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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
Commission File Number: 33-7075-LA
TangibleData, Inc.
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(Exact name of small business issuer as specified in its charter)
Colorado 33-0179781
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(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
5660 Airport Boulevard, Suite 105, Boulder, Colorado 80301
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(Address of principal executive offices including zip code)
(303) 417-0441
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(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 X No___
As of August 3, 2000, the Registrant had 12,642,673 shares of its no par value
common stock outstanding.
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TangibleData, Inc.
(A Development Stage Enterprise)
Form 10-QSB Quarterly Report
Table of Contents
Part I - Financial Statements Page
Item 1 - Financial Statements
Balance Sheet as of June 30, 2000 ............................... 3
Statements of Operations for the three months ended
June 30, 2000, and from inception to June 30, 2000 .............. 4
Statements of Cash Flows for the three months ended
June 30, 2000, and from inception to June 30, 2000 .............. 5
Notes to Consolidated Condensed Financial Statements ............. 6
Item 2 - Management's Discussion and Analysis and Results
of Operations ............................................. 7
Part II - Other Information ........................................ 9
Signatures ......................................................... 10
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TangibleData, Inc.
(A Development Stage Company)
BALANCE SHEET
JUNE 30, 2000
(UNAUDITED)
ASSETS
Current Assets:
Cash $ 1,132,000
Certificates of deposit 35,000
Receivables - related party 13,000
Other receivables 47,000
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Total current assets 1,227,000
Property and Equipment, net of 1,000 accumulated
depreciation 112,000
Other Assets 16,000
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Total Assets $ 1,355,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 174,000
Note payable - related party 79,000
Current portion of capital leases 8,000
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Total current liabilities 261,000
Long-term Capital Leases, net of current portion 18,000
Stockholders' Equity:
Common Stock, no par value; 50,000,000
shares authorized and 12,642,743 shares
issued and outstanding at June 30, 2000 9,831,000
Deficit accumulated during the development stage (8,755,000)
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Total stockholders' equity 1,076,000
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Total Liabilities and Stockholders' Equity $ 1,355,000
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See accompanying notes to these financial statements.
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TangibleData, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the
Three Months
Ended Inception
June 30, 2000 to Date
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Net Revenues $ - $ -
Operating Expenses:
Research and development costs 211,000 374,000
Acquisition costs 175,000 200,000
Other operating costs 259,000 8,198,000
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Total operating expenses 645,000 8,772,000
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Interest Income, net 17,000 17,000
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Net Loss $ (628,000) $(8,755,000)
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See accompanying notes to these financial statements.
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TangibleData, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the
Three Months
Ended Inception
June 30, 2000 to Date
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Cash Flows from Operating Activities:
Net loss $ (628,000) $(8,755,000)
Adjustments to reconcile net loss to
cash used in operating activities:
Depreciation expense 1,000 1,000
Expenses paid with stock - 7,855,000
Expenses paid with note - 125,000
Changes in operating assets and liabilities:
Accounts receivable - related party (13,000) (13,000)
Other receivables (47,000) (185,000)
Other assets (16,000) (16,000)
Accounts payable (111,000) 174,000
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Net cash used in operating activities (814,000) (814,000)
Cash Flows from Investing Activities:
Invest in certificates of deposits (35,000) (35,000)
Purchase property and equipment (87,000) (87,000)
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Net cash used in investing activities (122,000) (122,000)
Cash Flows from Financing Activities:
Repayment of related party note (46,000) (46,000)
Proceeds from stock sales, net 2,114,000 2,114,000
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Net cash used in financing activities 2,068,000 2,068,000
Increase in Cash 1,132,000 1,132,000
Cash, Beginning of year - -
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Cash, June 30, 2000 $ 1,132,000 $ 1,132,000
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See accompanying notes to these financial statements.
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TangibleData, Inc.
(A Development Stage Company)
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
Note 1 - Basis of Presentation:
The accompanying unaudited condensed financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. They do not include all information and notes required
by generally accepted accounting principles for complete financial statements.
However, except as disclosed herein, there has been no material change in the
information disclosed in the notes to the financial statements included in our
amended 8-K for the period ended March 31, 2000. In our opinion, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the periods
presented are not necessarily indicative of the results that may be expected
for the full year.
The accounting policies we followed are set forth in Note 1 to our financial
statements included in our amended 8-K for the period ended March 31, 1999.
These financial statements should be read in conjunction with the financial
statements and notes included in the amended 8-K.
Note 2- Stockholders Equity
YGCD Assets, Inc. was incorporated in January 2000 in the State of Colorado.
During the quarter ended June 30, 2000 the company issued an additional
917,550 shares for offering proceeds of $1,498,000, net of offering costs.
Also during the quarter, $616,000 was released from escrow representing
308,000 shares sold before year-end.
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ITEM 2
MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
The forward-looking statements included in Management's Discussion and
Analysis of Financial Condition and Results of Operations, which reflect
management's best judgment based on factors currently known, involve risks and
uncertainties. Our actual results may differ significantly from the results
discussed in the forward-looking statements. You should not regard their
inclusion as a representation by us that the objectives or plans will be
achieved. Factors that might cause such a difference include, but are not
limited to, competitive, technological, financial and business challenges
making it more difficult than expected to sell products and services. We may
be unable to hire and retain our key sales, technical and management
personnel; there may be other material adverse changes in the Internet
industry or in our operations or business, and any or all of these factors may
affect our ability to achieve our projected sales growth. Forward-looking
information provided by TangibleData pursuant to the safe harbor established
by recent securities legislation should be evaluated in the context of these
factors.
OVERVIEW
In the fiscal quarter ended June 30, 2000, the Company was primarily
engaged in the development of a digital information publishing, archiving and
distribution business. The Company is developing technology enabling a user
to bring digital data to a web-integrated fulfillment center where they can
access on-demand manufacturing and distribution of CDS and other media.
During the quarter ended June 30, 2000, the Company produced no sales and was
exclusively engaged in hiring personnel, acquiring equipment, and establishing
a base of operations and facility to duplicate and distribute CDs containing
customized information as desired by potential customers of the Company. The
Company is a development stage enterprise. Since YGCD Assets was just
incorporated in January 2000, there is no comparable financial information for
1999.
RESULTS OF OPERATIONS
Since the Company was in the start-up phase of its business during the
three months ended June 30, 2000, there were no sales or revenue during the
period.
During the three months ended June 30, 2000, the Company incurred
$211,000 of research and development costs related to developing its
technology.
General and administrative expenses for the three months ended June 30,
2000, totaled $259,000. The largest component of this item was salaries and
recruiting fees of $143,248. The Company also incurred legal and accounting
fees of $17,508, much of which was related to the reverse acquisition
transaction and preparing the necessary SEC filings.
During the three months ended June 30, 2000, the Company incurred
$175,000 in acquisition costs related to the reverse acquisition with Kimbell
deCar Corporation.
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LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital was $966,000 at June 30, 2000. The
increase in working capital during the three months ended June 30, 2000, was
primarily due to the proceeds from the sale of common stock during the three
months ended June 30, 2000.
During the three months ended June 30, 2000, cash used in operating
activities was $(814,000). The primary reason for the large increase in cash
used in operating activities was the net loss of $(628,000).
Cash used in investing activities during the three months ended June 30,
2000, was $(122,000). During the three months ended June 30, 2000, the
Company paid $87,000 for equipment.
Cash provided by financing activities during the three months ended June
30, 2000, was $2,068,000. The Company received $2,114,000 in net proceeds
from the sale of common stock in the three months ended June 30, 2000.
The Company anticipates that it will need additional equity investments
in the future to continue to fund general working capital. There can be no
assurance that such investments will be obtained. If they are not, the
Company's business will be adversely affected.
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PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings.
None.
ITEM 2 - Changes in Securities and Use of Proceeds.
On April 20, 2000, the Company issued 12,125,989 shares of its common
stock to the shareholders of YGCD Assets, Inc., a Colorado corporation
("YGCD"), in connection with the acquisition of 100% of the outstanding shares
of YGCD. Each YGCD shareholder was provided with information on the Company
and the Company complied with the other applicable requirements of Rule 506,
including the filing of a Form D with the SEC. Each YGCD shareholder signed a
Letter of Acceptance or Subscription Agreement in which he represented that he
was acquiring the shares for investment only and not for the purpose of resale
or distribution. The appropriate restrictive legend was placed on the
certificates and stop transfer orders were issued to the transfer agent.
ITEM 3 - Defaults on Senior Securities.
None.
ITEM 4 - Submission of Matters to a Vote of Security Holders.
A special meeting of shareholders of the Company was held on April 20,
2000, to approve the following: (1) an amendment to the Company's Articles of
Incorporation to change the name to TangibleData, Inc.; (2) an amendment to
the Company's Articles of Incorporation to limit directors' liability in
certain circumstances; and (3) the Company's 2000 Equity Incentive Plan.
The following table sets forth the number of votes cast for each matter.
There were no broker non-votes:
FOR AGAINST ABSTAIN
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1. Approval of name change 2,520,835 0 0
2. Approval of limitation 2,520,835 0 0
of directors' liability
3. Approval of 2000 Equity 2,520,835 0 0
Incentive Plan
ITEM 5 - Other Information.
None.
ITEM 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits.
27 Financial Data Schedule Filed herewith electronically
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(b) Reports on Form 8-K.
The Company filed a Report on Form 8-K dated April 20, 2000, related to
the reverse acquisition with YGCD Assets, Inc. The 8-K reported on Items 1,
2, 5, and 7. An amendment to this 8-K which included consolidated financials
and pro forma financial information under Item 7 was filed on June 28, 2000.
The Company filed a Report on Form 8-K dated June 23, 2000, related to a
change of the Company's auditors. The 8-K reported on Items 4 and 7.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TangibleData, Inc.
Dated: August 11, 2000 By:/s/ Blair Zykan
Blair Zykan, President
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EXHIBIT INDEX
EXHIBIT METHOD OF FILING
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27. FINANCIAL DATA SCHEDULE Filed herewith electronically
