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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-QSB
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(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from _____ to ______
Commission file number 0-25022
MoneyZone.com
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Nevada 72-1148906
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(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification No.)
8701 Red Oak Blvd, Suite 100, Charlotte, North Carolina 28217
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(Address Of Principal Executive Offices)
(704) 522-1410
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(Issuer's Telephone Number, Including Area Code)
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
preceding 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 [ ]
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest Practicable date: 6,275,835
Transitional Small Business Disclosure Format:
Yes [ ] No [X]
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<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
INDEX TO FORM 10-QSB
Page
----
PART I
Item 1. Financial Statements.......................................... 1
Item 2. Management's Discussion and Analysis and Plan of Operation.... 9
PART II
Item 6. Exhibits, List and Reports on Form 8-K........................ 12
Signatures............................................................... 13
(i)
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED)
BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, September 30,
2000 1999
------------ ------------
<S> <C> <C>
ASSETS
Cash $ 2,218,768 $ 11,317
Marketable securities
Accounts receivable 42,514
Property & equipment, net of accumulated
depreciation 319,297 1,582
Prepaid Expenses 1,235,312 -
------------ ------------
Total Assets $ 3,815,891 $ 12,899
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 23,333 $ 11,783
Advances 203,697 90,000
Accrued expenses 32,217
Accrued interest 6,250 -
------------ ------------
Total current liabilities 265,497 101,783
Long-term liabilities
Convertible debentures 3,000,000 -
------------ ------------
Total long-term liabilities 3,000,000 -
Total liabilities 3,265,497 101,783
------------ ------------
Commitments and contingencies
Shareholders' equity
Preferred stock; $.001 par value; authorized
15,000,000 shares; issued - none - -
Common stock; $.001 par value; authorized
50,000,000 shares; 6,275,835 and 5,550,000
shares issued and outstanding at September 30,
2000 and September 30, 1999 6,276 5,500
Additional paid in capital 2,865,063 220,992
Deficit accumulated during development stage (2,320,945) (315,376)
------------ ------------
Total shareholders' equity 550,394 (88,884)
------------ ------------
Total Liabilities and Shareholders' Equity $ 3,815,891 $ 12,899
============ ============
</TABLE>
See accompanying notes to financial statements.
1
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
(UNAUDITED)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
April 4, 1989
For the Three Months For the Nine Months (Inception) to
Ended September 30, Ended September 30, September 30,
--------------------------- ---------------------------- --------------
2000 1999 2000 1999 2000
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Service income $ 52,194 $ 39 $ 52,194 $ 39 $ 52,904
Other income 5,589 - 19,316 $ - 19,316
----------- ----------- ----------- ----------- -----------
Total income 57,783 39 71,510 $ 39 71,510
Costs and expenses
Costs related to attempted
business acquisitions - - - 192,020
Web site and related costs 267,207 32,953 467,411 32,953 553,142
Sales and marketing 192,044 - 411,320 399,616
General and administrative 213,223 50,683 684,768 61,234 1,022,106
Interest 104,000 6,635 104,000 6,635 229,357
Offering costs - - - - 66,464
----------- ----------- ----------- ----------- -----------
Total costs and expenses 776,474 90,001 1,667,499 100,552 2,462,705
----------- ----------- ----------- ----------- -----------
Forgiveness of debt (205,898) (205,898)
Net loss $ (718,691) $ 115,936 $(1,595,989) $ 105,385 $(2,391,195)
=========== =========== =========== =========== ===========
Basic and diluted net loss per
common stock share before
extraordinary item $ (0.115) $ (0.002) $ (0.254) $ (0.019)
=========== =========== =========== ===========
Weighted average common shares
outstanding 6,245,835 5,002,838 6,245,835 5,500,000
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
April 4, 1989
For the Nine Months (Inception) to
Ended September 30, September 30,
------------------------------------ --------------
2000 1999 2000
------------- ------------- --------------
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ (1,595,989) $ 105,385 $ (2,320,946)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Write-down to market of trading securities - - 27,398
Depreciation and amortization 29,946 - 32,724
Capital contributed by shareholder for - - 53,343
legal fees
Common stock issued for costs advanced and 151,112
services - -
Forgiveness of debt - (205,898)
Changes in operating assets and liabilities
Marketable securities 300,246 - 300,246
Accounts receivable (42,514) - (42,514)
Prepaid expenses (849,720) - (849,720)
Accounts payable (21,002) 9,203 23,334
Deposits (2,228) - (2,228)
Accrued Interest 8,467 - 27,208
------------- ------------- --------------
Net cash used in operating activities
(2,172,794) (91,310) (2,600,044)
------------- ------------- --------------
Cash flows from investing activities
Purchase of property and equipment (264,216) (1,583) (319,766)
Purchase of marketable securities - - (297,398)
Net cash acquired on acquisition of
EBonlineinc.com, Inc. - - 1,000
------------- ------------- --------------
Net cash used in investing activities (264,216) (1,583) (616,164)
------------- ------------- --------------
Cash flows from financing activities
Proceeds from sale of common stock, net 477,470 - - 2,044,122
Proceeds from notes payable and debentures 3,000,000 103,196 3,159,372
Advances from stockholders 203,697 - 231,482
------------- ------------- --------------
Net cash provided by financing activities 3,681,167 103,196 5,434,976
------------- ------------- --------------
Net increase (decrease) in cash 1,244,157 10,303 2,218,768
Cash and cash equivalents, beginning of period 974,611 1,014 -
------------- ------------- --------------
Cash and cash equivalents, end of period $ 2,218,768 $ 11,317 $ 2,218,768
============= ============= ==============
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE A. ORGANIZATION, BUSINESS, AND CONSOLIDATION
The financial statements presented are those of MoneyZone.com, a Nevada
corporation and a development stage company (the "Company"). The Company was
incorporated on April 4, 1989 under the laws of the State of Nevada under the
name Chelsea Atwater, Inc., later changing its name to CEREX Entertainment
Corporation and subsequently to CERX Entertainment Corporation, CERX Venture
Corporation and, on July 8, 1999, in connection with the merger of
EBonlineinc.com, Inc., a Delaware corporation, with the Company, to
EBonlineinc.com. Upon consummation of the merger, EBonlineinc.com, Inc. ceased
to exist and the Company was the sole surviving entity. On December 16, 1999,
the Board of Directors approved the Company changing its name to MoneyZone.com.
The Company's activities to date have been directed toward raising
capital, developing, implementing and marketing an Internet site designed to
facilitate mergers, acquisitions, and the funding of corporate finance
activities.
NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reporting amounts 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 period.
Actual results could differ from those estimates.
DEFERRED INCOME TAXES
Deferred income taxes reflect temporary differences in reporting
results of operations for income tax and financial accounting purposes. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized.
STOCK-BASED COMPENSATION
In October, 1995, the FASB issued SFAS No. 123, "Accounting for
Stock-Based Compensation" SFAS No. 123 encourages, but does not require,
companies to record compensation expense for stock-based employee compensation
plans at fair value. The Company has elected to account for its stock-based
compensation plans using the intrinsic value method prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB
No. 25). Under the provisions of APB No. 25, compensation cost for stock options
is measured as the excess, if any, of the quoted market price of the Company's
common stock at the date of grant over the amount an employee must pay to
acquire the stock.
4
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOTE B. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LOSS PER COMMON SHARE
Loss per common share is computed by dividing the net loss by the
weighted average shares outstanding during the period. Common stock equivalents
are not included in the weighted average calculation since their effect would be
anti-dilutive.
FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS 107, "Disclosures about Fair Value of Financial Instruments,"
requires the Company to report the fair value of financial instruments, as
defined. Substantially all of the Company's assets and liabilities are carried
at fair value or contracted amounts which approximate fair value. Estimates of
fair value are made at a specific point in time, based on relative market
information and information about the financial instrument, specifically, the
value of the underlying financial instrument.
PROPERTY AND EQUIPMENT
Property and equipment are carried at cost and are depreciated on a
straight-line basis over the estimated useful life of the related assets of five
years.
CASH AND CASH EQUIVALENTS
For purposes of the consolidated financial statements, the Company
considers all demand deposits held in banks and certain highly liquid
investments with maturities of 90 days or less other than those held for sale in
the ordinary course of business to be cash equivalents.
STOCK SPLIT
In July, 1999, in connection with our merger with EBonlineinc.com (see
Note D), the shareholders approved and the Company effected a 3.5 for 10 reverse
split of the Company's common stock and a cancellation of 117,766 shares of
common stock, resulting in an effective reverse split ratio of 3.2646:10. Unless
otherwise noted, all references to shares and share prices, including
retroactive treatment, reflect the reverse split on the basis of the effective
ratio.
RECLASSIFICATIONS
Certain amounts in prior periods have been reclassified to conform to
the current presentation.
NOTE C. STOCKHOLDERS' EQUITY AND RELATED PARTY TRANSACTIONS
PREFERRED STOCK
On February 10, 1997, the Company's Board of Directors designated
4,000,000 shares of preferred stock as the Series A, 6.75% Non-Voting
Convertible Preferred Stock. No shares of the Series A, 6.75% Non- Voting
Convertible Preferred Stock have been issued. On March 31, 1998, the Company
cancelled the designation of the Series A, 6.75% Non-Voting Convertible
Preferred Stock.
5
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
The Company has a total of 15,000,000 preferred shares, $.001 par
value, authorized. Dividends, voting rights and other terms, rights and
preferences of these preferred shares have not been designated but may be
designated by the Board of Directors from time to time.
COMMON STOCK
In 1989, the Company sold 734,530 shares of common stock to fifteen
persons for the aggregate sum of $19,040. Of these shares 262,800 common shares
were sold to officers and directors of the Company for $3,900.
On September 21, 1994, the Company issued 241,580 shares of common
stock to John D. Brasher Jr., the Company's principal shareholder and president
for out of pocket expenses paid on behalf of the Company. These share were
valued at $.006 per share or $1,480.
On January 25, 1996, the Company issued 40,240 shares of common stock
to John D. Brasher Jr., for out of pocket expenses paid on behalf of the
Company. These shares were valued at $.061 per share or $2,465.
On December 28, 1996, a majority of the Company's shareholders approved
a restructuring of the Company's authorized capital including (1) a reduction in
the authorized common shares from 250,000,000 to 50,000,000, (2) an increase in
the authorized preferred shares from 5,000,000 to 15,000,000, (3) a change in
par value to $.001 for both the common and preferred stock. All shares and per
share amounts have been restated to reflect this restructuring of the Company.
On December 31, 1996, the Company issued 600,554 shares of common stock
to John D. Brasher Jr., for Company expenses advances and legal services
provided by Brasher & Company. These shares were valued at $.245 per share or
$147,167.
On May 8, 1997, the Company sold 16,323 shares of common stock to a
corporation for cash of $2,500.
On October 1, 1999 the Company sold 733,335 common shares pursuant to a
private placement offering at $3.00 per share. Costs of the offering were
$654,893, leaving net proceeds to the Company of $1,545,112. In connection with
this offering, warrants to purchase 73,333 shares of the Company's common stock
at $3.00 per share were issued to the private placement agent. These warrants
will expire five years from the date of issuance.
On December 15, 1999 the Company issued warrants to purchase 176,667
shares of the Company's common stock at $3.00 per share under a one year
consulting agreement. The warrants will expire on December 31, 2002.
In September 2000, the Company entered into an agreement with Cortlandt
Investors LLC, whereby an amount of $2,500,000 was advanced to the Company in
the form of convertible debentures. The debentures pay an accrued interest rate
of 6% and are due and payable on September 15, 2002. In return, the Company has
issued 30,000 shares of common stock and warrants of 250,000 shares at an
exercise price equal to $4.00 per share. The warrants expire on September 15,
2005.
6
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
RELATED PARTY TRANSACTIONS
On December 30, 1997, Brasher & Company, of which John D. Brasher, Jr.
is the sold owner, forgave $53,343 of accrued legal expenses advanced on behalf
of the Company. The Company has recorded this debt forgiveness as a capital
contribution.
During 1998, John D. Brasher Jr., the Company's majority shareholder
and president, loaned the Company $61,850 and these funds subsequently were used
to partially repay advances of $60,000.
In July 1999, the Company owed John D. Brasher Jr., sole owner and
president, an aggregate of $159,372 in demand promissory notes and $25,106 of
accrued interest (8% simple interest per annum) for cash loans and advances of
$21,420 for expenses of the Company. These amounts were forgiven by the
shareholders, and because of the related party nature, the Company recorded this
transaction as additional paid-in capital.
Global Capital Partners, Inc. (GCAP) is a 31% owner of MoneyZone.com.
As additional collateral to the September 2000 issuance of convertible
debentures, GCAP has provided to the Cortlandt Investors, LLC, a 5% convertible
debenture on GCAP securities. This debenture is convertible to GCAP securities
equal to 120% of the MoneyZone.com debenture amount plus accrued interest.
Additionally, GCAP will provide Cortlandt warrants of 50,000 shares of GCAP
shares at an exercise price of $5.50 per share. Between January 2001 and March
2001, Cortlandt has the right to exchange MoneyZone.com debentures and warrants
for GCAP debentures and warrants.
NOTE D. MERGER
On June 28, 1999, the Company, the Company's then majority stockholder
and EBonlineinc.com, Inc., a Delaware corporation, and entered into an Agreement
and Plan of Merger providing for the merger of EBonlineinc.com, Inc. with and
into the Company. On July 15, 1999, the Company filed the Articles of Merger and
the Certificate of Merger with the Secretaries of State of the states of Nevada
and Delaware, respectively, consummating the merger. Immediately prior to the
merger, the Company changed its name from Cerx Venture Corporation to
EBonlineinc.com, effected a reverse stock split of its issued and outstanding
shares of common stock on a on a three-and-one-half-for-ten (3.5:10) basis, and
cancelled 117,765 shares of Registrant Common Stock. The Company is continuing
as the sole surviving corporation and the separate existence of EBonlineinc.com,
Inc. ceased effective as of July 15, 1999. The merger was valued at $1,000, the
fair market value of the assets of the non-surviving company. Immediately prior
to the consummation of the merger there were 1,633,227 outstanding shares of the
Company's common stock and immediately thereafter there were 5,500,000
outstanding shares of the Company's common stock.
The merger is intended to qualify as a tax-free reorganization pursuant
to Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the Plan of Merger is intended to qualify as a "plan of
reorganization" for purposes of Section 368 of the Code. Since the merger, the
Company has continued at least one significant historic business of
EBonlineinc.com, Inc. or to use at least a significant portion of the historic
business assets of EBonlineinc.com, Inc. in a business.
NOTE E. COMMITMENTS AND CONTINGENCIES
The Company entered into a lease agreement beginning in January 2000
for office space in
7
<PAGE>
MONEYZONE.COM
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
Charlotte, North Carolina. Minimum future rentals under this non-cancelable
lease are as follows:
Year Amount
2000 $ 40,800
2001 81,600
2002 68,000
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Total $204,000
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The Company has deposits in banks exceeding the FDIC insured amount of
$100,000. The amount in excess of $100,000 is subject to loss should the bank
cease business.
NOTE F. STOCK OPTIONS AND WARRANTS
EMPLOYEE STOCK COMPENSATION PLAN
The Company has an equity incentive stock option plan. The Plan was
adopted by the Board of Directors on May 23, 2000 and approved by the
shareholders on the same date. The Board believes that approval of the Plan was
in the best interest of the Company. The purpose of the Plan is to provide
incentives to attract, retain, and motivate eligible persons whose present and
potential contributions are important to the success to the Company, by offering
them an opportunity to participate in the Company's future performance through
awards of options and stock bonuses. The total number of shares of Common Stock
reserved under the plan is 1,000,000. Such number may, from time to time, be
amended by the Board, subject to shareholder approval. Options totaling 287,500
shares have been approved by the Board. Subsequent to December 31, 1999, options
at $3 per share have been granted to key officers, employees, and individuals
that are for a one or two year term.
NOTE G. INCOME TAXES
The Company has an unused net operating loss carryforward of
approximately $297,000, of which approximately $98,000 expires in 2014 and the
remainder in various periods through 2013. However, the ability to utilize such
losses to offset future taxable income is subject to various limitations imposed
by the rules and regulations of the Internal Revenue Service. A portion of the
net operating losses is limited each year to offset future taxable income, if
any, due to the change in ownership of MoneyZone.com's outstanding common stock.
This net operating loss carryforward may result in future income tax benefits of
approximately $101,000; however, because realization is uncertain at this time,
a valuation reserve in the same amount has been established. Deferred income
taxes reflect the net tax effects of temporary differences between the carrying
amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION
PLAN OF OPERATION
At September 30, 2000, we had cash and marketable securities in the
amount of $2,218,768 and incurred operating expenses at a rate of $110,000 per
month. We have liquid assets sufficient to cover operating expenses for the next
20 months.
In September 2000, $2.5 million was received with the issuance of
convertible debentures to Cortlandt Investors, LLC. The purpose of the funds has
been intended for the acquisitions of Ostrander Burch & Co., Inc., Carolina
Securities, Inc., and CrossBridge Capital Partners. Funds have also been
designated for the use of improving the Company's working capital. Subsequent to
September 30, 2000, the Company has suspended activities relating to the
acquisition of the companies mentioned above.
Proceeds have been used to improve the Company's working capital and to
continue development of financial website products and services.
Membership subscription revenue is now being recognized along with the
generation of advertising and marketing campaign revenue from the websites.
The backlog of contingent financing advisory fees continues to grow.
Although no revenues to date have been recognized regarding financial advisory
and/or placement fees, contracts are now in place with activities to which there
is anticipation of recognition of revenues.
In April 1999, we launched our initial corporate finance website at
www.ebonlineinc.com. That site's functionality was limited to a business for
sale and venture capital search and listing process. The website was primarily
designed to support the corporate finance activities of our largest stockholder,
Global Capital Partners, Inc., formerly Eastbrokers International Incorporated.
In December 1999, we purchased the domain name www.moneyzone.com and
discontinued the www.ebonlineinc.com website. Our current flagship website,
www.moneyzone.com was launched on January 18, 2000.
Our current operations are focused upon providing services and
products to middle-market businesses via our website. Resources include business
for sale listings, on-line commercial loans, equity funding sources, business
news, stock quotes, business articles, business products and business service
providers. We generate targeted traffic to our website through a combination of
traditional and online advertising and marketing campaigns including print
media, banner ads, email services, direct mail and other online media. Site
traffic has increased consistently since the January 18th launch of
www.moneyzone.com. Unique visitors are currently averaging 300,000 per month,
and we have more than 10,000 registered members.
Our plan of operation for the next year includes:
o Increasing our network of commercial lenders and equity funding sources
throughout the United States and Europe.
o Developing improved functionality for the lending and equity funding
sections so that funding seekers and funding sources may monitor
transactions continuously in real time.
o Licensing MoneyZone Capital Corp. as a broker-dealer so that we may
collect investment banking and advisory fees.
o Enrolling corporate finance affiliates throughout the United States and
Europe who will assist us in aggregating and facilitating corporate
finance transactions.
9
<PAGE>
o Sponsoring MoneyZone Capital Partners Fund I to invest in
business-to-business Internet companies and early-stage information
technology and information services companies. We intend to primarily
co-invest with established venture capital and investment firms.
o Retaining additional corporate finance professionals to expand our
capabilities in facilitating commercial loan and investment banking
transactions.
We believe that there are significant advantages for our member
businesses in utilizing the Internet and www.moneyzone.com to arrange commercial
loans, offer themselves for sale, raise equity capital, locate service
providers, access current business news and source related products. Our website
is in operation 24 hours per day, 7 days per week and 365 days per year. We have
members in more than 70 countries. Only one application form is required for
submission to multiple commercial lenders or equity funding sources. Response
times are typically shorter than in off-line transactions. Members may conduct
searches worldwide without time or place constraints. Transaction fees may be
lower than those typically charged by traditional investment banks.
We intend to constantly improve the functionality of our website and to
add services to better support our customers. As we continue to promote
www.moneyzone.com and increase our viewership, there will be a larger membership
base providing increased opportunities for customer interaction and completed
transactions. Our corporate finance professionals will also have a larger pool
of potential transactions to facilitate.
We currently have twelve (12) employees:
o Administration/Operations---- (3)
o Website engineering and design---- (4)
o Corporate finance---- (5)
Within the next six months we expect to have approximately twenty (20)
employees as follows:
o Administration/Operations---- (5)
o Website engineering and design---- (6)
o Corporate finance---- (9)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
GENERAL OVERVIEW
Since July 15, 1999, upon consummation of our merger with
EBonlineinc.com, Inc., a Delaware corporation, after which we continued as the
surviving corporation, the Company's activities have been directed toward
raising capital and developing, implementing and marketing an Internet site
designed to facilitate mergers, acquisitions, and the funding of corporate
finance activities. In October 1999, the Company completed its initial private
placement of funds. A total of 733,335 shares of stock were issued at a
placement cost of $3.00 per share. $2,200,005 of equity funds were raised. Cost
of the issuance of the private placement was $654,893. Net proceeds to the
Company were $1,545,112.
Moneyzone.com is a Web-based business consisting of a website, globally
accessible via the
10
<PAGE>
Internet, designed to facilitate mergers, acquisitions and corporate finance
activity. The site attracts businesses seeking merger opportunities or joint
venture partners, looking to sell or acquire businesses or to obtain debt or
equity capital or simply to gain exposure within the international investment
banking community. In addition, the site attracts accredited investors looking
for investment opportunities. We expect that the combination of finance and the
Internet will differentiate MoneyZone.com from its competition.
LIQUIDITY AND CAPITAL RESOURCES
Through September 30, 1999, we funded our operations almost exclusively
through cash loans and cash advances provided by shareholders. In October 1999,
we completed our initial private placement offering. Net fund proceeds were used
to repay short-term loans and advances provided by shareholders.
In September 2000, the Company issued convertible debentures of $2.5
million. These funds have been used to enhance website development and
accelerate the recognition of contingent recognized revenues.
For the period ended September 30, 2000, we had incurred and paid
website development, sales and marketing, and general and administrative and
overhead expenses of $776,474. As of September 30, 2000, we had an accumulated a
deficit (net loss) of $2,391,195 since inception. We currently have cash and
marketable securities amounting to $2,218,768. There are no outstanding loans or
debts owed as of September 30, 2000 other than the convertible debentures.
RESULTS OF OPERATIONS
During the three months ended September 30, 2000, we incurred a net
loss from operations of $776,474. Expenses for this second quarter are related
primarily to the development of the proprietary website, sales and marketing
expenses and to costs relating to the financint costs of the issued debenture.
The company has begun recognized revenues from advertising, membership
subscriptions, and web site development consulting fees. The Company paid rent,
salaries, and other general and administrative costs for the quarter totaling
$405,267. During the three months ended September 30, 1999, we had no revenues
and expenses totaled $100,552. The Company was a non-operating company until
September 1999.
NEW ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 128. The new standard replaces primary and fully diluted
earnings per share with basic and diluted earnings per share. We adopted SFAS
No. 128 beginning with the interim reporting period ended December 31, 1997. The
adoption did not impact previously reported earnings per share amounts.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive
Income." This statement established standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. There were no items of
comprehensive income as defined by SFAS 130 for any of the periods presented.
In June 1998, the FASB issued SFAS No. 133, "Accounting For Derivative
Instruments and Hedging Activities." This Statement establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts, and for hedging
11
<PAGE>
activities. SFAS No. 133 is effective for fiscal years beginning after June 15,
2000. At this time, we do not believe that this statement will have a
significant impact on us.
PART II
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit No. Description
----------- -----------
(27) Financial Data Schedule (Electronic Filing Only).
b. Reports on Form 8-K.
The Company filed no reports on Form 8-K during the quarter ended September 30,
2000.
12
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
MONEYZONE.COM
--------------------------------------------------
(Registrant)
Date: November 8, 2000 /s/ CRAIG B. KENDALL
--------------------------------------------------
Name: Craig B. Kendall
Title: Chief Financial Officer
* Craig Kendall is authorized to sign on behalf of
the registrant in addition to signing as Chief
Financial Officer
13
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
(27) Financial Data Schedule for the three-month period ended
September 30, 2000.
14
