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 December 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., Formerly Known As Technology Management and Marketing, Inc.
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(Name of small business issuer in its charter)
Colorado 84-1035751
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
201 San Antonio Cir., C250, Mountain View, CA 94040
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(Address of principal executive offices)
Issuer's telephone number: (650) 948-6200
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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
PART I - FINANCIAL INFORMATION
Item 1: Financial Statements
<TABLE>
<CAPTION>
NetUSA, Inc.
Condensed Consolidated Financial Statements
For the three months ended December 31, 1997 and 1996
(Unaudited)
<S> <C> <C>
1997 1996
------------- -------------
Current Assets
--------------------------
Cash . . . . . . . . . . . 48.616.68 434,411.05
A/R. . . . . . . . . . . . 415,985.51 350,177.56
Inventory. . . . . . . . . 4,051.74 7,073.00
Prepaid Expenses . . . . . 17,851.96 17,040.00
Deferred Income Tax Asset. 14,679.00 -
______________ . . . . ____________
Total Current Assets . . . 501,184.89 808,701.61
Property & Equipment
--------------------------
At Cost. . . . . . . . . . 276,789.92 233,627.91
Less: Accumulated Depre. . (191,827.20) (157,850.00)
----------- ----------
Net Property & Equipment . 84,962.72 75,777.91
Long-Term Assets
--------------------------
Def. IX Assets - LT. . . . 918,173.00 -
Other Assets
--------------------------
Notes Receivable . . . . . 80,000.00 50,000.00
Investment at Cost . . . . 100,000.00 150,000.00
R&D Cost and Other . . . . 779,337.96 10,046.44
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Total Other Assets . . . . 959,337.96 210,046.44
TOTAL ASSETS . . . . . . . 2,463.658.57 1,094.525.96
-------------------------- ============= =============
Current Liabilities
--------------------------
Accounts Payable . . . . . 373,418.88 37,959.36
Payroll Payable. . . . . . 513.02 8,209.81
Lease Obligation - Current 7,556.19 -
Accrued Liabilities. . . . 8,193.60 -
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Total Current
Liabilities. . . . . . . . 389,681.69 46,169.17
Long-Term Liabilities
--------------------------
Lease Obligation - LT. . . 13,969.42 -
Note Payable . . . . . . . 214,567.41 234,633.21
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Total Long-Term
Liabilities. . . . . . . . 228,536.83 234,633.21
Stockholders' Equity
---------------------
Common Stock 4,467.92 706,778.00
Add. Paid-In Capital 3,796,550.82 3,092,057.24
Current Deficit (89,741.05) (162,261.98)
Retained Deficit (1,865,837.64)(2,822,849.68)
______________ ____________
Total Stockholders'
Equity 1,845,440.05 813,723.58
TOTAL S/H EQUITY AND
-----------------------
LIABILITIES $2,463,658.57 $1,094,525.96
----------- ============ ============
REVENUE AND EXPENSES
====================
Sales 262,087.38 435,235.74
Cost of Sales (117,281.06) (156,689.07)
______________ ____________
Operating Income 144,806.32 278,546.67
Other Income 3,665.38 25,554.34
______________ ____________
Total Revenue 148,471.70 304,101.01
Salaries and Wages (53,022.33) (97,880.00)
Employee Benefits (21,529.78) (9,286.12)
______________ ____________
Total Salary and
Benefits (74,552.11) (107,166.12)
Administrative
& General Expenses (136,780.55) (180,091.04)
Depreciation &
Amortization (6,005.49) -
Marketing Expense (14,644.32) (167,332.26)
Interest Expense (6,229.28) (6,773.57)
Financial Expense - -
______________ ____________
Total Operating
Expenses (238,212.75) (461,362.99)
Income (Loss) before
Taxes (89,741.05) (157,261.98)
Provision for Current
Year's Income Tax - -
______________ ____________
Net Income (Loss)
for the Year after Tax $(89,741.05) $(157,261.98)
=========== ============
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.
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.
2. RESULTS OF OPERATIONS
Three Months Ended December 31, 1997 Compared to the Three Months Ended
December 31, 1996
Revenues for the three months ended December 31, 1997, were $262,087 compared
to $435,236 for the same period ended December 31, 1996. The $173,149
decrease was due primarily to Internet fax traffic decrease and due to higher
cost of sales. Gross margins slightly decreased from 64% in the three months
ended December 31, 1996 compared to 55% in the same period ended December 31,
1997.
Operating expenses were $238,213 for the three months ended December 31, 1997,
compared to $461,363 for the same period ended December 31, 1996, an decrease
of $223,150 because of overall reduction of business volume.
Marketing Expenses decreased $152,688 due to termination and reduction of
advertising that is not cost effective.
PART II: OTHER INFORMATION
Item 1: Legal Proceedings
NetUSA, Inc. and its relevant affiliates were not involved in any
reportable legal proceedings during this quarter.
Item 2: Changes in Securities
There were no changes in the relevant security instruments during this
quarter.
Item 3: Defaults Upon Senior Securities
There were no defaults upon senior securities during this quarter.
Item 4: Submission of Matters to a Vote of Security Holders
There was no matter submitted to a vote of security holders during this
quarter.
Item 5: Other Information
There is no relevant other information to be reported for this quarter.
Item 6: Exhibits and Reports on Form 8-K
There are no exhibits to be attached for this form, and no Form 8-K was
filed during this quarter.
Dated: May 5, 1998 NETUSA, INC.
By: /s/ Dr. Wun C. Chiou,
President and Chairman of the Board
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 48,617
<SECURITIES> 0
<RECEIVABLES> 415,986
<ALLOWANCES> 0
<INVENTORY> 4,052
<CURRENT-ASSETS> 501,185
<PP&E> 276,790
<DEPRECIATION> 157,850
<TOTAL-ASSETS> 2,463,659
<CURRENT-LIABILITIES> 389,682
<BONDS> 228,537
0
0
<COMMON> 4,468
<OTHER-SE> 3,796,551
<TOTAL-LIABILITY-AND-EQUITY> 2,463,659
<SALES> 262,087
<TOTAL-REVENUES> 148,472
<CGS> 117,281
<TOTAL-COSTS> 117,281
<OTHER-EXPENSES> 238,213
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,229
<INCOME-PRETAX> (89,741)
<INCOME-TAX> 0
<INCOME-CONTINUING> (89,741)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (89,741)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
