<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1999
Commission file number 1-12850
XDOGS.COM, INC.
Formerly known as The Sled Dogs Company
(Exact name of small business issuer as specified in its charter)
80 SOUTH EIGHTH STREET, SUITE 3660
MINNEAPOLIS, MINNESOTA 55402
(Address of principal executive offices)
Incorporated under the laws of 84-1168832
the State of Nevada ----------------------------
I.R.S. Identification Number
(612) 359-9020
(Small business issuer's telephone number including area code)
--------------------------
Indicate by check mark whether the issuer (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 issuer was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes No X
--- ---
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13, or 15 (d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court. Yes No X
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 8,965,104 shares of Common
Stock, $.01 par value per share, outstanding as of September 30, 1999.
<PAGE> 2
XDOGS.COM,INC.
FORM 10-QSB QUARTERLY REPORT FOR THE QUARTER ENDED
September 30, 1999
TABLE OF CONTENTS
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets - September 30, 1999 and March
31, 1999
Condensed Consolidated Statements of Operations for the Six Months
ended September 30, 1999 and 1998
Condensed Consolidated Statements of Cash Flows for the Six Months
ended September 30, 1999 and 1998
Notes to Condensed Consolidated Financial Statements - September 30,
1999
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II - Other Information
Item 1. Legal Proceedings
Item 3. Defaults on Senior Securities
Item 6. Exhibits and Reports on Form 8-K
<PAGE> 3
Xdogs.com, Inc.
(fka The Sled Dogs Company)
Balance Sheet
<TABLE>
<CAPTION>
Unaudited
September March
30, 1999 31, 1999
----------- ----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 162,075 $ 86,919
Prepaid Expenses 13,333 17,333
----------- --------
Total Current Assets 175,408 104,252
----------- --------
Property and equipment 14,144 0
Less Accumulated Depreciation (654) 0
-----------
Net Property and Equipment 13,490 0
Other Assets - Deposits 13,541 0
----------- --------
TOTAL ASSETS $ 202,439 $104,252
=========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Accounts Payable $ 28,505 $ 17,150
Liabilities Subject to Compromise 0 32,438
----------- --------
Total current liabilities 28,505 49,588
----------- --------
SHAREHOLDERS' EQUITY:
Convertible preferred stock, Series A, par
value $.10 per share;
Authorized 1,000,000 Shares; Issued
and outstanding -0- 0 0
Common Stock, $.01 Par Value;
Authorized 20,000,000 Shares; Issued
and outstanding 8,965,104 shares at
September 30, 1999
and 6,604,625 shares at March 31, 1999 89,651 66,046
Additional paid-in capital 1,592,706 513,828
Common Stock Paid for but not Issued 0 564,514
Accumulated deficit (1,508,423)
-----------
TOTAL SHAREHOLDERS' EQUITY 173,934 54,664
----------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 202,439 $104,252
=========== ========
</TABLE>
See Accompanying Notes To These Unaudited Financial
Page 1
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Xdogs.com, Inc.
(fka The Sled Dogs Company)
Unaudited Statement Of Operations
<TABLE>
<CAPTION>
3 Months 3 Months
Ended Ended
September September
30, 1999 30, 1998
----------- -----------
<S> <C> <C>
Revenue: $ 0 $ 547
Cost of goods sold 0 0
----------- ---------
Gross margin 0 547
----------- ---------
Costs and expenses:
General and administrative 211,165 173,578
----------- ---------
Total costs and expenses 211,165 173,578
----------- ---------
(Loss) From Operations (211,165) (173,031)
Other income (expense)
Interest income 68 0
----------- ---------
Total other income (expense) 68 0
----------- ---------
Net (Loss) (211,097) (173,031)
=========== =========
Basic (Loss) Per Common Share $ (0.02) $ (0.21)
=========== =========
Weighted Average Common Shares Outstanding 8,965,104 818,448
=========== =========
</TABLE>
See Accompanying Notes To These Unaudited Financial Statements.
Page 2
<PAGE> 5
Xdogs.com, Inc.
(fka The Sled Dogs Company)
Unaudited Statement Of Operations
<TABLE>
<CAPTION>
6 Months 6 Months
Ended Ended
September September
30, 1999 30, 1998
----------- ----------
<S> <C> <C>
Revenue: $ 0 $ 11,487
Cost of goods sold 0 0
----------- ----------
Gross margin 0 11,487
----------- ----------
Costs and expenses:
Other general and administrative 420,059 183,940
----------- ----------
Total costs and expenses 420,059 183,940
----------- ----------
(Loss) from operations (420,059) (172,453)
Other income (expense)
Interest income 1,360 0
----------- ----------
Total other income 1,360 0
----------- ----------
(Loss) before extraordinary item (418,699) (172,453)
Extraordinary gain on prepetitioned liabilities 0 2,564,734
----------- ----------
Net Income (Loss) $ (418,699) $2,392,281
=========== ==========
Basic and diluted earnings (loss) per common
Share before:
(Loss) before extraordinary items (0.05) (0.21)
Extraordinary item 0.00 3.13
----------- ----------
Net income (loss) (0.05) 2.92
Weighted Average Common Shares Outstanding 8,860,104 818,448
=========== ==========
</TABLE>
See Accompanying Notes To These Unaudited Financial Statements.
Page 3
<PAGE> 6
Xdogs.com, Inc.
(fka The Sled Dogs Company)
Unaudited Statement Of Cash Flow
<TABLE>
<CAPTION>
6 Months 6 Months
Ended Ended
September September
30, 1999 30, 1998
--------- ---------
<S> <C> <C>
Cash Flows From Operating Activities:
Net Income (loss) $(418,699) $ 2,392,281
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Extraordinary item 0 (2,564,734)
Depreciation and amortization 654 32,369
(Increase) in accounts receivable $ 0 $ (5,500)
Decrease in prepaid expenses 4,000 0
(Increase) in deposits (13,541) 0
(Decrease) in prepetitioned liabilities (32,438) 0
Increase in accounts payable 11,355 0
Increase (Decrease) in other accrued expenses 0 42,505
--------- -----------
Net Cash Flows (Used In) Operations (448,669) (103,079)
--------- -----------
Cash Flows From Investing Activities:
Purchase of property and equipment (14,144) 0
--------- -----------
Net Cash Flows (Used In) Investing Activities: (14,144) 0
--------- -----------
Cash Flows From Financing Activities:
Cash in excess of bank balance 0 (18,748)
Net proceeds from sale of common stock 537,969 126,055
--------- -----------
Net Cash Flows Provided By Financing Activities 537,969 107,307
Net Increase In Cash and cash equivalents 75,156 4,228
Cash and cash equivalents at beginning of period 86,919 6,424
--------- -----------
Cash and cash equivalents at end of period $ 162,075 $ 10,652
========= ===========
Supplementary Disclosure Of Cash Flow
Information:
Interest Paid $ 0 $ 0
========= ===========
</TABLE>
See Accompanying Notes To These Unaudited Financial Statements.
Page 4
<PAGE> 7
Xdogs.Com, Inc.
Notes To Unaudited Financial Statements
For The Six Month Period Ended September 30, 1999
Note 1 - Unaudited Financial Information
The unaudited financial information included for the three and six month interim
period ended September 30, 1999 were taken from the books and records without
audit. However, such information reflects all adjustments (consisting only of
normal recurring adjustments, which are of the opinion of management, necessary
to reflect properly the results of interim period presented). The results of
operations for the six month period ended September 30, 1999 are not necessarily
indicative of the results expected for the fiscal year ended March 31, 2000.
Note 2 - Bankruptcy Protection
On November 4, 1997, Xdogs.Com, Inc. (fka The Sled Dogs Company) filed voluntary
petitions in the United States Bankruptcy Court for the District of Minnesota
for reorganization under Chapter 11 of the Bankruptcy Code. On June 30, 1998,
following approval by creditors, the Bankruptcy Court confirmed the Company's
plan of reorganization, and the plan became affective 30 days later. During the
period from November 4, 1997, through June 30, 1998, the Company operated as a
debtor in possession.
Note 3 - Extraordinary Item
On June 30, 1998 the Company incurred an Extraordinary gain of $2,564,734 on the
discharge of prepetition liabilities.
Note 4 - Financial Statements
Management has elected to omit substantially all footnotes relating to the
condensed financial statements of the Company included in the report. For a
complete set of footnotes, reference is made to the Company's Report on Form
10K-SB for the year ended March 31, 1999 as filed with the Securities and
Exchange Commission and the audited financial statements included therein
Page 5
<PAGE> 8
PART I - ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
References in this document to "us," "we," or "the Company" refer to Xdogs.com,
Inc., its predecessor, and its subsidiary.
The following information should be read in conjunction with the
consolidated condensed financial statements and the notes thereto included in
Item 1 of this Quarterly Report, and the financial statements and the notes
thereto and Management's Discussion and Analysis of Financial Condition and
Results of Operations contained our Company's Annual Report on Form 10-KSB for
the year ended March 31, 1999.
RESULTS OF OPERATIONS
On November 5, 1997 we filed for protection under Chapter 11 of the
United States Bankruptcy Code. This filing permitted us to obtain Debtor In
Possession (DIP) financing from Norwest Business Credit, Inc. (Norwest). We
obtained $150,000 in DIP financing from Norwest on November 12, 1997. These
funds allowed us to implement a direct-sales program that is targeted at our
former primary market of aggressive in-line skaters, at significantly lower
prices than in past years. We changed our fiscal year end to March 31, effective
March 31, 1997. We emerged from Bankruptcy as of June 30, 1998.
Our most significant accomplishment for the period ended September 30,
1999 was our execution of a distribution agreement with Berghaus Limited. Under
this agreement, we became their North American distributor. Berghaus Limited is
a manufacturer of outdoor sporting goods, including performance clothing,
footwear, and equipment. We anticipate that this relationship will lead to
substantial revenues in the next fiscal year.
As of September 30, 1999, we had current assets of $175,408 and total
assets of $202,439. This compares with current and total assets of $104,252 as
of March 31, 1999. We had no liabilities subject to compromise, compared to
liabilities subject to compromise of $32,438 as of March 31, 1999.
For the three months ended September 30, 1999, we had no revenue or
cost of goods sold. We had a net loss from operations of $211,165. We had a loss
per share of $0.02.
For the six months ended September 30, 1999, we had no revenue or cost
of goods sold. We had a net loss from operations of $420,059. We had a basic
loss for the six month period per share of $0.05.
Our plan for the fiscal year ended March 31, 2000 is to implement our
plan to develop into an internet seller of action sports hard goods and related
apparel. We plan to actively develop our relationship with Berghaus Limited.
While we anticipate generating substantial revenues under our agreement with
Berghaus Limited during the fiscal year ended March 31, 2000, we do not expect
to be profitable during this period.
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
Our cash and cash equivalents were $162,075 on September 30, 1999,
compared to $10,652 on September 30, 1998. During the fiscal quarter ended
September 30, 1999, our investing activities used $14,144, compared to no cash
for the fiscal quarter ended September 30, 1998.
We sold $537,969 worth of common shares during the period to finance
our activities. As of September 30, 1999, we were essentially insolvent and
working toward a reorganization of our operations.
FORWARD-LOOKING STATEMENTS CONTAINED IN THIS FORM 10-QSB ARE MADE PURSUANT TO
THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. ALL FORWARD-LOOKING STATEMENTS INVOLVE RISKS AND UNCERTAINTIES. CERTAIN
IMPORTANT FACTORS COULD CAUSE RESULTS TO DIFFER MATERIALLY FROM THOSE
ANTICIPATED BY SOME STATEMENTS MADE IN THIS FORM 10-QSB. AMONG THE FACTORS THAT
COULD CAUSE RESULTS TO DIFFER MATERIALLY ARE THE FOLLOWING: LACK OF AVAILABILITY
OF FINANCING; INABILITY TO CONTROL COSTS OR EXPENSES; MANUFACTURING AND
DISTRIBUTION PROBLEMS; AND LACK OF MARKET ACCEPTANCE OF THE COMPANY'S PRODUCTS.
REFERENCE IS ALSO MADE TO THE RISK FACTORS CONTAINED IN THE COMPANY'S
REGISTRATION STATEMENT ON FORM S-3 (NO. 33-80875), WHICH ARE INCORPORATED HEREIN
BY REFERENCE.
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
On November 5, 1997, The Sled Dogs Company filed for protection under Chapter 11
of the United States Bankruptcy Code.
This Bankruptcy Case entitled In re: The Sled Dogs Company, United States
Bankruptcy Court File Number 97-47641 RLK. The matter is on file at the United
States Courthouse in Minneapolis, MN. We emerged from Bankruptcy as of June 30,
1998.
ITEM 3 - DEFAULTS ON SENIOR SECURITIES
The Legal Proceedings described in Item 1 constituted a default on the $355,000
in Senior Secured Notes sold by us in 1997. The amount in default includes the
principal amount of the of the senior secured notes plus accrued interest in the
amount of $18,717.
The Legal Proceedings described in Item 1 constituted a default on the $812,500
in Convertible Subordinated Debentures sold by us in 1997. The amount in default
includes the principal amount of the debentures plus accrued interest in the
amount of $57,515.
<PAGE> 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
27 -- Financial Data Schedule
b. No reports on Form 8-K
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
XDOGS.COM, INC.
Dated: March 1, 2000 /s/ Kent Rodriguez
-----------------------------------
Kent Rodriguez, Chairman and
Chief Executive Officer
(Principal Executive Officer)
<PAGE> 11
INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 162,075
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 175,408
<PP&E> 14,144
<DEPRECIATION> 654
<TOTAL-ASSETS> 202,439
<CURRENT-LIABILITIES> 28,505
<BONDS> 0
0
0
<COMMON> 89,651
<OTHER-SE> 84,283
<TOTAL-LIABILITY-AND-EQUITY> 202,439
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 420,059
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (418,699)
<INCOME-TAX> 0
<INCOME-CONTINUING> (418,699)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (418,699)
<EPS-BASIC> (0.050)
<EPS-DILUTED> (0.050)
</TABLE>
