UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the quarter period ended: June 30, 1999
or
[] Transition report pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
For the transition period from: to
Commission file number: 33-5902-NY
JustWebit.com, Inc.
(Exact name of registrant as specified in its charter)
Nevada 22-2774460
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
210 South Main Street, Suite 900, Salt Lake City, Utah 84111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (801) 595-0104
Indicate by check mark whether the registrant (1) has filed all reports
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
The number of shares outstanding of the registrant's Common Stock on
August 24, 1999 was 2,952,229.
1
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements.
The following Financial Statements of the Company and its subsidiaries
and related notes are included herein:
Balance Sheets as of June 30, 1999 and December 31, 1998
Statements of Income for the three months ended June 30, 1999 and 1998;
Statements of Income for the six months ended June 30, 1999 and 1998;
Statements of Income for the three and six months ended June 30, 1999;
Statements of Cash Flows for the six months ended June 30, 1999 and
1998;
Notes to Financial Statements.
2
<PAGE>
JustWebit.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
------------------ ------------------
(Unaudited)
ASSETS
Current Assets:
<S> <C> <C>
Cash $ 19,729 $ 2,131
Accounts Receivable & Prepaids 0 0
------------------ ------------------
Total Current Assets 19,729 2,131
Property, Plant, & Equipment 6,138 19,622
Other Assets:
Investment in Media Rage 32,000 0
Licenses & Other 138,358 330,053
------------------ ------------------
170,358 330,053
------------------ ------------------
TOTAL ASSETS $ 196,225 $ 351,806
================== ==================
LIABILITIES & STOCKHOLDERS DEFICIT
Current Liabilities:
Accounts Payable $ 74,007 $ 93,026
Accrued Liabilities 234,708 541,170
Note Payable 0 757,112
Income Taxes Payable 0 1,100
Payable - Related Parties 780,530 1,148,501
------------------ ------------------
Total Current Liabilities 1,089,245 2,540,909
Long-Term Debt 0 0
------------------ ------------------
Total Liabilities 1,089,245 2,540,909
Stockholders Deficit:
Common Stock, $.001 par value;
Authorized 50,000,000 shares;
Issued and Outstanding 2,577,229 at 3/31/99
and 1,679,895 at 12/31/98 2,577 1,680
Additional Paid-in Capital 3,413,621 2,202,768
Retained Earnings (Deficit) (4,309,218) (4,393,551)
------------------ ------------------
Total Stockholders Deficit (893,020) (2,189,103)
------------------ ------------------
TOTAL LIABILITIES &
STOCKHOLDERS DEFICIT $ 196,225 $ 351,806
================== ==================
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
JustWebit.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
1999 1998
------------------ ------------------
<S> <C> <C>
Revenues From License Sales $ 0 $ 0
Cost of Licenses Sold 0 0
------------------ ------------------
Gross Profit 0 0
Other Income 363 2,000
Forgiveness of Indebtedness 4,925 0
Receipt of Bad Debt Previously Written-off 125,000 0
------------------ ------------------
130,288 2,000
------------------ ------------------
Total Revenue 130,288 2,000
General & Administrative Expenses:
Travel & Auto Expense 1,508 1,501
Postage & Delivery 193 225
Office Expenses 69 681
Outside & Professional Services 9,211 3,119
Rent 1,500 2,000
Salaries - Officers 18,000 18,000
Depreciation & Amortization 344 26,096
Bank Charges 60 43
Insurance 0 774
Telephone Expense 581 965
Computer Expenses 80 0
Other Taxes & Licenses 184 0
Miscellaneous Expense 0 0
------------------ ------------------
Total General & Administrative Expenses 31,730 53,404
------------------ ------------------
Net Income (Loss)
Before Interest and Taxes 98,558 (51,404)
Interest Expense 58,959 77,136
State Income Taxes 0 0
------------------ ------------------
NET INCOME (LOSS) $ 39,599 $ (128,540)
================== ==================
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
JustWebit.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1999 1998
------------------ ------------------
<S> <C> <C>
Revenues From License Sales $ 308,092 $ 0
Cost of Licenses Sold 190,793 0
------------------ ------------------
Gross Profit 117,299 0
Other Revenues 213 2,000
Forgiveness of Indebtedness 11,500 0
Receipt of Bad Debt Previously Written-off 135,000 0
Loss on Abandonment 0 (44,168)
------------------ ------------------
146,713 (42,168)
------------------ ------------------
Total Revenue 264,012 (42,168)
General & Administrative Expenses:
Travel & Auto Expense 3,005 4,790
Postage & Delivery 321 376
Office Expenses 461 1,006
Outside & Professional Services 15,487 3,744
Rent 3,000 5,000
Salaries - Officers 36,000 36,000
Depreciation & Amortization 4,389 52,255
Bank Charges 121 122
Insurance 0 1,060
Telephone Expense 1,527 2,150
Computer Expense 464 1,250
Other Taxes & Licenses 273 86
Miscellaneous 0
------------------ ------------------
Total General & Administrative Expenses 65,048 107,839
------------------ ------------------
Net Income (Loss)
Before Interest and Taxes 198,964 (150,007)
Interest Expense 114,631 132,221
State Income Taxes 0
------------------ ------------------
NET INCOME (LOSS) $ 84,333 $ (282,228)
================== ==================
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
JustWebit.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
June 30, 1999
Three Months Six Months
------------------ ------------------
<S> <C> <C>
Revenues From License Sales $ 0 $ 308,092
Cost of Licenses Sold 0 190,793
------------------ ------------------
Gross Profit 0 117,299
Other Revenues 363 213
Forgiveness of Indebtedness 4,925 11,500
Receipt of Bad Debt Previously Written-off 125,000 135,000
Loss on Abandonment 0 0
------------------ ------------------
130,288 146,713
------------------ ------------------
Total Revenue 130,288 264,012
General & Administrative Expenses:
Travel & Auto Expense 1,508 3,005
Postage & Delivery 193 321
Office Expenses 69 461
Outside & Professional Services 9,211 15,487
Rent 1,500 3,000
Salaries - Officers 18,000 36,000
Depreciation & Amortization 344 4,389
Bank Charges 60 121
Insurance 0 0
Telephone Expense 581 1,527
Computer Expense 80 464
Other Taxes & Licenses 184 273
Miscellaneous 0 0
------------------ ------------------
Total General & Administrative Expenses 31,730 65,048
------------------ ------------------
Net Loss Before Interest and Taxes 98,588 198,964
Interest Expense 58,959 114,631
State Income Taxes 0 0
------------------ ------------------
NET INCOME $ 39,599 $ 84,333
================== ==================
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
JustWebit.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1999 1998
------------------ ------------------
OPERATING ACTIVITIES
<S> <C> <C>
Net Income (Loss) $ 84,333 $ (282,228)
Adjustments:
Depreciation & Amortization 4,389 52,255
Changes in current accounts (20,119) (714)
(Increase) Decrease in Notes Receivable 0 0
------------------ ------------------
Net Cash Provided (Required)
by Operating Activities 68,603 (230,687)
INVESTING ACTIVITIES
Disposal of Licenses 0 218,268
Investment in Media Rage (32,000) 0
------------------ ------------------
Net Cash Provided (Required)
By Investing Activities (32,000) 218,268
FINANCING ACTIVITIES
Loans 0 187,995
Repayment of Loans (1,431,545) (175,832)
Liabilities Paid with Common Stock 1,412,540 0
Note Payable on Licenses Purchased 0 0
------------------ ------------------
Net Cash Provided (Required)
by Financing Activities (19,005) 12,163
------------------ ------------------
Increase (Decrease) in Cash and Cash Equivalents 17,598 (256)
Cash and Cash Equivalents at Beginning of Period 2,131 943
------------------ ------------------
Cash and Cash Equivalents at End of Period $ 19,729 $ 687
================== ==================
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
JustWebit.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principals for complete
financial statements. In the opinion of the Company's management, all
adjustments (consisting of normal accruals) considered necessary for a fair
presentation of these financial statements have been included. The Company's
activities to date have been purely developmental and the Company has not yet
commenced significant commercial operations.
NOTE 2: CAPITALIZATION
The Company was incorporated in the State of Nevada on July 24, 1984 and
authorized 200,000,000 shares of $0.001 par value common stock. On March 16,
1994 the Company effected a 1 share for 30 share reverse stock split. The split
reduced the total outstanding shares from 32,272,000 to 1,075,807. On March 16,
1994 the Company issued 6,500,000 shares of post reverse-split stock to Marrco
Communications, Inc. in the conjunction with the purchase of all of Marrco's
assets and the assumption of all of Marrco's liabilities.
On October 25, 1996 the name of the Company was changed to Superior Wireless
Communications, Inc. and each of the 6,004,836 shares of then issued and
outstanding common stock of the Corporation were exchanged for one share of
preferred stock designated as Class A Convertible Cumulative Preferred Stock
(the "Class A Preferred Stock"), par value of $.001 per share. The Class A
Preferred Stock carries a ten percent (10%) dividend, which may be paid in
common stock, and is convertible into Common Stock of the Company as of October
25, 1998 (the "Conversion Date"). The rate of this conversion was dependent on
the price of the Company's Common Stock prior to the Conversion Date.
Under the terms of the Class A Preferred Stock, all shares outstanding as of
October 16, 1998 automatically converted into common stock at a rate of five
shares of common stock for every one share of Class A Preferred Stock. This
resulted in the automatic conversion of 6,541,416 shares of Class A Preferred
Stock into 32,707,080 shares of common stock. The holders of the remaining
shares of Class A Preferred Stock that were issued after October 16, 1998,
totaling 3,767,501 shares, agreed to convert at the same rate of five shares of
common stock for every one share of Class A Preferred Stock. The latter
conversion will be effective simultaneous to the reverse stock split described
below.
Effective August 16, 1999, the Company effectuated a reverse stock split at a
rate of twenty-to-one. This resulted in 2,577,229 shares of common stock being
outstanding as of that date and no preferred shares are outstanding. The Company
is obligated to issue up to 375,000 shares of its post reverse-split common
stock for the acquisition of Media Rage of Utah, Inc. (See PART II- Other
Information). This resulted in 2,952,229 shares of common stock outstanding as
of August 16, 1999.
8
<PAGE>
JustWebit.com, Inc.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (Continued)
THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998
NOTE 3: RELATED PARTY TRANSACTIONS
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their business
interests. The Company has not formulated a policy for the resolution of such
conflicts.
At June 30, 1999 the Company owed $780,530 to related parties for accrued
compensation, loans and sales to and payments made on behalf of the Company.
This balance was equal to $1,148,501 as of December 31, 1998.
NOTE 4: INCOME TAXES
The Company has available at June 30, 1999, net operating loss carryforwards of
approximately $4.2 million which may provide future tax benefits expiring in
June of 2008.
NOTE 5: WARRANTS
As of December 31, 1998, there are 300,000 redeemable Class "B" common stock
purchase warrants to purchase common stock at a price of $2.00 per share and
25,000 redeemable Class "C" common stock purchase warrants with a price of $4.00
per share. These warrants expired March 31, 1999.
NOTE 6: SUBSEQUENT EVENTS
See "PART II - Item 5. Other Information".
9
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The Company reported net income of $39,599 in the three months ended
June 30, 1999, compared to a loss of $128,540 for the three months ended June
30, 1998. The net income for the current quarter was generated primarily by the
receipt of payments on a note receivable that had previously been written off by
the Company. The loss for the quarter ended June 30, 1998 was attributable to
the Company's continuing General and Administrative Expenses, Interest as well
as depreciation and amortization. In the current quarter, the Company incurred
interest expense of $58,959. This was a decrease of 24% from the interest
expense of $77,136 in the same period last year. Officer's salaries made up
$18,000 of the total General and Administrative salaries of $31,730 in the
quarter ended June 30, 1999. None of this amount was paid as of June 30, 1999.
Of total expenses of $130,540 in the quarter ended June 30, 1998, depreciation
and amortization totaled $26,096, salaries totaled $18,000 and interest expense
for the quarter equaled $77,136. The interest expense is attributable to the
convertible notes payable into which the Company has entered. The majority of
these notes were settled through the issuance of the Company's stock, thus
resulting in the decrease in interest expense.
The Company did not have any income from operations during either the
quarter ended June 30, 1999 or the same period last year. The Company did
collect $125,000 on a note receivable that had previously been written off.
Additionally, the Company booked $4,925 in forgiveness of indebtedness income in
the current quarter.
The Company has continued to operate with a working capital deficit
through the current quarter, although such deficit is substantially reduced from
December 31, 1998. As of June 30, 1999, the Company's current liabilities of
$1,089,245 exceeded its current assets of $19,729 by $1,069,516. Of this
negative working capital, $780,530 represents amounts owed to related parties.
The working capital deficit equaled $2,538,778 as of December 31, 1998. The
related party debt as of June 30, 1999 is contemplated to be converted into
common stock in the quarter ended September 30, 1999. Additionally, other debts
amounting to $234,708 are being negotiated for settlement utilizing the
Company's common stock. The Company is confident that such a settlement will be
reached, thus greatly reducing the current liabilities of the Company.
PART II - OTHER INFORMATION
ITEM 5. Other Information.
On August 1, 1999, in accordance with the terms and provisions of a
certain Purchase Agreement dated as of June 1, 1999, by and between the Company
and Media Rage of Utah, Inc., a Utah corporation ("Media Rage"), 325,000 post
reverse-split shares (See Note 2 of the Footnotes to the Financial Statements)
of the Company's Common Stock, $.001 par value per share ("Common Stock"), were
issued to former shareholders of Media Rage in consideration of their sale,
assignment and transfer to the Company of all of the outstanding shares of
capital stock of Media Rage. The Company also agreed to issue 50,000 post
reverse-split shares of its Common Stock to a third party for services in
connection with such transaction. As a result of this acquisition and the
issuance of 375,000 post-reverse split shares of the Company's Common Stock, the
Company had issued and outstanding total number of 2,952,229 shares of Common
Stock as of August 16, 1999.
Media Rage provides customers with user friendly software solutions to
design and operate E- Commerce web sites, including shopping cart technology.
Media Rage also offers custom website design and valuable marketing information
and support for its clients.
10
<PAGE>
Year 2000 Compliance; Year 2000 Readiness Disclosure
To the fullest extent permitted by law, the following discussion is a
"Year 2000 Readiness Disclosure" within the meaning of the Year 2000 Information
and Readiness Disclosure Act 105 P.L. 271.
Background
Many of the world's computer systems and programs currently record
years in a two-digit format. Such computer systems or programs that have
date-sensitive software or hardware may recognize a date using "00" as the year
1900 rather than the year 2000, and therefore may be unable to recognize,
interpret or use dates in and beyond the year 1999 correctly. Because the
activities of many businesses are affected by dates or are date-related, the
inability of these systems or programs to use such date information correctly
could result in system failures or disruptions and lead to disruptions of
business operations in the United States and internationally (the "Year 2000
Problem"). In the case of the Company, such disruptions may include, among other
things, an inability to process transactions, send invoices, or engage in
similar routine business activities.
Issues relating to the Year 2000 Problem arise in a number of different
contexts in which the Company and its operating subsidiary use or access
computer programming. In its operations, the Company uses both third-party and
internally developed software programs and relies on customary
telecommunications services, as well as building and property logistical
services, including, without limitation, embedded computer-controlled systems.
The Company generally will also rely heavily upon suppliers, as well as data
processing, transmission and other services provided by third-party service
providers, including, without limitation, Internet access, online content,
product distribution and delivery, and information services.
The Company and its operating subsidiary will rely upon independent
internal local access network (LAN) computer systems. In addition, the Company
and its subsidiaries lease a portion of their office space from third parties
and may conduct business through multiple locations in major cities. Although
the operating subsidiary will, for the most part, conduct business
independently, it will substantially use similar third-party software and have
common relationships and dependencies with third party service providers.
Assessing the Impact of the Year 2000 Problem on the Company's
Operations
The Company has reviewed its computer systems and programs, including
information technology ("IT") and non-IT systems, and has determined that they
are in compliance with the requirements of the Year 2000. The Year 2000 problem,
however, is pervasive and complex as virtually every computer operation will be
affected in some way by the rollover of the two digit year to 00. Failure of any
of the Company's third-party service providers to adequately address this issue
could result in a substantial interruption of the Company's normal plan of
operation and business affairs, and could result in significant losses from
operations. To the extent that the Company relies upon non-U.S. third-party
service providers who may be less capable or prepared than their U.S.
counterparts to address and resolve the Year 2000 problem, the Company's
operations may be subject to a greater level of risk with respect to Year 2000
compliance. Although the Company could incur substantial costs in connection
with the failure of third-party computing systems and software, such costs are
not sufficiently certain to estimate at this time.
Contingency Planning
The Company has not developed any plan to address contingencies arising
from the inability of third-party service providers to become Year 2000
compliant in a timely manner. Consequently, no assurance can be given that the
potential failure of third-party systems will not increase the Company's
11
<PAGE>
operating costs or create uncertainties that may have an adverse effect on the
Company's operating results or financial condition.
ITEM 6. Exhibits and Reports on Form 8-K
(a) 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.
Dated: August 26, 1999
JustWebit.com, Inc.
Jon Richard Marple,
President, Chairman,
Chief Executive Officer and
Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
JustWebit.com, Inc. June 30, 1999 financial statements and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000793986
<NAME> JustWebit.com, Inc.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 19,729
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,729
<PP&E> 74,571
<DEPRECIATION> (68,433)
<TOTAL-ASSETS> 196,225
<CURRENT-LIABILITIES> 1,089,245
<BONDS> 0
0
0
<COMMON> 2,577
<OTHER-SE> (895,597)
<TOTAL-LIABILITY-AND-EQUITY> 196,225
<SALES> 308,092
<TOTAL-REVENUES> 308,092
<CGS> 190,793
<TOTAL-COSTS> 190,793
<OTHER-EXPENSES> 65,048
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 114,631
<INCOME-PRETAX> 84,333
<INCOME-TAX> 0
<INCOME-CONTINUING> 84,333
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 84,333
<EPS-BASIC> .04
<EPS-DILUTED> .04
</TABLE>
