U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarter ended June 30, 2000
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
Commission File No. 2-97869-D
CRAFTCLICK.COM, INC.
--------------------
(Name of Small Business Issuer in its Charter)
UTAH 87-0419571
------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
432 Culver Blvd.
Playa Del Rey, California 90293
--------------------------------
(Address Of Principal Executive Offices)
Issuer's Telephone Number: (310) 827-3500
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Company was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PAST FIVE YEARS)
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 a court. Yes No
(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each of the Issuer's classes of
common equity, as of the latest practicable date:
August 7, 2000
Common - 17,906,110 shares
Preferred - 139,000 shares
DOCUMENTS INCORPORATED BY REFERENCE
NONE.
Transitional Small Business Issuer Format Yes X No
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Consolidated Financial Statements of the Company required to be-filed with
this 10-QSB Quarterly Report were prepared by management and commence on the
following page, together with related Notes. In the opinion of management, the
Consolidated Financial Statements fairly present the financial condition of
the Company.
<TABLE>
CraftClick.com, Inc.
Balance Sheet
30-Jun-00
(Unaudited)
<CAPTION>
ASSETS
<S> <C>
Assets:
Current Assets:
Cash $ 48,719
Accounts Receivable 45,660
Investments - Note 1 450,706
Shareholder Loan 13,000
Note receivable 2,083
Prepaid Expenses and Other Current Assets 22,400
Total Current Assets 582,568
Property and equipment (net of
depreciation, $29,580) 266,698
Goodwill 2,264,647
Deposits 5,041
Total Assets $ 3,118,954
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Current Liabilities:
Accounts Payable $ 179,466
Accrued Liabilities 4,671
Current Portion Contract Payable 9,700
Total Current Liabilities 193,837
Total Liabilities 193,837
Stockholders' Equity:
Preferred Stock -- 5,000,000 shares
authorized, $.001 par value; 139,000
shares issued and outstanding - Note 2 139
<PAGE>
Capital Stock -- 300,000,000 shares
authorized having $.001 par value;
17,906,110 shares issued and
outstanding 18,031
Additional Paid-in Capital 7,598,798
Accumulated Deficit (4,691,851)
Total Stockholders' Equity 2,925,117
Total Liabilities and Stockholders' Equity $3,118,954
</TABLE>
<TABLE>
CraftClick.com, Inc.
Statements of Operations
For the Periods Ended June 30, 2000 and 1999
(Unaudited)
<CAPTION>
June 30, June 30,
2000 1999
<S> <C> <C>
Revenues $ 297,884 $ 0
Cost of Sales (224,839) 0
Gross Profit 73,045 0
General & Administrative Expenses 1,518,996 366,475
Operating Loss (1,445,951) (366,475)
Other Income/Expenses:
Interest Income 3,328 2,075
Interest expense 0 0
Total Other Income/ExpenBe 3,328 2,075
Net Loss Before Taxes $ (1,442,623) $ (364,400)
Provision for Income Tax 200 0
Net Loss $ (1,442,823) $ (364,400)
Loss Per Share $ ( 0.09) $ ( 0.03)
Weighted Average Shares Outstanding 15,351,968 12,167,580
</TABLE>
<TABLE>
CraftClick.com, Inc.
Statements of Cash Flows
For the Periods Ended June 30, 2000 and 1999
(Unaudited)
<CAPTION>
June 30, June 30,
2000 1999
<S> <C> <C>
Cash Flows Provided From Operating Activities:
Net Loss $ (1,442,823) $ (364,400)
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 57,163 5790
Increase in other current assets 0 (51,800)
Increase in accounts receivable (10,380) 0
Increase in prepaid expenses (9,948) 0
Decrease in accounts payable and
current liabilities (62,282) 0
Issued common stock for services 693,500 0
Net Cash Used for Operating Activities (774,770) (410,410)
Cash Flows From Investing Activities
Purchase of equipment (6,491) (114,599)
Net Cash Used for Investing Activities (6,491) (114,599)
Cash Flows From Financing Activities
Issued stock for cash 380,000 1,247,547
Decrease in notes receivable 2,084 0
Decrease in security deposits 19,440 0
Change in shareholder loan 0 (12,067)
Contract payable (6,600) 0
Net Cash Provided by Financing Activities 394,924 1,235,480
Net Increase in Cash (386,337) 710,471
Beginning Cash Balance 435,056 0
Ending Cash Balance $ 48,719 $ 710,471
Supplemental Disclosure of Cash Flow Information:
Cash paid during the year for interest $ 0 $ 0
Cash paid during the year for income taxes 0 0
Issued common shares for assets 773,206 0
</TABLE>
CraftClick.com, Inc.
Notes to Financial Statements
June 30, 2000 and 1999
PRELIMINARY NOTE
The accompanying condensed consolidated financial statements have been
prepared without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted. It is
suggested that these condensed financial statements be read in conjunction
with the financial statements and notes thereto included in the Company's
Annual Report on Form 10-KSB for the year ended March 31, 2000.
NOTE 1 INVESTMENTS
The Company entered into a stock swap of $500,000 of its "Restricted Stock"
stock with "Restricted Stock" of Popmail.com, Inc. On June 30, 2000 the stock
was recorded at the market value. A loss in value of $49,294 was recorded in
shareholders equity.
NOTE 2 PREFERRED STOCK
On November 1, 1999, the Company offered securities through a Confidential
Private Placement Memorandum (PPM). This PPM offered accredited investors the
opportunity to purchase units of two (2) shares of Series A convertible
Preferred Stock, each share convertible any time to 10 shares of common stock,
and warrants exercisable for three years to purchase ten (10) shares of common
stock at $1. The warrants may be redeemed at the option of the Company on 30
days notice to holders of the warrants at a redemption price of $.05 per
warrant, if the average closing price of the Company's common stock equals or
exceeds $5 per share for 20 consecutive days within a period of 30 consecutive
trading days. An investor must purchase a minimum of 1,000 units at $20 per
unit, or a minimum investment of $20,000. Through June 30, 2000, the Company
has issued 139,000 shares, or 69,500 units for cash of $1,390,000. No warrants
had been exercised to purchase common shares, and no preferred shares were
converted to common.
NOTE 3 SUBSEQUENT EVENTS
On July 13, 2000 the Company issued a promissory note to Venture Catalyst
Incorporated for the sum of $80,000. The note will bear interest at 10% and
all unpaid interest and principal will become fully due on December 11, 2000.
The note is secured by the domain name www.buvit.com and all its related
technology. The note holder has the option to convert at any time prior to
December 1, 2000 all unpaid balances in to equity shares of either preferred
or common stock at a price of $1.00 The note gives Venture Catalyst
Incorporated the option to purchase 40,000 warrants at a purchase price per
share of $1.
On July 19, 2000 the Company issued a promissory note to Stephen C and
Joey Wolf for the sum of $150,000. The note will bear interest at 11% paid
monthly and shall be payable in full on November 19,2000. The note is
<PAGE>
CraftClick.com, Inc.
Notes to Financial Statements
June 30, 2000
secured by the domain name www.art2art.com and all its related technology and
by the Company's investment in 450,706 shares of popmail.com Inc. The note
holder has the option to convert at any time prior to November 19, 2000 all
unpaid balances in to equity shares of either preferred or common stock at a
price of $1.00. The note gives Stephen C and Joey Wolfe the option to purchase
75,000 warrants at a purchase price per share of $1.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of operation.
Plan of Operation.
------------------
<PAGE>
CraftClick was formed to be the premier arts and crafts
destination on the Internet. CraftClick has built the ultimate online arts and
crafts community that offers amateur and professional craftspeople worldwide a
wealth of arts and crafts related content. Through the strategic acquisition of
16 online arts and crafts related web sites, we control all the significant
entry points for arts and crafts on the Internet. Being the first entrant to
market in this space, we are the distinct leader in the arts and crafts vertical
with over 500,000 members. The expanding scale and scope of the CraftClick
network comprising 14 web sites has created a cost-based entry barrier to
competitors. This vertical integration allows us to offer the broadest array of
craft materials available, the most compelling prices for arts and crafts
materials and the most comprehensive arts and crafts-based information point.
Our network of sites provides crafters with over 15,000 free projects, and
further fulfills the needs of this community by selling over 100,000 different
arts and crafts supplies and kits online.
More than just a low-cost online seller of arts and crafts products, we
maintain an entire virtual community of craftspeople, and provide a free
integrated e-commerce solution to this community, including personal homepages
and applications that enable e-commerce such as a virtual storefront with
shopping carts, credit card processing, e-mail, auctions and bulletin board
forums. We also have global search capabilities, allowing users to search
the entire community of craftspeople and affiliated arts and crafts vendors
for raw materials, finished products, "how to" content and craft-related
course information offered by individual craftspeople and vendors alike.
We ship our products through a fulfillment center located in the Midwestern
United States. Orders placed with us are transmitted electronically to our
fulfillment center using EDI protocol. our fulfillment center then ships the
order directly to the end customer.
Results of Operations.
----------------------
At June 30, 2000, the Company had $3,118,954 in assets and $193,837 in
liabilities. The Company had $297,884 in total revenues for the three months
ended June 30, 2000 and $0 for same period in 1999. Operating expenses for the
three months ended June 30, 2000 and 1999 were $1,743,835 and $366,475
respectively, with net losses of ($1,442,823) and ($364,400), respectively.
The major general and administrative expense items for the three months ended
June 30, 2000 and 1999 were as follows:
3 months ended 3 months ended
June 30, 2000 June 30, 1999
Marketing $ 28,557 $175,043
Payroll $370,566 $135,488
Consulting Fees $148,857 $ 12,490
Professional Fees* $707,004 $ 15,614
Other $264,012 $ 27,840
* The Company incurred approximately $693,500 in non-cash compensation
expenses for the three months ended June 30, 2000. The non-cash compensation
expenses resulted from the issuance of "restricted stock" as compensation paid
issued to consultants. This amount is included under professional fees in
operating expenses.
Liquidity.
----------
At June 30, 2000 and 1999, the Company had $582,568 and $754,871 respectively
in current assets, with total current liabilities of $193,837 and $0
respectively. Total stockholder's equity was $2,925,117 and $873,230.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None; not applicable.
Item 2. Changes in Securities.
None; not applicable.
Item 3. Defaults Upon Senior Securities.
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of the Company's security holders during the
third quarter of the calendar year covered by this Report or during the two
previous calendar years.
Item 5. Other Information.
The Company commenced on November 1, 1999, a Private Placement to sell a
minimum of 10,000 units to a maximum of 50,000 units, with a provision for
over allotment of an additional 25,000 units comprised of two shares of Series
A Convertible Preferred Stock (each share being convertible into 10 shares of
common stock) and 10 Common Stock Purchase Warrants, at a price of
$20 per unit. The Company currently has sold 139,000 Units of this Private
Placement as of June 30, 2000.
ASSET PURCHASE AGREEMENT
On May 10, 2000, CraftClick completed an Asset Purchase Agreement with Julie
Jane Denning, the sole owner of stenciling.com, a sole-proprietorship.
CraftClick issued 1S,000 shares of "restricted securities" (common stock) to
Ms. Denning in consideration of the exchange for 100% of the stenciling.com
assets.
On May 16, 2000, CraftClick completed an Asset Purchase Agreement with Command
Line Computer Services Inc., an Alberta Corporation. CraftClick issued 240,000
shares of "restricted securities" (common stock) to Command Line Computer
Services, Inc. in consideration for the craftcentralstation.com website and
other corresponding assets.
On June 14, 2000, CraftClick completed an Asset Purchase Agreement with Don
Spain doing business as Internet Voyages, a sole proprietorship. CraftClick
issued 50,000 shares of "restricted securities" (common stock) to Don Spain in
consideration for the craftmall.com website and other corresponding assets.
On June 21, 2000, CraftClick completed an Asset Purchase Agreement with
Craftville.com a U.K. based Bole proprietorship. CraftClick issued 125,000
shares of "restricted securities" (common stock) as consideration for the
craftville.com website and other corresponding assets.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be
signed on its behalf by the undersigned thereunto duly authorized.
CraftClick.com, INC.
Date: 8/10/2000 By /s/ Sandip Seth, Director
and President
Date: 8/10/2000 By /s/ Peter A. Yollin, Director
Secretary and Chairman
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below
by the following persons on behalf of the Company and in the capacities and on
the dates indicated:
CraftClick.com, Inc.
Date: 8/10/2000 By /s/ Sandip Seth, Director
and President
Date: 8/10/2000 By /s/ Peter A. Yollin, Director
Secretary and Chairman
Date: 8/10/2000 By /s/ Edgar Cayce, Director
and Vice President
Date: 8/10/2000 By /s/Sanjay Sabnani
Sanjay Sabnani, Director
Date: 8/10/2000 By /s/Leslie Linsley
Leslie Linsley, Director
