SMALL BUSINESS ISSUERS
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT #1 TO
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of The Securities Exchange Act of 1934
ValuSALES.com, Inc.
4101 Ravenswood Road, Suite 209, Fort Lauderdale, FL 33312
954-792-3773
State of Incorporation: Florida EIN # 65-1001686
Securities to be registered under Section 12(b) of the Act:
None
Securities to be registered under section 12 (g) of the Act:
Common Stock
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TABLE OF CONTENTS
PART I
ITEM 1. DESCRIPTION OF BUSINESS .......................................... 3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION ........ 9
ITEM 3. DESCRIPTION OF PROPERTY .......................................... 13
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ... 13
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS .... 14
ITEM 6. EXECUTIVE COMPENSATION ........................................... 14
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ................... 14
ITEM 8. DESCRIPTION OF SECURITIES ........................................ 15
PART II
ITEM 1. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS ......... 15
ITEM 2. LEGAL PROCEEDINGS ................................................ 16
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE .............................. 16
ITEM 4. RECENT SALE OF UNREGISTERED SECURITIES ........................... 16
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS ........................ 16
PART F/S
FINANCIAL STATEMENTS ...................................................... 16
PART III
ITEM 1. INDEX TO EXHIBITS ................................................ 16
SIGNATURES ................................................................ 17
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PART I
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ITEM 1 - DESCRIPTION OF BUSINESS
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CORPORATE HISTORY
ValuSALES.com, Inc. a Florida corporation (the "Company" or "ValuSALES")
was formed to create a single-source Internet solution's company providing
Internet and Technology products and services to various sized customers.
ValuSALES, Inc. was incorporated in the State of Florida, on March 19,
1999, and had no operations until on July 20, 1999 when it purchased assets for,
$75,000, and signed employment agreements with two individuals, which included
the issuance of 900,000 shares of common stock. The assets acquired were
property and equipment for $40,000 and inventory for $35,000. The common stock
was valued at par because the Company was privately owned and no market existed
for the sale of its stock.
On December 1, 1999, ValuSALES, Inc. sold 2,673,000 shares of its
common stock for $175,000 and used the proceeds to acquire an inactive entity,
September Project II Corp., which then changed its name to ValuSALES.com, Inc.
and became the surviving entity.
For accounting purposes, the acquisition has been treated as a capital
transaction rather than a business combination. Accordingly, the 5,000,000
outstanding shares of September Project II, Corp. have been reflected as
outstanding since inception.
All significant interdivisional transactions and balances have been
eliminated.
The Company has elected to operate with divisions rather than create
separate corporations for each business segment. The Company is headquartered at
4101 Ravenswood Road Suite 209, Fort Lauderdale, FL 33312.
GENERAL
ValuSALES provides Internet and Technology solutions for clients
ranging from small to medium sized customers. Our practice areas include
e-business strategy, interactive marketing and advertising solutions, website
strategy, development, and hosting, data base design and management, technology
products and integration, and Internet mortgage banking. We believe that our
primary strengths that distinguish us from our competitors are our:
o understanding of new Internet business models;
o broad service offerings and end-to-end solutions;
o experience in various technology product engagements
Examples of ValuSALES Internet and Technology solutions include (1)
website strategy, development, design, and corporate identity for entertainer
Nestor Torres, including event scheduling, (2) website strategy, development,
design, and corporate identity for equipment distributor Pantropic Power,
including a complete product catalog, and (3) website strategy, development,
design, and corporate identity for Advantage Diabetic Care, including streaming
video, Medicare and insurance invoicing, and integration with the company's IBM
AS400 system and Medicare architectures.
INDUSTRY BACKGROUND
The rapid growth in digital technology, the use of the Internet, and
electronic commerce have fundamentally changed the way in which companies
conduct business and interact with customers. Digital technology has created new
business models, new ways of sharing knowledge and experience, more efficient
ways to transact business and new channels through which to do so,
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direct ways of communicating with customers and employees and dramatically
enhanced efficiencies of scale and scope. As companies face increasing pressure
to improve their business models for the digital economy, operate more
efficiently and better serve customer needs, information flow both inside and
outside an organization has become critical. However, the escalating cost and
complexity of information technology and the shortage of in-house technical
expertise required to implement technology based solutions has led companies to
increasingly rely on Internet solution providers. This trend toward outsourcing
and a focus by companies on their core business has driven the rapid growth of
the Internet services market.
With the changes taking place in the e-commerce market and the
potential advantages to be gained from leveraging the Internet across a
company's entire value chain (customers, suppliers, buyers, sellers and
partners), we believe that companies must have an effective Internet solution in
order to remain competitive. The competencies required to effectively implement
such a solution include strategy, user experience and branding, knowledge of
business processes, systems architecture and design, systems integration,
applications development, knowledge transfer, testing and deployment.
While there are many Internet services firms active in the market
today, we believe that many focus on creative web design, user experience and
web-enablement of simple transactions. We believe that these areas are subsets
of the total problem that clients are trying to solve. In today's e-commerce
environment, clients require solutions that are reliable, scalable and flexible
and which can be deployed effectively in an environment that may involve
integration with multiple computing platforms and technologies. For example,
Forrester Research, an information technology market research firm, cites recent
high-visibility web site outages at a number of electronic commerce leaders in
support of its conclusion that many of today's electronic commerce solutions are
unreliable, un-scalable and deliver service levels that are not adequate for
online commerce. In order to support this emerging set of requirements, we
believe that the next generation of Internet services firms should have both the
business knowledge required to understand emerging business models and the
technical skills required to architect a solution that may involve the
integration of software packages, custom software components and large and
complex legacy systems in order to handle the enormous growth in volume that
businesses are expected to experience on the Internet.
THE VALUSALES.COM SOLUTION
We believe that the following characteristics position us for success
in the Internet services market and distinguish us from other Internet services
firms:
o UNDERSTANDING OF NEW AND EMERGING INTERNET BUSINESS MODELS
We have an understanding of the new and emerging Internet
business models being employed by both traditional businesses
and other companies operating exclusively on the Internet. For
example, for our client Advantage Diabetic Care we developed
an integrated Internet solution encompassing Medicare and
insurance billing with existing Legacy systems.
o COMPREHENSIVE SOLUTION OFFERINGS AND END-TO-END CAPABILITIES
Our solution offerings include web site design and hosting,
commerce solutions, business-to-business, advertising and
marketing solutions, computer hardware, software & networking,
wireless Internet solutions, and Internet Mortgage Banking. We
provide end-to-end solutions by utilizing professionals from
our practice areas in e-business strategy, interactive
marketing and branding
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and technology architecture and integration. To deliver these
solutions, we bring together our strategists, designers,
engineers and managers of our client engagements in
multi-disciplinary teams. This reduces the complexity for our
clients and avoids the bottlenecks in project management and
deliverables associated with using multiple consulting firms
to design and implement a desired solution. By doing this, we
allow our clients to achieve improved time-to-market and value
in today's competitive environment.
o EXPERIENCE IN A WIDE RANGE OF CLIENT ENGAGEMENTS
We have experience and expertise in the strategy,
architecture, development and implementation of client
engagements requiring integration across various hardware,
applications and
platforms. Our experience is particularly relevant as our
clients are seeking solutions that include not only web site
design but also the real-time integration of web sites with
critical business processes such as customer relationship
management, supply chain management, and procurement and
administration.
STRATEGY
Our goal is to become a full service provider of Internet and
Technology products and services for organizations seeking to compete in the
Internet economy. To achieve this goal we intend to:
o ENHANCE OUR BRAND
We believe that awareness of the ValuSALES brand within the
business and technology communities and the association of the
ValuSALES brand with the highest quality and most
comprehensive Internet services are crucial to our business.
Our strategy is to to promote and enhance our brand by
advertising, participating
in targeted industry conferences and seminars, regularly
contributing to industry publications, and engaging in an
extensive public relations campaign.
o EXPAND CLIENT RELATIONSHIPS
We currently have over 100 clients, ranging from small to
large Companies and organizations. We intend to expand our
existing client relationships into broader and more
sophisticated engagements. As part of this strategy, the
account managers dedicated to each of our clients identify
opportunities to offer additional solutions. In addition, we
have aggressively targeted new clients through relationships
established by our sales consultants and business development
teams and through the use of specialized programs in specific
industries.
o EXPAND THROUGH STRATEGIC ACQUISITIONS
ValuSALES will pursue strategic acquisitions to acquire
expertise in new technologies, gain access to additional
talented professionals, and enter into new geographic markets
and expand its customer base.
THE VALUSALES APPROACH
We have practices in the following areas: e-business strategy,
interactive marketing and advertising, technology products and
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integration, and Internet mortgage banking. We utilize our knowledge base and
professional talent from these practice areas to provide our clients with
various solution offerings.
PRACTICE AREAS
o E-BUSINESS STRATEGY - WWW.WEBODYSSEY.CC
We help our clients evaluate and formulate e-business
strategies that will result in a competitive advantage. Our
services include strategy formulation, conception and design
of Internet-based business models, qualitative and
quantitative market research, competitive analyses, business
process design and implementation, and delivery of streaming
video and development of proprietary software.
o INTERACTIVE MARKETING AND ADVERTISING -
WWW.ODYSSEYADVERTISING.COM
We help clients identify their online customers and other
target audiences, define the processes and venues for
communicating with these audiences and analyze the results of
their marketing efforts. We use our understanding of customer
preferences to develop interactive content and to create brand
value that enhance and extend our clients' relationships with
their customers. Our services are intended to optimize a
customer's experience with our clients' web sites. Our
interactive marketing and advertising services include:
o MARKETING AND COMMUNICATIONS STRATEGY: These services
include brand research and development, media
planning, online or direct marketing, audio and video
production, relationship marketing and online and
offline promotion measurement and analysis.
o CREATIVE SERVICES: These services include brand and
identity development, design for product packaging
and complete audio and video production from script
writing to media placement.
o TECHNOLOGY PRODUCTS AND INTEGRATION - WWW.VALUCOMPUTERS.COM
We help our clients build e-businesses by providing a set of
technology skills that include architecture, design, custom
application, and product integration. We believe our deep
understanding of third party e-business software and hardware
and our ability to modify and integrate these applications
into existing hardware environments differentiates us from our
competitors. This understanding is most critical in the
deployment of business-to-business hardware networks. We also
focus on how emerging technologies in the wireless and
broadband area will continue to impact the architecture,
devices and infrastructure requirements of our clients.
o INTERNET MORTGAGE BANKING - WWW.VALUMORTGAGES.COM
ValuMORTGAGES.com is what the Company believes to be a next
generation Internet mortgage banking firm. Combining Internet
technology with our role as a mortgage banker allows Realtors,
builders, and brokers to service their clients more
efficiently saving time and money. Our services offer
innovative financing solutions for purchasing, refinancing, or
leveraging the equity in a property.
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The Company, ValuSALES.com, Inc. d/b/a ValuMORTGAGES.com is
licensed with the State of Florida, Department of Banking and
Finance, license audit number: 0100445 as a Mortgage Lender.
The Company believes that on-line mortgages represent a
rapidly growing market. The Company is dedicated to
traditional service while providing the technology-based
infrastructure to automate the mortgage process. As an
example, a borrower may complete a mortgage application
on-line in the privacy of their home and submit directly to a
lending specialist who determines the `best fit' mortgage
program while a mortgage processor electronically gathers
necessary documentation for automated underwriting and
approval; thus shortening the time to closing.
Additionally, ValuMORTGAGES.com was recently launched in
Spanish. By targeting the Hispanic marketplace the Company
believes it has targeted a growing niche market.
CLIENTS
We focus on long-term relationships with our client's which range from
small to medium size companies and organizations. ValuSALES currently targets
companies in industries that can use its proprietary Internet technologies to
increase sales, improve communications and create business identities. These
industries include media and entertainment, information and telecommunications,
manufacturing and distribution healthcare and retail.
Each of ValuSALES clients is generally charged for the time, materials
and expenses incurred on a particular project. Agreements entered into in
connection with a project are generally terminable by the client upon 30-days'
prior written notice. ValuSALES cannot give any assurances that a client will
not terminate an engagement before its completion. If its clients terminate
existing agreements or if ValuSALES is unable to enter into new engagements, its
business, financial condition and results of operations could be materially and
adversely affected.
No client accounted for more than 10% of ValuSALES revenues in 2000 or
1999. Although, ValuSALES does not believe that it will derive a significant
portion of its revenues from a limited number of clients, there is a risk that
it may do so. Any cancellation, deferral or significant reduction in work
performed for principal clients or a significant number of smaller clients could
have a material adverse affect on ValuSALES business, financial condition and
results of operations.
SALES AND MARKETING
The Company promotes itself by direct sales efforts using telephone
sales, conventional media advertising, and some Internet marketing. These
advertisements are targeted at small and medium business customers who are
likely to respond to specific ads or visit specific web sites to make a
purchase. The Company employs several inside and outside sales people to help
customers and to prospect business from various forms of lead generation. In
addition, we have a business development team that sells our solution offerings.
Our business development team establishes contact with targeted
prospects to create awareness and preference for us. Thereafter, sales
consultants are assigned to accounts as client executives to establish and
maintain long-term relationships and coordinate multiple service offerings to
our clients.
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In addition to our business development team, we have a dedicated
marketing team. Our marketing strategy is to promote and enhance our brand by
participating in targeted industry conferences and seminars, regularly
contributing to industry publications, engaging in an extensive public relations
campaign. This strategy is designed to strengthen our brand name and generate
new clients by increasing the awareness of our brand with high quality
comprehensive Internet services.
We believe that establishing and maintaining a good reputation and name
recognition is critical for attracting and expanding our targeted client base.
We also believe that the importance of reputation and name recognition will
increase due to the growing number of information technology service providers.
If our reputation is damaged or if potential clients do not know what services
we provide, we may become less competitive or lose our market share. Promotion
and enhancement of our name will depend largely on our success in providing high
quality services and end-to-end digital communications solutions, which we
cannot ensure. If clients do not perceive our services to be effective or of
high quality, our brand name and reputation could be materially and adversely
affected.
COMPETITION
The Internet products and services market has grown dramatically in
recent years and is relatively new and highly competitive. ValuSALES competitors
include:
o Strategy consulting firms: including Bain & Company, Luminant,
and McKinsey & Company
o Internet service firms: including Viant Corporation, Sapient
Corporation, and MarchFirst
o Technology consulting firms and integrators: including EDS,
IBM, Anderson Consulting, PC Connection
o In-house information technology, marketing and design
departments of our clients and potential clients
o Internet mortgage banking firms: including E-Loan,
Mortgage.com, and Quicken Mortgage
Many of ValuSALES competitors have longer operating histories, larger
client bases, longer relationships with clients, greater brand or name
recognition and significantly greater financial, technical, marketing and public
relations resources. Several of these competitors may provide or intend to
provide a broader range of Internet-based solutions than ValuSALES. Furthermore,
greater resources may enable a competitor to respond more quickly to new or
emerging technologies and changes in customer requirements and to devote greater
resources to the development, promotion and sale of its products and services
than we can. In addition, competition may intensify because there are relatively
low barriers to entry into the Internet services market.
ValuSALES believes that the principal competitive factors in this
market, in relative importance, are technical knowledge and creative skills,
brand recognition and reputation, reliability of the delivered solution, client
service and price. ValuSALES believes that its ability to compete in its market
depends on its ability to attract and retain qualified professionals.
ValuSALES currently has an extremely small portion of these markets and
there can be no assurances it that it will be able to penetrate these markets
further in the future.
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the Financial
Statements, including the Notes thereto, of the Company included elsewhere in
this registration statement.
OVERVIEW
ValuSALES provides Internet and Technology solutions for clients
ranging from small to medium sized customers. We have practices in the following
areas: e-business strategy, interactive marketing and advertising, technology
products and integration, and Internet mortgage banking. We utilize our
knowledge base and professional talent from these practice areas to provide our
clients with various solution offerings.
o E-BUSINESS STRATEGY - WWW.WEBODYSSEY.CC
In April 2000, ValuSALES expanded its OdysseyAdvertising.com
group and created WebOdyssey. There were no significant
startup costs and no related commitments when we established
this group because the Company used existing internal
resources.
We help our clients evaluate and formulate e-business
strategies that will result in a competitive advantage. Our
services include strategy formulation, conception and design
of Internet-based business models, qualitative and
quantitative market research, competitive analyses, business
process design and implementation, and delivery of streaming
video and development of proprietary software.
o INTERACTIVE MARKETING AND ADVERTISING -
WWW.ODYSSEYADVERTISING.COM
We help clients identify their online customers and other
target audiences, define the processes and venues for
communicating with these audiences and analyze the results of
their marketing efforts. We use our understanding of customer
preferences to develop interactive content and to create brand
value that enhance and extend our clients' relationships with
their customers. Our services are intended to optimize a
customer's experience with our clients' web sites.
o TECHNOLOGY PRODUCTS AND INTEGRATION - WWW.VALUCOMPUTERS.COM
We help our clients build e-businesses by providing a set of
technology skills that include architecture, design, custom
application, and product integration. We believe our deep
understanding of third party e-business software and hardware
and our ability to modify and integrate these applications
into existing hardware environments differentiates us from our
competitors. This understanding is most critical in the
deployment of business-to-business hardware networks.
We also focus on how emerging technologies in the wireless and
broadband area will continue to impact the architecture,
devices and infrastructure requirements of our clients.
o INTERNET MORTGAGE BANKING - WWW.VALUMORTGAGES.COM
In January 2000, ValuSALES created its ValuMortgages.com
group. There were no significant startup costs and no related
commitments when we established this group because the Company
used existing internal resources.
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ValuMORTGAGES.com is what the Company believes to be a next
generation Internet mortgage banking firm. Combining Internet
technology with our role as a mortgage banker allows Realtors,
builders, and brokers to service their clients more
efficiently saving time and money. Our services offer
innovative financing solutions for purchasing, refinancing, or
leveraging the equity in a property.
ValuSALES derives substantially all of its revenues from fees and
product sales for services and products generated on a project-by-project basis.
ValuSALES services and products are provided on both a fixed-time, fixed-price
basis and on a time and material basis. Historically, ValuSALES has not operated
on a retainer basis; however, in the future, ValuSALES may utilize such
arrangements.
Agreements and purchase orders entered into in connection with time and
materials projects and product sales are generally terminable by the client upon
30-days' prior written notice, and clients are required to pay ValuSALES for all
time, materials and expenses incurred by ValuSALES through the effective date of
termination. Agreements and purchase orders entered into in connection with
fixed-time, fixed-price projects, are generally terminable by the client upon
payment for work performed and the next progress payment due. If clients
terminate existing agreements and purchase orders or if ValuSALES is unable to
enter into new engagements, ValuSALES' business, financial condition, and
results of operations could be materially and adversely affected. In addition,
because a proportion of ValuSALES' expenses is relatively fixed, a variation in
the number of client engagements can cause significant variations in operating
results from quarter to quarter.
ValuSALES' projects vary in size and scope; therefore, a client that
accounts for a significant portion of ValuSALES' revenues in one period may not
generate a similar amount of revenue in subsequent periods. No client accounted
for more than 10.0% of ValuSALES' revenues in the periods ended December 31,
1999 or June 30, 2000.
ValuSALES does not believe that it will derive a significant portion of
its revenues from a limited number of clients in the near future. However, there
is a risk that the source of ValuSALES' revenues may be generated from a small
number of clients. These clients may not retain ValuSALES in the future. Any
cancellation, deferral, or significant reduction in work performed for these
principal clients or a significant number of smaller clients could have a
material adverse affect on ValuSALES' business, financial condition, and results
of operations.
Quarter-to-quarter fluctuations in margins
The Company's operating results and quarter-to-quarter margins may fluctuate in
the future as a result of many factors, some of which are beyond the Company's
control. Historically, the Company's quarterly margins have been impacted by:
. the number of client engagements undertaken or completed;
. a change in the scope of ongoing client engagements;
. seasonality;
. a shift from fixed-fee to time and materials-based contracts;
. the number of days during the quarter;
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. utilization rates of employees;
. marketing and business development expenses;
. charges relating to strategic acquisitions;
. pricing changes in the information technology services market; and
. economic conditions generally or in the information technology services
market.
The Company expects this trend to continue.
Results of Operations: Calendar year 1999
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On December 1, 1999, ValuSALES, Inc. sold 2,673,000 shares of its
common stock for $175,000 and used the proceeds to acquire an inactive entity,
September Project II Corp., which then changed its name to ValuSALES.com, Inc.
and became the surviving company.
ValuSALES, Inc. was incorporated in the State of Florida, on March 19,
1999, and had no operations until on July 20, 1999 when it purchased assets for
$75,000 and signed employment agreements with two individuals, which included
the issuance of 900,000 shares of common stock. The assets acquired were
property and equipment for $40,000 and inventory for $35,000. The common stock
was valued at par because the Company was privately owned and no market existed
for the sale of its stock.
For accounting purposes, the acquisition has been treated as a
capital transaction rather than a business combination. All significant
interdivisional transactions and balances have been eliminated.
The Company has elected to operate with divisions rather than create
separate corporations for each business segment.
REVENUES
Net sales are comprised of product and services sales, net of returns
and allowances. In 1999, Product Revenues were $484,717 and Service Revenues
were $291,585 representing total Revenues of $776,302. The Company had no
operations prior to 1999 for a comparison period.
Cost of sales for the calendar year ended December 31,1999 were
$392,741 for Product COGS and $159,669 for Service COGS representing total COGS
of $552,410. As a percentage of net sales, the Company's gross margin was 28.8%
in 1999.
PERSONNEL COSTS AND EXPENSES
Personnel costs and expenses consist primarily of salaries, benefits,
and compensation for consultants. Personnel costs and expenses were $114,647
representing 14.8% as a percentage of revenue for the year ended December 31,
1999. The company had no operations prior to 1999 for a comparison period.
GENERAL AND ADMINISTRATIVE
General and administrative expense includes administrative expenses,
general office expenses, depreciation expenses, advertising costs, and
professional fees. General and administrative expenses were $266,361
representing 34.3% as a percentage of revenue for the year ended December 31,
1999. The Company had no operations prior to 1999 for a comparison period.
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Net cash used in operating activities was $146,275 for the year ended
December 31,1999. Net cash used in operating activities was primarily
attributable to net losses and partially offset by increases in trade payables.
Net cash provided by financing activities was $480,210 for the year
ended December 31,1999. Net cash provided by financing activities resulted from
the issuance of common stock in a Private Placement Offering and an advance by a
shareholder.
Results of Operations: Six-months ended June 30, 2000
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REVENUES
Net sales are comprised of product and services sales, net of returns
and allowances. For the six-months ended June 30, 2000, Product Revenues were
$657,252 and Service Revenues were $593,613 representing total Revenues of
$1,250,865. The Company had no operations prior to 1999 for a comparison period.
Cost of sales for the six-months ended June 30, 2000 was $511,832 for
Product COGS and $488,565 for Service COGS representing total COGS of
$1,000,397. As a percentage of net sales, the Company's gross margin was 20% for
the six-months ended June 30, 2000.
PERSONNEL COSTS AND EXPENSES
Personnel costs and expenses consist primarily of salaries, benefits,
and compensation for consultants. Personnel costs and expenses were $104,569
representing 8.4% as a percentage of revenue for the six-months ended June 30,
2000. The company had no operations prior to 1999 for a comparison period.
GENERAL AND ADMINISTRATIVE
General and administrative expense includes administrative expenses,
general office expenses, depreciation expenses, advertising costs, and
professional fees. General and administrative expenses were $213,902
representing 17.1% as a percentage of revenue for the six-months ended June 30,
2000. The Company had no operations prior to 1999 for a comparison period.
Net cash used in operating activities was $76,501 for the six-months
ended June 30, 2000. Net cash used in operating activities was primarily
attributable to net losses and partially offset by increase in trade payables.
Net cash provided by financing activities was $45,602 for the
six-months ended June 30, 2000. Net cash provided by financing activities
resulted from an advance by a shareholder.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 2000, the Company had $123,278 of working capital. The
Company believes that its current working capital, and cash generated from
operations will be sufficient to meet the Company's cash requirements through
June 30, 2001. The Company's capital requirements will depend on
numerous factors, including the rates at which the Company expands its personnel
and infrastructure to accommodate growth and invests in new technologies. In
addition, as part of its strategy, the Company evaluates potential alliances
with businesses that extend or complement the Company's business. Future
alliances may be funded with alliance financing, institutional financing, or
additional equity offerings. There can be no assurance that future alliances, if
identified, will be consummated by the Company.
Management believes that based upon the current operating plan,
existing cash and cash equivalents, and cash generated from operations will be
sufficient to fund operating activities, capital expenditures and other
obligations through June 30, 2001. However, if the Company is not successful in
generating sufficient cash flow from operations or in raising additional capital
when required in sufficient amounts and on acceptable terms, these
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failures could have a material adverse effect on the Company's business, results
of operations and financial condition. If additional funds are raised through
the issuance of equity securities, the percentage ownership of the Company's
then-current stockholders would be diluted.
There can be no assurance that the Company will be able to raise any
required capital necessary to achieve its targeted growth rates and future
continuance on favorable terms or at all.
The Company expects to continue with its current revenue growth plan as
experienced in the first two quarters of 2000 and believes that with current
available funds and funds generated from operations in 2000, there will be
sufficient capital resources to allow the Company to continue in existence as a
going concern.
Additionally, two shareholders have committed to fund the Company in
the event of a working capital deficiency up to $500,000.
ITEM 3 - DESCRIPTION OF PROPERTY
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The Company's corporate office is currently located at 4101 Ravenswood
Road, Suite 209, Fort Lauderdale, FL 33312. Pursuant to a written lease, the
Company leases approximately 2,950 square feet at an annual rent of $ 37,000.
The lease is for a term of 2 years.
The Company's ValuComputers.com office is currently located at 3310
Hillsboro Blvd. Deerfield Beach, FL 33442. Pursuant to a written lease, the
Company leases approximately 2,050 square feet at an annual rate of $32,000. The
lease is for a term of 1 year, expiring April 2001.
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
--------------------------------------------------------------------------------
As of June 30, 2000, the Company had 10,000,000 shares of its Common
Stock issued and outstanding. The following table sets forth, as of June 30,
2000, the beneficial ownership of the Company's Common Stock (i) by the only
persons who are known by the Company to own beneficially more than 5% of the
Company's Common Stock; (ii) by each director of the Company; and (iii) by all
directors and officers as a group.
<TABLE>
<CAPTION>
Name and Amount
Address of of
Title of beneficial beneficial Percent of
Class owner owner class
<S> <C> <C> <C>
Common Peter Fisher 650,000 6.5%
3310 Hillsboro Blvd.
Deerfield Beach, FL 33442
Albert Smith 620,000 6.2%
7727 Meadow Glen La.
Houston, TX 77063
Jim Joachimczyk 600,000 6.0%
1845 N. Warren
Milwaukee, WI 53202
Jonathan B. Silverstein 300,000 3.0%
1607 Osprey Bend
Weston, FL 33327
All officers and
Directors as a
Group (3 persons) 1,050,000 10.5%
</TABLE>
13
<PAGE>
--------------------------------------------------------------------------------
ITEM 5 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors and Executive Officers. The following are the Directors and
Executive Officers of the Company. None of the Directors hold similar positions
in any reporting company. The directors named below will serve until the next
annual meeting of the Company's stockholders. Thereafter, directors will be
elected for one-year terms at the annual stockholders' meeting.
V. Jeffrey Harrell, age 34, is the Chairman of the Board, President,
and CEO of the Company. Mr. Harrell has held these positions since December
1999. Prior to joining ValuSales.com Mr. Harrell was employed by Southeast
Bankers Mortgage Corp. as Vice President of Sales from December 1998 to January
1999, and before that he served as Vice President of Kensington-Ashworth
Financial Group, Inc. from March 1994 to January 1998.
Jonathan B. Silverstein, age 30, is the Vice President, Secretary and
Director of the Company. Mr. Silverstein has held these positions since December
1999. Prior to that, Mr. Silverstein was President and Founder of Odyssey
Advertising, Inc. from April 1997 to July 1999, and before that he served as
President of Silverstein Graphics, Inc. from December 1993 to January 1997.
Peter G. Fisher, age 38 is Executive Vice President and Director of the
Company. Mr. Fisher has held these positions since December 1999. Prior to that,
Mr. Fisher was President and Founder of Boca Technologies, Inc. from May 1997 to
July 1999, and before that he was Sales Manager for Computer Access
International, Inc. from January 1995 to May 1997.
ITEM 6 - EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
The Company paid the following salaries to its executives:
1999 2000
<S> <C> <C>
V. Jeffrey Harrell, President, CEO, and
Chairman of the Board $2,000 $25,315
Jonathan B. Silverstein, VP and Secretary $25,500 $49,500
Peter Fisher, Executive VP $24,000 $49,500
</TABLE>
None of the executives received any stock options or stock dividends.
The three above executives received reimbursement for health insurance as part
of their compensation. The directors were not compensated for any Board of
Directors meetings.
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------------------------------
On July 20, 1999 the Company acquired the assets of Boca Technologies,
Inc. for $50,000 and 600,000 shares of common stock issued to Peter G. Fisher.
Also, on July 20, 1999 the Company entered into an Employment contract with Mr.
Fisher including a $78,000 annual salary and a 10% pre tax income salary bonus
that expires on December 31, 2000.
On July 20, 1999 the Company acquired the assets of Odyssey
Advertising, Inc. for $25,000 paid to Jonathan B. Silverstein and 300,000 shares
of common stock issued to Jonathan B. Silverstein. Also, on July 20, 1999 the
company entered into an Employment contract with Mr. Silverstein including a
$78,000 annual salary and a 10% pre tax income salary bonus that expires on
December 31, 2000.
14
<PAGE>
At June 30, 2000 the Company owed $45,602 to one of its shareholders,
Latitude26 Venture Corp. These advances were made for working capital purposes
and will be repaid at a date to be determined by the Company and Latitude26
Venture Corp. and bear no interest.
ITEM 8- DESCRIPTION OF SECURITIES
--------------------------------------------------------------------------------
The Company is authorized to issue up to 50,000,000 shares of Common
Stock, par value $.001 per share. Currently the Company has 10,000,000 shares
issued and outstanding. Holders of Common Shares are entitled to one vote per
Common Share on all matters to be voted on by stockholders. The Common Shares do
not have cumulative voting rights. Therefore, holders of a majority of the
Common Shares can elect all the members of the Board of Directors. A majority
vote is also sufficient for most other actions requiring the vote or concurrence
of stockholders. The Company's Officers and Directors as a group (three persons)
own directly approximately 10.9% of the Issuer's capital stock.
All Shares are entitled to share equally in dividends when and if
declared by the Board of Directors out of funds legally available therefore. It
is anticipated that the Company will not pay cash dividends on its Shares in the
foreseeable future. In the event of liquidation or dissolution of the Company,
whether voluntary or involuntary, holders of the Shares are entitled to share
equally in all assets of the Company legally available for distribution to
stockholders. The holders of Shares have no preemptive or other subscription
rights to acquire authorized but un-issued capital stock of the Company, and
there are no conversion rights or redemption or sinking fund provisions with
respect to such Shares. All of the outstanding Shares of the Company are fully
paid and non-assessable.
PART II
--------------------------------------------------------------------------------
ITEM 1 - MARKET FOR COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
--------------------------------------------------------------------------------
The Company's Common Stock is listed for trading on the National
Quotation Bureau Pink Sheets and it trading symbol VLUS. There was no trading of
the Company's Common Stock prior to December 1999. The following table shows the
quarterly high and low bid prices for the calendar year 1999 and the first half
of 2000 as reported by the National Quotations Bureau Incorporated. These prices
reflect inter-dealer quotations without adjustments for retail markup, markdown
or commission, and do not necessarily represent actual transactions.
YEAR PERIOD HIGH LOW
1999 Fourth Quarter 0.00 0.00
2000 First Quarter 0.00 0.00
Second Quarter .51 .25
As of June 30, 2000, there were approximately 91 holders of record of
the company's Common Stock.
Holders of the Company's Common Stock are entitled to dividends when,
as and if declared by the Board of Directors out of funds legally available
therefore. The Company does not anticipate the declaration or payment of any
dividends in the foreseeable future.
The Company intends to retain earnings, if any, to finance the
development and expansion of its business. Future dividend policy will be
subject to the discretion of the Board of Directors and will be contingent upon
future earnings, if any, the Company's financial condition, capital
requirements, general business conditions and other factors. Therefore, there
can be no assurance that any dividends of any kind will ever be paid.
The Company registrar and transfer agent is Interwest Transfer Co.,
Inc., which is located at 1981 East 4800 South, Suite 100, Salt Lake City, UT
84117 phone 801.272.9294.
15
<PAGE>
ITEM 2 - LEGAL PROCEEDINGS
--------------------------------------------------------------------------------
The Company is subject to one lawsuit by a former employee who is suing
it for wrongful discharge. The Company is vigorously defending the suit and does
not believe that it is material to its operations.
ITEM 3 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
--------------------------------------------------------------------------------
Not Applicable
ITEM 4 - RECENT SALES OF UNREGISTERED SECURITIES
--------------------------------------------------------------------------------
As a result of the merger with ValuSALES, Inc., the Company issued
5,000,000 shares of its common stock in that transaction. The shares were
distributed to the prior shareholders of ValuSALES, Inc., as part of the merger.
No underwriters were involved in any of the offerings and all current
offerings of the Company's securities have been completed.
ITEM 5 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
--------------------------------------------------------------------------------
The Company's Amended Articles of Incorporation provide for the
indemnification of Directors in that Directors of this Corporation shall not be
personally liable for monetary damages to the Company or any other person for
any statement, vote, decision or failure to act, regarding corporate management
or policy, by a director unless the director breached or failed to perform his
duties as Director. Such indemnification is available to any person who was or
is a party to any proceeding (other than an action by, or in the right of, the
Company), by reason of the fact that he or she is or was a Director, officer,
employee or agent of the Company or is or was serving at the request of the
Company.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the small business
issuer pursuant to the foregoing provisions, or otherwise, the small business
issuer has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
PART F/S
--------------------------------------------------------------------------------
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
See index to Financial Statements on Page F-1.
PART III
--------------------------------------------------------------------------------
ITEM 1 INDEX TO EXHIBITS
--------------------------------------------------------------------------------
EX-3.(I) - ARTICLES OF INCORPORATION*
EX-3.(II) - AMENDED ARTICLES OF INCORPORATION*
EX-3.(III) - BY-LAWS*
EX-10.1 - OFFICE BUILDING LEASE
EX-10.2 - BUSINESS LEASE
EX-10.10 - PETER FISHER EXECUTIVE EMPLOYMENT AGREEMENT
EX-10.11 - JONATHAN SILVERSTEIN EXECUTIVE EMPLOYMENT AGREEMENT
EX-27 - FINANCIAL DATA SCHEDULE
* Previously filed.
16
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
VALUSALES.COM, INC.
By: /s/ V. Jeffrey Harrell Date: 11/06/2000
----------------------------------- -------------
V. Jeffrey Harrell, President
17
INDEX TO FINANCIAL STATEMENTS
Independent Auditor's Report ............................................. F-2
Balance Sheet ............................................................ F-3
Statement of Operations .................................................. F-4
Statement of Shareholders' Equity ........................................ F-5
Statement of Cash Flows .................................................. F-6
Notes to Financial Statements ............................................ F-7
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
ValuSALES.com, Inc.
I have audited the accompanying balance sheet of ValuSALES.com, Inc. as
of December 31, 1999 and the related statements of operations, shareholders'
equity, and cash flows for the period March 19, 1999 (inception) to December 31,
1999. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of ValuSALES.com, Inc.
as of December 31, 1999, and the results of its operations and cash flows for
the period March 19, 1999 (inception) to December 31, 1999, in conformity with
generally accepted accounting principles.
/s/ ROBERT JARKOW
---------------------------
ROBERT JARKOW
May 29, 2000 CERTIFIED PUBLIC ACCOUNTANT
3111 North Andrews Avenue
Fort Lauderdale, Florida 33309
(954) 630-9070
F-2
<PAGE>
VALUSALES.COM., INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
2000 1999
---------- -----------
UNAUDITED
<S> <C> <C>
Current Assets
Cash $ 44,516 $ 83,935
Accounts receivable 249,722 143,360
Inventories 112,454 92,578
--------- ---------
Total current assets 406,692 319,873
Property and equipment, net of accumulated depreciation of
$6,337 at June 30, 2000 and $2,962 at December 31, 1999 42,183 37,038
Other 6,343 --
--------- ---------
$ 455,218 $ 356,911
========= =========
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 226,812 $ 106,104
Due to shareholder 56,602 11,000
--------- ---------
Total current liabilities 283,414 117,104
--------- ---------
Shareholders' Equity
Common stock-par value $.001; 50,000,000 shares authorized,
10,000,000 issued and outstanding at
June 30, 2000 and December 31, 1999 10,000 10,000
Additional paid-in capital 391,923 391,923
Deficit (230,119) (162,116)
--------- ---------
Total shareholders' equity 171,804 239,807
--------- ---------
$ 455,218 $ 356,911
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
VALUSALES.COM., INC.
STATEMENTS OF OPERATIONS
July 20, 1999 (Inception) to December 31, 1999
Six Months Ended June 30, 2000 (Unaudited)
June 30, December 31,
2000 1999
------------ ------------
UNAUDITED
Revenues
Product $ 657,252 $ 484,717
Services 593,613 291,585
------------ ------------
Total 1,250,865 776,302
------------ ------------
Cost of sales
Product 511,832 392,741
Services 488,565 159,669
------------ ------------
Total 1,000,397 552,410
------------ ------------
Gross profit 250,468 223,892
------------ ------------
Expenses
Personnel Costs and related expenses 104,569 114,647
General and administrative 213,902 266,361
------------ ------------
318,471 381,008
------------ ------------
Net loss ($ 68,003) ($ 157,116)
============ ============
($ 0.007) ($ 0.021)
============ ============
(Loss) per share-basic
Weighted - average common shares outstanding 10,000,000 7,598,600
============ ============
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
VALUSALES.COM, INC.
STATEMENT OF SHAREHOLDERS' EQUITY
July 20, 1999 (Inception) to December 31, 1999
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
------------------------- Paid-in
Shares Amount Capital (Deficit)
<S> <C> <C> <C>
Sale of stock for cash-net 375,000 375 $ 293,235
Stock issued for services 1,052,000 1,052 101,361
Stock issued under employment agreements 900,000 900
Sale of stock for cash 2,673,000 2,673 172,327
Purchase of September Project II, Corp. 5,000,000 5,000 (175,000) ($ 5,000)
(Loss) for period July 20, 1999 (inception) to December 31, 1999 ($ 157,116)
----------- ----------- ----------- -----------
Balance December 31, 1999 10,000,000 10,000 391,923 (162,116)
(Loss) for the six months ended June 30, 2000 (68,003)
----------- ----------- ----------- -----------
Balance June 30, 2000 (Unaudited) 10,000,000 $ 10,000 $ 391,923 ($ 230,119)
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
VALUSALES.COM, INC.
STATEMENTS OF CASH FLOWS
July 20, 1999 (Inception) to December 31, 1999
Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
--------- ---------
UNAUDITED
<S> <C> <C>
Cash flows from operating activities
Net (loss) ($ 68,003) ($157,116)
Adjustments to reconcile net (loss) to net cash
(used) by operating activities
Stock issued for services -- 102,413
Depreciation 3,375 2,962
(Increase) in accounts receivable (106,362) (143,060)
(Increase) in inventories (19,876) (57,578)
(Increase) in other (6,343) --
Increase in accounts payable 120,708 106,104
--------- ---------
Total adjustments (8,498) 10,841
--------- ---------
Net cash (used) by operating activities (76,501) (146,275)
--------- ---------
Cash flows from investing activities
Purchase of assets (8,520) (75,000)
Purchase of ValuSales.Com, Inc. -- (175,000)
--------- ---------
Net cash (used) by investing activities (8,520) (250,000)
--------- ---------
Cash flows from financing activities
Loan from shareholder 45,602 11,000
Sale of common stock -- 469,210
--------- ---------
Net cash provided by financing activities 45,602 480,210
--------- ---------
Net change in cash (39,419) 83,935
Cash - beginning 83,935 --
--------- ---------
Cash - end $ 44,516 $ 83,935
========= =========
Supplemental disclosures of cash flow information:
Interest paid $ -- $ --
========= =========
Taxes paid $ -- $ --
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
VALUSALES.COM, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
June 30, 2000 (Unaudited)
Note 1. Nature of Business
ValuSALES.com, Inc. (the Company) offers Internet business-to-business
and business-to- consumers products and services through the Worldwide Web. The
Company also maintains retail outlets. The Company's divisions, and the business
each of them conducts, are as follows:
A. ValuCOMPUTERS.com, which began operations on July 20, 1999, offers
a full line of brand name new and refurbished computer products, such as PC's
and printers, from manufacturers including IBM, Compaq, and HP.
B. Odyssey Advertising, which began operations on July 20, 1999, offers
media advertising, corporate identity development and communications
C. ValuMORTGAGES.com, which began operation in January 2000, is a web
based Mortgage banking firm acting as a correspondent mortgage lender and a
mortgage brokerage business. ValuMORTGAGES.com is in Spanish as well as English.
D. WebOdyssey, which began operations in April 2000, designs websites
for small and medium size companies.
Note 2. Summary of Significant Accounting Policies
History and Basis of Presentation
ValuSALES, Inc. was incorporated in the State of Florida, on March
19, 1999, and had no operations until on July 20, 1999 when it purchased assets
for, $75,000, and signed employment agreements with two individuals, which
included the issuance of 900,000 shares of common stock. The assets acquired
were property and equipment for $40,000 and inventory for $35,000. The common
stock was valued at par because the Company was privately owned and no market
existed for the sale of its stock.
On December 1, 1999, ValuSALES, Inc. sold 2,673,000 shares of its
common stock for $175,000 and used the proceeds to acquire an inactive entity,
September Project II Corp., which then changed its name to ValuSALES.com, Inc.
and became the surviving entity.
F-7
<PAGE>
VALUSALES.COM, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
June 30, 2000 (Unaudited)
Note 2. Summary of Significant Accounting Policies-Continued
History and Basis of Presentation-Continued
For accounting purposes, the acquisition has been treated as a capital
transaction rather than a business combination. Accordingly, the 5,000,000
outstanding shares of September Project II, Corp. have been reflected as
outstanding since inception.
All significant interdivisional transactions and balances have been
eliminated.
Revenues
The Company recognizes revenues as follows:
A. Product sales revenue is recognized when the product is delivered.
B. Service revenue is recognized when the services are performed.
C. Mortgage fee revenue is recognized when the mortgage is closed.
D. Website development revenue is recognized when the website is
delivered.
Use of Estimates
Use of estimates and assumptions by management is required in the
preparation of financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those estimates and
assumptions.
Inventories
Inventories consists of computers and accessories and is stated at the
lower of cost (specific identity) or market.
Property and Equipment
Property and equipment is recorded at cost. Depreciation is computed
using the straight-line method over the five year estimated useful lives of the
assets.
(Loss) Per Share
Basic (loss) per share equals net (loss) divided by the weighted
average shares outstanding during the period. There are no items to give rise to
diluted shares.
Advertising
Advertising is expensed in the period incurred.
F-8
<PAGE>
VALUSALES.COM, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
June 30, 2000 (Unaudited)
Note 2. Summary of Significant Accounting Policies-Continued
Website Development and Maintenance
The Company's website was developed internally and expensed to
salary. For 1999 the expenditures were immaterial. Future expenditures for
maintenance are anticipated to be minimal and will be expensed as incurred.
Note 3. Other Matters
Employment Contracts-The Company entered into the two previously
mentioned employment contracts on July 20, 1999. The contracts expire on July
20, 2000 and December 31, 2000, respectively. The agreements require total
minimum annul salaries of $176,000.
Leases-The Company's operating facilities are leased for two years
through June 2002, for an annual rent of approximately $37,000. Prior rent was
under month-to-month arrangements for approximately $3,300 monthly.
Due to Shareholder-is due on demand and bears no interest.
Note 4. Income taxes
At June 30, 2000, the Company had net operating loss carryforwards,
of approximately $225,000, which expires through 2015. The deferred benefit of
the net operating loss carry- forwards, of approximately $45,000 at June 30,
2000 and $30,000 at December 31, 1999, has been fully reserved for due to the
uncertainty of its recognition.
At December 31, 1999 and June 30, 2000, there are no other items that
give rise to deferred income taxes.
Note 5.Common Stock
On April 1, 1999, the Company had a private placement offering of
375,000 shares of its common stock at $1 per share. Costs of the offering were
approximately $81,000. The stock was sold pursuant to Rule 504 of Regulation D
under the United States Securities Act of 1933.
On December 31, 1999, the Company issued 1,052,000 shares of its
common stock in exchange for professional services rendered to the Company. The
transactions was valued at the value of the services received.
F-9
<PAGE>
VALUSALES.COM, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
June 30, 2000 (Unaudited)
Note 6. Business Segments
The Company is organized into four business segments (See Note 1).
Summarized financial information concerning the Company's reportable segments is
shown in the following table. Corporate related items not allocated to
reportable segments are included in the reconciliation to the Balance Sheets and
Statements of Operations.
<TABLE>
<CAPTION>
Valu Odyssey Web Valu
Computers Advertising Odyssey Mortgages Total
--------- ----------- ------- --------- -----
1999
<S> <C> <C> <C> <C> <C>
Revenue-Product $ 484,717 $ 484,717
Revenue-Services $ 291,585 291,585
-----------
Total 776,302
Operating earnings (loss) (17,553) 4,197 (13,356)
Depreciation 875 2,087 2,962
Total assets 145,886 153,899 299,785
Capital expenditures 15,000 25,000 40,000
2000
Revenue-Product 657,251 657,251
Revenue-Services 481,545 $74,443 $37,626 593,614
-----------
Total 1,250,865
Operating earnings (loss) 30,664 (20,242) 52,790 (59,343) 3,869
Depreciation 875 2,500 3,375
Total assets 153,557 284,763 438,320
Capital expenditures 8,520 8,520
Reconciliation to Balance Sheets and Statements of Operations:
2000 1999
--------- ---------
Unaudited
Assets
Totals for reportable segments $ 438,320 $ 299,785
Corporate 16,898 57,126
C
Total $ 455,218 $ 356,911
========= =========
Operating results
Totals for reportable segments $ 3,869 ($ 13,356)
Corporate (71,872) (143,760)
--------- ---------
Total ($ 68,003) ($157,116)
========= =========
</TABLE>
F-10
