds from issuance of common stock 20,000 -
Proceeds from convertible note payable 16,000 16,000
------------------- -------------------
Net cash provided by financing activities 36,000 16,000
------------------- -------------------
Net increase in cash 5,755 (10,931)
Cash, beginning of period - -
------------------- -------------------
Cash, end of period $ 5,755 $ 5,755
=================== ===================
Non-cash transactions
Purchased of equipment by issuance of stock $ 3,162 $ -
=================== ===================
Payment of prepaid and other assets by issuance of stock $ 1,726 $ -
=================== ===================
Prepayment of services for stock $ 75,000 $ 75,000
=================== ===================
</TABLE>
See accompanying summary of accounting policies
and notes to the financial statements
5
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DSTAGE.COM, INC.
(A Development Stage Company)
Notes to the Financial Statements June 30, 2000
Note 1 - Basis of Presentation
The accompanying financial statements have been prepared by management
in accordance with basic rules established by the Securities and Exchange
Commission for Form 10-QSB. Not all financial disclosures required to present
the financial position and results of operations in accordance with generally
accepted accounting principles are included herein. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1999 audited
financial statements on Form 10-SB12G to the Securities and Exchange Commission
filed on June 12, 2000. In the opinion of management, all accruals and
adjustments (each of which is of a normal recurring nature) necessary for a fair
presentation of the financial position as of June 30, 2000 and the results of
operations for the six-month period then ended have been made. Significant
accounting policies have been consistently applied in the interim unaudited
financial statements and the audited financial statements.
Note 2 - Nature of Business and Organization
Dstage.com, Inc., a Delaware corporation (the "Company") was
incorporated on October 12, 1999 to provide support, creation and restructuring
services to other development stage companies. For the period October 12, 1999
(Inception) to June 30, 2000, the Company has been in the development stage. The
Company's activities since inception have consisted of; building a network of
individuals and organizations participating in the development of the Dstage.com
online resources for development stage companies; Completing development and
testing of our proprietary indexes to track various types of development stage
company activity; and developing concepts that can be successfully converted
into new development stage ventures. Through June 30, 2000, the Company has
expended costs of organizing the Company and developing the business in the
amount of $129,569. The Company has not generated any revenues as of June 30,
2000.
The Company is dependent on the continued financial support of its
largest stockholder and the contributions of time from its officers and
directors. While the Company operates independently of its largest stockholder,
a loss of this support in the near term could have a detrimental effect on the
Company.
Note 3 - Other information
On July 1, 2000 we relocated to a 255 square foot office at a cost of
$924 per month located at 1600 Broadway, Suite 2400, Denver, Colorado 80202
Note 4 - Legal Proceedings
There are no pending legal proceedings involving the Company and we are
not aware of any proceeding that any governmental authority or any other party
is contemplating.
Note 5 - Stockholders' Equity
On May 1, 2000, the Company issued a Private Placement Memorandum
promulgated under Regulation D, Rule 504 of the Securities and Exchange Act of
1933, as amended, for the purpose of raising $500,000 for audit and legal fees,
marketing advertising and sales costs, site and content development,
administrative and occupancy costs, capital expenditures and the establishment
of a reserve. The Company has filed its Form D with the Securities and Exchange
Commission, and has also filed in the states of New York and New Jersey. In
addition, the Company plans to file in the states of California, Colorado,
Nevada and Washington. As of the date of this filing, the Company has received
$6,885 in cash from its private Placement Memorandum.
6
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On May 20, 2000, we entered into a promissory note with BulletProof
Business Plans, Inc., the Company's largest stockholder. The promissory note
provided for the Company to receive up to $10,000 in cash advances and
administrative expenses paid on our behalf. Interest is to accrue on the unpaid
principal balance at a rate equal to the prime rate. Outstanding principal and
accrued interest is due and payable on demand by the stockholder. Terms of the
promissory note includes conversion provisions, allowing the holder to convert
all advances to common stock at a rate of $1.00 per share. As of June 30, 2000,
the Company had accrued $6,186 in administrative expenses of the balance allowed
under the BulletProof note payable agreement. As of the date of this filing,
BulletProof had not converted the note payable to common stock.
On June 17, 2000, our Board of Directors approved the issuance of
75,000 shares at $1.00 per share of common stock, in lieu of cash for prepayment
of professional services to be rendered to the Company. We expect to fully
utilize these services for the value given.
Note 6 - Prepaid expenses
The Company entered into an agreement whereby a professional service
provider, agreed to provide document preparation, filing, and consulting
services in exchange for common shares of the Company. As of June 30, 2000,
75,000 common shares were issued under this agreement. This transaction has been
recorded at $75,000, the estimated fair value of the professional services to be
received. As the preparation, filing and consulting services had not yet been
provided as of June 30, 2000, the amount has been recorded as a prepaid expense.
As services are rendered, the prepaid will be reduced and professional service
expense will be expensed in the statement of operations.
Note 7 - Subsequent Events
On July 28, 2000, our Board of Directors approved the issuance of
10,000 shares at $1.00 per share of common stock, in lieu of cash for prepayment
of technology development service to be rendered to the Company. We expect to
fully utilize these services for the value given.
Note 8 Amendment to Second Quarter 10-QSB
The Company has discovered an oversight in that it did not display the three
months ended June 30, 2000. Instead, the Company had inadvertently quoted the
quarter ending March 31, 2000. As a result of these findings, the Company's
financial statements have been amended to reflect the proper periods. In
addition, the Company has reclassified the amount in the unaudited Statement of
Cash Flows for the cumulative period during the development stage. These
revisions do not result in a change of the Company's year to date financial
position or results of operations.
7
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MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-Looking Statements
The statements contained in this report on Form 10-QSB concerning our
business outlook or future economic performance; anticipated profitability,
gross revenues, commissions and expenses or other financial items; and
statements concerning assumptions made or exceptions as to any future events,
conditions, performance or other matter are "forward-looking statements" as that
term is defined under the Federal Securities Laws. Forward-looking statements
are subject to risks, uncertainties and other factors, which would cause actual
results to differ materially from those stated in such statements. Such risks,
uncertainties and factors include, but are not limited to, adequate funding,
competition, external factors that we cannot control and regulatory.
Overview
As in the fiscal year ended December 31, 1999, Dstage.com, Inc.,
continues to concentrate primarily on three core business elements: 1) building
a network of individuals and organizations participating in the development of
the Dstage.com online resources for development stage companies; 2) completing
development and testing of our proprietary indexes to track various types of
development stage company activity; and 3)developing concepts that can be
successfully converted into new development stage ventures.
Although we have had no revenues as of June 30, 2000, we have completed
our business plan and have completed the steps that will eventually result in us
becoming a publicly traded company. In addition, we have had preliminary
discussions with potential affiliates, including some influential industry
leaders in the Internet marketplace.
Plan of Operation
As in the fiscal year ended December 31, 1999, Dstage.com, Inc.,
continues to concentrate primarily on three core business elements. 1)Building a
network of individuals and organizations participating in the development of the
Dstage.com online resources for development stage companies; 2) Completing
development and testing of our proprietary indexes to track various types of
development stage company activity; and 3) developing concepts that can be
successfully converted into new development stage ventures.
Cash Flow and The Need To Raise Cash
From October 12, 1999 Inception to June 30, 2000, we had incurred net
operating losses of $129,569, primarily due to costs associated with organizing
the Company, developing the business model and raising capital. We will rely
totally on the proceeds from our initial Private Placement Memorandum for our
initial liquidity and capital resources. The Private Placement Memorandum, dated
May 1, 2000, will attempt to produce approximately $425,000 in net proceeds. Our
business is designed to allow the largest expenses, namely the cost of
personnel, consultants, license and royalties for third-party information use to
be paid for with stock in lieu of cash. We expect that shares issued under these
8
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arrangements may be subject to lockup provisions and certain other restrictions.
There can be no assurance that personnel, consultants or other parties will
accept stock in lieu of cash. However, if they do, we expect our immediate
operational cash needs over the next twelve months will not exceed $250,000. In
the event this Private Placement memorandum is not fully subscribed, we can
sustain operations for the next twelve months, albeit at a much slower rate,
with as little as $20,000.
Net Profits
We have not realized a net profit from operations as of June 30, 2000.
We have an operating loss to date of $129,569. This net operating loss is due in
part to initial general and administrative costs, organizational costs and
initial start up operations.
Revenues
We have not generated any revenues. We are a development stage company
and have been developing our business model since inception. As part of our
business model, we plan to incur expenses for services for which we will pay
stock of our company in lieu of cash. As a result, our ability to generate
initial revenues is subject to our ability to earn management fees by providing
our services to potential clients once we are ready to enter that stage of our
development. We hope to begin generating initial revenues during the third
quarter of 2000.
Operating Expenses
Our operating expenses from inception to June 30, 2000 were $129,569.
Consulting expenses totaled $67,000 and general and administrative expenses
totaled $62,840. Other expense (income) totaled $(271). General and
Administrative expenses were comprised of sales and marketing, Internet access
and hosting, professional fees, rent, telephone and travel and entertainment. We
had budgeted approximately $100,000 for these initial expenses. As we begin to
enter the next stage of our business model, many of our internal service
requirements will be paid for by issuance of stock in lieu of cash. As we grow
and our common stock increases in value, we will adjust the value of our common
stock to reflect the market price at the time the services are provided. This
approach will enable us to minimize overhead costs while providing both the
company and the employee the maximum benefit for the services being performed.
Operating expenses from January 1, 2000 to June 30, 2000 were
$62,773. Consulting expense totaled $15,000 and general and administrative
expenses totaled $47,942. Other expense (income) totaled $(169). General and
Administrative expenses were comprised of sales and marketing, Internet access
and hosting, professional fees, rent, telephone, and travel and entertainment.
9
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Income Taxes
There is no current or deferred tax expense for the period from October
12, 1999 to June 30, 2000 due to net losses from operations by the Company. As
of June 30, 2000, we had operating loss carryforwards of approximately $129,569
(unaudited). The operating loss carryforwards expire beginning in 2019.
Liquidity and Capital Resources
Our primary source of capital has been our initial capitalization,
private equity sales and a loan from BulletProof Business Plans, Inc. Our
immediate liquidity needs are expected to come from the proceeds of our Private
Placement Memorandum, services provided to us for stock in lieu of cash and our
initial management and indexing fees.
Net Cash Provided by Operations
Since inception we have not had any revenues to date and operating
activities have consumed cash of $28,053. In addition, we have had services
provided to us by our management team for which the consideration was stock in
lieu of cash. As a result, our consumption of cash has been primarily directed
to third party out-of-pocket costs, including consulting, rent, telephone, legal
and audit fees. To date, we have received $20,000 in proceeds from the issuance
of common stock and $16,000 in proceeds from issuance of a convertible note
payable to BulletProof Business Plans, Inc., which has resulted in cash at the
end of period of $5,755. Our cumulative net loss to date is $129,569, all of
which is a direct result of operations. Our current accounts payable is $6,463.
The majority of our expenses have been paid for by the issuance of common stock,
greatly reducing our cash dependence.
From January 1, 2000 to June 30, 2000, we incurred a net operating loss
of $62,773. We consumed $25,132 in cash in our operating activities. We spent
$1,799 to acquire computer hardware, software and office furniture. We received
$16,000 in proceeds from the issuance of a note payable which was converted to
800,000 shares of common stock. These transactions resulted in a decrease of net
cash for the period of $10,931. All of the cash outlays for this period were
paid to third parties. As of June 30, 2000, our cash position was $5,755.
Capital Expenditures
We require funding primarily for computer hardware and software,
furniture and fixtures and general working capital needs. Substantially all of
our capital expenditures have been paid for by the issuance of stock to our
shareholders.
Trends on Liquidity
To date we have had no revenues and we have not had to heavily rely on
cash availability since we have been dependent on our management and
shareholders providing services for stock in lieu of cash. In order for our
business model to be successful, this trend will have to continue. We plan to
build up a cash reserve that will be available in the event additional cash is
needed in the future. Nonetheless, our business model is designed to be
functional with minimum cash requirements.
10
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Sources of Liquidity
We will derive most of our cash from revenues generated through the
normal course of business and from the proceeds of our initial Private Placement
Memorandum. A significant factor to preserving our liquidity will be management
and our shareholders, who will preserve cash by providing services for stock in
lieu of cash consideration.
Material Commitments for Capital Expenditures and the Expected Sources of Funds
for These
While we have budgeted approximately $250,000 for working capital and
operating expenditures in 2000, we have no material commitments for those
expenditures. Our expected source of funds for these expenditures will be a
combination of future revenues from management and indexing fees and the
proceeds from our initial Private Placement memorandum. In the event we do not
receive enough proceeds from our Private Placement memorandum and management and
indexing fees, we will reduce our operating activity to coincide with working
capital available.
Trends, Events and Uncertainties that could have an Impact on Net Operating
Results
We believe that the need for the services we provide will continue for
the foreseeable future as more companies enter the B2B and e-commerce
marketplace. In the event that we are unable to continue our business model due
to a major shift in the economy or some other unforeseen reason, and as a result
we have to adjust our business model to a more traditional reliance on cash
consideration, this event could have an impact on net operating results by,
among other things, requiring us to obtain various fiscal tools to meet
obligations, which could result in interest payments and other debt expenses.
Interim Periods
There was no material change in our financial position between December
31, 1999 and June 30, 2000, the current interim period. Accumulated deficit
increased from $66,796 to $129,569. During this period our cash position
declined from $16,686 to $5,755. We received in exchange for notes payable an
additional $16,000 in cash from our largest shareholder, and the majority of our
operating expense was paid for by management's acceptance of our common stock in
lieu of cash consideration.
Discussion on Material Events That Would Cause Reported Information Not to be
Indicative of the Future
Since we are in our first full year of operations, there have been no
material events that would be indicative of the future.
11
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SIGNATURES
In accordance with the requirements of the Securities and Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
DSTAGE.COM, INC.
Dated: October 24, 2000 By: /s/ Sue Perrault
----------------------------------------
Sue Perrault, President
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