U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------
FORM 10-QSB
-------------------------------------------
(Mark One)
|X| Quarterly REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 2001
|_| 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
-------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Nevada 72-1148906
---------------------- ---------------
(State Or Other Jurisdiction Of (I.R.S. Employer
Incorporation Or Organization) Identification No.)
6000 Fairview Road Ste. 1410 Charlotte, NC 28210
---------------------------------------------------
(Address Of Principal Executive Offices)
(704) 522-1410
-----------------------------------------------
(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
Transitional Small Business Disclosure Format:
Yes No X
The total number of shares of the registrant's Common Stock, $.15 par
value, outstanding on August 17, 2001, was 100,000.
MoneyZone.com
(A Development Stage Company)
Index to Form 10-QSB
Page
----
Part I-- FINANCIAL INFORMATION
Item 1. Financial Statements
Historical Financial Statements
Balance Sheet as of June 30, 2001..................................... 2
Statements of Operations for the Quarters and Six Months Ended June 30,
2001 and 2000....................................................... 3
Statements of Cash Flows for the Six Months Ended June 30, 2001 and
2000................................................................ 4
Notes to Financial Statements......................................... 6
Item 2. Management's Discussion and Analysis or Plan of Operation......... 9
Part II-- OTHER INFORMATION
Item 1. Legal Proceedings................................................. 11
Item 2. Changes in Securities and Use of Proceeds......................... 11
Item 3. Defaults Upon Senior Securities................................... 11
Item 4. Submission of Matters to a Vote of Security Holders............... 11
Item 5. Other Information................................................. 11
Item 6. Exhibits and Reports on Form 8-K.................................. 12
Signature ................................................................ 13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
MoneyZone.com
(A Development Stage Company)
Balance Sheets
June 30,
2001
(Unaudited)
ASSETS
Current Assets
Cash $ 42,294
Related party receivable -
Prepaid expenses and other -
-----------
Total current assets 42,294
Property & equipment, net of accumulated
depreciation of $0 and $0 14,000
-----------
Total Assets $ 56,294
-----------
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Accounts payable $ 245,231
Accrued liabilities from discontinued operations 129,200
Advances from affiliate 217,916
Accrued interest -
Convertible debenture -
-----------
Total liabilities 592,347
-----------
Shareholders' deficit
Preferred stock; $.001 par value; authorized
15,000,000 shares; 100,000 shares issued
and outstanding at June 30, 2001 100
Common stock; $.15 par value; authorized
333,333 shares; 100,000 shares issued
and outstanding at June 30, 2001 15,000
Additional paid in capital 5,401,055
Deficit accumulated during developmental stage (5,952,208)
-----------
(536,053)
-----------
$ 56,294
-----------
See accompanying notes to financial statements.
-2-
MoneyZone.com
(A Development Stage Company)
Statements of Operations
For the Quarter
Ended June 30,
-------------------
2001 2000
-------- --------
(Unaudited) (Unaudited)
Service income $ - $ 6,189
Other income - 13,727
--------- ---------
Total income - 19,916
--------- ---------
Costs and expenses
Costs related to attempted
business acquisitions - -
Web site and related costs - 153,102
Sales and marketing costs - 146,874
General and administrative 184,431 182,888
Interest and financing costs - -
Consulting fees - -
Loss on sale of marketable securities - -
Offering costs - -
--------- ---------
Total liabilities 184,431 482,864
--------- ---------
Loss prior to disposal of business (184,431) (462,948)
Loss from disposal of business
including provision of $115,398
for operating losses during the
phase-out period
- -
--------- ---------
Net loss $(184,431) $ (462,948)
--------- ---------
Basic and diluted net loss
per common share $ (1.84) $ (11.12)
--------- ---------
Weighted average common
shares outstanding 100,000 41,638
--------- ---------
- -Continued-
April 4, 1989
For the Six Months (inception) to
Ended June 30, June 30,
---------------------------------------
2001 2000 2001
------------------ ------------------ ------------------
(Unaudited) (Unaudited) (Unaudited)
$ - $ 6,189 $ 70,453
- 13,727 36,352
------------------ ------------------ ------------------
- 19,916 106,805
------------------ ------------------ ------------------
- - 192,020
- 200,204 795,640
- 219,276 616,203
220,992 471,545 1,638,916
21,560 - 1,112,917
- - 502,191
- - 602,891
- - 66,464
------------------ ------------------ ------------------
242,552 891,025 5,527,242
------------------ ------------------ ------------------
(242,552) (871,109) (5,420,437)
- - (531,771)
------------------ ------------------ ------------------
$(242,552) $ (871,109) $(5,952,208)
------------------ ------------------ ------------------
$ (2.99) $ (20.92)
------------------ ------------------
81,053 41,638
------------------ ------------------
See accompanying notes to financial statements.
-3-
MoneyZone.com
(A Development Stage Company)
Statements of Cash Flows
For the Six Months
Ended June 30,
--------------------
2001 2000
------ ------
(Unaudited) (Unaudited)
Cash flows from operating activities
Net loss $ (242,552) $ (871,109)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Interest expense 21,560 -
Depreciation and amortization - 29,946
Changes in operating assets and liabilities
Marketable securities - 207,780
Deposits - 130,000
Accounts payable 48,456 -
Accrued liabilities (109,148) -
----------- ----------
Net cash used in operating activities (281,684) (503,383)
----------- ----------
Cash flows from investing activities
Sale of property and equipment 35,000 -
Purchase of property and equipment - (292,085)
----------- ----------
Net cash used in investing activities 35,000 (292,085)
----------- ----------
Cash flows from financing activities
Advances from affilate 217,916 -
----------- ----------
Net cash provided by financing activities 217,916 -
----------- ----------
Net decrease in cash (28,768) (795,468)
Cash and cash equivalents, beginning of period 71,062 974,611
----------- ----------
Cash and cash equivalents, end of period $ 42,294 $ 179,143
----------- ----------
See accompanying notes to financial statements.
-4-
MoneyZone.com
(A Development Stage Company)
Statements of Cash Flows (continued)
For the Six Months
Ended June 30,
----------------------
2001 2000
------- -------
(Unaudited) (Unaudited)
Supplemental Information
Common stock issued under terms of
convertible debt, 56,327 shares issued $ 2,471,560 $ -
---------- ---------
See accompanying notes to financial statements.
-5-
MoneyZone.com
(A Development Stage Company)
Notes to Financial Statements
Note 1. 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 2. Interim Reporting
The financial statements of MoneyZone.com for the quarter and six months
ended June 30, 2001 have been prepared by the Company, are unaudited, and are
subject to year-end adjustments. These unaudited financial statements reflect
all known adjustments (which included only normal, recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of the
financial position, results of operations, and cash flows for the periods
presented in accordance with generally accepted accounting principles. The
results presented herein for the interim periods are not necessarily indicative
of the actual results to be expected for the fiscal year.
The notes accompanying the consolidated financial statements in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2000
include accounting policies and additional information pertinent to an
understanding of these interim financial statements.
Note 3. 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 of 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.
-6-
Note 3. Summary of Significant Accounting Policies (continued)
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.
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
On March 30, 2001, the Company effected a 150 for 1 reverse split of the
Company's common stock and decreased the number of authorized shares from
50,000,000 to 333,333. The increase in the number of authorized shares is
subject to the approval of the holders of a majority of the outstanding shares
and compliance with the Securities Exchange Act of 1934, as amended.
Reclassifications
Certain amounts in prior periods have been reclassified to conform to
the current presentation.
-7-
Note 4. Termination of Merger
On April 9, 2001, we entered into an Agreement and Plan of Merger with
our wholly owned subsidiary, Sutton Merger Corp., a Delaware corporation
("Merger Sub") and Sutton Online, Inc., a Delaware corporation ("Sutton Online")
(the "Merger Agreement"). Pursuant to the Merger Agreement, Merger Sub will
merge into Sutton Online whereby Sutton Online will be the surviving corporation
(the "Merger").
The Merger is subject to certain conditions including, but not limited
to, the approval of the stockholders of the Company and compliance with the
Securities and Exchanges Act of 1934. The Company intends to file an Information
Statement pursuant to Section 14 (c) of the Securities Act of 1934 relating to,
among other things, the Merger.
The Merger provides that each outstanding share of common stock of
Sutton Online, par value $.025 per share ("Sutton Online Common Stock") will be
converted into one share of our common stock, $.15 par value per share. Each
outstanding warrant to purchase Sutton Online Common Stock will be converted
into a warrant exercisable into the same number of shares of our common stock at
the same exercise price.
The foregoing description of the transactions contemplated by the Plan
of Merger is a summary only and is qualified in its entirety by reference to the
complete copy of the Plan of Merger attached as an exhibit to our Form 8-K dated
April 9, 2001, filed on April 12, 2001.
On May 25, 2001, MoneyZone.com announced that it has entered into a
Termination Agreement with its wholly owned subsidiary, Sutton Merger Corp., a
Delaware corporation and Sutton Online, Inc., a Delaware corporation.
Pursuant to the Termination Agreement, the Agreement and Plan of Merger,
dated April 9, 2001, among the Company, MergerSub and Sutton Online was
terminated and the proposed merger of MergerSub into Sutton Online was
abandoned. The parties entered into a Termination Agreement due to an inability
to close the merger transaction in a timely fashion.
-8-
PART I - FINANCIAL INFORMATION (CONTINUED)
Item 2. Management's Discussion and Analysis and Plan of Operation
General Overview
On March 7, 2001, we entered into an Agreement ("Agreement") with Global
Capital Partners Inc. CAP regarding the conversion of the MoneyZone Convertible
Debenture and the acquisition of certain of our assets by Global Capital
Partners Inc.
Under the terms of the MoneyZone Convertible Debenture, Global Capital
Partners Inc. was entitled to receive 9,886,236 shares (pre-reverse split) of
our common stock. Under the terms of the Agreement, Global Capital Partners,
Inc. converted the Debenture into 8,448,990 shares (pre-reverse split) of our
common stock.
On March 30, 2001, we (i) effected a reverse stock split (the "Reverse
Stock Split") of our outstanding common stock, par value $.001 per share,
effective at 5:00 p.m. on that date, by issuing one newly issued share of common
stock for each 150 shares of the Company's presently issued and outstanding
common stock; and (ii) after effecting the Reverse Stock Split, the number of
authorized shares decreased from 50,000,000 shares to 333,333 shares.
On April 9, 2001, we entered into an Agreement (the "Revised Agreement")
with Global Capital Partners Inc. which superseded in its entirety the March 7,
2001 Agreement regarding the conversion of the MoneyZone Convertible Debenture.
Under the terms of the MoneyZone Convertible Debenture, Global Capital Partners
Inc. was entitled to receive 9,886,236 shares of our stock. Under the terms of
the Revised Agreement, we agreed to issue Global Capital Partners Inc. 8,448,990
shares (pre-reverse split) of our Common Stock and 100,000 shares of our Series
A Preferred Stock. The Series A Preferred Stock issued to Global Capital
Partners Inc. carries special voting rights granting the holder to 200 votes per
share of the Series A Preferred Stock. Under the terms of the Revised Agreement,
we are no longer transferring all of our assets to Global Capital Partners Inc.
Also, on April 9, 2001, we entered into an Agreement and Plan of Merger
with our wholly owned subsidiary, Sutton Merger Corp., a Delaware corporation
("Merger Sub") and Sutton Online, Inc., a Delaware corporation ("Sutton Online")
(the "Merger Agreement"). Pursuant to the Merger Agreement, Merger Sub will
merge into Sutton Online whereby Sutton Online will be the surviving corporation
(the "Merger").
The Merger is subject to certain conditions including, but not limited
to, the approval of the stockholders of the Company and compliance with the
Securities and Exchanges Act of 1934. The Company intends to file an Information
Statement pursuant to Section 14 (c) of the Securities Act of 1934 relating to,
among other things, the Merger.
The Merger provides that each outstanding share of common stock of
Sutton Online, par value $.025 per share ("Sutton Online Common Stock") will be
converted into one share of our common stock, $.15 par value per share. Each
outstanding warrant to purchase Sutton Online Common Stock will be converted
into a warrant exercisable into the same number of shares of our common stock at
the same exercise price.
The foregoing description of the transactions contemplated by the Plan
of Merger is a summary only and is qualified in its entirety by reference to the
complete copy of the Plan of Merger attached as an exhibit to our Form 8-K dated
April 9, 2001, filed on April 12, 2001.
-9-
On May 25, 2001, MoneyZone.com announced that it has entered into a
Termination Agreement with its wholly owned subsidiary, Sutton Merger Corp., a
Delaware corporation and Sutton Online, Inc., a Delaware corporation.
Pursuant to the Termination Agreement, the Agreement and Plan of
Merger, dated April 9, 2001, among the Company, MergerSub and Sutton Online was
terminated and the proposed merger of MergerSub into Sutton Online was
abandoned. The parties entered into a Termination Agreement due to an inability
to close the merger transaction in a timely fashion.
Liquidity and Capital Resources
MoneyZone.com had $42,294 in cash at June 30, 2001, and had accounts
payable in the amount of $245,231.
Results Of Operations
During the six months ended March 31, 2001, we had no revenues and
incurred a net loss from operations of $242,552. Expenses for the six months are
related primarily to general and administrative expenses and interest expense
through the date of conversion on our convertible debenture.
During the six months ended March 31, 2000, we had $19,916 in revenues,
and a net loss from operations of $871,109. Expenses for this year are related
primarily to the development of the proprietary website, to accounting fees, and
to costs relating to the Company's SEC filings.
New Accounting Standards
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 activities. The
effective date of SFAS No. 133 was deferred by the issuance of SFAS No. 137.
SFAS No. 133 was then further amended by SFAS No. 138. The deferred effective
date of SFAS No. 133 is for fiscal years beginning after June 15, 2000. We
adopted SFAS No. 133 as amended by SFAS No. 138 effective with the year
beginning January 1, 2001.
-10-
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities and Use of Proceeds
On April 9, 2001, we entered into an Agreement (the "Revised Agreement")
with Global Capital Partners Inc. which superseded in its entirety the March 7,
2001 Agreement regarding the conversion of the MoneyZone Convertible Debenture.
Under the terms of the MoneyZone Convertible Debenture, Global Capital Partners
Inc. was entitled to receive 9,886,236 shares of our stock. Under the terms of
the Revised Agreement, we agreed to issue Global Capital Partners Inc. 8,448,990
shares (pre-reverse split) of our Common Stock and 100,000 shares of our Series
A Preferred Stock. The Series A Preferred Stock issued to Global Capital
Partners Inc. carries special voting rights granting the holder to 200 votes per
share of the Series A Preferred Stock. Under the terms of the Revised Agreement,
we are no longer transferring all of our assets to Global Capital Partners Inc.
These Securities were issued in accordance with the exemption provided by
Section 4(2) of the Securities Act of 1933 as amended.
Item 3. Defaults on Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
On April 9, 2001, we entered into an Agreement and Plan of Merger with
our wholly owned subsidiary, Sutton Merger Corp., a Delaware corporation
("Merger Sub") and Sutton Online, Inc., a Delaware corporation ("Sutton Online")
(the "Merger Agreement"). Pursuant to the Merger Agreement, Merger Sub will
merge into Sutton Online whereby Sutton Online will be the surviving corporation
(the "Merger").
The Merger is subject to certain conditions including, but not limited
to, the approval of the stockholders of the Company and compliance with the
Securities and Exchanges Act of 1934. The Company intends to file an Information
Statement pursuant to Section 14 (c) of the Securities Act of 1934 relating to,
among other things, the Merger.
The Merger provides that each outstanding share of common stock of
Sutton Online, par value $.025 per share ("Sutton Online Common Stock") will be
converted into one share of our common stock, $.15 par value per share. Each
outstanding warrant to purchase Sutton Online Common Stock will be converted
into a warrant exercisable into the same number of shares of our common stock at
the same exercise price.
The foregoing description of the transactions contemplated by the Plan
of Merger is a summary only and is qualified in its entirety by reference to the
complete copy of the Plan of Merger attached as an exhibit to our Form 8-K dated
April 9, 2001, filed on April 12, 2001.
-11-
On May 25, 2001, MoneyZone.com announced that it has entered into a
Termination Agreement with its wholly owned subsidiary, Sutton Merger Corp., a
Delaware corporation and Sutton Online, Inc., a Delaware corporation.
Pursuant to the Termination Agreement, the Agreement and Plan of Merger,
dated April 9, 2001, among the Company, MergerSub and Sutton Online was
terminated and the proposed merger of MergerSub into Sutton Online was
abandoned. The parties entered into a Termination Agreement due to an inability
to close the merger transaction in a timely fashion.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
None
b. Reports on Form 8-K
MoneyZone.com filed two reports on Form 8-K during the quarter ended
June 30, 2001, incorporated by reference to the Current Reports on Form 8-K
dated April 9, 2001 and May 25, 2001 (File No. 000-25022).
-12-
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: August 20, 2001 /s/ Randall F. Greene
- ----------------------- ----------------------------
Name: Randall F. Greene
Title: Chief Executive Officer
-13-
