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 SEPTEMBER 30, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 2-97869-D
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CRAFTCLICK.COM, INC.
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(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
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(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:
November 7, 2000
Common 19,765,018 shares
Preferred 139,000 shares
DOCUMENTS INCORPORATED BY REFERENCE
NONE.
Transitional Small Business Issuer Format Yes X No
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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-Sep-00
(Unaudited)
<CAPTION>
ASSETS
<S> <C>
Assets:
Current Assets:
Cash $16,318
Accounts Receivable 18,539
Prepaid Expenses and Other Current Assets 8,300
Total Current Assets 43,157
Property and equipment - net 239,785
Goodwill 2,236,766
Deposits 6,541
Total Assets $2,526,249
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
Current Liabilities:
Accounts Payable $237,616
Notes Payable (Note 2) 230,000
Accrued Liabilities 21,937
Current Portion Contract Payable 11,000
Total Current Liabilities 500,553
Total Liabilities 500,553
Stockholders' Equity:
Preferred Stock -- 5,000,000 shares
authorized, $.001 par value; 139,000
shares issued and outstanding - Note 1 139
Capital Stock -- 300,000,000 shares
authorized having $.001 par value;
19,765,018 shares issued and
outstanding 19,765
Additional Paid-in Capital 8,673,791
Accumulated Deficit -6,667,999
Total Stockholders' Equity 2,025,696
Total Liabilities and Stockholders'
Equity $2,526,249
</TABLE>
<TABLE>
CraftClick.com, Inc.
Statements of Operations
For the Six months Ended September 30, 2000 and 1999
(Unaudited)
<CAPTION>
6 months ended 6 months ended
30-Sep-00 30-Sep-99
<S> <C> <C>
Revenues $ 518,723 $ 0
Cost of Sales 366,829 0
Gross Profit 151,894 0
General & Administrative Expenses 3,188,862 738,171
Operating Loss -3,036,968 -738,171
Other Income/Expenses:
Loss from sales of investments (Note 3) -425,350 0
Interest Income 3,521 7,564
Interest expense 0 0
Total Other Income/Expense -421,829 7,564
Net Loss Before Taxes $-3,458,797 $-730,607
Provision for Income Tax 0 0
Net Loss -3,458,797 -730,607
Loss Per Share $ -0.19 $ -0.06
Weighted Average Shares Outstanding 18,375,352 12,345,000
</TABLE>
<TABLE>
CraftClick.com, Inc.
Statements of Operations
For the Three months Ended September 30, 2000 and 1999
(Unaudited)
<CAPTION>
3 months ended 3 months ended
30-Sep-00 30-Sep-99
<S> <C> <C>
Revenues $220,838 $ 0
Cost of Sales 140,966 0
Gross Profit 79,872 0
General & Administrative Expenses 1,675,860 371,696
Operating Loss -1,595,988 -371,696
Other Income/Expenses:
Loss from sales of investments (Note 3) -425,350 0
Interest Income 193 5,489
Interest expense 0 0
Total Other Income/Expense -425,157 5,489
Net Loss Before Taxes $-2,021,145 $-366,207
Provision for Income Tax 0 0
Net Loss $-2,021,145 $-366,207
Loss Per Share $ -0.11 $-0.03
Weighted Average Shares Outstanding 19,121,827 12,370,000
</TABLE>
<TABLE>
CraftClick.com, Inc.
Statements of Cash Flows
For the Six months Ended September 30, 2000 and 1999
(Unaudited)
<CAPTION>
6 months ended 6 months ended
30-Sep-00 30-Sep-99
<S> <C> <C>
Cash Flows Provided From Operating Activities
Net Loss $-3,458,797 $-730,607
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 112,832 14,498
(Increase)/decrease in other current assets - -53,582
(Increase)/decrease in accounts receivable 16,741 0
(Increase)/decrease in prepaid expenses 26,352 0
(Decrease)/increase in accounts payable and
Current liabilities 13,546 0
Issued common stock for services 2,259,923 0
Net Cash Used for Operating Activities -1,029,403 -769,691
Cash Flows From Investing Activities
Purchase of equipment -6,941 -172,970
Net Cash Used for Investing Activities -6,941 -172,970
Cash Flows From Financing Activities
Issued stock for cash 380,000 1,292,546
Decrease in notes receivable 4,166 0
Increase in notes payable 230,000 0
Increase in security deposits -4,260 0
Change in shareholder loan 13,000 -12,067
Contract payable -5,300 0
Net Cash Provided by Financing Activities 617,606 1,280,479
Net Increase in Cash -418,738 337,818
Beginning Cash Balance 435,056 0
Ending Cash Balance $16,318 $337,818
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
</TABLE>
<TABLE>
CraftClick.com, Inc.
Statements of Cash Flows
For the Three months Ended September 30, 2000 and 1999
(Unaudited)
<CAPTION>
3 months ended 3 months ended
30-Sep-00 30-Sep-99
<S> <C> <C>
Cash Flows Provided From Operating Activities
Net Loss $-2,021,145 $-366,207
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 61,695 8,708
(Increase)/decrease in other current assets 3,000 -1,782
(Increase)/decrease in accounts receivable 27,119 0
(Increase)/decrease in prepaid expenses 11,100 0
(Decrease)/increase in accounts payable and
current liabilities 75,035 0
Issued common stock for services 1,566,423 0
Net Cash Used for Operating Activities -276,773 -359,281
Cash Flows From Investing Activities
Purchase of equipment -511 -58,371
Net Cash Used for Investing Activities -511 -58,371
Cash Flows From Financing Activities
Issued stock for cash 0 44,999
Decrease in notes receivable 2,083 0
Increase in notes payable 230,000 0
Increase in security deposits -1,500 0
Change in shareholder loan 13,000 0
Contract payable 1,300 0
Net Cash Provided by Financing Activities 244,883 44,999
Net Decrease in Cash -32,401 -372,653
Beginning Cash Balance 48,719 710,471
Ending Cash Balance $16,318 $337,818
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
</TABLE>
CraftClick.com, Inc.
Notes to Financial Statements
September 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 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 September 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 2 NOTES PAYABLE
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.buyit.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
secured by the domain name www.art2art.com and all its related
technology. 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.
NOTE 3 LOSS ON SALE OF INVESTMENTS
The Company sold its investment of 450,706 shares of Popmail.com to
meet its financial obligations. The shares were "Restricted" under
S144. The stock was sold to Stephen C.Wolfe a related party at the
time of the sale for $74,650. The loss of $425,350 was charged to
the Income Statement during the period ended September 30, 2000.
$225,353 of the loss was due to market value decline during the
holding period. The market value of the stock at the date of sale
was $366,156.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation.
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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 18 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 free projects, and further fulfills the needs of this community by
selling over 40,000 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.
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At September 30, 2000, the Company had $2,526,249 in assets and $500,553
in liabilities. The Company had $518,723 in total revenues for the six
months ended September 30, 2000 and $0 for same period in 1999.
Operating expenses for the three months ended September 30, 2000 and
1999 were $3,188,862 and $738,171 respectively, with net losses of
($3,458,797) and ($730,607), respectively.
The major general and administrative expense items for the six months
ended September 30, 2000 and 1999 were as follows:
6 months ended 6 months ended
September 30, 2000 September 30, 1999
Marketing $ 42,834 $305,298
Payroll $ 668,325 $287,370
Consulting Fees $ 244,555 $ 33,450
Professional Fees* $1,323,242 $ 23,493
Shipping handling $ 67,461 $ 0
Other $ 842,445 $ 88,560
* The Company incurred approximately $1,285,000 in non-cash compensation
expenses for the six months ended September 30, 2000. The non-cash
compensation expenses resulted from the issuance of "restricted stock"
as compensation paid to consultants. This amount is included under
professional fees in operating expenses.
Liquidity
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At September 30, 2000 and 1999, the Company had $43,157 and $382,218
respectively in current assets, with total current liabilities of
$500,553 and $0 respectively. Total stockholder's equity was $2,025,696
and $551,763 respectively.
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 September 30, 2000.
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: 11/16/2000 By /s/ Sandip Seth, Director
and President
Date: 11/16/2000 By /s/ Maninder Singh, Director
Secretary and C.F.O.
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: 11/16/2000 By /s/ Sandip Seth, Director
and President
Date: 11/16/2000 By /s/ Maninder Singh, Director
Secretary and C.F.O.
