SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended April 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from _________
Commission File Number: 000-10576
PETPLANET.COM, INC.
Delaware 22-2298015
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21 Stillman St. Suite 600, San Francisco, California 94107
----------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number(415)-243-9000
Techscience Industries, Inc.
----------------------------
(Former name of registrant)
3 Rockaway Place, Parsippany, New Jersey 07054
(Previous Address)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
YES [ ] NO [X]
Check whether the issuer has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by the Court.
YES [ ] NO [X]
State the number of shares of each of the issuer's classes of common equity
outstanding at the latest practicable date: 9,104,640 shares of Common Stock as
of June 11, 1999.
Transitional Small Business Disclosure Format (check one):
YES [ ] NO [X]
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PETPLANET.COM, INC.
FORM 10-QSB
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Unaudited Financial Statements: 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 6. Exhibits
Signatures 10
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PETPLANET.COM, INC.
BALANCE SHEET
30-APR-99 31-OCT-98
ASSETS (unaudited)
Cash and cash equivalents $ 13,844 $ 2,214
Notes Receivable $ 150,000
----------- -----------
Total Assets $ 163,844 $ 2,214
=========== ===========
LIABILITIES AND STOCKHOLDER EQUITY
Accounts payable and accrued expenses $ 3,344 $ 10,082
Loan Payable $ 174,800
----------- -----------
Total Liabilities $ 178,144 $ 10,082
STOCKHOLDERS' EQUITY
Capital Stock $ 16,000 $ 16,000
Capital in excess of par $ 1,261,310 $ 1,261,310
(accumulated deficit) $(1,291,610) $(1,285,178)
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Total Stockholders' Equity $ (14,300) $ (7,868)
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Total Liabilities and Stockholder's Equity $ 163,844 $ 2,214
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<TABLE>
<CAPTION>
STATEMENT OF
OPERATIONS
FOR THE THREE MONTHS
ENDED
30-APR-99 30-APR-98
(unaudited) (unaudited)
<S> <C> <C>
REVENUE $ -- $ --
OPERATING EXPENSES
Printing $ 1,323
Blue Sky Fees $ 1,235
Transfer Agent Fees $ 2,684
Professional Fees $ -- $ 5,000
Miscellaneous $ 1,198 $ 1,672
----------- -----------
TOTAL OPERATING EXPENSES $ 6,440 $ 6,672
NET (LOSS) $ (6,440) $ (6,672)
EARNINGS PER SHARE Nil Nil
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WEIGHTED AVERAGE SHARES OUTSTANDING 1,600,000 1,600,000
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STATEMENT OF CASH FLOW 30-APR-99 30-APR-98
(unaudited) (unaudited)
CASH FLOW FROM OPERATING ACTIVITIES:
Net (Loss) $ (6,402) $ (6,672)
Adjustments to reconcile net (Loss) to net cash
provided by (used for) operating activities
Increase in accounts payable $ (6,738) $ 6,582
----------- -----------
Cash Provided by (used for) Operating Activities $ (13,140) $ (90)
INVESTMENT ACTIVITIES
Investment in PetPlanet.com $ (150,000) $ --
----------- -----------
Net cash used in investing activities $ (150,000) $ --
FINANCING ACTIVITIES
Proceeds from bridge loan $ 174,800 $ --
----------- -----------
Net cash provided by financing activities $ 174,800 $ --
NET INCREASE IN CASH $ 11,660 $ (90)
CASH, BEGINNING OF PERIOD $ 2,214 $ 2,304
CASH, END OF PERIOD $ 13,844 $ 2,214
=========== ===========
</TABLE>
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PETPLANET.COM, INC.
NOTES TO THE FINANCIAL STATEMENTS
(Unaudited)
April 30, 1999
NOTE 1 - BASIS OF PRESENTATION:
The balance sheet at the end of the preceding fiscal year has been derived from
the audited balance sheet contained in the Registrant's Form 10-KSB for the year
ended October 31, 1998 (the "10-KSB")and is presented for comparative purposes.
All other financial statements are unaudited. In the opinion of management, all
adjustments which include only normal recurring adjustments necessary to present
fairly the financial position, results of operations and cash flows for all
periods presented have been made. The results of operations for interim periods
are not necessarily indicative of the operating results for the full year.
Footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted in
accordance with the published rules and regulations of the Securities and
Exchange Commission. These financial statements should be read in conjunction
with the financial statements and notes thereto included in the 10-KSB for the
most recent fiscal year.
Loss per Share - Loss per share is based on the weighted-average number of
shares outstanding during the periods. The effect of warrants outstanding and
shares issuable in connection with convertible debentures is not included since
it would be anti-dilutive.
NOTE 2 -SUBSEQUENT EVENT:
On May 13, 1999, as reported in the Registrant's Form 8-K Current Report event
dated May 13, 1999 the registrant closed a reverse acquisition with
PetPlanet.com, Inc., a privately held California corporation (the
"Reorganization Agreement"). Simultaneous with this closing, the Registrant
closed on a private placement under Rule 506 of Regulation D under the
Securities Act of 1933 (the "1933 Act") in the amount of approximately
$975,000,000. The offering was made to accredited investors and 250,000 common
shares of the Registrant's stock were issued. The Reorganization Agreement
caused a reverse acquisition business combination wherein the Registrant
acquired all of the outstanding stock of PPI solely in exchange for an aggregate
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of 6,574,640 newly issued shares of the Registrant's common stock, $.01 par
value per share (the Registrant's Shares) after which there were 9,104,640
shares of the Registrant's Common Stock issued and outstanding (the
"Reorganization"). The share calculation reflects the PRO FORMA effect of the
Reorganization, the private placement, the four for 25 reverse split enumerated
in Note 3 below, the conversion of $50,000.00 of debt into 100,000 shares of
common stock and the conversion of $24,800 of debt into 400,000 shares of common
stock enumerated below.
In addition, pursuant to the Reorganization Agreement, all 892,527 PPI options
and warrants outstanding on the closing date of the Reorganization, were
converted into options and warrants (as appropriate) to purchase an aggregate of
570,360 shares of the Registrant's common stock.
The Reorganization Shares were issued to PPI's shareholders on a pro rata basis
with PPI becoming a wholly owned subsidiary of the Registrant. Following the
closing, on May 20, 1999, the name of the Registrant was changed to
PetPlanet.com, Inc. ("PPI") with the Registrant succeeding to the Internet-based
pet oriented service business conducted by PPI.
On May 13, 1999, the Bridge Loan Holders converted an aggregate of $50,000 of
principal due from Registrant pursuant to the March 4, 1999 10% Secured
Convertible Promissory Note payable to Bridge Loan Holders by Registrant into an
aggregate of 100,000 shares of the Registrant's common stock, $.01 par value per
share. In addition, the five identical accredited investors converted their
promissory notes into an aggregate of 400,000 shares of the Registrant's common
stock, $.01 par value per share.
NOTE 3- REVERSE SPLIT
On March 18, 1999, the Registrant filed a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of the State of
Delaware implementing a four for twenty five reverse split with respect to its
issued and outstanding shares of its common stock, $.01 par value per (the
"Reverse Split"). The Reverse Split was approved by the holders of a majority of
the Registrant's common stock after due notice to non-consenting stockholders
pursuant to applicable Delaware law. As a result of the Reverse Split all
10,000,000 issued and outstanding shares of common stock were reduced to
1,600,000 shares. The financial data reported herein has been adjusted to
reflect the Reverse Split.
NOTE 4 - MANAGEMENT'S ACTIONS TO OVERCOME OPERATING AND LIQUIDITY PROBLEMS:
The Registrant's financial statements have been presented on a going concern
basis which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Registrant's viability as a
going concern is dependent upon its ability to consummate the Reorganization and
PPI's ability to achieve profitable operations through increased sales and
raising additional financing.
NOTE 5- PRIVATE OFFERINGS
On February 5, 1999, and pursuant to the terms and conditions of five identical
Accredited Investor Subscription Agreements with non-affiliated investors, the
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Registrant consummated a private placement under Rule 506 of Regulation D under
the 1933 Act (the "Seed Money Private Offering"). The Seed Money Private
Offering, which provided the necessary funding to implement the Reorganization,
comprised of $24,800 in principal amount of 30 day convertible promissory notes
bearing interest at 9.6% per annum (the "Notes"). The Notes are convertible into
an aggregate of 400,000 authorized but unissued shares of the Registrant's
common stock, $.01 par value per share at $.062 per share which are ineligible
for public sale for a period of 30 months from the date of issuance.
On February 19, 1999, and pursuant to the terms and conditions of two identical
Accredited Investor Subscription Agreements with non-affiliated investors, the
Registrant consummated a private placement under Rule 506 of Regulation D under
the 1933 Act (the "Bridge Private Offering"). The Bridge Private Offering, which
provided the funding for the Registrant's bridge loan to PPI, was comprised of
$150,000 principal amount of 10% promissory notes (the "Notes") and the right to
convert $50,000 of the Notes into 100,000 unregistered shares of the
Registrant's Common Stock, $.01 par value per share (the "Bridge Shares"). The
Notes are due and payable on and the Bridge Shares are issuable at the closing
date of the Reorganization with PPI (the "Closing").
NOTE 6 - REORGANIZATION ADOPTION
On February 26, 1999, all of the Registrant's directors and the holders of
approximately 67% of the issued and outstanding shares of the Registrant's
common stock, $.01 par value per share, consented in writing to the adoption of
a number of actions designed to implement the Reorganization (the "Majority
Consent"). The Consent, which was adopted pursuant to the permissive provisions
of Section 228(a) and 228(c) of the General Corporation Law of the State of
Delaware (the "Delaware Sections"), was comprised of the authorization and/or
approval of the following actions: (i) the Reorganization; (ii) an amendment to
the Registrant's Certificate of Incorporation to effectuate: (a) an increase in
the number of authorized shares of common stock, $.01 par value per share to
20,000,000; (b) a four for twenty-five reverse split of all issued and
outstanding shares (the "Reverse Split"); (c) the creation of an authorized
class of 2,000,000 "blank check" shares of Preferred Stock, $.01 par value per
share; and (d) a change of the name of the Registrant to PetPlanet.com, Inc.;
(iii) a private placement under Rule 506 of Regulation D under the Securities
Act of 1933, as amended (the "1933 Act") of an aggregate of 400,000 post Reverse
Split Shares at $.062 per Share, which Shares shall be restricted for 30 months
(the "Seed Money Private Offering"); (iv) a minimum of 250,000 and a maximum of
375,000 restricted and post Reverse Split shares of common stock at $4.00 per
share offered in units of $25,000; and (v) an amendment to the Registrant's 1984
Incentive Stock Option Plan creating the 1999 Long Term Incentive Plan wherein
an aggregate of 2,000,000 Post Reverse Split Shares are reserved for issuance of
grants thereunder.
NOTE 7 - BRIDGE LOAN
On March 4, 1999, and pursuant to the terms and conditions of a written Bridge
Loan Agreement with PPI (the "Bridge Agreement"), the Registrant advanced the
sum of $150,000 to PPI in order to fund PPI's operations in anticipation of the
closing of the Reorganization (the "Bridge Loan"). The Bridge Loan was evidenced
by a 10% secured, convertible promissory note due at the closing of the
Reorganization (the "Bridge Note"). The Bridge Agreement provided that in the
event the Reorganization does not close on or before May 15, 1999, the term of
the Bridge Agreement shall be automatically extended to the earlier of the
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closing date of the first equity or debt financing consummated by PPI or October
1, 1999. The Bridge Note was secured by a continuing first lien and security
interest in and to: (i) such number of authorized but unissued shares of PPI's
common stock, no par value per share, as shall, when added to the number of
issued and outstanding shares, shall equal fifty one (51%) percent of PPI's
total issued and outstanding common stock capitalization; (ii) the right and
title to PPI's PetPlanet.com domain name, website, website software and any and
all copyrights, trademarks, servicemarks owned by PPI or acquired by PPI after
the date of the Bridge Agreement; and (iii) any and all inventory, accounts
receivable or other tangible or intangible assets acquired by PPI after the date
of the Bridge Agreement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
PLAN OF OPERATION.
The Registrant's plan of action for the three months ended April 30, 1999,
during which period no revenues from operations were generated, was to complete
the process of bring itself current in its periodic reporting obligations under
the Securities Exchange Act of 1934 (the "34 Act"), preparing and holding its
annual meeting of its stockholders as required by the New Jersey Business
Corporation Act. In furtherance of its principal plan of operations, the
Registrant sought to continue to pursue and close the Reorganization with PPI.
It was expected that the Registrant would be able to implement its plan of
operations without the raising of additional capital. It was similarly expected
that the aforesaid $25,000 would be sufficient capital to satisfy the
Registrant's capital requirements during the period up to and close of the
Reorganization.
On March 12, 1999, the Registrant, fulfilling its obligations under the Delaware
Sections, caused Notice of Consent to Action by Majority Shareholders
(comprising the Majority Consent) together with a President's letter to
Shareholders (the "Statutory Notice") to be mailed to the Registrant's
shareholders and all broker dealers holding shares for the benefit of the
Registrant's shareholders. The Statutory Notice was accompanied by a Notice of
the Reverse Split, a transmittal form, a substitute Form W-9 and instructions
for the transmittal form.
On March 18, 1999, the Registrant filed a Certificate of Amendment to its
Certificate of Incorporation to be filed with the secretary of State of the
State of Delaware implementing the Reverse Split.
During the three months ended April 30, 1999, the Registrant did not: (i) expend
any funds on product research or development; (ii) purchase or plan to purchase
any plant or equipment; (iii) have any employees other than its part time
executive officers and directors.
YEAR 2000 ISSUE
The Registrant does not have any computer systems that need to be reviewed to
identify the systems that could be affected by the "Year 2000" issue. The Year
2000 problem is the result of computer programs being written using two digits
rather than four digits to define the year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
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than the year 2000. This could result in major system failure or
miscalculations. PPI has yet to conduct a comprehensive review of its computer
systems to identify the systems that could be affected by the "Year 2000" issue.
The Year 2000 problem may pose significant operational problems for PPI after
the closing of the Reorganization if not appropriated addressed. PPI currently
plans to assess the readiness or its third-party supplied software, computer
technology and other services determine compliance with "Year 2000" issues.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-B
Exhibit 27-Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended April 30, 1999.
9
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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.
Dated: June 14, 1999 PetPlanet.com, Inc.
By: /s/ STEVEN E. MARDER
- -----------------------------------
Steven E. Marder, President
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's interim financial statements for the six months ended April 30, 1999
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000318523
<NAME> PETPLANET.COM, INC.
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> APR-30-1999
<EXCHANGE-RATE> 1
<CASH> 13,844
<SECURITIES> 0
<RECEIVABLES> 150,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 163,844
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 163,844
<CURRENT-LIABILITIES> 178,144
<BONDS> 0
0
0
<COMMON> 16,000
<OTHER-SE> (30,300)
<TOTAL-LIABILITY-AND-EQUITY> 163,844
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,440
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (6,440)
<INCOME-TAX> 0
<INCOME-CONTINUING> (6,440)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,440)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
