SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the Quarter ended June 30, 1999.Commission File No. 33-27652-NY
BusinessNet Holdings
Corp.(Exact name of registrant as specified in its charter)
Delaware
22-2946374
(State or other jurisdiction of
incorporation or organization)
(IRS Employer Identification No.)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code:(401) 841-5294
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act: None
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 shorter period that the registrant
was required to file such report), and (2) has been subject to such filing
requirements for the past 90 days.
Yes: _ No: X
Transitional Small Business Disclosure Format:
Yes: X No:
The number of shares outstanding of the registrant's common stock, $.01 par
value, as of August 15, 1999 is 1,974,964.
BusinessNet Holdings Corp.
(Formerly BusinessNet International, Inc.)
INDEX
Page
Part I Financial Information
Balance Sheet - June 30, 1999 2
Statements of Operations - Six Months Ended
June 30, 1999 3
Statements of Cash Flows - Six Months Ended
June 30, 1999 5
Notes to Financial Statements 6
Management's Discussion and Analysis of financial
Conditions and results of operations 7, 8, 9
Part II Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of
Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signature Page 11
BUSINESSNET HOLDINGS CORP.
BALANCE SHEET
JUNE 30, 1999
(Unaudited)
ASSETS
Current assets
Cash $ 142,050
Inventory 40,000
Prepaid expenses 11,875
Total current assets 193,925
TOTAL ASSETS $ 193,925
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts Payable and Accrued expenses $ 32,300
Total current liabilities 32,300
Stockholders' equity
Common Stock, $.001 Par Value, 50,000,000 shares
authorized; 917,482 issued and outstanding
At June 30, 1999 9,175
Additional Paid-In Capital 271,597
Retained Deficit Subsequent to
Reorganization (12/31/97) (119,147)
Total stockholders' equity 161,625
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 193,925
See Notes to Financial Statements
BUSINESSNET HOLDINGS CORP.
STATEMENT OF INCOME
(Unaudited)
Three Months Ended
June 30,
1998 1999
Income from Operations $ - $ -
Total income - -
Selling, general and administrative expenses 24,875 14,500
Interest expense - -
Depreciation and amortization - -
Total expenses 24,875 14,500
Income (loss) before income taxes (24,875) (14,500)
Income taxes - -
Net income (loss) $ (24,875) $ (14,500)
Per share data:
Earnings (Loss) $ (.0785) $ (.0176)
Average number of common
shares outstanding 316,480 823,482
See Notes to Financial Statements
BUSINESSNET HOLDINGS CORP.
STATEMENT OF INCOME
(Unaudited)
Six Months Ended
June 30,
1998 1999
Income from Operations $ - $ -
Total income - -
Selling, general and administrative expenses 49,750 19,000
Interest expense - -
Depreciation and amortization - -
Total expenses 49,750 19,000
Income (loss) before income taxes (49,750) (19,000)
Income taxes - -
Net income (loss) $ (49,750) $ (19,000)
Per share data:
Earnings (Loss) $ (.1571) $ (.0237)
Average number of common
shares outstanding 316,480 799,982
See Notes to Financial Statements
BUSINESSNET HOLDINGS CORP.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30,
1998 1999
Cash flows from operating activities:
Net income (loss) $ (49,750) $ (19,000)
Adjustments for non-cash items
Issuance of common stock for services 47,500 -
Changes in assets and liabilities
Increase in accounts payable and
accrued expenses 2,100 6,925
(Increase) in inventory - (40,000)
(Increase) in prepaid expenses - (11,875)
Net cash (used in) operations (150) (63,950)
Cash flows from financing activities:
Proceeds from the issue of common stock - 70,500
- 70,500
Net increase (decrease) in cash (150) 6,550
Cash, beginning of period 647 135,500
Cash, end of period $ 497 $ 142,050
See Notes to Financial Statements
BUSINESSNET HOLDINGS CORP.
NOTES TO CONDENSED FINANCIAL STATEMENTS
JUNE 30, 1999
NOTE A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to
Form 10QSB and Article 10 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, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
For further information, refer to the financial statements and footnotes
thereto included in the Registrant Company annual report on form 10-K for
the year ended December 31, 1998.
NOTE B. DURING THE YEAR, THE COMPANY ADOPTED FASB STATEMENT NO. 130 -
REPORTING COMPREHENSIVE INCOME.
Statement No. 130 required the reporting of comprehensive income and its
components in addition to net income from operations. Comprehensive
income is a more inclusive financial reporting methodology that includes
disclosure of certain financial information that historically has not been
recognized in the calculation of net income. To date, FASB Statement No.
130 does not have a material effect on the Company's financial position or
the results of operations.
NOTE C. RELATED PARTY TRANSACTIONS
The issuance of stock in the six months ended June 30, 1998 was to the
Company's acting president for services. The Company leases its
administration offices from the Company's president for $5,000 on a
monthly basis, of which $2,500 was included in expense for the six months
ended June 30, 1999.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying condensed consolidated
financial statements.
GENERAL INTRODUCTION
BusinessNet Holdings Corp. is presently structured as a technology holding
company which is seeking to acquire and/or develop start-up companies providing
information technology services and applications including Internet Services,
on-line entertainment content and programming, e-commerce and multi-media
telecommunication services to the United States and International business
communities.
Recent Reorganization
On June 5, 1996, the Registrant acquired 100% of the issued and outstanding
stock of BusinessNet U.K. Limited (formerly, Dubesco U.K. Limited), a United
Kingdom corporation from Morten Skjelborg and affiliates. BusinessNet Europe
was subsequently established as a holding company 100% owned by the
Registrant, and Mr. Skjelborg became Chairman of the Registrant.
During 1997, a financial reorganization of the Registrant's foreign subsidiaries
was required as a result of the failure of subsidiary Options Invest Danmark A/S
to obtain a required financial services license from the Government of Denmark.
As a result of this financial reorganization, the Registrant has discontinued
its European business operations effective for the year ended December 31,
1997. The Registrant at present has no administrative or operating control
of any of the former subsidiary operations.
On August 1, 1998 the Registrant changed its name to BusinessNet Holdings Corp.,
and undertook a reverse-split of its Common Stock on the basis of one new Share
for each fifty (50) issued and outstanding Shares.
Share Dividend Declared
On July 13, 1999, The Registrant announced today that its Board of Directors
had approved a Common Stock dividend of one (1) Share of Common Stock for
each one (1) Share of Common Stock held of record as of the close of business
on July 23, 1999, payable on July 30, 1999. As a result of the payment of
this dividend, the number of Shares of Common Stock of the Registrant
increased from 917,482 to 1,834,964 as of July 30, 1999.
Executive Offices Relocated to Newport, RI
In May, 1999, the Registrant relocated its executive and administrative offices
to 1 Bannister's Wharf, Newport, RI 02840. The telephone number is
(401) 841-5294.
Present Business Operations
Management of the Registrant is presently undertaking to explore various
options to acquire and/or develop new business operations for the Registrant,
including mergers with or acquisitions of other business corporations.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(Continued)
RESULTS OF OPERATIONS
Six Months Ended June 30, 1999 vs. June 30, 1998
The Registrant's business activities were inactive during the three months ended
June 30, 1999 as well as the six months ended June 30, 1998 except for
administrative and legal functions to assure the continuation of corporate
status, and the acquisition during June, 1999 of $40,000 of inventory and
payment of $11,875 for the Registrant's Omnicast Corp. subsidiary. The
Registrant had no revenues from operations or otherwise during this period.
Plan of Operations
The Company has raised its present working capital from private equity
transactions and has formed a subsidiary, Omnicast Corporation (in May of 1999)
for the purpose of acquiring entertainment rights to market media productions
and media related products. The Company, through its subsidiary, also has
opened its website, www.Omnicast.com. As a holding company, the Company
believes it can maintain sufficient capital to fund the projects of its
subsidiary during the next twelve months.
On May 11, 1999, the Company announced that it had acquired a 60% controlling
interest in Omnicast Corp., developer of omnicastlive.com, an Internet
entertainment content producer and web site. In exchange for its controlling
interest, the Company has agreed to provide its subsidiary Omnicast Corp. with
$2 million in working capital to immediately launch on the Internet its full-
time, video-based transactional network via on-line services.
Through a license agreement with The Classic Rock Network, and other
prospective licensing agreements, omnicastlive.com will provide scheduled
on-line video events such as live concerts, interviews with classic rock
artists, concert videos-on-demand, and an e-commerce component to market
music and music-related products as well as sponsor advertising.
The business operations of Omnicast Corp. during this financial quarter
consisted of the acquisition of $40,000 of inventory for sale on its Internet
e-commerce site. As a result of this and other product acquisitions, the
Registrant expects to report revenue from operations, including sales of
merchandise and services, during the third quarter ending September 30, 1999
and continuing thereafter.
EFFECT OF INFLATION ON OPERATION
The Registrant is at present undertaking no business operations and therefore is
not subject to the potential effects of inflation.
SEASONALITY
The Registrant is at present undertaking no business operations and therefore is
not subject to seasonal fluctuations.
CAPITAL RESOURCES AND LIQUIDITY
During the year ended December 31, 1997, the Company discontinued the operations
of its foreign operating subsidiaries. As of June 30, 1999, the Company had a
working capital surplus of $161,625.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
(Continued)
The Company has a material financial commitment at June 30, 1999, which is its
pledge to raise up to $2,000,000 for its Omnicast subsidiary, which it does not
anticipate having difficulty to obtain. The Company expects that it will
develop and/or acquire new business operations in the future, and that it
will finance its capital requirements in the future through equity offerings
and ultimately, cash generated from acquired operations and borrowings from
possible new credit facilities.
There can be no future assurance, that the Registrant's future business
operations will generate sufficient cash flow from operations or that future
working capital and equity offerings borrowings will be available in sufficient
amounts and required time frames to accomplish all of the Registrant's
potential future operating requirements.
SUBSEQUENT EVENT: ACQUISITION OF INTERNET BROADCAST RIGHTS
On August 9, 1999, the Registrant announced that its Internet entertainment
subsidiary, OMNICAST CORP., had acquired internet broadcast rights for the
"Itchykoo Park 99" music festival held August 12th through 15th at Itchykoo
Park near Nashville, TN. The four-day event featured over thirty classic
rock bands and artists, including Rick Springfield, Sammy Hagar, Styx,
Starship, Iron Butterfly, Grand Funk Railroad, and The Moffatts. Omnicast
will feature extended coverage of the concert event on its omnicastlive.com
Internet web site with video streaming, backstage interviews with artists,
and on-line merchandising of music and memorabilia. This concert production
was the first major entertainment event to be recorded live in the new High-
Definition TV (HDTV) format, and will be available for broadcast and purchase
in both HDTV and standard television formats.
With over forty hours of HDTV video footage of over thirty classic rock
artists, OMNICAST will produce a pay-per-view concert event featuring the
best of "Itchykoo Park 99" for an Internet pay-per-view broadcast, and is
presently negotiating with significant television distribution outlets for
re-broadcast of the program as a cable television pay-per-view and for a
series of broadcast programs. OMNICAST will also pursue domestic and
international video and merchandise sales.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Registrant is presently not engaged in any legal proceedings, nor is
management aware of any existing claim or controversy which could result in
legal proceedings against the Registrant. However, management is currently
reviewing its legal options with respect to recouping some portion of its
investment in BusinessNet Europe, Ltd.
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. Submission of Matters to a Vote of Security Holders
NONE
Item 5. Other Information
SEE "Subsequent Event: Acquisition of Internet Broadcast
Rights")
Item 6. Exhibits and Reports on Form 8-K
See Current Report on Form 8-K dated August 31, 1999
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BUSINESSNET HOLDINGS CORP.
(Registrant)
Date: September 15, 1999 By:/s/Rounsevelle W. Schaum
Rounsevelle W. Schaum, President
Date: September 15, 1999 By:/s/Kenneth Brown
Kenneth Brown, Secretary
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