FORM 10-QSB/A
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
________________________________________
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2000
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ___________ to _____________
Commission File Number: 033-05384
GOPUBLICNOW.COM
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(Exact name of Registrant as specified in its charter)
Delaware 13-3301899
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5000 Birch St., West Tower, Ste 4900, Newport Beach, California 92660
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (949) 752-2797
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Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months or for such shorter period that the
Registrant was required to file such reports, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No________
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The number of shares outstanding of Registrant's common stock as of August
2, 2000 was 10,803,239.
1
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GOPUBLICNOW.COM AND SUBSIDIARIES
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TABLE OF CONTENTS
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Page Number
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of
June 30, 2000 (unaudited) 3
Condensed Consolidated Statements of Operations
for the Three months and Six months ended June 30,
2000 (unaudited) 4
4
Condensed Consolidated Statement of Cash Flows for the
Six months ended June 30, 2000 (unaudited) 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 12
PART II. OTHER INFORMATION
Item 1. Legal proceedings 14
Item 2. Changes in Securities and Use of Proceeds 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of
Securities Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
2
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PART I. FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
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GoPublicNow.com, Inc. and Subsidiaries
(A Development Stage Company)
Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
<S> <C>
ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . JUNE 30, 2000
---------------
(Unaudited)
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 1,665,524
Marketable equity securities. . . . . . . . . . . . . . . . . . . . . 208,681
---------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . 1,874,205
Property and equipment, net of accumulated depreciation of $6,204 . . . 120,499
Capitalized web site development cost, net of accumulated amortization
of $12,217. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,519
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,730
---------------
$ 2,108,953
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . $ 80,510
Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . 267,466
---------------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 347,976
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Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,150
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Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized;
no shares outstanding . . . . . . . . . . . . . . . . . . . . . . . -
Common stock, $0.001 par value; 50,000,000 shares authorized;
10,803,239 shares issued and outstanding (including 70,000 shares
committed but unissued and 16,000 shares to be cancelled) . . . . . 10,803
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . 2,691,233
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . (14,844)
Accumulated other comprehensive income. . . . . . . . . . . . . . . . (45,285)
Deficit accumulated during the development stage. . . . . . . . . . . (1,010,080)
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Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . 1,631,827
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$ 2,108,953
===============
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements
3
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GOPUBLICNOW.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
For the three For The Six
Months Ended Months Ended
June 30, 2000 June 30, 2000
(unaudited) (unaudited)
----------------------------- ---------------
Net revenues. . . . . . . . . . . . . . . . . . . . . . . . . $ - $ -
----------------------------- ---------------
Operating expenses:
Employee compensation . . . . . . . . . . . . . . . . . . . 243,052 369,284
Selling, general and administrative expenses. . . . . . . . 447,726 672,019
----------------------------- ---------------
Total operating expenses . . . . . . . 690,778 1,041,303
----------------------------- ---------------
Operating loss. . . . . . . . . . . . . . . . . . . . . . . . (690,778) (1,041,303)
Other income (expense):
Interest income . . . . . . . . . . . . . . . . . . . . . . 25,463 32,823
----------------------------- ---------------
Loss before provision for taxes . . . . . . . . . . . . . . . (665,315) (1,008,480)
Provision for taxes . . . . . . . . . . . . . . . . . . . . . 800 1,600
----------------------------- ---------------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . (666,115) (1,010,080)
Other comprehensive income - unrealized loss on marketable
equity securities, net of tax of $0 . . . . . . . . . . . . (63,000) ( 45,285)
----------------------------- ---------------
Comprehensive loss. . . . . . . . . . . . . . . . . . . . . . $ (729,115) $ (1,055,365)
============================= ===============
Basic and diluted net loss per common share . . . . . . . . . (0.06) $ (0.10)
============================= ===============
Basic and diluted weighted average common shares outstanding 10,828,164 10,085,219
============================= ===============
</TABLE>
The accompanying notes are an integral part of these condensed financial
statements
4
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GOPUBLICNOW.COM, INC. AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six
Months Ended
June 30, 2000
Unaudited
<S> <C>
Cash flows from operating activities:
Net loss $(1,010,080)
Estimated fair market value of vested common stock granted to employees 35,407
Estimated fair market value of warrants granted to consultant 12,990
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization 18,421
Write-off of property and equipment 12,000
Changes in operating assets and liabilities:
Other assets (28,730)
Accounts payable and accrued expenses 80,510
Deferred revenue 13,500
------------
Net cash used in operating activities (865,982)
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Cash flows from investing activities:
Cash paid in connection with the DMRX acquisition (300,000)
Purchases of property and equipment (138,703)
Costs incurred to develop web site (97,736)
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Net cash used in investing activities (536,439)
------------
Cash flows from financing activities:
Payments for stock buyback (300,000)
Founders' capital contribution 500
Proceeds from the sale of subsidiary common stock, net of
offering costs of $28,350 129,150
Proceeds from the sale of common stock, net of offering
costs of $251,159 3,238,295
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Net cash provided by financing activities 3,067,945
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Net increase in cash 1,665,524
Cash at beginning of period -
------------
Cash at end of period $ 1,665,524
============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ -
============
Income taxes $ -
============
</TABLE>
Supplemental disclosure of non-cash investing and financing activities:
During the period ended June 30, 2000, the Company received 180,000 shares
of restricted common stock from a public company for services to be rendered,
valued at $253,966 (see Note 1).
See notes to accompanying financial statements for additional non-cash investing
and financing activities.
5
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GoPublicNow.com, Inc. and Subsidiaries
(A Development Stage Company)
Notes to Condensed Consolidated Financial Statements
NOTE 1 - BASIS OF PRESENTATION
-----------------------------------
The financial statements of GoPubilicNow.com ("GPN" or the "Company") for the
three and six months ended June 30, 2000 are unaudited. Certain information and
note disclosures normally included in the financial statements prepared in
accordance with generally accepted accounting principles have been omitted.
These financial statements should be read in conjunction with the audited
financial statements and notes thereto included in GPN's Form 8K/A as of and for
the period ended March 31, 2000. In the opinion of management, the financial
statements contain all adjustments, consisting of normal recurring adjustments,
necessary to present fairly the financial position of GPN for the periods
presented. The interim operating results may not be indicative of operating
results for the full year or for any other interim periods.
NOTE 2 - THE COMPANY
------------------------
GoPublicNow.com, Inc. (a development stage company) ("GPN" or the "Company") was
incorporated on December 2, 1999 according to the laws of Nevada. Operations
for the six months ended June 30, 2000 are indicative of the operations from
December 2, 1999 (date of inception) through June 30, 2000 as the Company had no
operations from December 2, 1999 through December 31, 1999. The Company has
been in the development stage since its inception. During the development
stage, the Company is primarily engaged in raising capital, obtaining financing,
developing its web site, advertising and marketing the Company, and
administrative functions. The Company intends to provide a web site dedicated
to helping their customers grow and obtain financing for their business
ventures.
Pursuant to an acquisition agreement (the "Acquisition Agreement") effective
April 6, 2000, the Company ("GPN-Nevada") completed a transaction whereby it
was merged with and into DermaRX Corporation ("DMRX"), an inactive public
corporation with a balance sheet only consisting of $300,000 in liabilities, and
the separate corporate existence of GPN-Nevada ceased. The transaction was
recorded as a "reverse acquisition" (the "Merger") where GPN-Nevada was
considered to be the accounting acquiror as it retained control of DMRX after
the merger. Simultaneously with the Merger, the name DMRX was changed to
GoPublicNow.com ("GPN"), and all the outstanding shares of common stock of
GPN-Nevada were exchanged on a one-for-one basis for shares of common stock of
GPN. Immediately prior to the merger, the common stock of DMRX was reduced by a
one for five reverse split. 16,000 shares of this stock to be reduced had
still not occurred at June 30, 2000, and the outstanding shares have been
restated as if these shares have been issued.
At the time of the merger DMRX had 766,117 shares outstanding. By virtue of the
merger, the shareholders of GPN-Nevada acquired 10,219,472 shares of DMRX plus
paid $300,000 in cash to satisfy DMRX's liabilities. The total issued,
outstanding, and committed shares of the combined entities subsequent to the
merger was 10,985,589 shares. Since DMRX's operations from December 2, 1999
through the date of acquisition were insignificant, a pro forma condensed
consolidated balance sheet and condensed consolidated statement of operations as
of and for the period ended June 30, 2000 are not presented here. In addition,
since DMRX prior quarter results were insignificant, the Company believes the
historical results are not indicative of the Company of future results of
operations. As a result, the Company has not presented comparative results
of operations.
6
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NOTE 2 - THE COMPANY, CONTINUED
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Subsidiaries
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In April 2000, the Company provided initial funding of $200,000 for its
majority-owned subsidiary GoBizNow.com. The Company commenced a private
placement memorandum selling a maximum of 300,000 shares of common stock at
$1.75. As of June 30, 2000, GoBizNow.com had sold 90,000 shares of common stock
for $129,150, net of offering costs of $28,350, which is presented as minority
interest in the accompanying balance sheet. As of August 4, 2000, GoBizNow.com
had sold 271,500 shares of common stock for $397,163, net of offering costs of
$77,962.
Pursuant to Staff Accounting Bulletin 84 ("SAB 84") when an offering takes the
form of a subsidiary's direct sale of its un-issued shares, a gain or loss may
be required to be reflected in the consolidated income statements of the parent
for the difference between the per share price of the offering and the parent's
recorded per share book value. However, SAB 84 does not require a gain or loss
to be recognized in situations where the subsidiary is a newly formed
non-operating entity, a startup or development stage company or an entity whose
ability to continue in existence is in question. Due to the subsidiary being
newly formed and in the development stage, the Company has recognized no gain or
loss on the sale of the subsidiary's stock at June 30, 2000.
The Company intends to operate a broker dealer in order to provide funding and
other financial services for its customers. In May 2000, the Company
incorporated its subsidiary GPN Securities, Inc. The Company intends to develop
GPN Securities, Inc. as an in-house broker dealer. In July 2000, the Company
incorporated its subsidiary GoNow Securities, Inc. The Company intends to
utilize GoNow Securities, Inc. as an acquisition vehicle to purchase a broker
dealer. There has been no activity in either entity at June 30, 2000.
Principles of Consolidation
-----------------------------
The consolidated financial statements include the accounts of the Company and
GoBizNow.com; GPN Securities, Inc.; and GoNow Securities, Inc., which are all
majority owned and non-operating subsidiaries in the development stage. All
significant intercompany balances and transactions have been eliminated in
consolidation.
Risks and Uncertainties
-------------------------
The Company is a start-up company subject to the substantial business risks and
uncertainties inherent to such an entity, including the potential risk of
business failure.
The Company has a loss of $1,010,080 for six months ended June 30, 2000.
Management believes that its positive cash balance of $1,665,524 and revenues
projected to be generated from new contracts subsequent to June 30, 2000 will be
sufficient to fund its operations, capital expenditures, working capital
requirements and web site development costs for the next twelve months. There
is no assurance the Company will be able to generate sufficient revenues or
obtain sufficient funds when needed, or that such funds, if available, will be
obtained on terms satisfactory to the Company.
7
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NOTE 2 - THE COMPANY, CONTINUED
------------------------------------
Marketable Securities
----------------------
Marketable securities consist of equity securities and are stated at fair market
value. During the six months ended June 30, 2000, the Company recorded
marketable securities valued at $253,966 in consideration for future services
from an unrelated party. Pursuant to the Statements of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," available for sale investments are to be recorded at their fair
market value, with any unrealized gain or loss to be reported as other
comprehensive income (loss) for the period ended. As of June 30, 2000, the
Company determined the fair market value of the underlying marketable securities
to be $208,681 and accordingly, reported an unrealized loss of $63,000 and
$45,285 for the three and six months ended June 30, 2000, respectively, as other
comprehensive loss and cumulative unrealized loss.
Capitalized Web Site Development
-----------------------------------
In March 2000, the Emerging Issues Task Force reached a consensus on Issue No.
00-2, "Accounting for Web Site Development Costs" ("EITF 00-2"). Pursuant to
EITF 00-2, the Company has capitalized approximately $98,000 of web site
development costs as of June 30, 2000. The Company began amortizing this
website in April, 2000. For the three months ended June 30, 2000, the Company
has recognized $12,217 of amortization expense on its website.
Earnings Per Share
--------------------
The Company has adopted Statement of Financial Accounting Standards No. 128
("SFAS 128"), "Earnings Per Share." Under SFAS 128, basic earnings per share is
computed by dividing income available to common shareholders by the
weighted-average number of common shares assumed to be outstanding during the
period of computation. Diluted earnings per share is computed similar to basic
earnings per share except that the denominator is increased to include the
number of additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional common shares were
dilutive. Because the Company has incurred net losses, basic and diluted loss
per share are the same as additional potential common shares would be
anti-dilutive.
Recent Accounting Pronouncements
----------------------------------
The FASB issued Statement of Financial Accounting Standards No. 133 ("SFAS
133"), "Accounting for Derivative Instruments and Hedging Activities." SFAS 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities on the balance sheet at their fair value. This
statement, as amended by SFAS 137, is effective for financial statements for all
fiscal quarters to all fiscal years beginning after June 15, 2000. The Company
does not expect the adoption of this standard to have a material impact on its
results of operations, financial position or cash flows as it currently does not
engage in any derivative or hedging activities.
8
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NOTE 2 - THE COMPANY, CONTINUED
------------------------------------
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin (SAB) 101, "Revenue Recognition," which outlines the basic criteria
that must be met to recognize revenue and provides guidance for presentation of
revenue and for disclosure related to revenue recognition policies in financial
statements filed with the Securities and Exchange Commission. The effective
date of this pronouncement is the fourth quarter of the fiscal year beginning
after December 15, 1999. The Company believes that adopting SAB 101 will not
have a material impact on the Company's financial position and results of
operations.
In March 2000, the FASB issued FASB Interpretation No. 44 ("FIN 44") "Accounting
for Certain Transactions Involving Stock Compensation," an interpretation of APB
Opinion No. 25 ("APB 25"). FIN 44 clarifies the application of APB 25 for (a)
the definition of employee for purposes of applying APB 25, (b) the criteria for
determining whether a plan qualifies as a noncompensatory plan, (c) the
accounting consequence for various modifications to the terms of a previously
fixed stock option or award, and (d) the accounting for an exchange of stock
compensation award in a business combination. FIN 44 is effective July 1,
2000, but certain provisions cover specific events that occur after either
December 15, 1998, or January 12, 2000. The adoption of certain other
provisions of FIN 44 prior to March 31, 2000 did not have a material effect on
the financial statements. The Company does not expect that the adoption of the
remaining provisions will have a material effect on the financial statements.
NOTE 3 - STOCKHOLDERS' EQUITY
---------------------------------
Preferred Stock
----------------
The Company's articles of incorporation authorize up to 10,000,000 shares of
$0.001 par value preferred stock. Shares of preferred stock may be issued in
one or more classes or series at such time the Board of Directors determine.
All shares of any series shall be equal in rank and identical in all respects.
As of June 30, 2000, no preferred shares have been designated or issued.
Common Stock
-------------
From the Company's date of inception to the period ended June 30, 2000, the
Company had issued an aggregate of 8,775,000 shares of common stock to the
founders for $500.
On December 3, 1999, the Company issued 201,000 shares of the Company's
restricted common stock (valued at $50,250 based on the estimated fair value on
date of grant) to employees. The shares are contingent upon employment and vest
on various dates through December 2001. As of June 30, 2000, 141,625 shares
were vested. Total compensation expense of $2,344 and $35,407 was recognized for
the three and six months ended June 30, 2000.
On December 3, 1999, the Company issued 150,000 shares of the Company's
restricted common stock to a third party for services rendered in connection
with raising funds pursuant to PPM 1999 and PPM 2000.
9
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NOTE 3 - STOCKHOLDERS' EQUITY, CONTINUED
---------------------------------------------
On December 7, 1999, the Company executed a private placement memorandum ("PPM
1999") for the offering of 541,800 shares at $2.50 per share. As of June 30,
2000, 541,800 shares have been issued under this PPM 1999 at $2.50 per share for
$1,267,450 (net of commissions and offering costs of $87,050). In addition, the
Company issued warrants to purchase 541,800 shares of common stock at $7.50 per
share and warrants to purchase 541,800 shares of common stock at $10 per share,
which are exercisable for three years from the date of grant. The warrants were
valued at $0 (based on Black-Scholes computation under SFAS 123).
On January 18, 2000, the Company commenced a private placement memorandum ("PPM
2000") for a maximum offering of $2,250,000. Pursuant to PPM 2000, the Company
may sell up to a maximum of 600,000 units at $3.75 per unit, where each unit
consists of one share of the Company's common stock, one warrant to purchase one
share of common stock at $7.50 per share and one warrant to purchase one share
of common stock at $10 per share and are exercisable for three years from the
date of grant. As of June 30, 2000, the Company sold 569,322 units for
$1,970,845 (net of commissions and offering costs of $164,109). The warrants
within the units sold were valued at $0 (based on Black-Scholes computation
under SFAS 123).
DMRX Transaction
-----------------
On April 6, 2000, the Company purchased all of the outstanding shares of DermaRX
Corporation ("DMRX") in a transaction known as a reverse merger (the "Merger").
The Company issued 766,117 shares of its common stock in exchange for the same
number of shares of DMRX. The Company also had previously wired $300,000 in
cash to DMRX to be used for the satisfaction of outstanding liabilities. At the
time of the Merger, DMRX had no assets or liabilities. The $300,000 was charged
against additional paid-in capital of the Company.
Stock Buyback
--------------
In May 2000, the Company repurchased 200,000 shares of its free trading common
stock for $300,000 in a privately negotiated transaction.
Stock Options
--------------
From time to time, the Company may issue non-plan stock options pursuant to
various agreements with other compensatory arrangements. Under the terms of
various employment agreements with employees, the Company issued options to
purchase 341,250 shares of the Company's common stock at exercise prices ranging
from $0.25 per share to $3.75 per share (the estimated fair market value on the
date of grant was $0.25 per share). The options vest over a two-year period
from the date of grant and are exercisable through March 2010.
10
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NOTE 3 - STOCKHOLDERS' EQUITY, CONTINUED
---------------------------------------------
Warrants
--------
From time to time, the Company issues warrants pursuant to various agreements
and other compensatory arrangements. Under the terms of various agreements with
consultants, the Company issued warrants to purchase 20,125 shares of the
Company's common stock at exercise prices ranging from $0.25 per share to $3.75
per share. The warrants vest in three months from the date of grant and are
exercisable through February 2010. Under SFAS 123, $12,990 of consulting
expense is to be recognized, of which $4,332 and $12,990 has been recognized for
the three and six months ended June 30, 2000, respectively. In addition, the
Company issued 2,222,244 warrants to various investors as part of various
private placement memorandums.
NOTE 4 - SUBSEQUENT EVENTS
------------------------------
Lotto Concepts
---------------
On July 31, the Company announced that it had signed an agreement (the
"Agreement") with Lotto Concepts, Inc. ("Lotto Concepts"). Under the Agreement,
the Company will provide business advisory services to Lotto Concepts in
exchange for 500,000 shares comprising 5% of Lotto Concepts, valued at
$1,000,000 (based on shares recently sold in a private placement offering at
$2.00 per share). The Company will recognize the revenue over the term of the
agreement of 90 days beginning when Lotto Concepts is posted on the Company's
website, which is expected to be August 2000.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
-------------------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
------------------------------------------------------
The following information should be read in conjunction with the financial
statements and the notes thereto. The analysis set forth below is provided
pursuant to applicable Securities and Exchange Commission regulations and is not
intended to serve as a basis for projections of future events.
EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED
IN THIS FORM 10-QSB ARE FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO CERTAIN
RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE SET FORTH IN SUCH FORWARD LOOKING STATEMENTS. SUCH FORWARD-LOOKING
STATEMENTS MAY BE IDENTIFIED BY THE USE OF CERTAIN FORWARD-LOOKING TERMINOLOGY,
SUCH AS "MAY," "WILL," "EXPECT," "ANTICIPATE," "INTEND," "ESTIMATE,"
"BELIEVE" OR COMPARABLE TERMINOLOGY THAT INVOLVES RISKS OR UNCERTAINTIES.
ACTUAL FUTURE RESULTS AND TRENDS MAY DIFFER MATERIALLY FROM HISTORICAL AND
ANTICIPATED RESULTS, WHICH MAY OCCUR AS A RESULT OF A VARIETY OF FACTORS. SUCH
RISKS AND UNCERTAINTIES INCLUDE, WITHOUT LIMITATION, GOPUBLICNOW.COM'S LIMITED
OPERATING HISTORY, THE UNPREDICTABILITY OF ITS FUTURE REVENUES, THE
UNPREDICTABLE AND EVOLVING NATURE OF ITS KEY MARKETS, REGULATION IN THE
SECURITIES AND MERGER AND ACQUISITION INDUSTRY, COMPETITION, INTERNET-RELATED
RISKS, DEPENDENCE ON KEY PERSONNEL, DEPENDENCE ON CONTENT ACQUISITION, CREATION
AND LICENSING, THE MANAGEMENT OF GROWTH AND GOPUBLICNOW.COM'S NEED FOR
ADDITIONAL CAPITAL EXCEPT AS REQUIRED BY LAW. GOPUBLICNOW.COM UNDERTAKES NO
OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS OR OTHERWISE. READERS SHOULD CAREFULLY REVIEW THE
FACTORS SET FORTH IN OTHER REPORTS OR DOCUMENTS THAT GOPUBLICNOW.COM'S FILES
FROM TIME-TO-TIME WITH THE SEC AND MATTERS GENERALLY AFFECTING ONLINE COMMERCE.
Overview
--------
The Company's website is the core of its business model. The Company intends
to list its client companies along with related information about the client
companies (including specific financing requirements) and provide access this
information to funding sources. The Company recognizes revenue from these
agreements over the period during which client companies are listed on this
website. At June 30, 2000, the Company's website was operational but client
company information had not been loaded. As a result, no revenue has yet been
recognized as of June 30, 2000.
The Company intends to bill its client customers based upon a success fee, and
has been advised by its legal counsel that such billing should be done through a
broker dealer. The Company is in the process of obtaining a broker-dealer and
expects to have either acquired one or developed one in-house within the next
six months, though there can be no assurance that this will be achieved. If
this is not achieved and the Company does not obtain a broker-dealer, the
Company would encounter significant difficulty in carrying out its business
plan.
12
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RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2000
-----------------------------------------------------------------
Employee Compensation
----------------------
Employee compensation was $243,052 for the three months ended June 30, 2000.
During the period, the Company added staff in both GoPublicNow.com and its
subsidiary company GoBizNow.com as a result of ramping up operations in the
development stage.
Selling, General and Administrative Expenses
------------------------------------------------
Selling, general and administrative expenses were $447,726 for the three months
ended June 30, 2000. These expenses increased as the Company increased staffing
levels, and due to the one-time non-cash charge of compensation expense pursuant
to SFAS 123 for the vested portion of common stock and warrants issued for the
three month period ended June 30, 2000.
Interest Income and Expense
------------------------------
Interest income for the three months ended June 30, 2000 was $25,463, as a
results of earnings on cash holdings not yet needed in the operations of the
Company. The Company had no interest expense for the period.
Net Loss
---------
For the reasons stated above, the Company had a net loss of $666,115 for the
three months ended June 30, 2000.
RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2000
---------------------------------------------------------------
Employee Compensation
----------------------
Employee compensation was $369,284 for the six months ended June 30, 2000,
representing the costs of the labor force from inception.
Selling, General and Administrative Expenses
------------------------------------------------
Selling, general and administrative expenses were $672,019 for the six months
ended June 30, 2000, representing the non-payroll expenses incurred by the
Company since inception, and the one-time non-cash charge of compensation
expense pursuant to SFAS 123 for the vested portion of common stock and warrants
issued for the six months ended June 30, 2000.
Interest Income and Expense
------------------------------
Interest income for the six months ended June 30, 2000 was $32,823, from
earnings on cash holdings not yet needed in the operations of the Company. The
Company had no interest expense for the period.
Net Loss
---------
For the reasons noted above, the Company's net loss for the six months ended
June 30, 2000 was $1,010,080.
13
<PAGE>
------
LIQUIDITY AND CAPITAL RESOURCES
----------------------------------
At June 30, 2000, the Company had $1,874,205 in current assets, including
$1,665,524 in cash. Also at June 30, current liabilities were $347,976. The
Company has used $865,992 in cash to fund its operations from the period of
inception to June 30, 2000. The Company has yet to generate revenue, and there
is no guarantee that the Company will be able to generate sufficient revenue to
fund future operations. Under the Company's business model, the Company is
compensated largely by shares of common stock in its client companies; thus the
Company's success, including its ability to fund future operations, depends
largely on both the liquidity and market value of its client company's common
stock. There can be no assurance that the Company will be able to liquidate its
client company's common stock in sufficient volume to fund the Company's future
operations, if at all. As a result, the Company expects its operations to
continue to use net cash, and the Company may be required to seek additional
debt or equity financings during the coming quarters. There can be no assurance
that the Company will be able to consummate debt or equity financings in a
timely manner on a basis favorable to the Company, or at all.
PART II - OTHER INFORMATION
-------------------------------
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On April 2000, the Company issued 766,117 shares of Common Stock in
exchange for all the outstanding shares of DermaRX corporation in a
transaction commonly referred to as a "reverse merger".
Also in April 2000, the Company completed its financing referred to as PPM 2000
by selling a total of 17,650 shares of its common stock at $3.75 per share.
In May 2000, the Company repurchased 200,000 shares of its common stock at
$1.50 per share.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS'
None.
ITEM 5. OTHER INFORMATION
None.
14
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits Description
-------- -----------
27.1 Financial Data Schedule
Reports on Form 8-K
----------------------
a) A report on Form 8-K was filed on April 20, 2000, in order to report
that GPN-Nevada was merged with and into DMRX and the separate corporate
existence of GPN-Nevada ceased in a transaction referred to as a "reverse
merger". Also reported on this 8-K was the changing of the name of DMRX to
"GoPublicNow.com".
b) A report on Form 8-K was filed on May 8, 2000, in order to report a
change in auditors.
c) A report on Form 8-K/A was filed on June 20, 2000. This report
amended the report on Form 8-K which was filed on April 20. The amendment
added the audited financial statements of GPN - Nevada and DMRX.
15
<PAGE>
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, on August 11, 2000.
GOPUBLICNOW.COM
By: /s/ Bruce A. Berman
--------------------------
Bruce A. Berman
President, Chief Executive Officer
By: /s/ Eric J. Hopkins
---------------------------
Eric J. Hopkins
Chief Financial Officer
