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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB/A-1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the quarterly period ended June 30, 2000.
Commission file number 0-19949
iRV, Inc.
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(Exact Name of Registrant as Specific in its Charter)
Colorado 84-1153522
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(State or other jurisdiction of IRS Employer
incorporation or organization) Identification
Number
5373 North Union Blvd., Suite 100 Colorado Springs, CO 80918
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 719 590-4900
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(Former Name or Address 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 Issuer was required to file such reports), and (2) has been
subject to filing requirements for the past 90 days.
Yes [ X ] No [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the Registrant has filed all documents and reports required
to be filed by Sections 12, 13, or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [ ] No [
] *** not applicable ***
APPLICABLE ONLY TO CORPORATE ISSUERS
As of June 30, 2000, the Company had 7,811,470 shares of its $0.001 par
value common stock outstanding.
Transitional Small Business Disclosure Format (Check one). Yes [ ] No [X]
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Forward-Looking Statements
In addition to historical information, this Annual Report contains
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995, and is thus prospective. The forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in the forward-
looking statements. Factors that might cause such a difference include, but
are not limited to, competitive pressures, changing economic conditions such
as changes in gasoline prices and the fluctuation of interest rates,
popularity of product lines, the success of the Company's efforts in
identifying and entering into an agreement with an acquisition or merger
candidate, and other items that iRV, Inc. discusses in the Management
Discussion and Analysis Section of this document. Readers are cautioned not
to place undue reliance on these forward-looking statements, which reflect
only management's opinions. iRV, Inc. does not have any obligation to revise
these forward-looking statement to reflect subsequent events or circumstances.
Readers should refer to and carefully review the information future documents
the Company files with the Securities and Exchange Commission.
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Part I - Financial Information
Item 1. Financial Statements
Consolidated Balance Sheet - June 30, 2000. . . . . . . . . . . . . . . 4
Consolidated Statement of Operations for the three months ended June 30,
2000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Consolidated Statement of Cash Flows for the three months ended June 30,
2000. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . 8
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<TABLE>
<CAPTION>
iRV, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30, 2000
ASSETS
<S> <C>
Current Assets:
Cash and cash equivalents $ 9,389
Funding Receivable 230,459
Inventory 1,370,333
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Total current assets 1,610,181
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Property and equipment, net 106,801
Refundable deposits 850
Intangible assets, net 193,602
Investment in restricted common stock 40,000
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341,253
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$ 1,951,434
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Floor Financing $ 1,472,001
Notes payable 574,311
Accounts payable-
Related parties 60,101
Other 188,283
Accrued liabilities 7,273
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Total Current Liabilities 2,301,969
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Stockholders deficit:
Preferred stock, $.01 par value;
50,000,000 shares authorized; no
shares issued and outstanding -
Common stock, $.001 par value;
100,000,000 shares authorized;
7,811,470 shares issued and
outstanding 7,811
Additional paid in capital 2,356,719
Accumulated deficit (2,715,065)
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Total stockholders' deficit (350,535)
Total liabilities and stockholders'
deficit $ 1,951,434
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
<CAPTION>
iRV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2000
<S> <C>
Revenue:
RV sales $ 1,056,247
Cost of sales 870,679
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Gross profit 185,568
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Operating expenses:
Sales and marketing 16,638
Interest 37,861
General and administrative 189,996
Internet Web site development 27,250
Stock issuance costs 224,500
Consulting-
Related Parties 22,248
Other 18,767
Travel and entertainment 15,516
Depreciation and amortization 30,537
Rent 31,384
Salaries and benefits 110,341
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Total Operating expenses 725,038
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Net loss $ (539,470)
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Basic loss per share $ (0.07)
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Fully diluted loss per share $ (0.07)
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Weighted average shares outstanding
Basic 7,893,803
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Fully Diluted 7,893,803
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</TABLE>
The accompanying notes are an integral part of these financial statements.
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<TABLE>
<CAPTION>
iRV, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTH PERIOD ENDED JUNE 30, 2000
CASH FLOWS FORM OPERATING ACTIVITIES:
<S> <C>
Net Loss $ (539,470)
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Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization 30,538
Stock issued for services 224,500
Settlement agreement with former
officer and director 15,229
Loss on disposal of property 3,634
Changes in operating assets and
liabilities:
Funding Receivable (230,459)
Inventory (615,308)
Other 21,106
Accounts payable 58,864
Accrued liabilities (33,963)
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(525,859)
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Net cash used in operating activities (1,065,329)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (14,051)
Refundable deposits (850)
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Net cash used in investing
activities (14,901)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in floor financing payable 776,588
Proceeds from borrowings from related
parties 324,850
Payments on notes (2,154)
Payments on advances from related
parties (38,500)
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Net cash provided by financing
activities 1,060,784
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Net decrease in cash and cash
equivalents (19,446)
Cash and cash equivalents, beginning 28,835
Cash and cash equivalents, ending $ 9,389
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest $ 29,717
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SUPPLEMENTAL DISCLOSURE OF NON CASH
FINANCING ACTIVITIES:
Company canceled 450,000 shares of
common stock $ 450
Company eliminated $910 receivable
by reducing amount of note payable
to the same related party $ 910
</TABLE>
The accompanying notes are an integral part of these financial statements.
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iRV, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business and Significant Accounting Policies
iRV, Inc. ("the Company") was incorporated in Colorado on August 1, 1999
as RV Holiday.com, Inc. The Company changed its name to iRV, Inc. in
December 1999. The Company is engaged in the retail sales of recreational
vehicles primarily in Tennessee, and the development and operation of an
interactive Web site that enables nationwide shopping for RVs via the
Internet.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts
of the Company and its wholly owned subsidiaries, iRV.com, Inc. and iRV -
Dealerships, Inc. Internet development activities are conducted through
iRV.com, Inc., while the acquisitions of RV dealerships are conducted through
iRV - Dealerships, Inc. All material inter-company accounts have been
eliminated in consolidation.
Cash and Cash Equivalents
The Company considers all highly liquid instruments with an original
maturity of three months or less to be cash equivalents.
2. Floor Financing Payable
In February the Company executed a floor financing agreement with
Deutsche Financial Services, whereby the Company may draw up to $2,000,000 to
purchase inventory in connection with the operation of its RV dealership. As
of the period ended June 30, 2000 we had used $1,456,397 of our inventory
credit line. The financing agreement bears interest at prime plus 1% and is
collateralized by essentially all the assets of the Company. Interest expense
associated with floor financing for the 3-month period was $25,643. We were
in full compliance with our floor financing agreement during the period ended
June 30, 2000.
In connection with obtaining the floor financing, an entity controlled by
a stockholder of the Company provided an irrevocable letter of credit in favor
of Deutsche Financial Services in the amount of $300,000. In consideration of
providing the irrevocable letter of credit, the Company agreed to grant this
entity warrants to purchase 2,500 shares of the Company's common stock at
$2.00 per share for each month that the letter of credit is issued and
outstanding. The warrants are exercisable over a three-year period.
3. Notes Payable
Notes payable consist of the following at June 30, 2000:
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<CAPTION>
<S> <C> <C>
10% Note payable to related party,
due on demand, without collateral $ 100,000
10% Note payable to related party
due on demand, without collateral 320,940
9% note payable to related party,
due on demand, without collateral 30,000
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$ 450,940
</TABLE>
During the period ended June 30, 2000 the Company's note between itself
and one of its shareholders increased $255,440. At the end of the period the
Company owed The Rockies Fund a total of $320,940.
In addition the Company borrowed $55,000 from a shareholder who is also a
director as well as legal counsel. The funds were used toward the separation
agreement with the Company's former president. As part of the separation
agreement the Company paid its former president $55,000 in cash. As of June
30, 2000 $25,000 of the $55,000 note had been re-paid.
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<CAPTION>
<S> <C> <C>
9.74% Note payable to financial institution,
payable in monthly installments,
due September 2000, collateralized by
a recreational vehicle $ 64,784
9.74% Note payable to financial institution,
due September 2000, collateralized by
a recreational vehicle 58,587
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$ 123,371
</TABLE>
4. Lease Commitment
As of June 30, 2000 the Company's only lease commitments were at the RV
dealership in Knoxville, TN. The Company leases land and a building under a
non-cancelable operating lease. Beginning August 2000, the real property
requires monthly payments of $7,200, and expires August 2003. Additionally,
the Company leases, on a month-to-month basis, a trailer and temporary housing
for two of its employees. Rent expense for the period ended June 30, 2000 was
$31,384. This also included amounts paid for temporary corporate office space
and temporary housing for the Company's former president.
5. Capital Structure
In May, 2000 the Company and its president reached a separation agreement
and the president resigned. The former president returned 450,000 of his
500,000 shares of stock to the Company for cancellation. As part of the
separation agreement a stockholder caused the issuance of 100,000 shares of
freely traded common stock to the former president. The former president also
received $55,000 in cash and approximately $16,000 in assets that included an
automobile, computer, and cellular telephone. The shareholder who arranged
for the transfer of freely tradable shares received 140,000 shares of
restricted common stock from the Company as consideration. The Company
recorded stock issuance expenses totaling $217,000 due to these two events.
In June 2000 the general manager of the dealership located in Knoxville
received 10,000 shares of restricted common stock. An expense in the amount
of $7,500 was recorded in association by this action of the board of
directors.
Item 2. Management's Discussion and Analysis of Operations
Overview
We offer retail sales of recreational vehicles through our dealership in
Knoxville, TN. Additionally, we have developed an interactive Web site that
enables nationwide shopping for RVs via the Internet.
Results of Operations
Period April 1, 2000 through June 30, 2000
RV sales and service. Revenues for the quarter were $1,056,247. Of this
amount, 90% was derived from RV sales of new and used vehicles. Starting in
the second fiscal quarter, we plan to add an additional rental unit to our RV
rental program. We have experienced an increase in sales every month since
acquiring the dealership in Knoxville. Although some of the increase in sales
can be attributed to seasonal fluctuations, we believe an expansion of product
assortment, increased marketing, additional staff, and capital improvements
have contributed to the increase in sales.
Cost of RV sales and service. Cost of sales and services was $870,679,
resulting in a gross margins of 17% of sales. Presently, we have $1,472,001
in RVs financed. During the period we incurred $25,643 in interest expense
in relation to our inventory.
Stock compensation. Stock compensation expense in the amount of $224,500
was recorded during the period ended June 30, 2000. This represents three
separate events. In May 2000 when the president resigned, a shareholder
provided the former president with 100,000 shares of freely tradable common
stock. A stock compensation expense in the amount of $112,000 was recorded.
The shareholder who provided the stock received 140,000 shares of restricted
common stock. A stock compensation expense of $110,500 was recorded. Finally,
the General Manager of the RV dealership received 10,000 shares of common
stock as compensation. A stock compensation expense of $7,500 was recorded.
General and administrative. General and administrative expenses were
$189,996. The major portion of these expense are attributable to professional
fees. These fees were paid for legal services and accounting services.
Included in general and administrative were expenses associated with the
separation settlement between the Company and the former president in the
amount of $70,229. Our operating expenses have been significantly reduced and
we anticipate lower general and administrative expenses in future periods.
Internet Web site development. Internet Web site development expenses
were $27,500. This represents the final development related to Web site
enhancements and on-going adjustments. In order to encourage usage of the
purchase segment of the Web site the fees associated with purchasing an RV on-
line were waived. Therefore, no revenue was recorded during this period.
Consulting. Consulting expenses were paid to a real estate consultant
who is actively pursuing additional RV dealerships, an RV operations'
consultant, and a financial consultant who is also a shareholder of the
Company. The total amount paid to consultants for the period was $41,015.
The Company will continue to engage consultants as the Company expands in
order to maximize its changing needs.
Travel and entertainment. The total costs incurred for travel and
entertainment were $15,516. These expenses are attributable to transportation
to visit potential acquisition candidates, the dealership in Knoxville, TN,
and transportation for temporarily located employees at the dealership in
Knoxville, TN to return to their permanent homes.
Sales and marketing. The RV dealership generated all sales and marketing
expenses. As we evaluate each marketing campaign's results, we anticipate
costs to increase and be used effectively to generate traffic and sales.
During the period the dealership used radio, newspaper, and direct mail.
Rent. The majority of this expense was related a residential house that
the Company rented for its former president and temporary office space. The
additional expense relates to temporary housing provided to two employees at
the RV dealership in Knoxville, TN.
Liquidity and Capital Resources
The Company depends on its major shareholders for its funding. The
Company does not internally generate sufficient funds to meet its present
spending levels.
Net cash used by operating activities during the period were $1,065,329.
This includes a substantial increase in our inventory of RVs at the dealership
in Knoxville, TN. The Company's major asset is its inventory; and the majority
of its inventory is financed. However, during the period our equity in our
inventory increased 71%, from approximately $75,216 to $128, 791.
We continue to finance our operations by advances provided from financing
activities of our major shareholders. This includes three notes from
shareholders in the amounts of $100,000, $367,540 and $30,000. All notes are
due on demand, are not secured and the interest rates are 10%, 10%, and 9%
respectively. Total notes due increased by $283,286 during this period.
In addition we have continued to finance our operations by using our
$2,000,000 floor financing line provided by Deutsche Financial Services. We
have increased our financing by $776,588 during this period.
We do not believe that our cash resources are sufficient to fund our
anticipated working capital and capital expenditures for the next twelve
months. We will continue to rely on our major investors. However, there can
be no assurances that their funding will continue. We will also continue to
explore alternative debt and equity means of raising capital.
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Part II - Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
In May 2000, the Company entered into a Settlement Agreement and Mutual
Release with the former president and director. Pursuant to the Settlement
Agreement the Company paid the former president $55,000 in cash and conveyed
title to an automobile and certain other equipment. Additionally the Company
provided the former president with 100,000 freely tradable shares of the
Company's common stock, which were provided by a stockholder of the company.
The former president surrendered 450,000 shares of stock that had been issued
to him. The Company canceled these shares of stock.
In connection with the Settlement Agreement, a stockholder and director,
who is also the Company's legal counsel advanced $55,000 to the Company to pay
the cash portion of the Settlement Agreement. A note evidences this advance.
$25,000 of the original note has been repaid.
Item 6. Exhibits and Reports on Form 8-K
(a) None.
(b) Current Report on Form 8-K dated April 24, 2000
Item 5. Other Events. Reported change of name.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this annual report to be
signed on its behalf by the undersigned, thereunto duly authorized.
iRV, INC.
Date: September 1, 2000 By: /s/ Bradley Smith
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Bradley Smith, Chief Financial Officer
