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 June 30, 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
<TABLE>
<CAPTION>
Net USA, Inc.
Condensed Consolidated Fianancial Statements
June 30, 1997 and 1996 (Unaudited)
<S> <C> <C>
1997 1996
------ ------
Current Assets
--------------
Cash $ 463,794.82 $ 580,590.60
Accounts Receivable 312,304.27 349,591.45
Inventory 3,987.32 5,051.75
Prepaid Exp 13,000.00 8,947.54
------------ --------------
Total Current Assets 793,086.41 944,181.34
Property & Equipment 85,309.11 79,601.20
Long-Term Assets
----------------
Def. IX Assets - LT 811,749.00 0.00
Other Assets
-----------
Note Receivable 80,000.00 0.00
Investment at cost 100,000.00 50,000.00
R&D Cost and Other 525,071.11 528.74
------------ ------------
Total Other Assets 705,071.11 50,528.74
TOTAL ASSETS $2,395,215.63 $ 1,074,311.28
<PAGE>
Current Liabilities
----------------------
Accounts Payable $ 166,346.21 $ 197,657.88
Payroll Payable 10,873.10 2,485.75
State Income Tax Payable 22,781.00 0.00
Lease Obligation - Current 8,237.55 0.00
Accrued Liabilities 8,193.60 0.00
-------------- --------------
Total Current Liabilities $ 216,411.46 $ 200,143.63
Long-Term Liabilities
----------------------
Lease Oblig. - Long-Term $ 15,489.35 0.00
Note Payable 224,753.54 254,424.44
Loan from Shareholders 0.00 70,787.58
------------- -------------
Total Long-Term Liabilities $ 240,242.89 $ 325,212.02
Stockholders' Equity
--------------------
Common Stock $ 4,455.92 3,911.92
Add. Paid-In Capital 3,766,562.82 3,108,120.16
Current Deficit 990,392.22 (141,010.62)
Retained Deficit (2,822,849.68) (2,422,065.83)
-------------- --------------
Total SH Equity 1,938,561.28 $ 548,955.63
TOTAL S/H and LIAB. $2,395,215.63 $ 1,074,311.28
<PAGE>
Condensed Consolidated Statements of Operations
For the Nine Months Ended June 30, 1997 and
the Four Months Ended June 30, 1996
(Unaudited)
June 30, 1997 June 30, 1996
------------- -------------
Sales $ 2,466,405.66 $ 462,777.44
Cost of Sales (809,359.01) (265,941.24)
Operating Income 1,657,046.65 196,836.20
Other Income 96,362.90 7,048.74
--------------- -------------
Total Revenue 1,753,409.55 203,884.94
Salaries and Wages (328,129.11) (92,627.16)
Employee Benefits (143,846.52) (21,750.37)
Administrative &
General Expenses (634,430.88) (172,375.00)
Depreciation & Amortization (20,978.03) 0.00
Marketing Expense (514,333.20) (46,812.30)
Interest Expense (34,673.90) (11,330.73)
Financial Expense (354.47) 0.00
-------------- ---------------
Total Operating Expenses (1,676,746.11) (344,895.56)
Income (Loss) before Taxes 76,663.44 (141,010.62)
Income Tax Benefit 788,188.00 0
Net Income (Loss) for the
year after Tax 864,851.44 (141,010.62)
</TABLE>
<PAGE>
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.
RESULTS OF OPERATIONS
Nine Months Ended June 30, 1997 Compared to the Four Months Ended June
30, 1996
Revenues for the nine months ended June 30, 1997, were $2,466,406 compared to
$462,777 for the four months ended June 30, 1996. The $2,003,629 increase was
due primarily to the short active months ended June 30, 1996. Gross margins
increased from 43% in the four months ended June 30, 1996 compared to 67% in
the nine months ended June 30, 1997.
Operating expenses were $1,676,746 for the nine months ended June 30, 1997,
compared to $344,896 for the four months ended June 30, 1996, an increase of
$1,331,850 due to the short active months ended June 30, 1996. $462,056 of
this increase was due to Administration & General Expenses:
Travel: $69,553
Consulting: $121,667
Legal Fee: $19,643
Accounting Fee: $62,475
Other Operating Expense: $188,718
<PAGE>
Due to increase in business activities and due to short active months ended
June 30, 1996. Internet Phone project was in development process, so
consulting and network with other countries were necessary. Consulting fee
and travel expenses increased a lot.
Salaries and benefits expenses increased $357,598 for the nine months ended
June 30, 1997 compared to the four months ended June 30, 1996 due to short
active months ended June 30, 1996 and due to new switch center operation in
Taiwan.
RESULTS OF OPERATIONS (Continued)
Nine Months Ended June 30, 1997 Compared to the Four Months Ended June
30, 1996
Marketing Expenses increased $467,521 due to short active months ended June
30, 1996 and launching Internet fax products marketing expenses.
PART II: OTHER INFORMATION
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.
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
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 463,795
<SECURITIES> 0
<RECEIVABLES> 312,304
<ALLOWANCES> 0
<INVENTORY> 3,987
<CURRENT-ASSETS> 793,086
<PP&E> 85,309
<DEPRECIATION> 0
<TOTAL-ASSETS> 705,071
<CURRENT-LIABILITIES> 216,412
<BONDS> 240,243
0
0
<COMMON> 4,456
<OTHER-SE> 3,766,563
<TOTAL-LIABILITY-AND-EQUITY> 2,395,216
<SALES> 2,466,406
<TOTAL-REVENUES> 1,753,410
<CGS> 809,359
<TOTAL-COSTS> 809,359
<OTHER-EXPENSES> 1,676,746
<LOSS-PROVISION> 788,188
<INTEREST-EXPENSE> 34,674
<INCOME-PRETAX> 76,663
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 864,851
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
