UNITED STATES
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 March 31, 2001
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _____________ to _____________
Commission file number 000-32045
Natexco Corporation
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(Exact name of small business issuer as specified in its charter)
Nevada 84-1480636
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(State or other jurisdiction of ( I.R.S. Employer Identification No.)
incorporation or organization)
3255 Norfolk Road, Victoria, British Columbia, Canada V8R 6H5
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(Address of principal executive offices)
(250) 598-2373
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(Issuer's telephone number)
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(Former name, former address and former fiscal year, if
changed since last report)
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes X No ___
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APPLICABLE ONLY TO CORPORATE ISSUERS
1
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: 2,400,000 shares of common stock,
$.001 par value per share, outstanding as of June 28, 2001.
Transitional Small Business Disclosure Format (Check one): Yes ____ No X
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Natexco Corporation
Consolidated Balance Sheet
(A Company in the Development Stage)
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Unaudited Audited
March December
31, 2001 31, 2000
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ASSETS
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Current Assets:
Cash and cash equivalents $632 $8,076
---- ------
Total Current Assets 632 8,076
---- -----
Property and equipment 6,466 6,466
Less Accumulated Depreciation (5,014) (4,693)
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Net Property and Equipment 1,452 1,773
Goodwill 22,083 22,083
Less Accumulated Amortization (7360) (4,600)
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Net Goodwill 14,723 17,483
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TOTAL ASSETS $16,807 $27,332
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LIABILITIES AND SHAREHOLDERS' EQUITY
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LIABILITIES
Bank Overdraft $2,122 $0
Note Payable - Shareholder 20,000 20,000
Accounts Payable 935 325
Other accrued liabilities 2,057 1,557
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Total current liabilities 25,114 21,882
TOTAL LIABILITIES 25,114 21,882
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SHAREHOLDERS' EQUITY:*
3
Preferred stock, par value $.001 per share;
Authorized 5,000,000 Shares; Issued
and outstanding 50,000 50 50
Common Stock, $.001 Par Value;
Authorized 20,000,000 Shares; Issued
and outstanding 2,400,000 shares 2,400 2,400
Additional paid-in capital 50,250 49,350
Accumulated deficit (61,007) (46,350)
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TOTAL SHAREHOLDERS' EQUITY (8,307) 5,450
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $16,807 $27,332
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See Accompanying Notes To These Unaudited Financial Statements.
4
Natexco Corporation
Unaudited Consolidated Statement Of Operations
(A Company in the Development Stage)
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Period From
3 Months 3 Months Inception
Ended Ended March 3, 1998
March March Through
31, 2001 31, 2000 March 31, 2001
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Revenue: $720 $0 $2,005
Operating Expenses:
Accounting 2,100 0 17,600
Amortization and depreciation 3,081 0 8,825
General and administrative 4,172 2 10,762
Legal 4,399 0 12,178
Occupancy 900 0 10,200
Stock transfer 225 0 1,390
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Total costs and expenses 14,877 2 60,955
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Income (loss) from operations (14,157) (2) (58,950)
Other (expense) - Interest (500) 0 (2,057)
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Net (Loss) $(14,657) ($2) $(61,007)
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Basic (Loss) per common share (0.01) (0.00)
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Weighted Average Common Shares Outstanding 2,400,000 2,400,000
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See Accompanying Notes To These Unaudited Financial Statements.
5
Natexco Corporation and Subsidiary
Consolidate Statements of Changes In Shareholders' Equity
(A Company in the Development Stage)
March 3, 1998(Inception) Through March 31, 2001
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Deficit
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Par Value Shares Par Value Capital Stage Total
------ -------- ------ --------- ------- ----- -----
Balances, March 3, 1998 (inception) 0 $0 0 $0 $0 $0 $0
Sales of preferred shares, December 5, 1998 10,000 10 90 100
Office space contributed by Company's president 2,000 2,000
Net (Loss) (2,008) (2,008)
Balances, December 31, 1998 10,000 10 0 0 2,090 (2,008) 92
Common shares sold in private offering,
March 31, 1999 2,400,000 2,400 2,400
Office space contributed by Company's president 2,400 2,400
Net (Loss) (2,635) (2,635)
Balances, December 31, 1999 10,000 10 2,400,000 2,400 4,490 (4,643) 2,257
Sale of preferred shares, May 18, 2000 40,000 40 39,960 40,000
Office space contributed by Company's president 4,900 4,900
Net (Loss) (41,707) (41,707)
Balances, December 31, 2000 50,000 50 2,400,000 2,400 49,350 (46,350) 5,450
Office space contributed by Company's president 900 900
Net (Loss) (14,657) (14,657)
Balances, March 31, 2001 50,000 $50 2,400,000 $2,400 $50,250 ($61,007) ($8,307)
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See Accompanying Notes To These Unaudited Financial Statements.
6
Unaudited Consolidated Statement Of Cash Flow
(A Company in the Development Stage)
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Period From
3 Months 3 Months Inception
Ended Ended March 3, 1998
March March Through
31, 2001 31, 2000 March 31, 2001
-------- -------- --------------
Cash Flows From Operating Activities:
Net (Loss) $(14,657) $(2) $(61,007)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciaton and amortization 3,081 0 8,825
Office space contributed by shareholder 900 0 10,200
Increase in accounts payable 610 0 935
Increase in other accrued liabilities 500 0 2,057
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Net Cash Flows (used) in operations (9,566) (2) (38,990)
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Cash Flows From Investing Activities:
Purchase of subsidiary 0 0 (25,000)
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Net Cash Flows (used) in Investing activities 0 0 (25,000)
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Cash Flows From Financing Activities:
Proceeds from note payable 0 20,000 20,000
Issuance of preferred stock 0 10,000 40,100
Issuance of common stock 0 0 2,400
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Net Cash Flows provided by financing activities 0 30,000 62,500
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Net Increase (Decrease) In Cash and cash equivalents (9,566) 29,998 (1,490)
Cash and cash equivalents at beginning of period 8,076 2,477 0
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Cash and cash equivalents at end of period ($1,490) $32,475 ($1,490)
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Supplementary Disclosure Of Cash Flow Information:
Non-cash activities: Rent provided by shareholder $900 $0 $0
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See Accompanying Notes To These Unaudited Financial Statements.
7
Natexco Corporation and Subsidiary
Notes To Unaudited Financial Statements
For The Three Month Period Ended March 31, 2001
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Note 1 - Unaudited Financial Information
The unaudited financial information included for the three month interim period
ended March 31, 2001 was taken from the books and records without audit.
However, such information reflects all adjustments (consisting only of normal
recurring adjustments, which are of the opinion of management, necessary to
reflect properly the results of the interim period presented). The results of
operations for the three month period ended March 31, 2001 are not necessarily
indicative of the results expected for the fiscal year ended December 31, 2001.
Note 2 - Financial Statements
For a complete set of footnotes, reference is made to the Company's Report on
Form 10K-SB for the year ended December 31, 2000 as filed with the Securities
and Exchange Commission and the audited financial statements included therein.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation
Our plan of operation for the next twelve months is to focus upon the
marketing and sale of our SEI security software product through advertising,
attendance at trade shows and online marketing, primarily. In order to commence
the implementation of this plan, we have placed advertisements in "Common
Ground" and "Managers Report," two of the principal property management trade
magazines. Additionally, we intend to continue our research and development
program, utilizing the services of Mr. John H. Tetstill, President of Security
Software, at no cost, to develop additional features for SEI, including visual,
voice, fingerprint and eyeball identification recognition technology, in order
to enhance the product and make it more attractive and serviceable for
prospective customers and continue preliminary work on the revision, adaptation
and/or expansion of the SEI software program to function in conjunction with
other security software. We have allocated the sum of $5,000 that we expect to
cover the cost of the technology for the proposed enhancements to the SEI
security software and limited additional work. We are unable to calculate the
cost of our plan of operations over the next twelve months, except for the
estimated cost of $5,000 of our research and development program. If we are
successful in our efforts to raise additional funding from equity and/or debt
financing, we intend to allocate the bulk of those funds for marketing, although
a portion of the funds would be allocated for research and development as well.
Future research and development to effectuate the proposed enhancements to SEI
and produce new products will require the services of independent computer
programmers retained on a contract basis. We have no organized plan to raise
additional capital and our fund-raising efforts have been minimal since our
purchase, on June 30, 2000, of Security Software. We intend to increase our
efforts to raise capital, exploring all available alternatives for debt and/or
equity financing, including, but not limited to, private and public securities
offerings, although we cannot be certain that these efforts will be successful.
We do not expect the purchase or sale of any significant equipment or a
significant change in the number of employees for the next twelve months.
Results of Operations
During the three months ended March 31, 2001, we sold no SEI security
software packages. We attribute the lack of sales to our inability to raise
additional capital for marketing, primarily. Our revenues decreased to $-0- for
the three months ended March 31, 2001, as compared to $720 for the three months
ended March 31, 2000.
During the three months ended March 31, 2001, our operating expenses
increased to $14,877 from $2 for the three months ended March 31, 2000. The
operating expenses that we incurred during the three months ended March 31,
2001, include accounting ($2,100), amortization and depreciation ($3,081),
general and administrative ($4,172), legal ($4,399), occupancy ($900) and stock
transfer ($225).
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Financial Condition and Liquidity
At March 31, 2001, Natexco had a working capital deficit of $24,482
consisting of current assets totaling $632 and current liabilities totaling
$25,114. Our working capital deficit at March 31, 2001, increased by $10,676 as
compared to our working capital deficit at December 31, 2000, of $13,806. The
increase in the working capital deficit was the result of the decrease of
$7,444, from $8,076 to $632, in our cash and cash equivalents, a bank overdraft
of $2,122, an increase of $600 in accounts payable, from $325 to $935, and an
increase of $500, from $1,557 to $2,057, in other accrued liabilities.
During the three months ended March 31, 2001, we used cash of $9,566 as
compared to $29,998 in cash provided during the three months ended March 31,
2000. We used $9,566 in operating activities.
Inflation
We believe that inflation has not had a material impact on our
business.
Seasonality
We do not believe that our business is seasonal.
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PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
We know of no legal proceedings to which Natexco Corporation
("Natexco") is a party or to which any of its property is the subject that are
pending, threatened or contemplated or any unsatisfied judgments against
Natexco.
Item 2. Changes in Securities.
(a) No instruments defining the rights of shareholders of Natexco's
common stock have been modified.
(b) No rights evidenced by Natexco's common stock have been limited or
qualified by the issuance or modification of any other class of securities.
(c) Natexco sold no equity securities during the quarter ended March
31, 2001, covered by this report.
(d) Natexco has not yet filed a registration statement under the
Securities Act of 1933.
Item 3. Defaults Upon Senior Securities.
Natexco has no indebtedness as of the date of this report.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of Natexco's shareholders, by means
of the solicitation of proxies or otherwise, during the quarter ended March 31,
2002, covered by this report.
Item 5. Other Information.
There is no information with respect to which information is not
otherwise called for by this form.
Item 6. Exhibits and Reports on Form 8-K.
(a) Index to Exhibits.
Item Number Description
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3.1* Articles of Incorporation of Natexco Corporation filed
March 3, 1998.
3.2* Bylaws of Natexco Corporation.
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10.1* Promissory Note dated March 21, 2000, in the principal amount
of $20,000 payable by Natexco Corporation to Aboyne Management,
Ltd.
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*Incorporated by reference to the Amendment No. 1 to the Registration
Statement on Form 10-SB (File No. 000-32045) filed November 30, 2000.
(a) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter ended March 31,
2001, for which this report is filed.
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SIGNATURES
The financial information furnished in this report has not been audited
by an independent accountant; however, in the opinion of management, all
adjustments (only consisting of normal recurring accruals) necessary for a fair
presentation of the results of operations for the three months ended March 31,
2001, have been included.
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.
NATEXCO CORPORATION
Date: June 28, 2001 By: ----------------------------
Gerald A. Mulhall, President
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