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 six months ended March 31, 2000
[ ] 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)
103 Hammond Ave., Fremont, CA 94539
(Address of principal executive offices)
Issuer's telephone number: (510) 580-9800
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
(Note: unaudited, as permissible under Item 310(b) of
Regulation S-B.)
Balance Sheet
2000 1999
Current Assets
Cash 138,564 222,296
A/R 628,453 253,825
Inventory 49,584 20,164
Prepaid Expenses 2,132 1,701
Deferred Income Tax Asset - -
______________ _____________
Total Current Assets 818,733 497,986
Property & Equipment
At Cost 610,813 306,372
Less: Accumulated Depre. (472,885) (226,076)
______________ ______________
Net Property & Equipment 137,928 80,296
Other Assets
Investment at Cost 1,137,000 14,575
Other Assets 44,556 110,270
Goodwill/Intangible 1,694,042 143,125
______________ ______________
Total Other Assets 2,875,598 267,970
TOTAL ASSETS 3,832,259 846,252
Current Liabilities
Bank Overdraft 84,310 -
Accounts Payable 452,979 172,607
State Income Tax Payable 7,047 -
Lease Obligation - Current 4,146 5,272
Accrued Liabilities 58,824 78,471
Other Liabilities 69,965 27,933
Notes Payable 397,384 8,975
______________ _____________
Total Current
Liabilities 1,074,655 293,258
Long-Term Liabilities
Lease Obligation - LT 8,698 8,698
Note Payable - 196,646
Due to Shareholders 750,018 36,090
______________ ______________
Total Long-Term
Liabilities 758,716 241,434
Stockholders' Equity
Common Stock 11,478 7,006
Add. Paid-In Capital 8,881,476 4,843,886
Treasury Stock (14) (14)
Add. Paid-In Cap. -
(Treasury Stock) (12,064) 22,047
Current Deficit (648,253) (422,827)
Retained Deficit (6,233,735) (4,138,538)
______________ ______________
Total Stockholders'
Equity 1,998,888 311,560
TOTAL S/H
AND LIABILITIES 3,832,259 846,252
Statements of Operations for the
Six Months Ended March 31, 2000 and 1999
Six Months Ended Six Months Ended
March 31, 2000 March 31, 1999
Sales 943,273 1,594,527
Cost of Sales (612,398) (1,309,823)
______________ ______________
Operating Income 330,875 284,704
Salaries/Wages/Benefits (393,870) (319,046)
Administrative, Depreciation,
Amortization, Marketing,
Interest, and Financial
Expenses (584,424) (483,469)
______________ ______________
Total Operating Expenses (978,294) (802,515)
______________ ______________
Gain/(Loss) from Operations (647,419) (517,811)
Other Income 36 94,984
______________ ______________
Gain/(Loss) before Taxes (647,383) (422,827)
Provision for Current
Year's Income Tax (870) -
______________ ______________
Net Income (Loss) for the
Year after Tax (648,253) (422,827)
Shares Outstanding 9,683,082 10,068,082
Profit (Loss) Per Share (0.07) (0.04)
Item 2: Management's Discussion and Analysis or Plan
of Operation
(1) The Company
NetUSA, Inc., previously named Technology Management
and Marketing, Inc., was incorporated under the laws of the
State of Colorado on Dec. 31, 1985. During the period May
1990 to December 31, 1995 the Company was inactive. 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. In the recent
months, the Company has expanded itself into print and
electronic media and is receiving substantial revenue from
advertising in those media. The Company operates a
division with the trade name Recomex located in San Diego,
Calif., that distributes various kinds of computer
peripherals. Over the past six months, the Company has been
working to expand its web services, in the form of its
SoftwareCenter website, which retails software products
from many software companies. The Company also operates a
telecommunication services division under the name of
GlobalCom Teleservices, which offers conventional and
Internet telephone and fax services.
(2) Results of Operations
The operating income for the six months ending March
31, 2000 was $330,875, an increase of $46,171 as compared
with that of the six months ending March 31, 1999. This
increase is mainly due to increases in advertising revenue
from the operation of Silicon Valley High Tech Magazine and
other advertising venues.
The operating expenses for the six months ending March
31, 2000 was $978,294, an increase of $175,779 as compared
with those of the six months ending March 31, 1999. The
increase is mainly due to the Company's recent hiring of
new personnel and purchase of new equipment to start the
operation of Silicon Valley High Tech Magazine and BizNet
Business Directories. The Company believes that as the
income figures indicate, these new business ventures have
great potential, and the spending will be recaptured
quickly.
Part II: Other Information
Item 1: Legal Proceedings
NetUSA, Inc. and its relevant affiliates were not
involved in any legal proceedings that the company
considers reportable during this quarter. However, there
is one litigation of note which may become reportable - a
breach of contract proceeding in which DoubleClick, Inc.,
of New York is the plaintiff and NetUSA and
CandyCenter.com, Inc., of North Carolina are co-defendants.
The litigation may cost the company up to $100,000 in fees
and costs.
Item 2: Changes in Securities
The company issued 563,000 shares of common stock for
cash to unrelated parties at a total consideration of
$231,500 during the six months ended March 31, 2000.
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 six months period.
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.
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 12, 2000 /s/ Wei-Ling Soong
Executive Vice President
and Director
