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, 1999
[ ] 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.)
(Note: these are preliminary figures; the Company may make revisions to
these figures if warranted.)
Balance Sheet
1999 1998
Current Assets
Cash 93,474 309,035
A/R 599,479 157,202
Inventory 36,601 9,035
Prepaid Expenses 2,132 2,666
Deferred Income Tax Asset - -
______________ _____________
Total Current Assets 731,686 477,938
Property & Equipment
At Cost 609,168 303,666
Less: Accumulated Depre. (444,511) (218,897)
______________ ______________
Net Property & Equipment 164,657 84,769
Other Assets
Investment at Cost 1,137,000 14,576
Other Assets 43,556 10,390
Goodwill/Intangible 1,695,933 143,125
______________ ______________
Total Other Assets 2,876,489 168,091
TOTAL ASSETS 3,772,832 730,798
Current Liabilities
Bank Overdraft 8,055 -
Accounts Payable 442,778 271,141
State Income Tax Payable 6,976 -
Lease Obligation - Current 4,146 5,272
Accrued Liabilities 58,824 40,134
Other Liabilities 75,772 37,611
Notes Payable 392,158 204,976
______________ ______________
Total Current Liabilities 988,709 559,134
Long-Term Liabilities
Lease Obligation - LT 8,697 8,698
Loan from Shareholders 396,675 156,462
______________ ______________
Total Long-Term
Liabilities 405,372 165,160
Stockholders' Equity
Common Stock 11,378 5,979
Add. Paid-In Capital 8,841,576 4,245,580
Treasury Stock (14) (14)
Add. Paid-In Cap. -
(Treasury Stock) (12,064) 22,047
Current Deficit (228,391) (128,551)
Retained Deficit (6,233,734) (4,138,538)
______________ ______________
Total Stockholders'
Equity 2,378,751 6,504
TOTAL S/H AND
LIABILITIES 3,772,832 730,798
Statements of Operations for the Three Months Ended
December 31, 1999 and 1998
Three Months Ended Three Months Ended
Dec. 31, 1999 Dec. 31, 1998
Sales 504,243 817,850
Cost of Sales (280,240) (726,409)
______________ ______________
Operating Income 224,003 91,441
Salaries/Wages/Benefits (191,369) (125,929)
Administrative, Depreciation,
Amortization, Marketing,
Interest, and Financial
Expenses (260,158) (169,175)
______________ ______________
Total Operating
Expenses (451,527) (295,104)
______________ ______________
Gain/(Loss)
from Operations (227,524) (203,663)
Other Income - 75,112
______________ ______________
Gain/(Loss) before Taxes (227,524) (128,551)
Provision for Current
Year's Income Tax (867) -
______________ ______________
Net Income (Loss) for the
Year after Tax (228,391) (128,551)
Shares Outstanding 9,583,082 6,222,048
Profit (Loss) Per Share (0.02) (0.02)
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 quarter, 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 GlobalCom
Teleservices, which offers conventional and Internet telephone
and fax services.
(2) Results of Operations
The operating income for the three months ending December 31,
1999 was $224,003, an increase of $132,562 from the three months
ending December 30, 1998. 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 three months ending December 31,
1999 was $451,527, an increase of $156,423 from the three months
ending December 30, 1998. 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 463,000 shares of common stock for cash to
unrelated parties at a total consideration of $191,500 during
the three months ended December 31, 1999.
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.
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
