FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________________________________
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: Commission File Number:
March 31, 2000 033-26344
e*machinery.net, inc.
______________________________
Formerly known as Harvard Financial Services Corp.
(Exact name of registrant as specified in its charter)
Delaware 75-2254748
________________________ __________________________________
(State of Incorporation) (I.R.S. Employer Identification No.)
1400 Medford Plaza
Route 70 & Hartford Road
Medford, New Jersey 08055
(Address of principal executive office)
Telephone Number: (609) 953-7985
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 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.
X Yes No
_____ _____
The number of shares outstanding of the registrant's common
stock as of the date of the filing of this report: 13,450,633
shares.
<PAGE>
FORM 10-QSB
PART 1 - FINANCIAL INFORMATION
______________________________
Item 1. Financial Statements
_____________________________
E*MACHINERY.NET, INC.
CONSOLIDATED BALANCE SHEETS
___________________________________
ASSETS
_______
March 31,
1999 December 31,
(Unaudited) 1999
___________ ___________
Current Assets
Cash $1,489,917 $ 200,861
Prepaid expenses and other assets 57,143 -
__________ __________
Total current assets $1,547,060 $ 200,861
Developed software 476,088 446,500
Deferred income taxes 21,985 13,785
Property and equipment, net 9,199 -
_________ __________
Total assets $2,054,332 $ 661,146
========== ==========
See Accompanying Notes
<PAGE>
FORM 10-QSB
E*MACHINERY.NET, INC.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
March 31,
2000 December 31,
(Unaudited) 1999
_________ ____________
Liabilities:
Accounts payable $ 29,588 $ 521,500
Accrued liabilities 67,119 -
--------- ---------
Total Liabilities 96,707 521,500
Stockholders' Equity:
Common stock, $.0001 par value,
50,000,000 shares authorized;
issued and outstanding
13,413,133 and 8,800,000,
respectively 1,341 880
Additional paid-in capital 2,056,084 200,120
Accumulated deficit (99,800) (61,354)
---------- --------
Total Stockholders' Equity 1,957,625 139,646
---------- --------
Total Liabilities and
Stockholders' Equity $2,054,332 $661,146
========== ========
See Accompanying Notes
<PAGE>
FORM 10-QSB
E*MACHINERY.NET, INC.
CONSOLIDATED STATEMENT OF INCOME
The following Consolidated Statement of Income for the three-month
period ended March 31, 2000, is unaudited, but the Company believes
that all adjustments (which consist only of normal recurring
accruals) necessary for a fair presentation of the results of
operations for the respective period have been included. Quarterly
results of operations are not necessarily indicative of results for
the full year.
Three-Months Ended
March 31, 2000
(Unaudited)
-----------------
Revenues $ -
Cost of sales -
----------
Gross profit -
Expenses
Selling -
General and administrative 51,436
----------
Total expenses 51,436
Other income/(expense)
Interest income 4,380
Other 410
----------
Total other income 4,790
Loss before income taxes (46,646)
Income taxes (benefit) (8,200)
----------
Net loss $ (38,446)
==========
Basic net loss per common share $ (.004)
==========
Weighted average:
Average common shares outstanding
(Basic) 9,436,300
==========
See Accompanying Notes
<PAGE>
FORM 10-QSB
E*MACHINERY.NET, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTHS ENDED MARCH 31, 2000
March 31,
2000
--------
Cash flows from operating activities
Net loss $(38,446)
Adjustments to reconcile net loss to
net cash used in operating activities
Changes in operating assets and liabilities
Increase in prepaid expenses (57,143)
Increase in deferred income taxes (8,200)
Increase in accounts payable and
accrued liabilities 96,707
--------
Net cash used in operating activities (7,082)
--------
Investing activities
Capital expenditures (38,787)
--------
Net cash used in investing activities (38,787)
Cash flows provided by financing activities
Proceeds from issuance of common stock, net 1,334,925
----------
Net cash provided by financing
activities 1,334,925
Net increase in cash 1,289,056
Cash, beginning 200,861
---------
Cash, ending $ 1,489,917
===========
See Accompanying Notes
<PAGE>
Form 10-QSB
e*machinery.net, inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Nature of Operations
--------------------
Subsequent to the year ended December 31, 1999, Harvard
Financial Services Corp. amended its Certificate of Incorporation
to change its name to e*machinery.net, inc. (The "Company"). The
Company was formerly in the business of purchasing installment
loans from vocational schools and higher educational institutions.
During 1999, the Company ceased all operations in the area of
installment loan purchasing due to the inability to obtain new
financing. The Company was not actively involved in any business
operations during 1999, except for the collection of existing loans
receivable.
On March 27, 2000, the Company acquired e*machinery, inc.
through an exchange of stock at a 1 for 1 ratio whereas
e*machinery.net, inc. issued stock to the shareholders of
e*machinery, inc. in exchange for shares representing 100% of the
outstanding shares of e*machinery, inc. e*machinery.net, inc. is
currently traded on the Nasdaq Over-The-Counter Bulletin Board
under the stock symbol "EMAC". Pursuant to the transaction, the
directors and officers of e*machinery.net, inc. resigned in favor
of the directors and officers of e*machinery, inc.
Immediately after the transaction, the stock ownership of
e*machinery.net, inc. was as follows:
Shares Percent
Original Shareholders
(including public owners) 1,200,000 9%
Former shareholders of
e*machinery, inc. 11,935,000 91%
---------- ----
Total 13,135,000 100%
========== ====
Because the former owners of the stock of e*machinery, inc.
maintain control of e*machinery.net, inc., the transaction would
normally be considered a purchase by e*machinery, inc. for
accounting purposes. However, e*machinery.net, inc. did not have
any ongoing business operations at the date of the transaction.
Since e*machinery.net, inc. had no business, the transaction is not
being treated as a business combination. Instead, the transaction
is being treated for accounting purposes as a recapitalization of
e*machinery, inc. and as an issuance of stock by e*machinery, inc.
(represented by the outstanding shares of e*machinery.net, inc.)
for the assets and liabilities of e*machinery, inc.
e*machinery.net, inc. had liabilities of $200,000 with no assets
based upon historical book value at March 27, 2000. The recording
of the liabilities resulted in a charge to additional paid in
capital.
The future business plan is focused on the continued
development of an Internet based portal specializing in business to
business e-commerce in the construction and mining industries, as
well as the sales and distribution of heavy machinery.
The Company is in the process of developing an Internet based
distribution business for heavy machinery used primarily in the
construction and mining industries. Software development of a web
site began in 1999 and is ongoing. The intention is to develop a
vertically integrated portal which will provide interplay between
major manufacturers, distributors, and providers of supportive
goods and services to the heavy machinery industry. Anticipated
sources of revenue include fees related to access to the
information maintained on the web site along with revenues related
to distribution of heavy machinery.
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary. All significant
intercompany accounts and transactions are eliminated in
consolidation.
Use of Estimates
----------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.
Software Development
--------------------
The Company accounts for software development costs related to
development of the web site in accordance with AICPA Statement of
Position (SOP) 98-1 which provides guidance on accounting for the
costs of computer software developed or obtained for internal use.
SOP 98-1 requires computer software costs which are incurred in the
preliminary project stage to be expensed as incurred. The
preliminary project stage relates to the planning of the project
<PAGE>
through the formulation, evaluation, and final selection of
alternatives. SOP 98-1 requires capitalization of costs incurred
during the application development phase when the preliminary
project stage is completed, management commits to funding the
project, and it is probable that the project will be completed and
the software will be used for the function intended. The
application development stage relates to the design, coding,
installation, and testing of the software. The Company incurred an
expense of $75,000 during the preliminary project stage (fiscal
1999) and capitalized costs of $476,088 related to application
development through the end of the first quarter of Fiscal 2000.
Property and Equipment
----------------------
Property and equipment are recorded at cost less accumulated
depreciation. Depreciation is computed by the straight line method
over the estimated useful lives of the respective assets.
Expenditures for maintenance and repairs are charged against income
as incurred. When assets are sold or retired, the cost and
accumulated depreciation are removed from the accounts and any gain
or loss is included in income.
Property and equipment consisted of the following at March 31:
2000
----
Equipment $ 6,199
Furniture 3,000
-------
Less accumulated depreciation -
-------
Net property and equipment $ 9,199
=======
Income Taxes
------------
The Company accounts for income taxes under the provisions of
SFAS No 109, Accounting For Income Taxes, which requires an asset
and liability approach for financial accounting and reporting of
income taxes. Under this approach, deferred income taxes are
recognized for the estimated taxes ultimately payable or
recoverable based on enacted tax law. Changes in enacted tax law
will be reflected in the tax provision as they occur.
Earnings Per Share
------------------
The earnings per share computation have been made in
accordance with Statement of Financial Accounting Standards No.
128, which the Company adopted in 1998; prior period accounts were
<PAGE>
restated. Basic earnings (loss) per common share is computed using
the weighted average number of common shares outstanding during the
period. Diluted earnings per common share is computed using the
combination of dilutive common share equivalents and the weighted
average number of common shares outstanding during the period.
2. Income Taxes/(Benefit)
No income tax expense was incurred during the quarter ended
March 31, 2000. An income tax benefit of $8,200 was recognized for
the period from a deferred tax asset described below.
Deferred income taxes reflect the net tax effects of (a)
temporary differences between carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes, and (b) net operating loss carryforwards.
The Company did not have a net operating loss carryforward at
March 31, 2000.
3. Related Party Transactions
The Company contracted with Canterbury Information Technology,
Inc. ("CITI") to obtain software development services for its web
site. Total costs incurred to date amounted to $551,088 which
included capitalized costs of $476,088 and an expense of $75,000
(fiscal 1999) as described in Footnote 1. Certain stockholders,
Officers and Directors of CITI own a substantial number of shares
of the Company.
4. Supplemental Cash Flow Information
Capitalized software development costs of $29,588 are
included in accounts payable at March 31, 2000 representing the
only noncash investing and financing transaction during the period.
No cash payments were made during the period for interest or
taxes.
<PAGE>
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 Security Holders
On March 27, 2000, an Annual and Special Shareholders
Meeting was held at which time three matters were submitted to the
Company's stockholders for a vote. The majority of the
stockholders voted for the appointment of Baratz & Associates, P.A.
as the Company's independent auditors, the acquisition of 100% of
the shares of e*machinery, inc. and the election of the following
Directors: Arthur A. O'Shea, III, Stuart R. Matthews, Stanton M.
Pikus, Kevin J. McAndrew, and Frank A. Cappiello.
Item 5 Other Information
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K:
1. A Form 8-K was filed on February 16, 2000.
2. A Form 8-K/A was filed on March 7, 2000.
3. A Form 8-K was filed on March 29, 2000.
<PAGE>
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.
e*machinery.net, inc.
(Registrant)
By/s/ Arthur A. O'Shea, III
Arthur A. O'Shea, III
President, Director
(Chief Executive Officer and duly
authorized signer)
By/s/ Kevin J. McAndrew
Kevin J. McAndrew, C.P.A.
Secretary, Director
(Chief Financial Officer and duly
authorized signer)
May 15, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000844893
<NAME> E*MACHINERY.NET, INC.
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<PERIOD-TYPE> 3-MOS
<CASH> 1,489,917
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,547,060
<PP&E> 9,199
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,054,332
<CURRENT-LIABILITIES> 96,707
<BONDS> 0
0
0
<COMMON> 1,341
<OTHER-SE> 1,956,284
<TOTAL-LIABILITY-AND-EQUITY> 1,957,625
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 51,436
<OTHER-EXPENSES> (4,790)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (46,646)
<INCOME-TAX> (8,200)
<INCOME-CONTINUING> (38,446)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (38,446)
<EPS-BASIC> (0.004)
<EPS-DILUTED> (0.004)
</TABLE>
