SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 September
30, 1997
[ ] 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 0-24408
INTERJET NET CORPORATION
(Exact Name of Registrant as specified in its Charter)
Delaware 33-0611753
(State or other Jurisdiction of I.R.S. Employer
Incorporation or Organization Identification No.)
15554 FM 529, Suite 123, Houston, Texas 77095
(Address of Principal Executive Offices) (Zip Code)
(281) 463-7998
(Registrant's Telephone Number, including Area Code)
Indicate by check mark whether the Registrant (i) 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 (of for such shorter period that the
Registrant was required to file such reports) and (ii) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of Common Stock, as of the latest practicable date.
Common Stock, $1.00 par value 12,000,563
Title of Class Number of Shares outstanding
at November 12, 1997
Exhibit Index - NONE.
<PAGE>
<TABLE>
<CAPTION>
INTERJET NET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND SEPTEMBER 30, 1997
(UNAUDITED)
March 31, September 30,
ASSETS 1997 1997
- ------
Current Assets:
<S> <C> <C>
Cash $ 0 $ 992,243
Prepaid Expenses 0 17,116
Inventory 0 47,416
Total Current Assets $ 0 $ 1,056,775
Property, Plant & Equipment $ 0 $ 738,859
Other Assets:
Organizational Costs $ 14 $ 10,679
Deposits 0 6,580
Licenses and Other 0 864,207
$ 14 $ 881,466
TOTAL ASSETS $ 14 $ 2,677,100
LIABILITIES & SHAREHOLDERS EQUITY
Current Liabilities:
Accounts Payable $ 2,252 $ 305,730
Accrued Liabilities 0 83,704
Income Taxes Payable 0 800
Current Portion of Long-Term Debt 0 9,002
Payable - Related Parties 0 15,000
Total Current Liabilities $ 2,252 $ 414,236
Long-Term Debt $ 0 $ 37,932
Total Liabilities $ 2,252 $ 452,168
Shareholders Equity:
Common Stock, $.001 par value;
Authorized 20,000,000 shares;
Issued and Outstanding 993,537
at March 31, 1997 and 12,000,563
at September 30, 1997 $ 994 $ 12,000
Additional Paid-in Capital 252 3,009,252
Retained Earnings (Deficit) (3,484) (796,320)
Total Shareholder's Equity $ (2,238) $ 2,224,932
TOTAL LIABILITIES & EQUITY $ 14 $ 2,677,100
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INTERJET NET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1997
<S>
Revenues <C> <C>
$ 0 $ 0
Cost of Sales $ 5,744 $ 5,744
Gross Profit $ (5,744) $ (5,744)
General & Administrative Expenses $ 413,416 $ 795,084
Interest Income $ 5,308 $ 5,308
State Income Taxes $ 0 $ 800
Net Income (Loss) $ (413,582) $ (796,320)
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INTERJET NET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
Three Months Nine Months
Ended Ended
September 30, September 30,
1997 1997
OPERATING ACTIVITIES
<S> <C> <C>
Net Income (Loss) $ (413,582) $ (796,320)
Adjustments:
Depreciation and Amortization $ 18,785 $ 18,785
Expenses Paid with Common Stock 0 321,252
Changes in Current Accounts 227,956 349,143
Net Cash Required by Operating Activities $ (166,841) $ (107,140)
INVESTING ACTIVITIES
Purchase of Fixed Assets $ (498,252) $ (693,276)
Purchase of Licenses (125,605) (223,989)
Net Cash Required by Investing Activities $ (623,857) $ (917,265)
FINANCING ACTIVITIES
Loans $ 42,793 $ 42,793
Repayment of Loans (4,861) (4,861)
Sale of Common Stock 1,326,000 1,978,716
Net Cash Provided (Required) by
Investing Activities $ 1,363,932 $ 2,016,648
Increase (Decrease) in Cash and
Cash Equivalents $ 573,234 $ 992,243
Cash and Cash Equivalents at
Beginning of Period $ 419,009 $ 0
Cash and Cash Equivalents at
End of Period $ 992,243 $ 992,243
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
The following Condensed Consolidated Financial Statements of the Company
and its subsidiaries and related notes are included herein:
Condensed Consolidated Balance Sheet as of March 31, 1997 and September
30, 1997;
Condensed Consolidated Statements of Income for the three and nine
months ended September 30, 1997 presented on a pro-forma basis
reflecting the acquisition of Interjet Net, Inc;
Condensed Consolidated Statements of Cash Flows for the three and nine
months ended September 30, 1997 presented on a pro-forma basis
reflecting the acquisition of Interjet Net, Inc;
Notes to Condensed Consolidated Financial Statements.
<PAGE>
INTERJET NET CORPORATION
A DELAWARE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 1997
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principals for complete
financial statements. In the opinion of the Company's management, all
adjustments (consisting of normal accruals) considered necessary for a fair
presentation of these financial statements have been included.
The Company was essentially inactive prior to the acquisition of Interjet Net,
Inc., a Nevada corporation (see Note 2 below). As such, comparable financial
statements have not been presented as the management feels this presentation is
immaterial. Where relevant, comparable financial information has been presented
on a pro-forma basis.
NOTE 2: CAPITALIZATION
The Company was incorporated in the State of Delaware under the name Picometrix,
Inc. on June 11, 1992 and authorized 20,000,000 shares of $0.01 par value common
stock. On June 30, 1997 the Company effected a 2.3399365-for-1 share forward
stock split. The split increased the total outstanding shares from 579,600 to
1,356,277. On August 8, 1997 the Company issued 9,964,286 shares of post
forward-split stock to InterJet Net, Inc. in conjunction with the purchase of
all of the outstanding stock of InterJet Net, Inc. Immediately following the
acquisition of InterJet Net, Inc., the Company conducted a private placement of
680,000 shares of its common stock at a price of $1.95 per share. This offering
was completed on August 27, 1997.
NOTE 3: RELATED PARTY TRANSACTIONS
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their business
interests. The Company has not formulated a policy for the resolution of such
conflicts.
At September 30, 1996 the Company owed $15,000 to related parties for expenses
paid on behalf of the Company. No interest has been charged on this loan and it
was paid back in full on October 4, 1997.
NOTE 4: INCOME TAXES
The Company has available at September 30, 1997, net operating loss
carryforwards of approximately $3,500 which may provided future tax benefits
expiring in June of 2010.
<PAGE>
NOTE 5: WARRANTS TO PURCHASE COMMON STOCK
At September 30, 1997, there are outstanding 512,821 warrants to purchase
512,821 shares of common stock at $1.95 per share. These warrants expire on
August 27, 1998.
NOTE 6: SUBSEQUENT EVENTS
See "PART II - Item 5. Other Information".
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of
Operations.
The Company's loss for the three months ended September 30, 1997 was
equal to $413,582. This amount was prepared on a pro-forma consolidated basis
reflecting the acquisition of InterJet Net, Inc., which is now a wholly-owned
subsidiary of the Company. Prior to this acquisition the Company was virtually
inactive and thus the management does not believe comparative financial
information would be relevant. The loss for the current quarter was attributable
to the Company's General and Administrative Expenses of which salaries and
professional services made up the largest amount. The increased loss this
quarter, compared to the losses in the previous quarters, reflects the
implementation of the Company's aggressive growth strategy. Operating systems in
both Salt Lake City, Utah and Beaumont, Texas are ready for launch in the
quarter subsequent to this filing. Total salaries of $118,350 were paid or
accrued for the three months ended September 30, 1997. This equated to 28.6% of
the total expenses for the quarter which totaled $413,146. The total expense for
professional services, including legal, accounting and engineering fees, totaled
$89,663 for the three months ended September 30, 1997. Professional services
expense amounted to 21.7% of total General and Administrative Expenses for the
quarter ended September 30, 1997.
The Company's loss for the nine months ended September 30, 1997 was
equal to $796,320. This amount was prepared on a pro-forma consolidated basis
reflecting the acquisition of InterJet Net, Inc., which is now a wholly-owned
subsidiary of the Company. Prior to this acquisition the Company was virtually
inactive and thus the management does not believe comparative financial
information would be relevant. The loss for this period was attributed to the
Company's General and Administrative Expenses of which salaries and professional
services made up the largest amount. Total salaries of $323,446 were paid or
accrued for the nine months ended September 30, 1997. This equated to 40.7% of
the total expenses for the period which totaled $795,084. The total expenses for
professional services, including legal, accounting and engineering fees, totaled
$120,689 for the nine months ended September 30, 1997. Professional service
expenses amounted to 15.1% of total General and Administrative Expenses for the
nine month period ended September 30, 1997.
As of September 30, 1997, the Company has yet to begin generating
revenues, but as previously mentioned both the Salt Lake City and Beaumont
systems are projected to begin generating revenue in the quarter subsequent to
this filing.
The Company has current assets totaling $1,056,775 at September 30,
1997 with total net working capital of $642,539. This equates to a current ratio
of approximately 2.55.
<PAGE>
PART II - OTHER INFORMATION
ITEM 5. Other Information
Letter of Intent to Acquire Access Communications, Inc. On October 22,
1997, the Company entered into a Letter of Intent with Access Communications,
Inc. ("Access") to acquire all of the assets and certain liabilities of Access
in exchange for 100,000 shares of the Company's common stock. The Access assets
include an operating Internet service provider in Houston, Texas. Access
currently serves approximately 1,400 subscribers. The Company and Access are
currently working towards the execution of a Definitive Agreement to complete
the proposed transaction.
Letter of Intent to Acquire Sunbury, Pennsylvania MMDS Licenses. On
October 4, 1997, the Company entered into a Letter of Intent with Shoreline
Wireless Cable TV Partnership ("Shoreline") to lease with an option to purchase
a ninety percent interest in the MMDS licenses in Sunbury, Pennsylvania. The
purchase price is based on the number of commercial MMDS channels that can be
secured by Shoreline as the winning bidder in the MDS Auctions conducted by the
Federal Communications Commission. The Company and Shoreline are currently
working towards the execution of a Definitive Agreement to complete the proposed
transaction.
ITEM 6. Exhibits and Reports on Form 8-K
Reports of Form 8-K
Report filed on August 22, 1997.
<PAGE>
SIGNATURES
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 thereunto duly authorized.
Dated: November 12, 1997
INTERJET NET CORPORATION
By: /s/ Jon H. Marple
Jon H. Marple, President, Chairman
and Chief Financial Officer
By: /s/ Mary E. Blake
Mary E. Blake, Vice President and
Director
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE STATEMENTS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 AND
AS OF SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000925739
<NAME> INTERJET NET CORPORATION
<MULTIPLIER> 1
<CURRENCY> US dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Mar-31-1998
<PERIOD-START> Jun-01-1997
<PERIOD-END> Sep-30-1997
<EXCHANGE-RATE> 1
<CASH> 286,773
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 47,516
<CURRENT-ASSETS> 1,056,775
<PP&E> 738,859
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,677,100
<CURRENT-LIABILITIES> 414,236
<BONDS> 0
0
0
<COMMON> 1,200
<OTHER-SE> 2,212,932
<TOTAL-LIABILITY-AND-EQUITY> 2,677,100
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 795,084
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (796,320)
<INCOME-TAX> 0
<INCOME-CONTINUING> (796,320)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (796,320)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
