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 December 31, 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 Identi-
Incorporation or Organization fication 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 th
preceding 12
months (of for such shorter period that the Registrant was required to file suc
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, $.001 par value 12,298,183
Title of Class Number of Shares outstanding
at February 12, 1998
No exhibits included.
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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 December
31, 1997;
Condensed Consolidated Statements of Income for the three and nine
months ended December 31, 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 December 31, 1997 presented on a pro-forma basis reflecting
the acquisition of Interjet Net, Inc;
Notes to Condensed Consolidated Financial Statements.
2
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<TABLE>
<CAPTION>
INTERJET NET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1997 AND DECEMBER 31, 1997
(UNAUDITED)
March 31, December 31,
ASSETS 1997 1997
Current Assets:
<S> <C> <C>
Cash $ 0 $ 211,309
Prepaid Expenses 0 12,243
Inventory 0 59,065
Total Current Assets $ 0 $ 282,617
Property, Plant & Equipment $ 0 $ 912,971
Other Assets:
Organizational Costs $ 14 $ 9,555
Deposits 0 7,004
Licenses and Other 0 1,063,474
$ 14 $ 1,080,033
TOTAL ASSETS $ 14 $ 2,275,621
LIABILITIES & SHAREHOLDERS EQUITY Current Liabilities:
Accounts Payable $ 2,252 $ 289,230
Accrued Liabilities 0 89,500
Income Taxes Payable 0 800
Current Portion of Long-Term Debt 0 144,912
Total Current Liabilities $ 2,252 $ 524,442
Long-Term Debt $ 0 $ 178,514
Total Liabilities $ 2,252 $ 702,956
Shareholders Equity:
Common Stock, $.001 par value;
Authorized 20,000,000 shares;
Issued and Outstanding 993,537
at March 31, 1997 and 12,000,663
at December 31, 1997 $ 994 $ 12,001
Additional Paid-in Capital 252 3,009,251
Retained Earnings (Deficit) (3,484) (1,448,587)
Total Shareholder's Equity $ (2,238) $ 1,572,665
TOTAL LIABILITIES & EQUITY $ 14 $ 2,275,621
</TABLE>
See Notes to Condensed Consolidated Financial Statements
3
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<TABLE>
<CAPTION>
INTERJET NET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED DECEMBER 31, 1997
(UNAUDITED)
Three Months Nine Months
Ended Ended
December 31, December 31,
1997 1997
<S> <C> <C>
Revenues $ 10,233 $ 10,233
Cost of Sales $ 40,542 $ 46,286
Gross Profit $ (30,309) $ (36,053)
General & Administrative Expenses:
Professional Services 25,858 146,547
Salaries - Officers 73,400 258,825
Salaries - Others 147,009 285,050
Payroll Taxes and Benefits 19,378 33,499
Office Expenses 16,704 54,352
Advertising and Marketing 70,282 102,203
Auto Expense 11,211 34,683
Travel and Entertainment 58,415 129,595
Depreciation and Amortization 25,535 44,320
Loss on Abandoned Projects 6,000 6,000
Channel Lease Payments 88,552 90,052
Computer Expenses 5,856 10,529
Postage and Delivery 8,593 19,144
Insurance 9,486 32,221
Interest Expense 1,126 7,051
Rent 34,102 95,876
Tower Lease Payments 4,380 7,295
Seminars and Conventions 425 3,831
Telephone Expense 22,373 61,369
Taxes - Other 525 1,852
Total General and Administrative Expenses 629,210 1,424,294
Interest Income $ 7,252 $ 12,560
State Income Taxes $ 0 $ 800
Net Income (Loss) $ (652,267) $ (1,448,587)
</TABLE>
See Notes to Condensed Consolidated Financial Statements
4
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<TABLE>
<CAPTION>
INTERJET NET CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
THREE AND NINE MONTHS ENDED DECEMBER 31, 1997
(UNAUDITED)
Three Months Nine Months
Ended Ended
December 31, December 31,
1997 1997
OPERATING ACTIVITIES
<S> <C> <C>
Net Income (Loss) $ (652,267) $ (1,448,587)
Adjustments:
Depreciation and Amortization $ 25,535 $ 44,320
Expenses Paid with Common Stock 0 321,252
Changes in Current Accounts 58,669 407,812
Net Cash Required by Operating Activities $ (568,063) $ (675,203)
INVESTING ACTIVITIES
Purchase of Fixed Assets $ (216,003) $ (909,279)
Purchase of Licenses (262,450) (486,439)
Net Cash Required by Investing Activities $ (478,453) $ (1,395,718)
FINANCING ACTIVITIES
Loans $ 287,343 $ 330,136
Repayment of Loans (21,761) (26,622)
Sale of Common Stock 0 1,978,716
Net Cash Provided (Required) by
Investing Activities $ 265,582 $ 2,282,230
Increase (Decrease) in Cash and
Cash Equivalents $ (780,934) $ 211,309
Cash and Cash Equivalents at
Beginning of Period $ 992,243 $ 0
Cash and Cash Equivalents at
End of Period $ 211,309 $ 211,309
</TABLE>
See Notes to Condensed Consolidated Financial Statements
5
<PAGE>
INTERJET NET CORPORATION
A DELAWARE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED
DECEMBER 31, 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-QSB 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
1,356,377. 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.
NOTE 4: INCOME TAXES
The Company has available at December 31, 1997, net operating loss carryforwards
of approximately $3,500 which may provided future tax benefits expiring in June
of 2010.
6
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NOTE 5: WARRANTS TO PURCHASE COMMON STOCK
At December 31, 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".
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The Company's loss for the three months ended December 31, 1997 was
equal to $652,267. 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 primarily
attributable to the Company's Selling, General and Administrative Expenses of
which salaries, travel and marketing 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 were successfully launched this
quarter. Total salaries of $220,409 were paid or accrued for the three months
ended December 31, 1997. This equated to 35.0% of the total expenses for the
quarter which totaled $629,210. Travel and related costs equaled $58,415 for the
quarter, or approximately 9.3% of total expenses. The total cost advertising and
marketing expenses for the quarter totaled $70,282 for the three months ended
December 31, 1997. This represented to 11.2% total expenses for the quarter
ended December 31, 1997.
As a result of the launching of the operational systems in Salt Lake
City, Utah (in October of 1997) and Beaumont, Texas (in late December of 1997),
the Company produced gross revenues of $10,233 for the quarter ended December
31, 1997. These revenues represent the first since the Company's inception.
The Company's loss for the nine months ended December 31, 1997 was
equal to $1,44,587. 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 Selling, General and Administrative Expenses of which salaries,
professional fees, travel, marketing, and rent made up the largest amount. Total
salaries of $543,875 were paid or accrued for the nine months ended December 31,
1997. This equated to 38.2% of the total expenses for the period which totaled
$1,424,294. The total expenses for professional services, including legal,
accounting and engineering fees, totaled $146,547 for the nine months ended
December 31, 1997. Professional service expenses amounted to 10.3% of total
General and Administrative Expenses for the nine month period ended December 31,
1997. Total travel and related costs of $129,595 were incurred in the nine month
period. This equated to 9.1% of the total expenses. The total expense marketing,
including printing and advertising, totaled $102,203 for the nine months ended
December 31, 1997. This amounted to 7.2% of total General and Administrative
Expenses for the nine month period ended December 31, 1997.
The Company has current assets totaling $282,617 at December 31, 1997
with total net working capital deficit of $241,825. This equates to a current
ratio of approximately -1.85.
8
<PAGE>
PART II - OTHER INFORMATION
ITEM 5. Other Information
Acquisition of Access Communications, Inc. Effective January 1, 1998,
the Company
acquired Access Communications, Inc. ("Access") as a wholly-owned subsidiary.
Access is an
operating Internet service provider in Houston, Texas. Access currently serves
approximately
1,800 subscribers. The Company exchanged 211,000 shares of its common stock for
all of the
outstanding stock of Access.
ITEM 6. Exhibits and Reports on Form 8-K
Reports of Form 8-K
None.
9
<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: February 12, 1998 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,
Director and duly authorized officer
10
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[TEXT]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE STATEMENTS FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND
AS OF DECEMBER 31, 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> 9-MOS
<FISCAL-YEAR-END> Mar-31-1998
<PERIOD-START> Apr-01-1997
<PERIOD-END> Dec-31-1997
<EXCHANGE-RATE> 1
<CASH> 211,309
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 59,065
<CURRENT-ASSETS> 282,617
<PP&E> 912,971
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,275,621
<CURRENT-LIABILITIES> 524,442
<BONDS> 0
0
0
<COMMON> 12,001
<OTHER-SE> 1,560,664
<TOTAL-LIABILITY-AND-EQUITY> 2,275,621
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,424,294
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,447,787)
<INCOME-TAX> 800
<INCOME-CONTINUING> (1,448,587)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,448,587)
<EPS-PRIMARY> (.12)
<EPS-DILUTED> (.12)
</TABLE>
