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UNITED STATES OMB APPROVAL
SECURITIES AND EXCHANGE COMMISSION ------------------------
Washington, D.C. 20549 OMB Number:3235-0416
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FORM 10-QSB Expires: April 30,2003
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Estimated average burden
hours per response: 32.0
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ______ to ______.
Commission file number: 033-18778
MovieO Network, Inc.
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(Exact name of small business issuer as specified in its charter)
Nevada 99-0259454
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(State or other jurisdiction of incorporation (IRS Employer Identification No.)
or organization)
2116 Dabney Road, Suite A-2
Richmond, Virginia 23230
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(Address of principal executive offices)
(804) 355-8384
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(Issuer's telephone number)
Former address, 1730 Federal Highway, Suite #322
if changed since last report. Del Ray Beach, Florida 33483
As of September 30, 2000 there were 12,222,762 shares of common stock issued and
outstanding.
Transitional Small Business Disclosure Format (Check one): Yes[__] No[__]
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MovieO Network, Inc.
FORM 10-QSB
INDEX
PART I FINANCIAL INFORMATI0N
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Item 1 -Financial Statements (Unaudited)
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . .F-1
Statements of Operations . . . . . . . . . . . . . . . . . . .F-2
Statements of Cash Flows . . . . . . . . . . . . . . . . . . .F-3
Note to Financial Statements . . . . . . . . . . . . . . . . .F-4
Item 2 -Management's Discussion and Analysis or Plan of Operation. . . .10
PART II OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . .12
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Item 1 -Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . 7
Item 2 -Changes in Securities. . . . . . . . . . . . . . . . . . . . . . 7
Item 3 -Defaults Upon Senior Securities. . . . . . . . . . . . . . . . . 7
Item 4 -Submission of matters to a Vote of Securities Holders. . . . . . 7
Item 5 -Other Information. . . . . . . . . . . . . . . . . . . . . . . . 8
Item 6 -Exhibits and reports on Form 8-K
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . .13
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PART 1. Financial Statements
The financial statements in response to this item are as follows:
MovieO Network, Inc.
(A Development Stage Company)
BALANCE SHEET - Unaudited
September 30, 2000
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ASSETS
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TOTAL ASSETS $ -
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LIABILITIES AND DEFICIENCY IN ASSETS
LIABILITIES
Accounts payable $ 125,089
Accrued liabilities 5,400
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TOTAL LIABILITIES 130,489
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COMMITMENTS AND CONTINGENCIES
DEFICIENCY IN ASSETS
Common stock, $0.001 par value, 50,000,000 shares authorized,
12,222,762 shares issued and outstanding 12,222
Additional paid-in-capital 143,155
Accumulated deficit prior to development stage (960)
Accumulated deficit during development stage (284,906)
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TOTAL DEFICIENCY IN ASSETS (130,489)
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TOTAL LIABILITIES AND DEFICIENCY IN ASSETS $ -
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See accompanying notes.
F-1
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MovieO Network, Inc.
(A Development Stage Company)
STATEMENTS OF OPERATIONS - Unaudited
Since Inception of
Nine Months Ended Three Months Ended Development Stage
September 30, September 30, Through
2000 1999 2000 1999 September 30, 2000
REVENUES $ - $ - $ - $ - $ -
GENERAL AND ADMINISTRATIVE
Professional fees 33,662 - 8,795 - 33,662
Administrative 108,327 - 50,157 - 251,244
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TOTAL GENERAL AND
ADMINISTRATIVE 141,989 - 58,952 - 284,906
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NET LOSS BEFORE
INCOME TAX BENEFIT(141,989) - (58,952) - (284,906)
INCOME TAX BENEFIT - - - - -
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NET LOSS $(141,989) $ - $(58,952) $ - $ (284,906)
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WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING
(BASIC AND DILUTED)11,517,803 560,312 12,222,762 - 11,517,803
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NET LOSS PER SHARE
(BASIC AND DILUTED) $(0.012)$ - $(0.005) $ - $ (0.025)
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See accompanying notes.
F-2
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MovieO Network, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS - Unaudited
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For the Nine Months For the Nine Months Inception of
Ended Ended Development Stage
September 30, September 30, Through
2000 1999 September 30, 2000
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (141,989) $ - $ (284,906)
Adjustments to reconcile
net loss to net cash
used by operating activities:
Fees paid by issuance
of common stock 500 - 500
Accounts payable paid
by issuance of
common stock 105,817 - 142,574
Changes in assets and liabilities:
Accounts payable (18,228) - (17,985)
Accrued liabilities 5,400 - 5,400
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NET CASH USED BY OPERATING
ACTIVITIES (48,500) - (154,417)
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CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from sales of
common stock 40,291 - 146,208
Contributed capital 8,209 - 8,209
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NET CASH PROVIDED BY FINANCING
ACTIVITIES 48,500 - 154,417
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NET DECREASE IN CASH AND
EQUIVALENTS - - -
CASH AND CASH EQUIVALENTS
- BEGINNING - - -
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CASH AND CASH EQUIVALENTS
- ENDING $ - $ - $ -
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SUPPLEMENTAL DISCLOSURES:
Interest received $ - $ - $ -
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING TRANSACTIONS:
Common stock issued for:
Services $ 500 $ - $ 500
Satisfaction of
accounts payable $105,817 $ - $ 105,817
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See accompanying notes.
F-3
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MovieO Network, Inc.
(A Development Stage Company)
Notes to Financial Statements
NOTE 1. PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine-month period ending September 30, 2000, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2000. For further information, refer to the financial statements
and footnotes included in our annual report on Form 10-KSB for the year ended
December 31, 1999.
NOTE 2. ORGANIZATION
MovieO Network, Inc., (MovieO) was organized in the state of Nevada on September
25, 1987, under the name of Potenco, Inc. In April of 2000, the Company changed
its name to MovieO Network, Inc. The Articles of Incorporation state the purpose
of the corporation is to conduct business in the field of financial and business
consulting and operation; to seek for and acquire business opportunities in the
financial field; or transact any lawful business, or to promote or conduct any
legitimate object or purpose, under and subject to the laws of the state of
Nevada.
NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, cash and
cash equivalents consist of demand deposits in banks, purchased with a maturity
of three months or less. The Company had no such items at September 30, 2000.
USE OF ESTIMATES The preparation of financlal statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures
Accordingly, actual results could differ from those estimates.
NET LOSS PER SHARE Basic per share information is computed by dividing
income available to common stockholders by the weighted average number of common
shares outstanding
SOFTWARE DEVELOPMENT Capitalized software development costs and web design costs
will be stated at cost after the conceptual stage is complete. These assets have
not been depreciated pending the onset of actual use in the operations of the
Company
START-UP ACTIVITIES Statement of Position 98-5 "Reporting on the Costs of Start-
up Activities," ("SOP 98-5") issued by the American Institute of Certified
Public Accountants is effective for financial statements beginning after
December 15, 1998. SOP 98-5 requires that the costs of start-up activities,
including organization costs, be expensed as incurred.
Start-up activities are defined broadly as those one-time activities related to
opening a new facility, introducing a new product or service, conducting
business in a new territory, conducting business with a new class of customers
(excluding ongoing customer acquisition costs, such as policy acquisition costs
and loan origination costs) or beneficiary, initiating a new process in an
existing facility, or commencing some operation.
COMPUTER SOFTWARE DEVELOPED FOR INTERNAL USE Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," ("SOP 98-1") issued by the American Institute of Certified Public
Accountants is effective for financial statements beginning after December 15,
1998, SOP 98-1 requires that costs incurred in the preliminary stage of a
development project be expensed as incurred, and that subsequent costs be
capitalized or expensed, depending on criteria defined within SOP 98-1
Capitalized costs should be amortized on a straight-line basis unless another
systematic basis is more representative of the software's use
INCOME TAXES Income taxes are computed under the provisions of the Financial
Accounting Standards Board (FASB) Statement No. 109 (SFAS 109), Accounting for
Income Taxes. SFAS 109 is an asset and liability approach that requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of the difference in events that have been recognized in the
Company's financial statements compared to the tax returns.
LONG-LIVED ASSETS Long-lived assets to be held and used are reviewed for
impairment whenever events or changes in circumstances indicate that the related
carrying amount may not be recoverable. When required, impairment losses on
assets to be held and used are recognized based on the fair value of the asset.
Long-lived assets to be disposed of, if any, are reported at the lower of
carrying amount or fair value less cost to sell.
ADVERTISING COSTS Advertising costs will be expensed as incurred.
DEVELOPMENT STAGE COMPANY The Company has been devoting its efforts to
activities such as raising capital, establishing sources of information, and
developing markets for its planned operations. The Company has not yet generated
any revenues and, as such, it is considered a development stage company.
NOTE 4. INCOME TAXES
MovieO has adopted FASB 109 to account for income taxes. MovieO currently has no
issues that create timing differences that would mandate deferred tax expense.
Net operating losses would create possible tax assets in future years. Due to
the uncertainty as to the utilization of net operating loss carryforwards an
evaluation allowance has been made to the extent of any tax benefit that net
operating losses may generate. Subsequently MovieO Network had a change in
officers and a change in control. When control of an entity changes net
operating losses generally can be used only by the taxpayer who sustained the
losses. There can be no assurance that the net operating losses sustained before
the change in control will be available for future benefits.
F-4
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MovieO Network, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE 4. INCOME TAXES (Continued)
MovieO Network, Inc., has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal Revenue Code are met. These losses
are as follows:
Year of Loss Amount Expiration Date
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1987 - 1998 $ 1,667,771 2007 - 2008
1999 32,102 2019
Current Tax Asset Value of Net Operating Loss
Carryforwards at Current Prevailing Federal Tax Rate $ 577,956
Valuation Allowance ( 577,956)
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Net Derferred Tax Asset $ -0-
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Current Income Tax Expense -0-
Deferred Income Tax Benefit -0-
NOTE 5. GOING CONCERN
MovieO has no assets and no operations from which it can obtain working capital.
MovieO Network, Inc., recognizes that it must find a source of working capital
or MovieO may not be able to continue its existence. Current officers of MovieO
Network, Inc., are seeking a business opportunity through merger or acquisition
that would provide operations with a revenue flow and the possibility of
additional capital investment.
NOTE 6. STOCKHOLDERS' EQUITY
Pursuant to a Form S-18 Registration statement MovieO issued 2,500,000 shares at
$0.01 per share for gross proceeds of $250,000, while the cost of the offering
was $28,860.
F-5
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MovieO Network, Inc.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE 6. STOCKHOLDERS' EQUITY (Continued)
On January 6, 2000, the Company issued 4,029,100 shares of its common stock for
cash of $40,291 and 4,585,000 shares in satisfaction of accounts payable of
$45,850.
On February 15, 2000, the Company issued, Pursuant to a Form S-8 Registration
Filing, 2,998,350 shares in satisfaction of accounts payable of $59,967.
On March 11, 2000, the Company issued 50,000 shares valued at $500 to Board
Member for services rendered.
F-6
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Item 2. Management's Discussion and Analysis or Plan of Operation
SAFE HARBOR STATEMENT
Certain statements in this Form 10-QSB, including information set forth under
Item 2 - Management's Discussion and Analysis or Plan of Operation constitute
'forward-looking statements' within the meaning of the Private Securities
Litigation Reform Act of 1995 (the Act). MovieO desires to avail itself of
certain 'safe harbor' provisions of the Act and is therefore including this
special note to enable us to do so. Forward-looking statements in this Form
10-QSB or hereafter included in other publicly available documents filed with
the Securities and Exchange Commission, reports to our stockholders and other
publicly available statements issued or released by us involve known and unknown
risks, uncertainties and other factors which could cause our actual results,
performance (financial or operating) or achievements to differ from the future
results, performance (financial or operating) or achievements expressed or
implied by such forward-looking statements. Such future results are based upon
management's best estimates based upon current conditions and most recent
results of operations.
General
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Management intends for us to proceed in our efforts to expand holdings through
the purchase of existing, profitable, private, companies where there is a
demonstrable gain in productivity through the minimization of general and
administrative costs which are duplicative. We will seek to implement a capital
structure which affords the greatest flexibility for future acquisitions while
maintaining an adequate base of equity to cushion against fluctuations in the
business cycle. Currently, we are a development stage company, with no revenues.
Liquidity and Capital Resources
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We have no assets and no operations from which to produce revenues and we are
dependent upon a consultant to our Company to provide working capital and
satisfy our cash needs.
Results of Operations
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During the quarter ended September 30, 2000, we incurred $58,952 in operating
expenses compared to none in the comparable quarter of 1999. The loss for the
third quarter of 2000 was $58,952, while there were no activities for the third
quarter of 1999.
PART II OTHER INFORMATION
Item 1. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . None
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . None
Item 3. Defaults Upon Senior Securities. . . . . . . . . . . . . . . None
Item 4. Submission of Matters to a Vote of Securities Holders . . . None
Item 5. Other Information. . . . . . . . . . . . . . . . . . . . . . None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - 27 Financial Data Schedule
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MovieO Network, Inc.
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(Registrant)
Date: October 23, 2000 By: /S/ Quigg Lawrence
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QUIGG LAWRENCE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
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