UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File Number 000-24755
---------
HOLLYWOOD PARTNERS.COM, INC.
-----------------------------
Exact name of Registrant as specified in its charter)
DELAWARE 33-0379106
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1800 Avenue of the Stars, Suite 480, Los Angeles, CA 90067
----------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(310) 552-0555
--------------
(Registrant's telephone number, including area code)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the preceding twelve
months ended December 31, 1998 (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 ninety days.
Yes: X No:
The number of shares of the Registrant's Common Stock, par value $.001 per share
outstanding on November 20, 2000 is 8,833,450.
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
CONTENTS
PART 1 - FINANCIAL INFORMATION
-----------------------------------------------------------------
ITEM 1. Consolidated Financial Statements:
Balance Sheets
September 30, 2000 (unaudited) and December 31,1999........ 3-4
Statements of Operations (unaudited)
Three Month Periods Ended September 30, 2000 and 1999........ 5
Nine Month Periods Ended September 30, 2000 and 1999......... 6
Statement of Stockholders' Equity (unaudited)
Nine Month Period Ended September 30, 2000................... 7
Statements of Cash Flows (unaudited)
Nine Month Periods Ended September 30, 2000 and 1999......... 8
Notes to the Financial Statements......................... 9-10
ITEM 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................11-15
PART II - OTHER INFORMATION
---------------------------------------------------------------
Signature............................................................16
2
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
CONSOLIDATED BALANCE SHEET
As of September 30, 2000 and December 31, 1999
<TABLE>
ASSETS
<CAPTION>
September 30,
2000 December 31,
(Unaudited) 1999
---------- ------------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 36,791 $ 1,086,585
Accounts receivable, less allowance for
doubtful accounts of $61,803 - -
Inventory - -
Marketable securities - 514,150
Other receivables 11,211 -
Prepaid insurance, current 66,417 76,225
Prepaid expenses and other current assets 32,691 68,801
-------- -----------
Total Current Assets 147,110 1,745,761
-------- -----------
Equipment
Computer equipment 46,583 7,517
Less accumulated depreciation (8,883) (502)
------- ----------
Total Equipment 37,700 7,015
------- ----------
Prepaid insurance, long term - 49,835
Receivable from related parties - 8,995
Other assets - 18,495
-------- ----------
Total Assets $ 184,810 $ 1,830,101
========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
CONSOLIDATED BALANCE SHEET
As of September 30, 2000 and December 31, 1999
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<CAPTION>
September 30,
2000 December 31,
(Unaudited) 1999
----------- ------------
<S> <C> <C>
Current liabilities
Notes payable $ 65,985 $ 87,516
Loan from parent company - 64,295
Accounts payable $ 16,648 23,838
Accrued expenses 124,282 104,829
--------- -----------
Total Current Liabilities 206,915 280,478
--------- -----------
Notes payable - Long term - 12,693
--------- --------
Total liabilities 206,915 293,171
--------- -----------
Stockholders' equity
Convertible Preferred Stock, cumulative 7%,
$.001 par value; authorized 5,000,000 shares;
issued and outstanding 600 shares 1 1
Common stock, $.001 par value; authorized
50,000,000 shares; issued and outstanding
8,424,000 and 8,036,000 shares 8,424 8,036
Additional paid-in capital 3,031,286 2,387,826
Accumulated deficit (3,061,816) (858,933)
----------- ----------
Total Stockholders' Equity (22,105) 1,536,930
----------- ----------
Total Liabilities & Stockholders' Equity $ 184,810 $ 1,830,101
========== ============
</TABLE>
See accompanying notes to consolidated financial statements
4
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
2000 1999
---------- ---------
<S> <C> <C>
Net revenues $ 10,516 $ 279,446
Cost of sales - 99,130
-------- ---------
Gross profit 10,516 180,316
------- --------
Operating expenses
Research and development - 7,594
Sales and marketing 223,107 182,172
General and administrative 887,123 86,313
-------- -------
Total operating expenses 1,110,230 276,079
---------- -------
Income (Loss) from operations (1,099,714) (95,763)
Other income 1,974 -
--------- --------
Total other income 1,974 -
--------- --------
Net income (loss) (1,097,740) (95,763)
=========== ==========
Basic and diluted net income (loss) per common share $ (0.13) $ (0.01)
============ ========
Basic and diluted weighted average shares
of common stock 8,275,956 8,000,000
============ =========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
-------- ----------
<S> <C> <C>
Net revenues $ 62,504 $ 1,019,155
Cost of sales - 600,667
----------- -----------
Gross profit 62,504 418,488
Operating expenses
Research and development 27,422 12,489
Sales and marketing 604,827 568,965
General and administrative 1,650,240 269,404
---------- --------
Total operating expenses 2,282,489 850,858
---------- --------
Loss from operations (2,219,985) (432,370)
Other income
Other income - -
Interest income 17,103 476
------- ----
Total other income 17,103 476
---------- --------
Loss, before extraordinary item (2,202,882) (431,894)
Extraordinary gain on extinguishment of debt - 84,441
------------ --------
Net loss $ (2,202,882) $ (347,453)
============= ===========
Basic and diluted net loss per common share:
Loss before extraordinary item $ (0.26) $ (0.04)
Extraordinary gain on extinguishment of debt - -
-- --
Basic and diluted net loss $ (0.26) $ (0.03)
============ ==========
Basic and diluted weighted average shares
of common stock 8,324,000 8,000,000
</TABLE>
See accompanying notes to consolidated financial statements
6
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Nine Months Ended September 30, 2000
(Unaudited)
<TABLE>
<CAPTION>
Preferred Stock Common Stock
-------------------------------------
Shares Amount Shares Amount
--------- --------- -------- -------
<S> <C> <C> <C> <C>
Balance, January 1, 2000 600 1 8,036,000 $8,036
Issuance of stock for services 388,000 388
Issuance of warrants and
options for services
Net Loss
--------- --------- ---------- -------
Balance, September 30, 2000 600 1 8,424,000 $8,424
========= ========= ========= ========
</TABLE>
<TABLE>
<CAPTION>
Additional
Paid-In Accumulated
Capital Deficit Total
--------- ----------- ----------
<S> <C> <C> <C>
Issuance of stock for services
Balance, January 1, 2000 $ 2,387,826 $(858,934) $ 1,536,929
Issuance of stock for service 223,172 223,560
Issuance of warrants and
options for services 420,288 420,288
Net Loss (2,202,882) (2,202,882)
------------ ----------- -----------
Balance, September 30, 2000 $ 3,031,286 $(3,061,816) $ (22,105)
=========== ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements
7
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
2000 1999
-----------------------------
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities:
Net loss $ (2,202,882) $ (347,450)
Allowance for doubtful accounts - -
Adjustment to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Stock, warrants and options issued for services 643,848 -
Depreciation & Amortization 8,380 -
Changes in operating assets and liabilities:
Accounts receivable, trade - 611,840
Other receivables (3,650) -
Inventories - (163,231)
Prepaid expenses and other current assets 95,753 3,693
Accounts payable (47,647) (135,412)
Other assets 18,495 -
Accrued expenses (4,385) 24,526
---------------- ---------------
Cash and cash equivalents provided by
(used in) operating activities (1,492,088) (6,034)
---------------- ---------------
Cash flows from investing activities:
Proceeds from sale of marketable securities 514,150 -
Purchase of computer equipment (39,066) (4,804)
--------------- ---------------
Cash and cash equivalents provided by
(used in) investing activities 475,084 (4,804)
---------------- ---------------
Cash flows from financing activities:
Loan from related parties 1,434 (680,961)
Proceeds from additional paid-in capital 500,000
Repayment of notes payable (34,224)
Proceeds from notes payable - 375,000
---------------- ---------------
Cash and cash equivalents used in
financing activities (32,790) 194,039
---------------- ---------------
Decrease in cash and cash equivalents (1,049,794) 183,201
Cash and cash equivalents, beginning of period 1,086,585 243,834
--------------- ---------------
Cash and cash equivalents, end of period $ 36,791 $ 427,035
============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
8
<PAGE>
HOLLYWOOD PARTNERS.COM, INC.
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1 - GENERAL
The Company has positioned itself to service its client base in the
areas of marketing, branding and distribution. Using the Company's tie-ins to
entertainment and sports properties, the Company provides strategic solutions to
help clients to achieve their marketing and business objectives. The Company
will generate revenue by charging the client base for its promotional packages,
and by utilizing the registered database for back end commerce and demographic
enhancement.
Our Website offers visitors opportunities to win free prizes and
receive entertainment-oriented information in exchange for simple opt-in
registration. We intend to utilize demographic and psychographic information
collected by the registration to generate store traffic, and allow us to send
appropriate offers from our marketing partners. Once our Website generates
sufficient traffic, we can also utilize it as a source for branding, advertising
and back-end business development.
The experience of our management team and the support of our eclectic
advisory board enables us to create unique and functional programs combining
various components from the fields of entertainment, sports and business that
will keep our customer base pleased with the results. To date revenues are
minimal because of the changes in the base model, but we are now focused on
retaining retailers, manufacturers and Fortune 2000 companies as clients for the
upcoming quarters.
We launched our initial Website in September 1999 under the URL
www.HollywoodPartners.com. This Website was used to post and manage a number of
sweepstakes contests for various customers and partners, coming from industries
such as food manufacturing, entertainment, publishing, sporting goods and
concert promotion. In the second quarter, we re-launched our Internet offerings
with two new Websites under a HollywoodPartners.com brand umbrella:
PlanetFree.com (launched May 2000) - a new sweepstakes Website that
replaced the sweepstakes functions of the prior hollywoodpartners.com
Website and that initially can host up to 20 sweepstakes at one time.
This Website is designed to host sweepstakes and promotions for
retailers and manufacturers who we believe are seeking a higher level of
branding and education capabilities than are generally offered on other
sweepstakes Websites.
BigTimeHollywood.com (launched May 2000) - a new e-magazine that offers
original content plus news, games and reference information about the
entertainment industry, with a primary focus toward movies and
television. The features and other information provided on this Website
both entertain and inform the visitor about the entertainment industry.
As part of our mission, we also strive to be a socially responsible
company. In our normal course of business, we attempt to integrate environmental
organizations and charitable causes into our content. For example,
PlanetFree.com contains links to environmental organizations and many of our
sweepstakes are expected to have tie-ins to charities. We promote support of
charities and encourage co-sponsorship of charities as a part of our regular
sales program.
9
<PAGE>
We intend to use the Hollywood Partners.com brand as an "umbrella" to
build, partner or acquire additional complementary Websites that offer unique
content for our visitors. As this group of associated Websites builds, we plan
to increase the relationship we have with our visitors and increase our ability
to effectively conduct direct marketing activities with them.
Effective September 13, 1999, the Company acquired all the issued and
outstanding shares of Hollywood Partners, Inc. that previously operated as a
wholly-owned subsidiary of Vitafort International Corporation. The Company
issued 5,000,000 shares of its common stock to Vitafort International
Corporation in connection with this acquisition and changed its name to
Hollywood Partners.com, Inc.
Previous to the acquisition, the Company had 3,000,000 shares of common
stock outstanding and had only nominal operations.
The accompanying financial statements have been prepared on the basis
that Hollywood Partners, Inc. has been the acquirer for accounting purposes for
the reporting periods presented.
The unaudited consolidated financial statements have been prepared on
the same basis as the audited consolidated financial statements for the year
ended December 31, 1999 and, in the opinion of management, reflect all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation for each of the periods presented. The financial statements include
the results of Hollywood Partners, Inc., a wholly owned subsidiary of Hollywood
Partners.com, Inc. In addition, all significant intercompany accounts have been
eliminated. The results of operations for interim periods are not necessarily
indicative of results to be achieved for full fiscal years.
As contemplated by the Securities and Exchange Commission (SEC) under
item 310(b) of Regulation S-B, the accompanying consolidated financial
statements and related footnotes do not contain certain information that will be
included in the Company's annual consolidated financial statements and footnotes
thereto. The accompanying consolidated financial statements should be read in
conjunction with the more detailed financial statements, and the related
footnotes thereto, filed with the Company's Annual Report on Form 10-KSB for the
year ended December 31, 1999.
NOTE 2 - OTHER RECEIVABLES
Other receivables include a receivable from the sale of marketable
securities.
NOTE 3 - RELATED PARTY
As of September 30, 2000, the Company is owed $ 0.00 from its majority
shareholder, Vitafort International Corporation.
NOTE 4 - NOTES PAYABLE
Represents primarily the amount of insurance costs being financed by a
financial institution. The note has monthly payments of $6,347, bears interest
at 8.92%, and matures in February 2001.
10
<PAGE>
NOTE 5 - STOCKHOLDERS' EQUITY
During the third quarter, the Company issued 150,000 warrants to
Mediacom, Inc. to purchase common shares at $3.125, vesting immediately with
a 3 year term for consulting services. The value of the warrants were
recorded as a non cash charge of $328,500 to consulting expense.
The Company issued 45,000 options to Carol Yee, an employee, to
purchase common shares at $3.125, vesting immediately with a 3 year term.
NOTE 6 - LIQUIDITY
The Company continues to suffer recurring losses from operations and
has not generated sufficient recurring revenue producing operations to sustain
operations. Currently, the Company's current assets exceed its current
liabilities. The Company is attempting to raise additional capital to meet
future working capital requirements and launch new products, but may not be able
to do so. If the Company is not able to raise additional capital, it may have to
significantly curtail operations. Subsequent to September 30, 2000, the Company
has raised $150,000 in equity financing.
NOTE 7 - LITIGATION
The Company is not subject to any pending claims or litigation.
NOTE 9 - SUBSEQUENT EVENTS
The Company has begun to execute the Hall of Fame Pro, Inc. ("HOFP")
business plan and Paul Bartelt has been hired as President of HOFP. Hollywood
Partners has provided all of the working capital to date, although a private
placement has been initiated by the Company to raise capital for HOFP.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(Unaudited)
Cautionary Statement for Purposes of "Safe Harbor Provisions" of the Private
Securities Litigation Reform Act of 1995. Certain statements contained in this
Quarterly Report on Form 10-QSB ("Form 10-QSB") constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements involve known and unknown risks, uncertainties and
other factors that may cause our or our industry's actual results, levels of
activity, performance or achievements to be materially different than any
expressed or implied by these forward-looking statements. These statements may
be contained in our filings with the Securities and Exchange Commission, press
releases, and written or oral presentations made by our representatives to
analysts, rating agencies, stockholders, news organizations and others. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will," "should," "intend", "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "continue," or the negative of these terms
or other comparable terminology. Although we believe that the expectations in
the forward-looking statements are reasonable, we cannot guarantee future
results, levels of activity, performance or achievements. See also the
information set forth in Exhibit 99.1 on our Form 8-K dated January 21, 2000
titled "RISK FACTORS," incorporated herein to this quarterly report.
11
<PAGE>
Three Months and Nine Months Ended September 30, 2000 and 1999
Results of Operations:
As a result of the rapidly changing dynamics in marketing and the world
of the Internet, the Company redefined its business description in the third
quarter of last year, and as a result it may not be meaningful to compare the
revenues of 1999 and 2000. In the third quarter of 1999 the Company was
transitioning from its food licensing business to an Internet sweepstakes and
promotion model, therefore food revenue was reflected in the previous years'
numbers.
We launched our initial Website in September 1999 under the URL
www.HollywoodPartners.com. This Website was used to post and manage a number of
sweepstakes contests for various customers and partners, coming from industries
such as food manufacturing, entertainment, publishing, sporting goods and
concert promotion. In the second quarter, we re-launched our Internet offerings
with two new Websites under a HollywoodPartners.com brand umbrella:
PlanetFree.com (launched May 2000) - a new sweepstakes Website that
replaced the sweepstakes functions of the prior hollywoodpartners.com
Website and that initially can host up to 20 sweepstakes at one time.
This Website is designed to host sweepstakes and promotions for
retailers and manufacturers who we believe are seeking a higher level of
branding and education capabilities than are generally offered on other
sweepstakes Websites.
BigTimeHollywood.com (launched May 2000) - a new e-magazine that offers
original content plus news, games and reference information about the
entertainment industry, with a primary focus toward movies and
television. The features and other information provided on this Website
both entertain and inform the visitor about the entertainment industry.
Revenues to date have been minimal for the Company's new business model
and both the financial market conditions and the Internet market conditions have
changed considerably since our initial launch. It has become extremely difficult
to attract investors to a pure Internet business model with no immediate revenue
and profit. In addition, advertising and promotional opportunities driven by a
pure Internet model have also become increasingly harder to secure. Due to these
precarious market conditions, management has identified new opportunities for
the Company that could potentially allow for more immediate revenue and profit
opportunities.
In the third quarter the Company formed a subsidiary called Hall of
Fame Pro, Inc. ("HOFP"). This newly formed sports marketing company that has
brought together the majority of the members of the Pro Football Hall of Fame,
content developers and marketing and promotions experts to market the unique
intellectual property rights of these sports legends.
One of the initial actions of the HOFP was to form an exclusive alliance
with the Hall of Fame Players Association ("HOFPA"). The HOFPA is a newly formed
association of members of the Pro Football Hall of Fame that was established to
advance goals of mutual interest of its member players, coaches and luminaries
of Pro Football.
12
<PAGE>
This association is exclusive to Pro Football Hall of Fame members and
will work in conjunction with the HOFP to build a sports brand. At this time,
more than 90 of the 137 living members of the Pro Football Hall of Fame have
agreed to join the HOFPA.
HOFP will target seven initial revenue streams to build out its business
model. This business model provides management with a framework to develop
strategic relationships with corporate sponsors who can take advantage of the
marketing and promotional programs offered by the HOFP. These sponsorship
programs may include many of the following revenue opportunities: Hall of Fame
Golf Series, HOFP Website and e-commerce, licensing, content development &
syndication, event sponsorship and personal appearances, sweepstakes and
promotions and corporate sponsorships.
In addition to implementing the Hall of Fame business strategy, the
Company is also in the process of transitioning its overall model from the
Internet to a more traditional sales and marketing organization. Management is
currently evaluating state of the art technology that will assist the Company as
it introduces new products and services. With the collapse of valuations of
Internet businesses and the tightening of the financial markets, management
feels that re-positioning the Company as a full-service sales marketing and
promotions organization will allow for the greatest potential shareholder value.
In September, John Coppolino, a co-founder and board member, was
appointed the President of the Company and is responsible for daily operations.
Gene Scher is remaining in the position of Chief Executive Officer.
Net Revenues
For the three months ended September 30, 2000, net sales were $10,516
compared to $279,446 for the same period in 1999, a decrease of $268,930 or
approximately 96%. This decrease in revenue was due to the Company's change in
strategy to exit the snack food manufacturing and distribution businesses and to
develop its marketing and promotions business on the Internet.
For the nine months ended September 30, 2000, net sales were $62,504
compared to $1,019,155 for the same period in 1999, a decrease of $956,651 or
approximately 93.8%. This decrease in revenue was due to the Company's change in
strategy to exit the snack food manufacturing and distribution businesses and to
develop its marketing and promotions business on the Internet. Revenues for the
period reflect sweepstakes services performed for Vitafort International
Corporation, the majority owner of the Company.
Gross Profit
Gross profit decreased from $180,316 for the three months ended
September 30, 1999 to $10,516 for the three months ended September 30, 2000, a
decrease of $169,800 or 94.1%. Gross profit was 100% of net revenues for the
quarter ended September 30, 2000, compared to 64.5% for the same period of 1999.
The decrease of the amount of gross profit is due to the change in Company
strategy, and reflects the decrease in net revenues from this change. The
increase in the gross margin percentage reflects the new business strategy to
exit the manufacturing and distribution business model and to initiate a
technology-based business model.
13
<PAGE>
Gross profit decreased from $418,488 for the nine months ended
September 30, 1999 to $62,504 for the nine months ended September 30, 2000, a
decrease of $355,984 or 85%. Gross profit was 100% of net revenues for the nine
months ended September 30, 2000, compared to 41% for the same period of 1999.
The decrease of the amount of gross profit is due to the change in Company
strategy, and reflects the decrease in net revenues from this change. The
increase in the gross margin percentage reflects the new business strategy to
exit the manufacturing and distribution business model and to initiate a
technology-based business model.
Research and Development
Total research and development expenses for product development in the
three months ended September 30, 2000 were $ 0 compared to $7,594 for the same
period in 1999, a decrease of $7,594, or 100%. For the three-month 1999 period,
these expenses were for the development of food products.
Total research and development expenses for product development in the
nine months ended September 30, 2000 were $27,422 compared to $12,489 for the
same period in 1999, an increase of $14,933, or 120%. For the nine-month 1999
period, these expenses were for the development of food products. For the
nine-month 2000 period, these expenses were primarily for the development of our
Website offerings and technology underlying the Website.
Sales and Marketing
Total sales and marketing expenses for the three months ended September
30, 2000, were $223,107 compared to $182,172 for the three months ended
September 30, 1999, an increase of $40,935, or 22%. This decrease is primarily
due to the cost of design and development of the Company's new Websites on the
Internet and the cost of promoting its new business strategy, which was greater
than the amounts spent in the prior year.
Total sales and marketing expenses for the nine months ended September
30, 2000, were $604,827 compared to $568,965 for the nine months ended September
30, 1999, an increase of $35,862, or 6.3%. This decrease is primarily due to the
cost of design and development of the Company's new Websites on the Internet and
the cost of promoting its new business strategy, which was greater than the
amounts spent in the prior year.
General and Administrative
For the three months ended September 30, 2000, total general and
administrative expenses were $887,123 compared to $86,313 for the same quarter
ended September 30, 1999, an increase of $800,810. This increase is due to the
increase of staffing and administrative expenses to execute the Company's
business strategy to marketing and promotions on the Internet.
For the nine months ended September 30, 2000, total general and
administrative expenses were $1,650,240 compared to $269,404 for the nine months
ended September 30, 1999, an increase of $1,380,836. This increase is due to the
increase of staffing and other administrative expenses to execute the Company's
business strategy to marketing and promotions on the Internet.
14
<PAGE>
Liquidity and Capital Resources
Nine Months Ended
September 30,
2000 1999
------------- ---------------
Net Cash Provided by (Used in) for Operations $(1,492,088) $(686,995)
Net Cash Used in Financing Activities ( 32,790) 875,000
Net Cash Used in Investing Activities 475,084 (4,804)
Working Capital (Deficit) (59,805) 146,082
The Company is increasing spending levels to allow for the transition of
focus from the prior business of formulating, marketing and distributing food
products to a new business strategy to develop a marketing and promotions
Website on the Internet. The Company received a $2 million funding commitment
during 1999 to support this change in focus and to allow for increased
expenditures. The Company has suffered recurring losses from operations. The
Company is attempting to raise additional capital to meet future working capital
requirements, but may not be able to do so. Should the Company not be able to
raise additional capital, it may have to severely curtail operations.
15
<PAGE>
PART II - OTHER INFORMATION
HOLLYWOOD PARTNERS.COM, INC.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
HOLLYWOOD PARTNERS.COM, INC.
(Company)
/s/ John Coppolino
John Coppolino
President
/s/ Fred Rigaud
Fred Rigaud
Acting Chief Financial Officer
Date: November 20, 2000
16
