UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark one)
XX QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
- ---------- EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
- ---------- OF 1934
For the transition period from ____________ to ___________
Commission File Number: 33-40848-A
----------
WorldWideWeb Institute.com, Inc.
(Exact name of small business issuer as specified in its charter)
Florida 65-0260247
------------------------ ------------------------
(State of incorporation) (IRS Employer ID Number)
6245 N. W. 9th Avenue, Ft. Lauderdale FL 33309
----------------------------------------------
(Address of principal executive offices)
(954) 776-8444
--------------
(Issuer's telephone number)
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
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: November 12, 1999: 8,641,250
Transitional Small Business Disclosure Format (check one): YES NO X
--- ---
<PAGE>
WorldWideWeb Institute.com, Inc.
(formerly Spectrum Pharmaceutical Corporation)
Form 10-QSB for the Quarter ended September 30, 1999
Table of Contents
Page
----
Part I - Financial Information
Item 1 Financial Statements 3
Item 2 Management's Discussion and Analysis or Plan of Operation 11
Part II - Other Information
Item 1 Legal Proceedings 13
Item 2 Changes in Securities 13
Item 3 Defaults Upon Senior Securities 14
Item 4 Submission of Matters to a Vote of Security Holders 14
Item 5 Other Information 14
Item 6 Exhibits and Reports on Form 8-K 14
Signatures 14
2
<PAGE>
Part 1 - Item 1 - Financial Statements
WorldWideWeb Institute.com, Inc.
(formerly Spectrum Pharmaceutical Corporation)
Balance Sheets
September 30, 1999 and 1998
(Unaudited)
-----------
1999 1998
----------- -----------
ASSETS
------
Current Assets
Cash on hand and in bank $ 435,132 $ 47,801
Accounts receivable, net of allowance for
doubtful accounts of $-0-, respectively
Trade 40,068 7,140
Other 41,046 7,000
Prepaid and other expenses 145,575 21,137
----------- -----------
Total current assets 661,821 83,078
----------- -----------
Property and equipment - at cost
Computer equipment 319,001 59,232
Other 99,673 17,881
----------- -----------
418,674 77,113
Accumulated depreciation (90,734) (5,450)
----------- -----------
Net property and equipment 327,940 71,663
----------- -----------
Other Assets
Due from related parties 1,578,373 1,910
Other 5,014 22,223
----------- -----------
Total other assets 1,583,387 24,133
----------- -----------
Total Assets $ 2,573,148 $ 178,874
=========== ===========
- Continued -
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
3
<PAGE>
<TABLE>
<CAPTION>
WorldWideWeb Institute.com, Inc.
(formerly Spectrum Pharmaceutical Corporation)
Balance Sheets - Continued
September 30, 1999 and 1998
(Unaudited)
-----------
1999 1998
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<S> <C> <C>
Current Liabilities
Current maturities of capital lease payable $ -- 5,360
Accounts payable - trade 231,585 7,987
Other accrued liabilities 336,296 8,394
Income taxes payable 269,750 12,000
Deferred revenues 213,192 82,588
Due to officer/shareholder -- 472,500
------------ ------------
Total current liabilities 1,050,823 588,829
------------ ------------
Commitments and Contingencies
Shareholders' Equity
Common stock - $0.00001 par value. 50,000,000
shares authorized. 8,717,750 and 5,716,250
issued and outstanding, respectively. 87 57
Additional paid-in capital 2,014,845 933,875
Accumulated deficit (491,707) (1,342,987)
------------ ------------
1,523,225 (409,055)
Stock subscription receivable (900) (900)
------------ ------------
Total shareholders' equity 1,522,325 (409,955)
------------ ------------
Total Liabilities and Shareholders' Equity $ 2,573,148 $ 178,874
============ ============
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
4
<PAGE>
<TABLE>
<CAPTION>
WorldWideWeb Institute.com, Inc.
(formerly Spectrum Pharmaceutical Corporation)
Statements of Operations and Comprehensive Income
Six and Three months ended September 30, 1999 and 1998
(Unaudited)
Six months Six months Three months Three months
ended ended ended ended
September 30, September 30, September 30, September 30,
1999 1998 1999 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 3,585,613 $ 583,148 $ 1,839,819 $ 434,697
Cost of Sales 1,037,881 215,443 525,443 115,111
------------- ------------- ------------- -------------
Gross Profit 2,547,732 367,715 1,314,376 319,586
------------- ------------- ------------- -------------
Operating Expenses
Selling 370,157 69,857 83,150 43,507
1,571,216 312,963 931,858 204,949
General and administrative expenses 48,604 5,450 27,486 4,454
Depreciation ------------- ------------- ------------- -------------
Total operating expenses 1,989,977 388,270 1,042,494 252,910
------------- ------------- ------------- -------------
Income (loss) from operations 557,755 (20,555) 271,882 66,676
Other income (expense)
Litigation settlement (20,000) -- -- --
Forgiveness of accrued
compensation under
employment agreement 550,000 -- -- --
------------- ------------- ------------- -------------
Net Income (Loss)
before Income Taxes 1,087,755 (20,555) 271,882 66,676
Income tax provision 219,000 -- 102,000 12,000
------------- ------------- ------------- -------------
Net Income (Loss) 868,755 (20,555) 169,882 54,676
Other comprehensive income -- -- -- --
------------- ------------- ------------- -------------
Comprehensive Income (Loss) $ 868,755 $ (20,555) $ 169,882 $ 54,676
============= ============= ============= =============
Income (Loss) per share of
common stock outstanding,
computed on net loss
basic $ 0.11 $ (0.01) $ 0.02 $ 0.01
============= ============= ============= =============
fully diluted $ 0.11 $ (0.01) $ 0.02 $ 0.01
============= ============= ============= =============
Weighted-average number
of shares outstanding
basic 7,895,594 5,716,250 8,166,196 5,716,250
============= ============= ============= =============
fully diluted 8,121,749 5,716,250 8,392,351 5,716,250
============= ============= ============= =============
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
5
<PAGE>
<TABLE>
<CAPTION>
WorldWideWeb Institute.com, Inc.
(formerly Spectrum Pharmaceutical Corporation)
Statements of Cash Flows
Six months ended September 30, 1999 and 1998
(Unaudited)
-----------
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows from Operating Activities
Net income (loss) $ 868,755 $ (32,555)
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 48,604 5,450
Lawsuit settlement paid with transfer of assets 20,000 --
Common stock issued for consulting fees 18,000 --
Forgiveness of accrued compensation on employment contract (550,000) --
(Increase) Decrease in
Accounts receivable - trade 1,183 (7,140)
Accounts receivable - other (31,046) (7,000)
Prepaid expenses and other (22,998) (23,360)
Increase (Decrease) in
Accounts payable 181,204 7,987
Other accrued liabilities 241,136 8,394
Due to former officer/shareholder -- 75,000
Income taxes payable 219,000 12,000
Deferred revenues 28,064 82,588
----------- -----------
Net cash provided by operating activities 1,021,902 121,364
----------- -----------
Cash Flows from Investing Activities
Purchase of property and equipment (191,166) (77,113)
----------- -----------
Net cash used in investing activities (191,166) (77,113)
----------- -----------
Cash Flows from Financing Activities
Proceeds from private placements of
common stock - net of selling expenses 1,063,000 --
Change in advances to affiliates - net (1,513,378) (1,910)
Proceeds from capital lease payable -- 7,950
Payments on capital lease payable (1,379) (2,590)
----------- -----------
Net cash used in financing activities (451,757) 3,450
----------- -----------
Increase in Cash and Cash Equivalents 378,979 47,701
Cash and cash equivalents at beginning of period 56,153 100
----------- -----------
Cash and cash equivalents at end of period $ 435,132 $ 47,801
=========== ===========
Supplemental Disclosures of Interest and Income Taxes Paid
Interest paid during the period $ -- $ 191
=========== ===========
Income taxes paid (refunded) $ -- $ --
=========== ===========
Supplemental Disclosure of Non-Cash
Investing and Financing Activities
Settlement of lawsuit with transfer of a patent $ 20,000 $ --
=========== ===========
</TABLE>
The financial information presented herein has been prepared by management
without audit by independent certified public accountants.
6
<PAGE>
WorldWideWeb Institute.com, Inc.
(formerly Spectrum Pharmaceutical Corporation)
Notes to Financial Statements
Note 1 - Basis of Presentation
WorldWideWeb Institute.com, Inc. (Company) was incorporated on May 29, 1990 as
Interamerican Pharmaceutical Corporation under the laws of the State of Florida.
The Company changed its name to Spectrum Pharmaceutical Corporation in April
1991. The Company was originally formed to engage in the development and
marketing of certain products utilizing the chemical compound procaine
hydrochloride for the treatment of tinnitus, certain symptoms of Alzheimer's
Disease and cocaine addiction. The Company was assigned a patent covering its
products for the specifically named conditions and diseases.
On June 29, 1999, as filed on July 30, 1999, the Company amended its Articles of
Incorporation to issue up to 50,000,000 shares of $0.00001 par value Common
Stock and to effect a one (1) for ten (10) reverse stock split, with no
fractional shares being issued. All issued and outstanding share amounts in the
accompanying financial statements have been restated to reflect the effect of
this reverse stock split as of the first day of the first period presented. The
Company also changed its corporate name to WorldWide Web Institute.com, Inc.
On July 2, 1999, the Agreement and Plan of Reorganization and Stock Purchase
Agreement among Spectrum Pharmaceutical Corp. ("Acquiror"), the principal
shareholder of the Acquiror, WorldWideWeb Institute, Inc. ("WorldWideWeb") and
the shareholders of WorldWideWeb was completed. As part of the acquisition, the
shareholders of WorldWideWeb acquired 5,025,000 shares of the Acquiror's Common
Stock in exchange for all of the capital stock of WorldWide Web and, in
addition, acquired 1,815,000 shares of the Acquiror from the principal
shareholder of the Acquiror, Halter Capital Corporation, in consideration for
$350,000. As a result of this transaction, the shareholders of WorldWideWeb
received an aggregate of 6,840,000 shares or approximately 89.6% of the total
outstanding Common Stock of the Acquiror. The exchange of consideration involved
resulted from arms-length bargaining and there was no previous relationship
between the Acquiror and its principal shareholder and WorldWideWeb and its
shareholders. The cash portion of the consideration was derived from personal
funds.
A change in control of the Company and the simultaneous July 2, 1999 acquisition
of WorldWideWeb Institute, Inc. involved common ownership and management.
Accordingly, the acquisition was accounted for pursuant to Interpretation #39 of
Accounting Principles Board Opinion # 16, "Business Combinations", whereby the
combination of entities under common control are accounted for on an
"as-if-pooled" basis. The combined financial statements of the Company and its
wholly-owned subsidiary became the historical financial statements of the
Company as of the first day of the first period presented.
The Company will retain its March 31 year-end for all future periods.
During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-KSB and the accounting policies of WorldWideWeb Institute,
Inc. on Form 8-K/A filed with the U. S. Securities and Exchange Commission. The
information presented herein does not include all disclosures required by
generally accepted accounting principles and the users of financial information
provided for interim periods should refer to the annual financial information
and footnotes contained in its Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934 on Form 10-KSB and the Form 8-K/A filed
containing the historical financial statements of WorldWideWeb Institute, Inc.
when reviewing the interim financial results presented herein.
In the opinion of management, the accompanying interim financial statements,
prepared in accordance with the instructions for Form 10-QSB, are unaudited and
contain all material adjustments, consisting only of normal recurring
adjustments necessary to present fairly the financial condition, results of
operations and cash flows of the Company for the respective interim periods
presented. The current period results of operations are not necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending March 31, 2000.
7
<PAGE>
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 reporting period.
Actual results could differ from those estimates.
Note 2 - Summary of Significant Accounting Policies
a.) Cash and cash equivalents
-------------------------
The Company considers all cash on hand and in banks, including accounts in
book overdraft positions, certificates of deposit and other highly-liquid
investments with maturities of three months or less, when purchased, to be
cash and cash equivalents.
b.) Income taxes
------------
The Company filed a separate corporate federal income tax return through
December 31, 1998. Due to the changes in control occurring in 1999, the
Company has no net operating loss carry forwards available to offset
financial statement or tax return taxable income in future periods.
The Company uses the asset and liability method of accounting for income
taxes. At September 30, 1999 and 1998, respectively, the deferred tax
asset and deferred tax liability accounts, as recorded when material to
the financial statements, are entirely the result of temporary
differences. Temporary differences represent differences in the
recognition of assets and liabilities for tax and financial reporting
purposes, primarily non-deductible accrued compensation amounts payable to
an officer.
c.) Income (Loss) per share
-----------------------
Basic earnings (loss) per share is computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and common
stock equivalents (primarily outstanding options and warrants). Common
stock equivalents represent the dilutive effect of the assumed exercise of
the outstanding stock options and warrants, using the treasury stock
method. The calculation of fully diluted earnings (loss) per share assumes
the dilutive effect of the exercise of outstanding options and warrants at
either the beginning of the respective period presented or the date of
issuance, whichever is later. As of September 30, 1999 and 1998, the
Company had no warrants and options outstanding which could be deemed to
be dilutive.
Note 3 - Due from Related Parties
The Company has made short term loans in the form of unsecured advances,
provided services or paid certain expenses on behalf of foreign web-site
marketing and production companies located in Toronto, Canada, Melbourne,
Australia, and Sao Paolo, Brazil and which have received advances totaling
approximately $1,578,000 and $1,000 as of September 30, 1999 and 1998,
respectively. These foreign marketing affiliates presently are under substantial
common control ownership, with ownership by local management and by Mr. Smiley
Sansoni or Mr. Brett Hudson, officers and directors of the Company. These
advances were primarily used to establish facilities and for working capital.
These advances are due upon demand and bear an interest rate of 4% per annum.
Subsequent to the end of the quarter, the Company's Board has approved the
acquisition of these foreign marketing affiliates with neither Mr. Sansoni, nor
Mr. Hudson receiving any additional consideration for assignment of their
ownership to the Company.
8
<PAGE>
Note 4 - Common stock transactions
On June 29, 1999, as filed on July 30, 1999, the Company amended its Articles of
Incorporation to issue up to 50,000,000 shares of $0.00001 par value Common
Stock and to effect a one (1) for ten (10) reverse stock split. All issued and
outstanding share amounts in the accompanying financial statements have been
restated to reflect WorldWideWeb Institute.com, Inc. (formerly Spectrum
Pharmaceutical Corporation) the effect of this reverse stock split as of the
first day of the first period presented.
On April 1, 1999, the Company issued 18,000,000 pre-reverse split shares
(1,800,000 post-reverse split shares, as discussed below) of unregistered,
restricted common stock to its former President in settlement of a consulting
contract for providing various services to the Company in preserving the
corporate entity during preceding years.
On April 15, 1999, the Company issued 125,000 post-reverse split shares of
restricted, unregistered common stock in settlement of a consulting agreement,
valued at approximately $6,000, which approximates the value of the services
rendered and the "fair value" of the shares on the issue date, as compensation
for various services rendered to the Company for the purpose of identifying a
suitable merger candidate for the Company and for paying certain re activation
expenses on behalf of the Company.
On July 2, 1999, the Company issued approximately 5,025,000 shares of
post-reverse split stock to acquire 100% of the issued and outstanding stock of
WorldWideWeb Institute, Inc. (a privately owned Florida corporation).
WorldWideWeb Institute, Inc. then became a wholly-owned operating subsidiary of
the Company.
In August 1999, the Company sold 1,000,000 Units under a Private Placement
Memorandum, consisting of one (1) share of common stock and one (1) warrant to
purchase one (1) share of common stock. Each Unit sold for $1.00 per share. Each
warrant is exercisable at $2.25 per share and expires two (2) years from the
date of issuance.
The Company realized net proceeds of approximately $900,000 in this transaction.
In September 1999, the Company issued a separate private placement offering an
aggregate of 500,000 Units, consisting of one (1) share of common stock and one
(1) warrant to purchase one (1) share of common stock. As of September 30, 1999,
the Company has sold 76,500 Units at $2.00 per Unit for total gross and net
proceeds of approximately $153,000. Each warrant is exercisable at $2.25 per
share and expires two (2) years from the date of issuance.
Note 5 - Contingencies
Litigation
- ----------
The Company is a plaintiff in two cases involving former employee violations of
their non-compete, confidentiality and non-circumvention agreements. The
defendants in the first case, WorldWideWeb Institute Inc. vs. USA Web
Technology, Valentin Flores, Andrew Bessio and Gary Weston, alleges
misappropriation of the Company's trade secrets pursuant to Chapter 688 of
Florida Statutes. The defendant in the second case, WorldWideWeb Institute vs.
Carol Fletcher Hudson, involves the defendant's alleged violation of her
Non-Competition, Non-Disclosure and Non-Circumvention agreements which she
signed as an employee of the Company. The Company does not believe either case,
regardless of the outcome, will materially effect the results of the Company.
9
<PAGE>
WorldWideWeb Institute.com, Inc.
(formerly Spectrum Pharmaceutical Corporation)
Notes to Financial Statements - Continued
Note 6- Stock Option Plans
On July 1, 1999, the Company's Board of Directors and Shareholders approved a
Qualified and Non-Qualified Stock Option Plan which authorized a total of
740,000 shares of common stock to be issued to employees and key persons. As of
September 30, 1999, approximately 551,000 shares have been issued as part of the
non-qualified plan at an exercise price of $1.50 per share.
The Company's Board of Directors and Shareholders also approved a one time grant
of non-qualified options to the Company's President and Chief Executive Officer
to purchase up to 450,000 shares of the Company's common stock. The vesting
schedule of these option and the exercise prices are as follows: July 1, 2000 -
112,500 shares at $1.25 per share; July 1, 2001 - 112,500 shares at $2.50 per
share; July 1, 2002 - 112,500 shares at $3.75 per share; July 1, 2003 - 112,500
shares at $5.00 per share.
10
<PAGE>
Part I - Item 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(1) Caution Regarding Forward-Looking Information
This quarterly report contains certain forward-looking statements and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to the Company or management. When used in this document, the words
"anticipate," "believe," "estimate," "expect" and "intend" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current view of
the Company regarding future events and are subject to certain risks,
uncertainties and assumptions, including the risks and uncertainties noted.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described herein as anticipated, believed, estimated, expected or
intended. In each instance, forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.
(2) General
On May 20, 1999, the Company's then majority shareholder, Dr. Howard I.
Wertheim, executed a Stock Purchase Agreement whereby he sold 22,472,634 of the
24,911,165 pre-reverse split shares (2,247,263 of 2,491,250 post-reverse split
shares) of common stock then issued and outstanding to Halter Capital
Corporation in a cash transaction. Halter Capital Corporation then became the
Company's controlling shareholder.
On July 2, 1999, Halter Capital Corporation executed a Stock Purchase Agreement
whereby they sold 1,815,000 of the 2,491,250 post-reverse split shares of common
stock then issued and outstanding to Smiley J. Sansoni, Randall Denton, James
Brett Hudson, Dana Williams, Mira DeLane, Corporate Builders, Inc. and
Prosperity Power, Inc. (collectively New Shareholders). The New Shareholders
then became the Company's controlling shareholders. These individuals were also
the controlling shareholders of WorldWideWeb Institute, Inc.
On July 2, 1999, concurrent with the above transaction, the Company issued
approximately 5,025,000 shares of post-reverse split stock to acquire 100% of
the issued and outstanding stock of WorldWideWeb Institute, Inc. (a privately
owned Florida corporation). WorldWideWeb Institute, Inc. then became a
wholly-owned operating subsidiary of the Company.
Accordingly, the acquisition of WorldWideWeb Institute, Inc. was accounted for
pursuant to the requirements of Interpretation # 39 of Accounting Principles
Board Opinion # 16, "Business Combinations", whereby the combination of entities
under common control is accounted for on an "as-if-pooled" basis. The combined
financial statements of the Company and its new wholly-owned subsidiary became
the historical financial statements of the Company as of the first day of the
first period presented.
The Company will retain its March 31 year-end for all future periods.
11
<PAGE>
(3) Results of Operations, Liquidity and Capital Resources
For the three months ended September 30, 1999, the Company's revenues were
$1,839,819 compared to $434,697 in the previous year period ending September 30,
1998. Net after tax earnings for the three months ended September 30, 1999 were
$169,882 compared to $54,676 for the three months ended September 30, 1998.
For the six months ended September 30, 1999, revenues were 0$3,585,613 compared
to the six months ended September 30, 1998 of $583,148. Net after tax earnings
for the six months ended September 30, 1999 were $868,000 compared to a loss of
$20,555, for the previous year period ending September 30, 1998. Net after tax
earnings for six months ending September 30, 1999 included a non-recurring
$530,000 net gain from release of debt obligations resulting from an employment
contract, and litigation settlement.
The Company results reflect continued strong interest by small to medium sized
businesses looking to establish web sites. During the quarter, the Company
incurred a higher level of expenses a result of becoming a publicly traded
company in July, and the addition of more production and administrative
personnel to support increased sales of products.
Operating revenue during the second quarter ending September 30, 1999 was
substantially similar to the Company's first quarter. However this reflects
limitations on the number of production personnel and students primarily because
the Company's need for additional space. The Company has subsequently obtained
additional temporary space and has plans for expansion into permanent
facilities.
WWWI incurred general and administrative expenses of approximately $1.57 million
expended in the second quarter of the fiscal year, reflecting the costs of
additional personnel and expenditures as noted earlier. Marketing expenses were
approximately $370, 157 for the six months, but were only $69,857 for the second
quarter. This reflected timing differences in expenses, and the effects of the
Company's implementation of more cost-effective methods of marketing its
program.
Management anticipates that current expenditure levels will continue to increase
in proportion to revenues of WWWI in future periods. While its current level of
operations allows it to closely match financial expenditures with revenues,
there is no assurance that future contracts, alliances or businesses will not
require it to make significant expenditures in advance of revenues.
Earnings (loss) per share were approximately $0.11 and ($0.01) per share for the
six months ended September 30, 1999 and 1998 respectively and approximately
$0.02 and $0.01 per share for the second quarter only of Fiscal 2000 and 1999
respectively. Included in the $0.11 per share amount for the six months ended
September 30, 1999 is approximately $0.07 per share related to one-time items
previously discussed. Pro-forma earnings per share for continuing activities
during Fiscal 2000 are approximately $0.04 per share.
(4) Liquidity and Capital Resources
For the six months ended September 30, 1999 and 1998, the Company generated net
cash flows from operations of $1,021,000 and $121,000. Due to the nature of the
Company's business, the Company is required to maintain a technologically
current computer production facility. Accordingly, the Company has expended
approximately $191,000 and $77,000 on property and equipment during the six
months ended September 30, 1999 and 1998 respectively. The Company anticipates
increased further capital expenditures for computer and network facilities in
future periods. However, at this time, the exact amount, if any to be expended
to maintain a technologically current facility can not be predicted.
The Company raised $1,163,000 through the private sale of its securities as of
September 30, 1999. On August 10,1999, the Company sold 1,000,000 units, each
unit consisting of one common share and one 2-year warrant at $1 per unit, or
proceeds of $1,000,000. As of September 30, 1999, it had sold 81,500 units, each
unit consisting of one common share and one 2-year warrant at $2 per unit, or
gross proceeds of $163,000.
12
<PAGE>
The Company expects that its current day to day operational financial needs will
be provided by on-going operations. Subsequent to the end of the quarter, the
Company secured commitments for an additional $750,000 in capital which will be
used for expansion and working capital.
(5) Year 2000 Considerations
The Year 2000 (Y2K) date change is believed to affect virtually all computers
and organizations. The Company has undertaken a comprehensive review of its
information systems, including personal computers, software and peripheral
devices, and its general communications systems. The Company has no direct
electronic links with any customer or supplier. In addition, the Company has
held discussions with certain of its software suppliers with respect to the Y2K
date change. The Company has completed its detailed review, as a preliminary
assessment and the Company believes, as of the date of this filing, that it will
not be required to modify or replace significant portions of its computer
hardware or software and any such modifications or replacements are, or will be,
readily available. The Company has no known direct Y2K exposures and anticipates
that any costs associated with the Y2K date change compliance to have a material
effect on its financial position or its results of operations. There can be no
assurance until January 1, 2000, however, that all of the Company's systems, and
the systems of its suppliers, shippers, customers or other external business
partners will function adequately.
Part II - Other Information
Item 1 - Legal Proceedings
13
<PAGE>
The Company is a plaintiff in two cases in Broward County Court alleging
former Company employee violations of their non-compete, confidentiality and
non-circumvention agreements. The defendants in the first case are USA Web
Technology, Valentin Flores, Andrew Bessio and Gary Weston where the Company
alleges misappropriation of trade secrets pursuant to Chapter 688 of Florida
Statutes. The defendant in the second case is Carol Fletcher Hudson, and it
involves the defendant's alleged violation of her Non-Competition,
Non-Disclosure and Non-Circumvention agreements which she signed as an employee
of the Company. The Company does not believe either case, regardless of the
outcome, will materially effect the results of the Company.
Item 2 - Changes in Securities
On August 16, 1999, the Company sold 1,000,000 Units under a Private Placement
Memorandum, consisting of one (1) share of common stock and one (1) warrant to
purchase one (1) share of common stock. Each Unit sold for $2.00 per share. Each
warrant is exercisable at $2.25 per share and expires two (2) years from the
date of issuance.
The Company realized net proceeds of approximately $900,000 in this transaction.
In September 1999, the Company commenced another private placement offering an
aggregate of 500,000 Units, consisting of one (1) share of common stock and one
(1) warrant to purchase one (1) share of common stock. As of September 30, 1999,
the Company has sold 76,500 Units at $2.00 per Unit for total gross and net
proceeds of approximately $153,000. Each warrant is exercisable at $2.25 per
share and expires two (2) years from the date of issuance.
Item 3 - Defaults on Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
None
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
None
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.
WorldWideWeb Institute.com, Inc.
November 1, 1999 /s/ Smiley J. Sansoni.
--- ------------------------------------
Smiley J. Sansoni.
President, Director and
Chief Executive Officer
November 1, 1999 /s/ Ernest D. Chu
--- ------------------------------------
Ernest D. Chu
Chief Financial Officer
and Director
14
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<NAME> WorldWideWeb Institute.com, Inc.
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