U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-QSB/A
Quarterly Report Under
the Securities Exchange Act of 1934
For Quarter Ended: July 31, 1999
Commission File Number: 0-24590
E-NET FINANCIAL CORPORATION
(f/k/a E-NET CORPORATION)
(Exact name of small business issuer as specified in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
84-1273503
(IRS Employer Identification No.)
2102 Business Cent. Dr.
Irvine, CA
(Address of principal executive offices)
92612
(Zip Code)
(949) 253-4633
(Issuer's Telephone Number)
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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 ____.
The number of shares of the registrant's only class of common stock issued and
outstanding, as of JULY 31, 1999 was 4,500,000 shares.
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS.
E-NET FINANCIAL CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
July 31 April 30
1999 1999
---- ----
ASSETS
CURRENT ASSETS
Cash and equivalents $ 2,774 $ 4,282
Accounts receivable 1,464 611
Note receivable 88,275 87,500
Other current assets 17,446 13,807
--------- ---------
TOTAL CURRENT ASSETS 109,959 106,200
EQUIPMENT, net 36,744 40,030
INVESTMENT IN MARKETABLE EQUITY SECURITIES 162,500 162,500
OTHER ASSETS 74,270 18,800
--------- ---------
$ 383,473 $ 327,530
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES
Current portion of deferred revenue $ 83,300 $ 83,300
Notes payable 174,052 38,606
Accounts payable and accrued expenses 122,214 56,754
Income tax liability 17,700 17,700
--------- ---------
TOTAL CURRENT LIABILITIES 397,266 196,360
DEFFERRED REVENUE 54,632 75,458
--------- ---------
TOTAL LIABILITIES 451,898 271,818
--------- ---------
SHAREHOLDERS EQUITY
Preferred stock, 1,000,000 shares authorized,
no par value, none issued and outstanding
Common stock, 20,000,000 shares authorized,
$.00l par value, 4,500,000 shares issued and
outstanding 4,500 4,500
Additional paid-in capital 45,175 45,175
Retained earnings (118,100) 6,037
--------- ---------
TOTAL SHAREHOLDERS' EQUITY (68,425) 55,712
--------- ---------
$ 383,473 $ 327,530
========= =========
<PAGE>
E-NET FINANCIAL CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
July 31,
----------------------------
1999 1998
REVENUES
Consulting fee revenue $ 20,826 $ 20,825
Other revenue 3,092 0
----------- -----------
TOTAL REVENUES 23,918 20,825
OPEPATING EXPENSES
General and administrative 150,510 0
----------- -----------
TOTAL OPERATING EXPENSES 150,510 0
----------- -----------
INCOME (LOSS) FROM OPERATIONS (126,592) 20,825
OTHER INCOME (EXPENSE)
Interest expense (2,695) 0
Interest income 5,150 0
----------- -----------
TOTAL OTHER INCOME (EXPENSE) 2,455 0
INCOME (LOSS) BEFORE INCOME TAXES (124,137) 20,825
Income Taxes 0 37
----------- -----------
NET INCOME (LOSS) $ (124,137) $ 20,788
=========== ===========
BASIC AND DILUTED NET LOSS PER SHARE $ 0.00 $ 0.00
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER
OF COMMON SHARES OUTSTANDING 2,417,808 2,417,808
=========== ===========
<PAGE>
<TABLE>
<CAPTION>
Consolidated Statements of Shareholders' Deficit
From inception (November 20, 1996) to July 31, 1999
Common Stock (1)
----------------------------- Retained
Amount Earnings
----------------- Additional During the Total
Number Per Paid-in Development Shareholders'
of Shares Share Total Capital Stage Equity
--------- ----- ----- ------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Initial capitalization 2,000,000 $0.001 $ 2,000 $ -- $ -- $ 2,000
Net loss for 1997 -- -- -- -- (2,000) (2,000)
--------- --------- --------- --------- ---------
Balance, April 30, 1997 2,000,000 2,000 -- (2,000) --
Net income for 1998 -- -- -- -- 5,242 5,242
--------- --------- --------- --------- ---------
Balance, April 30, 1998 2,000,000 2,000 -- 3,242 5,242
Contributed capital -- -- -- 10,000 -- 10,000
E-net reorganization 2,500,000 $0.001 $ 2,500 35,175 -- 37,675
Net income for l999 -- -- -- -- 2795 2795
--------- --------- --------- --------- ---------
Balance, April 30, 1999 4,500,000 -- 4,500 45,175 6,037 55,712
Net Loss for Quarter Ended July 31, 1999 -- -- -- (124,137) (124,137)
--------- --------- --------- --------- ---------
Balance, July 31, 1999 4,500,000 $ 4,500 $ 45,175 $(118,100) $ (68,425)
========= ========= ========= ========= =========
(1) Common stock and additional paid in capital have been retroactively restated to give effect to the E-net
reorganization. (see Note 1 to the consolidated financial statements.)
</TABLE>
<PAGE>
E-NET FINANCIAL CORPORATION AND SUBSIDIARIES
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
July 31,
-----------------------
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(124,137) $ 20,788
Adjustments to reconcile net income (loss)
to net cash used by operating activities:
(Increase) in accounts receivable (2,078)
(Increase) in accrued receivables (6,792)
(Increase) in notes receivable (775) (87,500)
(Increase) in deposits (5,190)
(Increase) in prepaid expenses (4,850)
Depreciation 5,281
(Increase) in other assets
Increase in accounts payable 4,963
Increase in accrued expenses 116,499
Increase in income tax liability 16,000 1,738
(Decrease) in deferred revenue (104,126) 221,233
Investment received as payment on consulting
agreement
--------- ---------
Net cash used by operating activities (105,205) 156,259
--------- ---------
Cash flows from investing activities:
Purchases of equipment (42,025)
Investments in negotiable stock (1,000) (161,500)
Joint venture investments (74,270)
--------- ---------
Net cash used by investing activities (117,295) (161,500)
--------- ---------
Cash flows from financing activities:
Proceeds from borrowings on short-term loans 174,052
Proceeds from issuance of common stock 500 4,000
Proceeds received from stockholders 45,175 1,241
--------- ---------
Net cash provided by financing activities 219,727 5,241
--------- ---------
Net increase in cash (2,774) 0
Cash, beginning of period 0 0
--------- ---------
Cash, end of period $ (2,774) $ 0
========= =========
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND PLAN OF
OPERATIONS
PLAN OF OPERATIONS
The Company's business plan provides for the Company to develop and deliver
through the internet and through other means, mortgage loan brokerage services
and telecommunications (voice and data) services and other related services. The
Company does this through developing, acquiring and joint venturing with
appropriate organizations and businesses.
Activities of E-Net Mortgage Corp.
The Company's wholly owned subsidiary, E-NET MORTGAGE CORP, provides Mortgage
loan brokerage services. E-NET MORTGAGE CORP. conducts business on the Internet
and through conventional methods. It has at present three offices: San Jose,
Costa Mesa and Las Vegas. These offices are in the process of being staffed.
Revenue has begun in the San Jose office. Revenue has not yet been generated in
the Las Vegas or Costa Mesa offices.
E-NET MORTGAGE CORP has established a web site on the internet. At present it is
informational only. It is the Company's intention to make the site interactive:
potential clients will be able to complete applications on line, and will be
able to check progress of their loan applications through the Web Site.
Six additional satellite office facilities are planned during the remainder of
this year.
As a retail mortgage broker, E-Net Mortgage has developed relationships with
many of the key mortgage lenders in the State of California. This subsidiary is
in the process of putting similar relationships in place nationwide. With these
relationships in place the Company will be able to offer a wide range of
mortgage loan products and services.
Activities of City Pacific International, U.S.A., Inc.
Through City Pacific International U.S.A., Inc., the Company intends to provide
products and interconnectivity to telecommunications companies by purchase of
essential equipment and/or lease of communication lines or satellite pathways to
enable the carriers to transport voice and date information. On the retail
level, through joint ventures with other providers, this subsidiary will offer
debit cards for corporate customers, calling card services, long distance
services and international termination. This entity will also provide switch
co-location and billing services.
On September 8, 1999, the Company executed a letter of intent on behalf of its
wholly owned subsidiary, City Pacific International, Inc., to acquire Special
Accounts Billing Group Inc. SABG is licensed in 49 states to provide long
distance telephone service, including billing customers, at the retail level.
<PAGE>
This acquisition will give the Company through its wholly owned subsidiary, City
Pacific International, Inc., the ability to provide long distance service in 49
states. This service will include 1 plus service, phone card calling, phone
clubs, local service (in several states), and regular long distance. These
activities will be conducted through City Pacific's joint venture partner,
Omnetrix International. The Company will provide service on a nation wide basis
at the retail level. This acquisition saves approximately two years of legal and
regulatory effort.
Activities of the Parent Company
On July 1, 1999, the company entered into a joint venture with Genesis
Residential Healthcare Inc. to form a Limited Partnership for the purpose of
developing residential healthcare facilities. Genesis will be providing in-depth
planning and study for a highly innovative national program for the 21st century
by creating well planned communities that provide the best services in
healthcare, social, spiritual, and financial benefits at an affordable cost. The
result of this cost-effective program will generate a substantial return on
investment while still providing the best in senior care.
The company engaged Atlantic Union Distribution Ltd. as an investment-banking
consultant to access $20,000,000 from foreign sources under an investment
banking agreement. The purpose of this agreement is to finance the Genesis
project. Funds will go to the Limited Partnership.
Under this partnership agreement, the Company will act as the general partner
and pledge its preferred stock as security for investors. The terms and
conditions of this class of preferred stock have not yet been determined.
Effective July 1, 1999 D. Weckstein & Co., Inc. was retained to raise funds
through public or private offerings, of debt or equity securities. Under terms
of this agreement D. Weckstein & Co., Inc. will also seek merger and acquisition
candidates and serve as a financial consultant to The Company. The project is
currently in the developmental stage; operations have not yet started.
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON 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
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
e-Net Financial Corporation.
(Registrant)
Dated: October 21, 1999
By: /s/ Michael Roth
--------------------
Michael Roth
President
<PAGE>
e-Net Financial Corporation
Exhibit Index to Quarterly Report on Form 10-QSB
For the Quarter Ended July 31, 1999
EXHIBITS Page No.
EX-27 Financial Data Schedule..................................... 11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> MAY-01-1999
<PERIOD-END> JUL-31-1999
<CASH> 2,774
<SECURITIES> 0
<RECEIVABLES> 89,739
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 109,959
<PP&E> 42,025
<DEPRECIATION> 5,281
<TOTAL-ASSETS> 383,473
<CURRENT-LIABILITIES> 397,266
<BONDS> 0
0
0
<COMMON> 4,500
<OTHER-SE> 35,175
<TOTAL-LIABILITY-AND-EQUITY> 383,473
<SALES> 0
<TOTAL-REVENUES> 23,918
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 150,509
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,695
<INCOME-PRETAX> (124,137)
<INCOME-TAX> 0
<INCOME-CONTINUING> (124,137)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (124,137)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
