Form 10-QSB
Amendment 1
U.S. Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[X] Quarterly report pursuant section 13 or 15(d) of the Securities Exchange
Act of 1934 For the quarterly period ended August 31, 1998
[ ] Transition report pursuant section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from ........... to..........
Commission file number: 33-21481-FW
Internet Stock Market Resources, Inc.
(Exact name of small business issuer as specified in its charter)
Delaware 76-0246940
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
405 Central Avenue, Fifth Floor, St. Petersburg, Florida 33701
(Address of principal executive offices)
(727) 896-9696
(Issuer's telephone number)
N/A
(Former name, former address and former fiscal year,
if changed since last report)
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..X... No.......
Applicable only to corporate issuers
State the number of shares outstanding of each of the issuer's classes of
common equity, as of November 30, 1998: 11,340,000
Transitional Small Business Disclosure Format (check one): Yes..... No...X...
Page 1 of 16 pages contained in sequential numbering system.
The Exhibit Index may be found on Page 13 of the sequential numbering system.
<PAGE>2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Internet Stock Market Resources, Inc.
(hereinafter referred to as the "Registrant" or "Company")
Registrant prepared the accompanying unaudited financial statements from its
own books and records. In Management's opinion, these financial statements
present fairly in all material respects Registrant's financial condition and
changes therein as of November 30, 1998, and the results of operations and
cash flows for the period, in conformity with generally accepted accounting
principles.
[Page 2 of 16]
<PAGE>3
INTERNET STOCK MARKET RESOURCES, INC.
f/k/a Internet Stock Exchange Corp.
BALANCE SHEETS
As of As of
November 30, 1998 November 30, 1997
<TABLE>
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash on hand $ 909 1,755
Cash in bank 95,693 220
Accounts receivable 49,307 18,342
Allowance for doubtful accounts (2,143) 0
Loans to stockholders 0 21,558
------- -------
Total current assets 143,766 41,875
PROPERTY AND EQUIPMENT
Fixtures and equipment 56,489 53,525
Less: Accumulated depreciation (11,105) 0
------- ------
Total property and equipment 45,384 53,525
OTHER ASSETS
Deposits 500 500
Less: Accumulated amortization (30) 0
--- ---
Total other assets 470 500
------- -------
Total assets 189,620 95,900
======== =======
<PAGE>4
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 22,804 4,389
Note payable (6% interest) 880,000 0
Income taxes payable 5,928 0
Accrued compensation 400 0
Accrued professional fees 6,000 1,192
Deferred income taxes 33,397 32,663
------- -------
Total current liabilities 948,529 38,244
LONG-TERM LIABILITIES
-- --
Total long-term liabilities 0 0
SHAREHOLDERS' EQUITY (DEFICIENCY
IN ASSETS)
Common stock, par value $0.0001 per
share, 50,000,000 shares
authorized, 11,340,000 and
10,500,000 shares outstanding 1,134 1,050
Preferred stock, par value $0.01 per
share, 10,000,000 shares
authorized, 0 shares outstanding 0 0
Additional Paid-in capital 2,654,578 3,454,662
Retained earnings (3,414,621) (3,398,056)
---------- ----------
Total shareholders' equity (758,909) 57,656
Total liabilities and stockholders'
equity 189,620 95,900
======== =======
</TABLE>
See accompanying notes.
[Page 4 of 16]
<PAGE>5
INTERNET STOCK MARKET RESOURCES, INC.
f/k/a Internet Stock Exchange Corp.
INCOME STATEMENTS
6 Months Ended 6 Months Ended
November 30, 1998 November 30, 1997
<TABLE>
<S> <C> <C>
REVENUES
Sales revenues $ 97,361 225,420
------- --------
Total revenues 97,361 225,420
EXPENSES
Advertising 3,355 7,779
Amortization 30 0
Auto and truck 209 2,000
Bank charges 1,050 611
Commissions 30,158 62,369
Computer Website fees 2,784 4,378
Depreciation 5,553 0
Dues and subscriptions 0 675
Meals and entertainment 2,147 2,351
Gifts 158 273
Insurance 2,380 3,123
Interest 11,392 0
Laundry and cleaning 118 41
Licenses and fees 357 95
Miscellaneous 5,459 1,688
Office expense 3,682 8,573
Outside services 650 0
Printing 207 949
Professional fees 69,473 5,727
Promotional expense 0 3,389
Postage 2,205 1,568
Rent 6,741 6,118
Repairs and maintenance 0 1,752
Salaries and wages 11,200 0
Security 0 674
Supplies 658 2,787
Taxes - payroll 999 0
Telephone 10,637 14,344
Trading fees 3,527 0
Travel 3,020 837
-------- --------
Total expenses 178,149 132,101
-------- --------
EARNINGS BEFORE TAXES (80,788) 93,319
Income taxes (credits) (28,275) 32,663
--------- --------
NET INCOME (LOSS) (52,513) 60,656
BASIC NET INCOME (LOSS)
PER COMMON SHARE (0.0046) 0.0058
</TABLE>
See accompanying notes.
[Page 5 of 16]
<PAGE>6
INTERNET STOCK MARKET RESOURCES, INC.
f/k/a Internet Stock Exchange Corp.
STATEMENTS OF CASH FLOWS
November 30, November 30,
1998 1997
<TABLE>
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) $ (52,513) 60,656
Adjustments to reconcile cash flow:
Depreciation 5,553 0
Decrease (increase) in current assets:
Accounts receivable 3,877 (18,342)
Interest receivable 4,920 0
Loans to stockholders 56,506 (28,079)
Deferred income taxes (34,203) 32,663
Increase (decrease) in current liabilities:
Accounts payable 27,025 4,389
Accrued compensation 400 0
Accrued professional fees 6,000 1,192
------- -------
Total adjustments 70,078 (8,177)
------- -------
Cash provided (used) by operations 17,565 52,479
CASH FLOW FROM INVESTING ACTIVITIES
Sales (purchases) of assets:
Purchases of assets (963) (50,950)
---- -------
Cash provided (used) by investing (963) (50,950)
CASH FLOW FROM FINANCING ACTIVITIES
Cash provided (used) by:
Notes payable (120,000) 0
Common stock issued 200,000 0
-------- --
Cash provided (used) by
financing activities 80,000 0
-------- --
Net increase (decrease) in cash 96,602 1,529
Cash at beginning of period 0 446
------- -------
Cash at end of period 96,602 1,975
</TABLE>
See accompanying notes
[Page 6 of 16]
<PAGE>7
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING BASIS
The financial information presented has been prepared without audit from the
books and records of the Company. In the opinion of Management, all
adjustments, consisting of normal reversing entries and adjustments, necessary
for a fair presentation of the financial information for the periods
indicated, have been included.
Effective September 1, 1998, Internet Stock Market Resources, Inc. (formerly,
Internet Stock Exchange Corp.) acquired 100% of the shares authorized,
issued, and outstanding, consisting of 1,000 shares of Common stock, $1.00 par
value per share, of Internet Stock Market Corp., a close, Florida corporation.
The financial statements herewith presented reflect the transaction as a
"pooling of interests" of the two entities; that is, the accounting principle
used in the acquisition/merger of Internet Stock Market Corp. (the
"Non-surviving Corporation" of the merger) by Internet Stock Market
Resources, Inc. (the "Surviving Corporation," or the "Company") is treated
for financial reporting purposes the same as a "pooling of interests."
NOTE 2. COMPENSATION AND CONVERSION OF SHARES
The compensation to the Non-surviving Corporation (Internet Stock Market
Corp.) shareholder Anastasios Kyriakides for his equity in that business
was $1,000,000 in the form of a promissory note payable in lawful money of the
United States of America with 6% interest per annum, issued by the Surviving
Corporation (Internet Stock Market Resources, Inc.).
NOTE 3. RELATED PARTY TRANSACTIONS
The holder of the promissory note described above is Anastasios Kyriakides,
an officer and shareholder of the Company.
NOTE 4. CORPORATE ORGANIZATION
The Non-surviving Corporation was a corporation duly organized and in good
standing in the state of Florida, and was qualified to do business in its
jurisdiction; it had no subsidiaries. The Surviving Corporation is duly
organized under General Corporation Law of the state of Delaware, is in good
standing, and is qualified to conduct business in any lawful jurisdiction. The
Surviving Corporation has completed all aspects of its acquisition of/merger
with the Non-surviving Corporation.
NOTE 5. CAPITALIZATION
The Non-surviving Corporation's authorized capital stock consisted of 1,000
Common shares, par value $1.00 per share. As of September 1, 1998 (the
Effective Date of the merger), the Surviving Corporation's authorized capital
stock consists of 50,000,000 shares of Common stock, par value $0.0001 per
share, and 10,000,000 share of Preferred stock, par value $0.01 per share,
this par value being subject to Amendment to the (Amended) Certificate of
Incorporation of the Company. As of September 1, 1998, there were 7,748,001
Common shares issued and outstanding, and 0 shares of Preferred stock issued.
[Page 7 of 16]
<PAGE>8
NOTE 6. ACCOUNTING POLICIES
TAXES
Income taxes are provided for the tax effects of transactions reported in the
financial statements, and consist of taxes currently due plus deferred taxes.
Deferred taxes are recognized for the differences between the basis of assets
and liabilities for financial statement and income tax purposes. The
differences relate primarily to depreciable assets (use of different
depreciation methods and lives for the financial statements and income tax
purposes) and allowance for doubtful receivables (deductible for financial
statement presentations but not for income tax purposes). The deferred tax
assets and liabilities represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. Deferred taxes are also recognized for
operating losses and tax credits that will be available to offset future
taxable income.
DEPRECIATION AND AMORTIZATION
The straight-line method of depreciation is applied over the estimated useful
life of the relevant assets, which consist of office furniture and equipment,
and are depreciated over 5 years. The straight-line method of amortization is
applied over the estimated useful life of the intangible assets, which consist
of start-up costs, and are amortized over 5 years.
[Page 8 of 16]
<PAGE>9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
As disclosed in previous report, Registrant received the approval of its
shareholders to merge with the close, Florida corporation called Internet
Stock Market Resources, Inc., an operating company engaged in providing
corporate information (including company profiles and stock quotes) on the
Internet. Shortly after inception in 1988, the Registrant filed with the
United States Securities and Exchange Commission a registration statement
on Form S-18, effectively causing the corporation to become a reporting
entity under Section 12(g) of the Securities Exchange Act of 1934. On
February 9, 1989, the Company was merged with Sea Venture Cruises, Inc., a
close, Delaware corporation, in a tax-free reorganization which resulted
in the re-domiciling of the corporation from Texas to Delaware. Trans
America Enterprises, Inc., the specifically-named surviving corporation of
the merger, changed its name to Sea Venture Cruises, Inc., and conducted
business as such until March of 1998. As of fiscal year-end 1997, and
further, as of March of 1998, the records of the Registrant reflected
494,405,953 shares of Common, voting stock issued and outstanding. This
issued and outstanding Common stock was the result of three events: first,
the Issue of Common shares pursuant to the Form S-18 described above;
second, the merger of Trans America Enterprises, Inc. with Sea Venture
Cruises, Inc.; and third, debt-to-equity conversions carried out by the
Registrant in the normal course of business.
Because of a lack of success in the cruise business, the Registrant began to
seek a merger partner in a new line of enterprise. Determining that
substantial opportunities existed in the burgeoning area of Internet
information services, certain principals of the Registrant began developing
a separate, private, Florida corporation called Internet Stock Market
Resources Corp. which was engaged in providing information on the World Wide
Web through a Web site with the URL http://www.internetstockexchange.com.
(That Web address was later revised to www.internetstockmarket.com.) On
March 26, 1998, the Registrant's name was change by amendment to the
(Amended) Articles of Incorporation to Internet Stock Exchange Corp. On
April 14, 1998 the Registrant executed a reverse-split of all shares of
Common Stock of the corporation on a one for one thousand (1-for-1000)
basis, with fractional shares being canceled. This reverse-split resulted
in the total number of shares issued and outstanding becoming 487,001.
On August 17, 1998, the Registrant changed its name to Internet Stock Market
Resources, Inc., and subsequently announced that it had merged with the
private, close Florida corporation Internet Stock Market Corp. The
financial statements herewith presented of the Surviving Corporation reflect
the effect of the "pooling of interests" of the private corporation (the
"Non-surviving Corporation") with that of the Registrant (the "Surviving
Corporation" of the merger/acquisition). The effective date of the merger
coincides with the first day (September 1, 1998) of the second quarter of
the Registrant's current fiscal year. The discussion that follows (and
all future discussions) will exclusively address the financial statements of
the "pooled," Surviving Corporation.
Revenues for the 6 months ended November 30, 1998 reflect a decline of almost
57% over year-earlier results. Largely due to a re-alignment of staff, and a
reconstruction of market segment focus, Management believes that the new
target markets being approached by the Company will, in the long run, produce
more sustainable, growth-oriented revenues than those that were being pursued
in the Company's previous fiscal year. Moreover, the Company is preparing to
deploy new services for fee, and to the extent that these new products will
constitute profit centers, each in its own right, revenues realized from
these sources will begin to be reflected in the Company's income statements
before the end of the current fiscal year. That operating expenses did not
[Page 9 of 16]
<PAGE>10
decline coincidentally with revenues is largely due to two factors: first,
the Company incurs fixed costs that are robust (at least in the short run)
to the scale of operating activities, yet are still expensed rather than
capitalized; and, second, the Company has incurred substantially higher
expense levels with respect to items such as professional fees and compen-
sation, these occuring as Management deepens the Company's human capital
resources for sustained, but as yet largely unrealized, growth. Management
considers the costs of both internal (i.e., employee) compensation, and
external (i.e., legal, accounting, and consulting) professional fees to be
investments in the long-term health of the organization. Management does not,
however, plan for these costs to grow commensurately with revenues, and will
be mindful of their continuing relation to sales revenue. As can be noted
from the Statement of Cash Flows and the Balance Sheet, in order to generate
new business, Management is extending favorable terms of trade aggressively,
with accounts receivable having increased by more than two-and-a-half times.
Concomitantly, the Company's accounts payable has grown by a factor of
approximately 5, this being the result of deepening and spreading
relationships with upstream suppliers and service providers. It is the belief
of Management that attentive control over the actual sources and uses of cash
will allow the Company to avoid any short-term liquidity constraints, and
the contemplated growth in revenues from operations will provide increasing
levels of such liquidity in the quarters ahead.
[Page 10 of 16]
<PAGE>11
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(a) If the instruments defining the rights of the holders of any class of
registered securities have been materially modified, give the title of the
class of securities involved and state briefly the general effect of such
modification upon the rights of holders of such securities.
No instrument defining the rights of any holder of any class if securities of
the Registrant has been materially modified during the reporting period.
(b) If the rights evidenced by any class of registered securities have been
materially limited or qualified by the issuance or modification of any other
class of securities, state briefly the general effect of the issuance or
modification of such other class of securities upon the rights of the holders
of the registered securities.
No rights evidenced by any class of registered securities of the Registrant
have been materially limited or modified during the reporting period.
(c) Furnish the information required by Item 701 of Regulation S-B (Section
228.701 of this chapter) as to all equity securities of the Registrant sold by
the registrant during the period covered by the report that were not
registered under the Securities Act.
Common stock sold during the period included 800,000 shares, raising
$200,000 in proceeds. With respect to a merger between the Registrant and a
close, Florida corporation (see Part I, Item 2), two million (2,000,000)
shares of the Registrant's Common stock were issued to the shareholders of
the acquired entity (as described in previous report). These securities are
unregistered, and are therefore "restricted" as that term is meant under
17 CFR Section 230.144. The closing of this merger was effective September 1,
1998, which is the first day of the second quarter of the Registrant's fiscal
year.
(d) If required pursuant to Rule 463 (17 CFR 230.463) of the Securities Act
of 1933, furnish the information required by Item 701(f) of Regulation S-B.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
[Page 11 of 16]
<PAGE>12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
If any matter has been submitted to a vote of security holders during the
period covered by this report, through the solicitation of proxies or
otherwise, furnish the following information.
(a) The date of the meeting and whether it was an annual or special meeting.
Not applicable.
(b) If the meeting involved the election of directors, the name of each
director elected at the meeting and the name of each other director whose term
of office as a director continued after the meeting.
Not applicable.
(c) A brief description of each matter voted upon at the meeting and state
the number of votes cast for, against or withheld, as well as the number of
abstentions and broker non-votes, as to each such matter, including a separate
tabulation with respect to each nominee for office.
Not applicable.
(d) A description of the terms of any settlement between the registrant and
any other participant (as defined in Rule 14a-11 of Regulation A under the
Exchange Act) terminating any solicitation subject to Rule 14a-11, including
the cost or anticipated cost to the registrant.
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits (Item 601 of Regulation S-B).
(1) Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K.
(1) Form 8-K, November 11, 1998: Press release of October 23, 1998
(2) Form 8-K, November 11, 1998: Press release of October 28, 1998
[Page 12 of 16]
<PAGE>13
SIGNATURES
Pursuant of the requirements of the Securities Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Internet Stock Market Resources, Inc.
(Registrant)
DATE: 1/23/99 By: /s/ Anastasios Kyriakides
----------------------------
Anastasios Kyriakides
Chairman/Secretary/Director
[Page 13 of 16]
<PAGE>14
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
27 Financial Data Schedule
[Page 14 of 16]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE PERIOD ENDED NOVEMBER 30, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-START> JUN-01-1998
<PERIOD-END> NOV-30-1998
<CASH> 96,602
<SECURITIES> 0
<RECEIVABLES> 49,307
<ALLOWANCES> (2,143)
<INVENTORY> 0
<CURRENT-ASSETS> 143,766
<PP&E> 56,489
<DEPRECIATION> (11,105)
<TOTAL-ASSETS> 189,620
<CURRENT-LIABILITIES> 948,529
<BONDS> 0
0
0
<COMMON> 1,134
<OTHER-SE> (760,043)
<TOTAL-LIABILITY-AND-EQUITY> 189,620
<SALES> 97,361
<TOTAL-REVENUES> 97,361
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (166,757)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (11,392)
<INCOME-PRETAX> (80,788)
<INCOME-TAX> (52,513)
<INCOME-CONTINUING> (52,513)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (52,513)
<EPS-PRIMARY> (0.005)
<EPS-DILUTED> (0.005)
</TABLE>
