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 112,149 309,035
A/R 563,082 157,202
Inventory 60,396 9,035
Prepaid Expenses - 2,666
Deferred Income Tax Asset - -
______________ _____________
Total Current Assets 735,627 477,937
Property & Equipment
At Cost 659,168 303,666
Less: Accumulated Depre. (427,518) (218,897)
______________ ______________
Net Property & Equipment 231,650 84,769
Other Assets
Investment at Cost 1,137,000 14,576
Other Assets 43,556 10,391
Goodwill/Intangible 1,669,526 143,125
______________ ______________
Total Other Assets 2,850,082 168,091
TOTAL ASSETS 3,817,359 730,798
Current Liabilities
Accounts Payable 432,013 270,282
Payroll Payable - 859
State Income Tax Payable 7,846 -
Lease Obligation - Current 4,146 5,272
Accrued Liabilities 58,860 40,135
Other Liabilities 91,788 5,223
Notes Payable 616,257 361,778
______________ ______________
Total Current Liabilities 1,210,910 683,549
Long-Term Liabilities
Lease Obligation - LT 8,698 8,698
______________ ______________
Total Long-Term Liabilities 8,698 8,698
Stockholders' Equity
Common Stock 10,365 5.979
Add. Paid-In Capital 9,044,148 4,245,580
Treasury Stock (14) (14)
Add. Paid-In Cap. (Trea. Stock) (12,064) 22,047
Current Deficit (215,900) (126,551)
Retained Deficit (6,228,784) (4,138,538)
______________ ______________
Total Stockholders' Equity 2,597,751 6,504
TOTAL S/H AND LIABILITIES 3,817,359 730,798
0.00 0.00
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 520,107 817,850
Cost of Sales (278,416) (726,409)
______________ ______________
Operating Income 241,691 91,441
Salaries/Wages/Benefits (237,076) (125,929)
Administrative, Depreciation,
Amortization, Marketing,
Interest, and Financial
Expenses (220,514) (169,175)
______________ ______________
Total Operating Expenses (457,590) (295,104)
______________ ______________
Gain/(Loss) from Operations (215,899) (203,663)
Other Income - 75,113
______________ ______________
Gain/(Loss) before Taxes (215,899) (128,551)
Provision for Current
Year's Income Tax - -
______________ ______________
Net Income (Loss) for the
Year after Tax (215,899) (128,551)
Shares Outstanding 9,270,082 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 30, 1999
was $241,691, an increase of $150,250 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 30,
1999 was $457,591, an increase of $162,487 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
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.
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: February 22, 2000 /s/ James Yu,
President and Chairman of the
Board
