NOTE 3. INCOME TAXES
At June 30, 2002, the Company had a net operating loss carryforward of approximately $92,886. This loss may be carried forward to offset federal income taxes in future years through the year 2021. However, if subsequently there are ownership changes in the Company, as defined in Section 382 of the Internal Revenue Code, the Company's ability to utilize net operating losses available before the ownership change may be restricted to a percentage of the market value of the Company at the time of the ownership change. Therefore, substantial net operating loss carryforwards could, in all likelihood, be limited or eliminated in future years due to a change in ownership as defined in the Code. The utilization of the remaining carryforwards is dependent on the Company's ability to generate sufficient taxable income during the carryforward periods and no further significant changes in ownership.
SFAS No. 109 provides for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. A valuation allowance must be established to reduce deferred income tax benefits if it is more likely than not that, a portion of the deferred income tax benefits will not be realized. It is Management's opinion that the entire deferred tax benefit of $15,000 resulting from the net operating loss carryforward may not be recognized in future years. Therefore, a valuation allowance equal to the deferred tax benefit of $15,000 has been established, resulting in no deferred tax benefits as of the balance sheet date.
NOTE 4. GOING CONCERN AND MANAGEMENT'S PLANS
As shown in the accompanying financial statements, the Company incurred net losses of $4,467 for the three months ended June 30, 2002, and has an accumulated deficit of $92,886. As a result, the Company has a negative working capital and a deficiency in assets. The ability of the Company to continue as a going concern is dependent upon its ability to obtain financing and achieve profitable operations. The Company anticipates meeting its cash requirements through the financial support of its management until such time as it begins operations. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
NOTE 5. COMMITMENTS AND CONTINGENCIES
The Company has its executive offices in the residence of its Vice-President. The Company occupies approximately 150 square feet, free of charge.
NOTE 6. DEFICIENCY IN ASSETS
Preferred Stock - The Board of Directors is authorized to establish the rights and preferences of preferred stock. To date, the Board of Directors has not established those rights and preferences.
Common Stock - In February 2002, the Board of Directors approved a four (4) for one (1) stock split. In connection with this stock split the Board of Directors amended the Articles of Incorporation and the Company is now authorized to issue 200 million shares of common stock. Retroactive effect has been given to the stock split in these financial statements.
HeavenExpress.com, Inc.
(A Development Stage Company)
ITEM 2. Plan Of Operation
Forward-Looking Statements
This report on Form 10-QSB contains forward looking statements. The words or phrases "would be," "will allow," "intends to," "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," or similar expressions are intended to identify "forward-looking statements." Actual results could differ materially from those projected in the forward looking statements as a result of a number of risks and uncertainties, including: (a) lack of demand for our products and services being purchased via the Internet; (b) competitive products and pricing; (c) limited or no amount of resources devoted to advertising; (d) limited amount of time our management devotes to our business; (e) the absence of management experience in the memorial business or in Internet marketing; (f) if we fail to obtain financing to conduct our plan of operations, we may be unable to continue in business; (g) because our President is recovering from a brain related operation, our Plan of Operations has experienced delays; and (h) absence of any contracts or arrangements with third party supplies or manufacturers. Statements made herein are as of the date of the filing of this Form 10-QSB with the Securities and Exchange Commission and should not be relied upon as of any subsequent date. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward-looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.
Our Operations from Our Inception to June 30, 2002
We were incorporated on December 9, 1999. Since our inception through June 30, 2002, we have no revenues and we have an accumulated deficit of $92,886.
Since our inception to June 30, 2002, we have accomplished the following:
- Developed our business plan;
- Raised Capital - We raised $1,350.00 for our operations through the sale of private placement securities;
- Appointment of Board Members - We appointed Charles Scheuerman as a second member of our Board of Directors;
- Obtained our website address - We obtained the address of www.heavenepxress.com
- Development of a website - We developed our website content;
- Graphics - We designed the graphics for our website; and
- Website Designers - We hired Sensory Design Group, Inc. who created our website;
- Our website became operational on May 21, 2000.
Our Future Plan of Operations
Our plan of operations over the next twelve months will consist of the following:
A. Our management plans to redesign and reformat our website to accomplish the following goals:
- Create a user-friendly environment;
- Create an aesthetically pleasing website; and
- Create an organizational format to the website as reflected in B below that offers users a more organized product and service description.
To accomplish the above goals, management plans to locate computer consultants to design and upgrade our website. We have not yet located consultants to perform these services. Until we locate and retain such consultants, we will continue to conduct our operations with our originally formatted website. The components of our future website are described below under "Our Future Plan of Operations". We expect that our new website will be operational by February 28, 2003.
B. New Website. Our website will contain an entirely new organizational format, as follows:
(General Category): Retail products with the following sub-categories:
- Burial vaults;
- Garments;
- Caskets;
- Monuments;
- Urns;
- Flowers;
- Sympathy gifts;
- Cards;
- Stone and bronze memorials; and
- Books.
(General Category): Funeral Services with the following sub-categories:
- Traditional funeral arrangements;
- Theme funeral arrangements (such as parades); and
- Denominational funeral arrangements
Within each sub-category above, the user will be able to link to various sites that retail that type merchandise or describe the particular type of information within each sub-category. For instance, if users wish to click on "caskets" under the general category, "Retail Products", they will then view a page that contains a listing of all caskets which we offer through various casket manufacturers retailers.
Our new website will also contain a "print function" that will print substantive information from linked retailer websites while omitting images and pictures and an e-mail function enabling users to automatically E-mail linked retailer websites to other E-mail addresses. We will also add an "advertiser" management system to simplify the addition, removal, and use of links from different sources. We will also create a new professional logo, color scheme, and navigation layout to the website to improve our awareness of our website.
We expect that all of the above described aspects of our new website will be operational by February 28, 2003.
C. New Content. Between now and February 28, 2003 we expect to add content on our website that will demonstrate the price advantage of ordering online memorial products via our website compared to prices offered at retail establishments, such as physically situated funeral homes. In addition, to attract additional visitors to our website, we plan to eventually provide educational and informative content, as follows:
- Quality of various memorial and funeral products and services, such as the different types of wood, metal, bronze and copper caskets;
- Laws and consumer rights pertaining to the funeral and memorial industry;
- Customs and etiquette regarding funeral attendance and appropriate charitable contributions in memory of the deceased, sympathy card content, expressing personal thoughts, and considerations pertaining to various religions; and
- Legal ramifications and advantages and disadvantages of pre-paid funeral arrangements.
We originally planned to have this additional content available on our website approximately nine months after we established our new website; however, our time estimate for completion of our new content is now February 28, 2003. We expect a cost of $1,500 pertaining to establishing this additional content.
D. Additional Sources of Revenue. During the entire course of our Plan of Operations, our President plans to actively seek potential sources of revenues from various establishments. She plans to contact funeral homes and online obituaries to establish relationships that will generate potential sources of revenue, as follows:
- Referral fees by referring business to these entities from business leads obtained from contact with our website;
- Advertising fees from advertising these establishments on our website;
- Establishing relationships with vendors of memorial products that will sell their products through our website;
- Developing an apparatus by which we will receive transaction fees from e-commerce applications;
- Developing a plan to obtain advertising of other memorial based businesses on our website that will generate advertising fees;
- Establishing links with other third party vendors of memorial based products, wherein the third party vendors will provide us with a commission from third party e-commerce transactions; and
- Including testimonials from our customers on our website to demonstrate the quality of our service.
We originally expected that we would accomplish these goals by February 28, 2003; however, our President has been unsuccessful thus far in accomplishing any of the above-stated goals and because our President has been ill and is recovering from surgery, our Plan of Operations has been delayed. Accordingly, our President will continue these efforts throughout our next twelve months of operations. We expect costs of $2,500 pertaining to the establishment of these revenue sources.
E. Advertising. We plan to obtain small advertisements in trade magazines. We estimate that these advertisements will cost between $75.00 and $500.00 depending upon the publication, number of advertisements and length of advertisements. We expect to advertise in local written publications in South Florida and large cities. These advertisements will cost between $150.00 and $1,500.00 per advertisement. We expect to spend approximately $10,000 for these type advertisements. At present, we do not have sufficient cash or financing resources to accomplish this goal; accordingly, we will place these advertisements only if we have sufficient revenues or financing from other sources. Even if we do develop sufficient financial resources to conduct our advertising campaign, we do not expect to begin our advertising until our new website and website content is completed in February 2003. We will continually monitor the relative success or failure of these advertisements to determine whether our advertising campaign requires content adjustment or publication selection.
Liquidity and Capital Resources. As of June 30, 2002, we had limited cash capital resources of only $78. Our business plan includes the following estimated capital expenditures of $32,000 over the next twelve months: $10,000 for advertising; $2,500 to establish new sources of revenue; $1,500 to improve the content of our website; $600 for paying our server over the next twelve months; $5,000 to upgrade our website and $12,000 for working capital.
Our existing cash is insufficient to fund our operations. Moreover, we have incurred accumulated net losses of $92,886 since our inception to June 30, 2002. As a result, we have a negative working capital and a deficiency in assets. Our ability to continue as a going concern is dependent upon our ability to obtain financing and achieve profitable operations. If our revenues are insufficient to meet our needs, our President/Director or Director plans to loan us funds to conduct our operations; however, we have no agreement with our President/Director or Director to do so and they are under no obligation to loan us funds. Moreover, there are no assurances that our President/Director or Director will have sufficient funds to make these loans. Accordingly, there are no assurances that we will receive loans from our President/Director or Director. We have no compensation agreements to our President/Director or Director in connection with any loans that either may provide to us. If our president/director or director is unable or unwilling to make loans to us necessary to implement our continuing plan of operations, we will need additional financing through traditional bank financing or a debt or equity offering; however, because we are a development stage company with little operating history and a poor financial condition, we may be unsuccessful in obtaining such financing or the amount of the financing may be minimal and therefore inadequate to implement our continuing plan of operations. Accordingly, there can be no assurance that we will be able to obtain financing on satisfactory terms or at all, or raise funds through a debt or equity offering. In addition, if we only have nominal funds by which to conduct our operations, we may have to curtail advertising or be unable to conduct any advertising, both of which will negatively impact development of our company name and reputation.
PART II - OTHER INFORMATION
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 EVENTS
Subsequent Events.
Our Board of Directors unanimously approved a forward stock split of our common stock at a ratio of four (4) shares for every one (1) share held. The forward split became effective on February 22, 2002. As a result of the split, we have 8,116,000 shares of common stock issued and outstanding. Prior to the split, we had 2,029,000 shares of Common Stock outstanding.
We increased our authorized capital shares in proportion to the forward stock split. Our authorized capital stock consists of 200,000,000 shares of common stock. Prior to the split, we were authorized to issue 50,000,000 shares of common stock. In connection, with the forward split, we amended our articles of incorporation.
In May 2002, our President was diagnosed with a brain related illness that resulted in surgery during August 2002. She is expected to make full recovery over the next few months. However, her illness has caused delays in executing our Plan of Operations. Charles Scheuerman was our interim President from May 2002 until October 10, 2002. Our President resumed her duties as President on October 10, 2002.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS
3.1 Articles of Incorporation*
3.2 Amendment to Articles of Incorporation**
3.2 Bylaws*
4.0 Share Certificate*
*Filed by the Company as exhibits to its Registration Statement on Form SB-2 filed with the Commission on January 27, 2000.
**Filed by the Company as exhibits to its Report on 8-K filed on February 22, 2002.
Reports on Form 8-K.
We hereby incorporate the following documents by reference in this Registration Statement:
a) Our Form SB-2 Registration Statement filed on May 3, 2001.
b) Our Report on Form 8-K filed with the Commission on February 22, 2002 reporting a forward stock split of our common stock at a ratio of four (4) shares for every one (1) share held. The forward split became effective on February 22, 2002.
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.
HeavenExpress.com, Inc.
(Registrant)
Date: October 15, 2002
By: /s/ Saundra Sharpe
Saundra Sharpe, President, Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer
Certifications
I, Saundra Sharpe, certify that:
- I have reviewed this quarterly report on Form 10-QSB of HeavenExpress.com, Inc.;
- Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
- Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of HeavenExpress.com, Inc. as of, and for, the periods presented in this quarterly report.
Date: October 15, 2002
/s/ Saundra Sharpe
Saundra Sharpe
President, Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer
