U.S. Securities and Exchange Commission
Washington, DC 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
For the fiscal quarter ended March 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 33-11324-LA
NETUSA, INC.
(Name of small business issuer in its charter)
Colorado 84-1035751
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
201 San Antonio Cir., C250, Mountain View, CA 94040
(Address of principal executive offices)
Issuer's telephone number: (650) 948-6200
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 registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes__ No__X
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.__X
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
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<CAPTION>
NetUSA, Inc.
Condensed Consolidated Financial Statements
For the Six Months Ended March 31, 1997
and
For the One Month Ended March 31, 1996
(Unaudited)
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Assets 1997 1996
===== ==== ====
Current Assets
---------------
Cash and Cash Equivalents $ 698,143.92 $ 803,482.55
Accounts Receivable, Net 442,679.94 210,966.11
Inventory 7,073.00 5,051.75
Prepaid Expenses 17,040.00 1,447.54
------------ -------------
Total Current Assets $1,164,936.86 $1,020,947.95
Property and Equipment
at Cost $ 241,936.29 $ 185,741.93
Less: Accum. Depreciation (157,850.00) (107,369.18)
-------------- -------------
Net Property and Equipment $ 84,086.29 $ 78,372.75
Other Assets
---------------
Notes Receivable $ 130,675.00 $ -
Investment at Cost 200,000.00 50,000.00
R & D Costs and Other 10,046.44 528.74
------------- -------------
Total Other Assets $ 340,721.44 $ 50,528.74
------------- -------------
Total Assets $1,589,744.59 $1,149,849.44
============= =============
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Liabilities and Stockholders' Equity
==========================
Current Liabilities
----------------------
Account Payable $ (14,696.65) $ 90,721.96
Accrued Payroll Payable 4,655.53 (242.21)
-------------- --------------
Total Current Liabilities $ (10,041.12) $ 90,479.75
Long Term Liabilities
--------------------------
Notes Payable $ 229,675.99 $ 282,183.45
Loans from Shareholders - 70,787.58
-------------- ----------------
Total
Long-Term Liabilities $ 229,675.99 $ 352,971.03
Stockholders' Equity
=====================
Common Stock $ 4,639.92 $ 3,913.92
Additional Paid
In Capital 4,226,695.32 3,112,766.64
Current Deficit (38,375.84) 11,783.93
Retained Deficit (2,822,849.68) (2,422,065.83)
-------------- -------------
Total Stockholders'Equity $1,370,109.72 $ 706,398.66
---------------- -----------------
Total Liabilities and
Stockholders' Equity $ 1,589,744.59 $1,149,849.44
=============== =============
Revenue and Expenses
================
Revenues
------------
Sales $ 965,878.98 $ 124,400.64
Cost of Sales (297,740.15) (8,803.38)
Operating income 668,138.83 115,597.26
Other Income 41,122.14 1,848.65
-------------- --------------
Total Revenues $ 709,260.97 $ 117,445.91
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Expenses
========
Operating Expenses
--------------------
Salaries and Wages $ 188,627.70 $ 21,800.00
Employee Benefits 11,550.04 8,404.87
Administrative &
General Expense 347,104.74 67,070.13
Marketing Expense 181,457.98 5,098.24
Interest Expense 13,096.35 3,288.74
------------------ --------------
Total
Operating Expenses $ 741,836.81 $ 105,661.98
------------------ --------------
Income(Loss) before Taxes $ 32,575.84 $ 11,783.93
Provision for current year's
Income Tax $ 800.00 $ -
----------------- -----------------
Net Income (Loss)
for the year after Tax $ 33,375.84 $ 11,783.93
Item 2: Management's Discussion and Analysis or Plan of Operation
1. THE COMPANY
NetUSA, Inc., previously named as Technology Management and Marketing
Inc., was incorporated under the laws of the State of Colorado on December 31,
1985. The Company was engaged principally in organizational activities until
its public offering of securities in 1987.
The Company was the exclusive licensee of Temple University for a
diagnostic test for the detection of gonorrhea, known as the GONOSTAT.
During the period May 1990 to December 31, 1995 the Company was inactive.
The Company did not file any SEC reports, Federal or State income tax returns.
On February 26, 1996, the Company acquired 100% of the issued and
outstanding shares of Pacific Microelectronics, Inc., a company incorporated
in the State of California on July 1, 1987.
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The Company's main business in recent years is merchandising software
products primarily through distributors and direct sales to consumers. The
Company also provides a newly developed telecommunication system for offering
Internet web site services and facilitating the fax function worldwide.
Results of Operations
- -----------------------
Six Months Ended March 31, 1997 Compared to the One Month Ended March 31,1996
Revenues for the six months ended March 31, 1997, were $965,879 compared to
$124,401 for the one month ended March 31, 1996. The $841,478 increase was
due primarily to the short active months ended March 31, 1996. Gross margins
decreased from 93% in the one month ended March 31, 1996 compared to 69% in
the six months ended March 31, 1997.
Operating expenses were $741,837 for the six months ended March 31, 1997,
compared to $105,662 for the one month ended March 31, 1996, an increase of
$636,175 due to the short active months ended March 31, 1996. $280,035 of
this increase was due to Administration & General Expenses:
Rent: $24,210
Telephone: $89,518
Travel: $22,907
Insurance: $31,729
Consulting: $51,982
Other Operating Expenses: $59,689
Due to short active months ended March 31, 1996 and increase in Internet fax
business.
Salaries and benefits expenses increased $169,973 for the six months ended
March 31, 1997 compared to the one month ended March 31, 1996 due to the short
active months ended March 31, 1996 and hiring of more engineers.
<PAGE>
Six Months Ended March 31, 1997 Compared to the One Month Ended March 31, 1996
Marketing Expenses increased $176,360 due to the short active months ended
March 31, 1996 and expansion of business exposure.
PART II: OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K
There are no exhibits to this form, and no Form 8-K was filed during this
quarter.
SIGNATURES
In accordance with the requirements of the Exchange Act, Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
NetUSA,Inc.
Dated: May 4, 1998 /s/ Wun C. Chiou, President and
Chairman of the Board
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 698,144
<SECURITIES> 0
<RECEIVABLES> 442,680
<ALLOWANCES> 0
<INVENTORY> 7,073
<CURRENT-ASSETS> 1,164,937
<PP&E> 241,936
<DEPRECIATION> 157,850
<TOTAL-ASSETS> 1,589,745
<CURRENT-LIABILITIES> (10,041)
<BONDS> 229,676
0
0
<COMMON> 4,640
<OTHER-SE> 4,226,695
<TOTAL-LIABILITY-AND-EQUITY> 1,589,745
<SALES> 965,879
<TOTAL-REVENUES> 709,261
<CGS> 297,740
<TOTAL-COSTS> 297,740
<OTHER-EXPENSES> 741,837
<LOSS-PROVISION> 800
<INTEREST-EXPENSE> 13,096
<INCOME-PRETAX> 32,576
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 33,376
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
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