U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ---- to ----
Commission File number 0-22954
THE WINNER'S EDGE.COM, INC.
---------------------------
(Name of Small Business Issuer in its Charter)
Delaware 65-0952186
------------- --------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
1900 Corporate Boulevard, Suite 400 East, Boca Raton, FL 33431
--------------------------------------------------------------
(Address of principal executive offices, including zip code)
(561) 988-3333
---------------------------
(Issuer's telephone number)
----------------------------------------------------
(Former name, former address, and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports) and (2) has been subject to filing requirements for
the past 90 days. Yes X No___
The number of shares of Common Stock, par value $ .01 per share,
issued and outstanding as of March 31, 2000 is 26,955,941.
<PAGE> 1
THE WINNER'S EDGE.COM, INC
INDEX TO FORM 10-QSB
March 31, 2000
PAGE
PART I. FINANCIAL INFORMATION 3
Item 1. Financial Statements
Balance Sheet - Three months ended March 31, 2000 F-1
(Unaudited)
Statement of Operations - Three months ended March F-2
31, 2000 and 1999 (Unaudited) and July 8, 1998
(inception) to March 31, 2000.
Statement of Cash Flows - Three months ended March F-3
31, 2000 and 1999 (Unaudited) and July 8, 1998
(inception) to March 31, 2000.
Statement of Deficiency in Assets - Three Months F-4
ended March 31, 2000.
Notes to Financial Statements. 4
Item 2. Management's Discussion and Analysis of Financial 5-6
Condition or Plan of Operation.
PART II. OTHER INFORMATION
7
Item 1. Legal Proceedings
Item 2. Changes in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security-Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
SIGNATURES 8
<PAGE> 2
THE WINNER'S EDGE.COM, INC.
(A Development Stage Enterprise)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<PAGE> 3
THE WINNER'S EDGE.COM,INC.
(a Development Stage Enterprise)
BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 2000 1999
----------- -----------
(unaudited) (audited)
<S> <C> <C>
CURRENT ASSETS
Cash $ 2,749 $ 2,873
Prepaid expenses 52,500
----------- -----------
Total current assets 55,249 2,873
EQUIPMENT, net of accumulated depreciation $29,731 105,558 82,519
and $24,736 respectively.
----------- -----------
$ 160,807 $ 85,392
=========== ===========
LIABILITIES AND DEFICIENCY IN ASSETS
CURRENT LIABILITIES
Accounts payable and accrued liabilities $ 240,950 $ 71,917
Due to related parties 274,278 188,597
----------- -----------
Total current liabilities 515,228 260,514
COMMITMENTS AND CONTINGENCIES - -
DEFICIENCY IN ASSETS:
Common stock-par value $.01; authorized
60,000,000 shares; 27,430,941 shares
issued and outstanding at March 31, 2000
and December 31, 1999 274,309 269,559
Additional paid-in capital 103,750 38,500
Accumulated deficit (732,480) (483,181)
----------- -----------
(354,421) (175,122)
----------- -----------
$ 160,807 $ 85,392
=========== ===========
</TABLE>
SEE FOOTNOTES TO FINANCIAL STATEMENTS.
<PAGE> F-1
THE WINNER'S EDGE.COM. INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
July 8, 1998
Three months ended Three months ended (inception)
March 31 March 31 to March 31
2000 1999 2000
---------------- ---------------- ---------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
NET REVENUES $ 3,753 $ 363 $ 19,099
EXPENSES:
Selling general and administrative 235,552 99,833 679,047
Stock based compensation 17,500 35,000 53,750
17,106
----------- ----------- -----------
TOTAL EXPENSES 253,052 134,833 749,903
----------- ----------- -----------
NET LOSS $ (249,299) $ (134,470) $ (730,804)
=========== =========== ===========
NET LOSS PER SHARE: (.01) (.01)
=========== ===========
Number of shares used in computation 27,080,941 13,502,971
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> F-2
THE WINNER'S EDGE.COM, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
July 8, 1998
Three months ended, (inception)
March 31, March 31, to March 31,
2000 1999 2000
--------------------------------------------
(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $ (249,299) $ (134,470) $ (730,804)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation 5,000 5,886 29,736
Stock based on compensation 17,500 35,000 53,750
Changes in assets and liabilities:
Accounts payable and accrued liabilities 169,033 74,927 240,950
Due to related parties 85,681 17,573 274,278
-
-------------------------------------------
Net cash provided by operating activites 27,915 (1,084) (132,090)
CASH FLOWS FROM INVESTING ACTIVITIES:
Equipment (28,039) - (135,294)
-------------------------------------------
Net cash used in investing activies (28,039) - (135,294)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net cash provided by financing activies - - 270,133
NET INCREASE IN CASH (124) (1,084) 2,749
-------------------------------------------
CASH AT BEGINNING OF THE YEAR 2,873 1,084 -
-------------------------------------------
CASH AT THE END OF THE YEAR $ 2,749 $ - $ 2,749
===========================================
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid for:
Interest $ - - -
Taxes - - -
NON -CASH FINANCING ACTIVITIES:
Common stock issued for services $ 70,000 $ 35,000 $ 105,000
===========================================
</TABLE>
SEE FOOTNOTES TO FINANCIAL STATEMENTS.
<PAGE> F-3
THE WINNER'S EDGE.COM,INC.
(A Development Stage Enterprise)
STATEMENT OF DEFICIENCY IN ASSETS
<TABLE>
<CAPTION>
Common Stock Additional
par value Paid-in Accumulated
Shares $0.01 Capital Deficit Total
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1999 26,955,941 $ 269,559 $ 38,500 $ (483,181) $ (175,122)
Stock issued for services 475,000 $ 4,750 $ 65,250 $ 70,000
NET LOSS - - (249,299) $ (249,299)
----------------------------------------------------------------------
BALANCE AT MARCH 31, 2000 27,430,941 $ 274,309 $ 103,750 $ (732,480) $ (354,421)
(unaudited) ======================================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE> F-4
THE WINNER'S EDGE.COM, INC.
(A Development Stage Enterprise)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
---------------------
The accompanying unaudited consolidated financial
statements of The Winner's Edge.com, Inc. (the "Company")
have been prepared in accordance with generally accepted
accounting principles for interim financial information
and with the instructions to Form 10-QSB and Regulation
S-B. 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 considered
necessary for a fair presentation (consisting of normal
recurring accruals) have been included. 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. Operating results for
expected for the three months period ended March 31, 2000
are not necessarily indicative of the results that may be
expected for the year ending December 31, 2000. For
further information, refer to the financial statements
and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31,
1999. Per share data for the periods are based upon the
weighted average number of shares of common stock
outstanding during such periods, plus net additional
shares issued upon exercise of options and warrants.
NOTE 2 - EQUITY TRANSACTIONS
-------------------
The Company issued 700,000 shares of common stock for
legal services to be rendered for the year 2000. The
legal services have been valued at $70,000 and the pro-
rated portion of $17,500 has been expensed. Also included
in the shares issued is a 225,000 share reduction due to
a reclassification error from 1999.
<PAGE> 4
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
Plan of Operation
-----------------
The Registrant is presently a development stage company
conducting minimal business operations. The Company is attempting
to effect a merger, exchange of capital stock, asset acquisition or
other similar business combination (a "Business Combination") with
an operating or development stage business which the Registrant may
consider to have significant growth potential within the
thoroughbred horseracing or a related industry.
As indicated above, management has determined that the
Company's business plan during the next twelve (12) months is
primarily to seek one or more potential businesses which may, in
the opinion of management, warrant the Company's involvement. The
Company recognizes that as a result of its limited financial,
managerial or other resources, the number of suitable potential
businesses which may be available to it will be extremely limited.
In seeking to attain its business objective, the Company will focus
on the thoroughbred horseracing industry, but will not restrict its
search to any particular industry. Management's discretion is
unrestricted and it may participate in any business whatsoever
which may, in the opinion of management, meet the business
objectives discussed herein. It is emphasized that the business
objectives discussed herein are extremely general and are not
intended to be restrictive upon the discretion of management. As
of the date of this report, the Company has chosen to focus on the
particular area of thoroughbred horseracing in which its proposes
to engage and has not conducted any market studies with respect to
any other business or industry.
The Company will not restrict its search to any specific
industry, except as set forth above. At this time, it is
impossible to determine the needs of the business in which the
Company may seek to participate, and whether such business may
require additional capital, management, or may be seeking other
advantages which the Company may offer.
Possible business endeavors may involve the acquisition of or
a merger with a company which does not need additional equity, but
seeks to establish a public trading market for its securities.
Businesses which seek the Company's participation in their
operations may desire to do so to avoid what such businesses deem
to be adverse factors related to undertaking a public offering.
Such factors include substantial time requirements and legal costs,
along with other conditions or requirements imposed by Federal and
state securities laws.
The analysis of potential business endeavors will be
undertaken by, or under, the supervision of the Company's
management. Management is comprised of individuals of varying
business experiences, and management will rely on their own
business judgment in formulating decisions as to the types of
businesses which the Company may acquire or in which the Company
may participate. It is quite possible that management will not
<PAGE> 5
have any business experience or expertise in the type of businesses
engaged in by a potential business which may be investigated by the
Company.
It is anticipated that locating and investigating specific
proposals will take a substantial period of time, although the time
such process will take can by no means be assured. Further, even
after a business is located, the negotiation, drafting and
execution of relevant agreements, disclosure documents and other
instruments may require substantial additional time, effort and
attention on the part of management, as well as substantial costs
for attorneys, accountants and others. If a decision is made not
to participate in a specific business endeavor, the costs
theretofore incurred in the related investigation might not be
recoverable. Furthermore, even if an agreement were reached for
the participation in a specific business, the failure to consummate
that transaction might result in the loss to the Company of the
related costs incurred.
The Company currently does not have the liquidity or capital
resources to fund the Company without raising capital either from
debt or equity funding sources. It is anticipated that the
Company's current management and others will fund the Company's
operations, if required, by loans and/or contributions of capital.
For its operations to date, the Company has borrowed approximately
$150,000 from Drake Alexander and Associates, Inc., a venture
capital firm owned by two of the directors of the Company and has
raised smaller amounts through the private sale of restricted
common stock. The Company has engaged the services of vanAar, Inc.
as a consultant to assist and advise in the management and
organizational development of the Company and to explore interim
financing through short-term lending, private placement with
accredited investors, or both, in the event a business combination
cannot be effectuated.
The Company knows of no unusual or infrequent events or
transactions, nor significant economic changes that could
materially affect the amount of its reported income from continuing
operations for the period ending March 31, 2000.
<PAGE> 6
PART II
-------
Item 1. LEGAL PROCEEDINGS
-----------------
Not applicable.
Item 2. CHANGE IN SECURITIES
--------------------
Not Applicable
Item 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
Not Applicable
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
Not Applicable
Item 5. OTHER INFORMATION
-----------------
Not Applicable
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) There are no exhibits required to be filed for the
period covered by this Report.
(b) The Company did not file a Current Report on Form
8-K during the period covered by this Report.
<PAGE> 7
SIGNATURES
In accordance with the requirements of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE WINNER'S EDGE.COM, INC.
By:/s/ Michael E. Fasci
----------------------------------
Michael E. Fasci
Chief Financial Officer
<PAGE> 8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Balance
Sheet, Statement of Operations, Statements of Cash Flows and Notes thereto
incorporated in Part I, Item 1 of this Form 10-QSB and is qualified in its
entirety by refernce to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 2,749
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 55,249
<PP&E> 135,289
<DEPRECIATION> (29,731)
<TOTAL-ASSETS> 160,807
<CURRENT-LIABILITIES> 515,228
<BONDS> 0
0
0
<COMMON> 274,309
<OTHER-SE> (354,421)
<TOTAL-LIABILITY-AND-EQUITY> 160,807
<SALES> 3,753
<TOTAL-REVENUES> 3,753
<CGS> 0
<TOTAL-COSTS> 253,052
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (249,299)
<INCOME-TAX> 0
<INCOME-CONTINUING> (249,299)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (249,299)
<EPS-BASIC> (.01)
<EPS-DILUTED> 0
</TABLE>
