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 September 30, 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 __ No ___ (Not Applicable)
APPLICABLE ONLY TO CORPORATE ISSUERS
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 September 30, 2001.
Transitional Small Business Disclosure Format (Check one): Yes ____ No X
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PART I - FINANCIAL INFORMATION
Natexco Corporation
Consolidated Balance Sheet
(A Company in the Development Stage)
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Unaudited Audited
September December
30, 2001 31, 2000
ASSETS
Current Assets:
Cash and cash equivalents $64 $8,076
Due from officer 220 0
--- --
Total Current Assets 284 8,076
--- -----
Property and equipment 6,412 6,466
Less Accumulated Depreciation (5,601) (4,693)
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Net Property and Equipment 811 1,773
Goodwill 22,083 22,083
Less Accumulated Amort (12,880) (4,600)
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Net Goodwill 9,203 17,483
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TOTAL ASSETS $10,298 $27,332
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LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Bank Overdraft $0 $0
Note Payable - Shareholder 35,000 20,000
Accounts Payable 75 325
Other accrued liabilities 3,057 1,557
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Total current liabilities 38,132 21,882
TOTAL LIABILITIES 38,132 21,882
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SHAREHOLDERS' EQUITY: *
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 52,050 49,350
Accumulated deficit (82,334) (46,350)
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TOTAL SHAREHOLDERS' EQUITY (27,834) 5,450
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $10,298 $27,332
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Natexco Corporation
Unaudited Consolidated Statement Of Operations
(A Company in the Development Stage)
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3 Months 3 Months
Ended Ended
September September
30, 2001 30, 2000
Revenue: $2,357 $0
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Operating Expenses:
Accounting 2,680 1,574
Amortization and depreciation 3,081 0
General and administrative 3,949 1,563
Legal 0 0
Occupancy 900 0
Stock transfer 225 0
Total costs and expenses 10,835 3,137
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(Loss) from operations (8,478) (3,137)
Other (expense) - Interest (500) 0
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Net (Loss) ($8,978) ($3,137)
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Basic (Loss) per common share (0.00) (0.00)
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Weighted Average Common Shares Outstanding 2,400,000 2,400,000
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See Accomopanying Notes to These Unaudited Financial Statements
Natexco Corporation
Unaudited Consolidated Statement Of Operations
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Period From
Inception
9 Months 9 Months March 3, 1998
Ended Ended Through
September September September
30, 2001 30, 2000 30, 2001
Revenue: $5,482 $0 $6,767
Operating Expenses:
Accounting 7,690 0 23,190
Amortization and depreciation 9,242 0 14,986
General and administrative 11,855 20,933 18,445
Legal 7,699 0 15,478
Occupancy 2,700 2,800 12,000
Stock transfer 780 0 1,945
Total costs and expenses 39,966 23,733 86,044
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(Loss) from operations (34,484) (23,733) (79,277)
Other (expense) - Interest (1,500) (1,048) (3,057)
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Net (Loss) ($35,984) ($24,781) ($82,334)
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Basic (Loss) per common share (0.01) (0.01)
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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.
Natexco Corporation
Unaudited Consolidated Statement Of Cash Flow
(A Company in the Development Stage)
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Period From
Inception
9 Months 9 Months March 3, 1998
Ended Ended Through
September September September
30, 2001 30, 2000 30, 2001
Cash Flows From Operating Activities:
Net (Loss) ($35,984) ($24,781) ($82,334)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciaton and amortization 9,242 2,492 14,986
Office space contributed by shareholder 2,700 2,800 12,000
(Increase) in due from officer (220) (220)
(Decrease) Increase in accounts payable (250) 12,773 75
Increase in other accrued liabilities 1,500 0 3,057
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Net Cash Flows (used) in operations (23,012) (6,716) (52,436)
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Cash Flows From Investing Activities:
Purchase of subsidiary 0 (25,000) (25,000)
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Net Cash Flows (used) in Investing activities 0 (25,000) (25,000)
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Cash Flows From Financing Activities:
Proceeds from note payable 15,000 20,000 35,000
Issuance of preferred stock 0 40,000 40,100
Issuance of common stock 0 0 2,400
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Net Cash Flows provided by financing activities 15,000 60,000 77,500
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Net Increase (Decrease) In Cash and cash equivalents (8,012) 28,284 64
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 $64 $30,761 $64
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Supplementary Disclosure Of Cash Flow Information:
Non-cash activities: Rent provided by shareholder $2,700 $0 $0
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Natexco Corporation and Subsidiary
Consolidate Statements of Changes In Shareholders' Equity
(A Company in the Development Stage)
March 3, 1998(Inception) Through September 30, 2001
Deficit
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Par Value Shares Par Value Capital Stage Total
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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)
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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 2,700 2,700
Net (Loss) (35,984) (35,984)
Balances, September 30, 2001 50,000 $50 2,400,000 $2,400 $52,050 ($82,334) ($27,834)
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See Accompanying Notes To These Unaudited Financial Statements.
Natexco Corporation
Notes To Unaudited Consolidated Financial Statements
For The Nine Month and Three Month Period Ended September 30, 2001
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Note 1 - Unaudited Financial Information
The unaudited financial information included for the three month and nine month
interim period ended September 30, 2001 were 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 interim period presented). The
results of operations for the nine month period ended September 30, 2001 are not
necessarily indicative of the results expected for the fiscal year ended
December 31, 2001.
Note 2 - Notes Payable
The Company's notes payable outstanding at September 30, 2001 totaled $35,000.
These notes are due December 31, 2001. The notes consist of the following:
Note payable: $10,000
Interest at 10%
Note payable: $20,000
Interest at 10%
Note payable: $ 5,000
Interest at 12%
Note 3 - 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.
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 software product, Security Entry Interface ("SEI")
through advertising, attendance at trade shows and online marketing. During the
three months ended September 30, 2001, the Company has had only $2,357 in
revenues and has not fulfilled its business goals in developing additional
features for SEI, which would have included visual, voice, fingerprint and
eyeball identification recognition technology, in order to enhance the product
to make it more attractive and serviceable for prospective customers. The
Company has been unable to implement its marketing plans due to insufficient
capital and personnel. It is attempting to locate a partner to assist in these
activities. Additionally, the Company has serious need of additional working
capital to continue operations and advance the stated business goals of the
Company. At the present time the management of the Company is attempting to
develop plans for raising additional capital and explore 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 nine months ended September 30, 2001, we sold SEI security
software packages. We had revenues during the third quarter-year ended September
30, 2001 in the amount of $2,357 as compared to $-0- for the three months ended
September 30, 2000. For the nine months ended September 30, 2001 the revenues
were $5,482 as compared to for the nine months ended September 20, 2000.
During the three months ended September 30, 2001, our operating
expenses were $10,835 as compared to $-0- during the three months ended
September 30, 2000. The operating expenses for the nine months ended September
30, 2001 were $5,482 as compared to $-0- for the nine months ended September 30,
2000. The operating expenses that we incurred during the nine months ended
September 30, 2001, include accounting ($7,690), amortization and depreciation
($9,242), general and administrative ($11,855), legal ($7,699), occupancy
($2,7800) and stock transfer ($780).
Financial Condition and Liquidity
At September 30, 2001, Natexco had a working capital deficit of $82,334
with current assets totaling $10,298 and current liabilities totaling $38,132.
Our working capital deficit at September 30, 2001, increased by $62,528 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
$8,012, from $8,076 to $64, in our cash and cash equivalents, an increase of
$15,000 in notes payable, from $20,000 to $35,000, and an increase of $1,500,
from $1,557 to $3,057, in other accrued liabilities.
During the nine months ended September 30, 2001, we used cash of
$39,966 as compared to $24,781 in cash provided during the nine months ended
September 30, 2000.
Inflation
We believe that inflation has not had a material impact on our
business.
Seasonality
We do not believe that our business is seasonal.
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 June 30,
2001, covered by this report.
(d) Natexco has not filed a registration statement under the Securities
Act of 1933.
Item 3. Defaults Upon Senior Securities.
Natexco has had no defaults on senior securities as 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 June 30,
2001, 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
3.1* Articles of Incorporation of Natexco Corporation filed March
3, 1998.
3.2* Bylaws of Natexco Corporation.
3.1* Promissory Note dated March 21, 2000, in the principal amount
of $20,000 payable by Natexco Corporation to Aboyne
Management, Ltd.
*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 June 30,
2001, for which this report is filed.
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 nine months ended September
30, 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: November 9, 2001
By: /ss/ Gerald A. Mulhall
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Gerald A. Mulhall, President