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: 000-28611
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ISEMPLOYMENT.COM, INC.
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(Exact name of small business issuer as specified in its charter)
Wyoming 86-0970152
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
203-380 Pelissier Street, Windsor, Ontario N9A 6W8
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(Address of principal executive office) (Zip Code)
(519) 258-8318
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(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 XX No
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The number of outstanding shares of the issuer's common stock, $0.001 par
value, as of June 30, 2001 was 2,100,000.
Transitional Small Business Disclosure Format
Yes No XX
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TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Balance Sheets as of June 30, 2001
and September 30, 2000 (unaudited)....................................3
Condensed Statements of Operations
for the Nine Month and Three Month Periods Ended
June 30, 2001 and 2000 (unaudited)....................................4
Condensed Statements of Cash Flows
for the Nine Month Periods Ended
June 30, 2001 and 2000 (unaudited)....................................5
Notes to Unaudited Condensed Financial Statements.....................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS..................................8
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS....................................................10
ITEM 2. CHANGES IN SECURITIES................................................10
ITEM 5. OTHER INFORMATION....................................................10
2
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to ISEMPLOYMENT.COM, INC.
(formerly known as Magical Marketing, Inc.), a Wyoming corporation, and its
subsidiaries and predecessors unless otherwise indicated. Unaudited, condensed
interim financial statements including a balance sheet for the Company as of the
quarter ended June 30, 2001 and statements of operations and statements of cash
flows for the nine months ended and the comparable period for the preceding
year.
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
Condensed Balance Sheets
(UNAUDITED)
June 30, September 30,
2001 2000
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ASSETS
Current Assets:
Cash $ -- $ 2,944
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Total current assets -- 2,944
Due from Officers -- 2,515
Fixed Assets 2,388
Related Party Receivables 38,835 597
Other Assets 353 --
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Total assets $ 41,576 $ 6,056
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts Payable $ 95,766 $ 20,719
Overdraft 966 626
Due to Officers 40,403 --
Loans Payable 348,418 206,413
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Total current liabilities 485,553 227,758
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Stockholders' Deficit:
Common stock; $.001 par value;
100,000,000 shares authorized;
2,100,000 and 600,000 shares issued
and outstanding 2100 600
Paid in Capital (deficit) (1900) (400)
Receivable for common stock (200) (200)
Deficit accumulated during the
development stage (443,977) (221,702)
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Total stockholders' deficit (443,977) (221,702)
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Total liabilities
and stockholders' deficit $ 41,576 $ 6,056
========= =========
See accompanying notes to financial statements
3
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Cumulative From
For the Nine Months For the three Months (October 20, 1999)
Ended Ended Development Stage
June 30, June 30 Inception Through
2001 2000 2001 2000 June 30, 2001
---------- ---------- ---------- ---------- -----------------
Revenues $ -- $ -- $ -- $ -- $ --
---------- ---------- ---------- ---------- ----------
Expenses
System development costs 35,055 126,874 -- 72,725 185,592
General and
administrative 187,220 27,498 107,411 6,800 258,385
---------- ---------- ---------- ---------- ----------
Net Loss $ 222,275 $ 154,372 $ 107,411 $ 79,525 $ 443,977
========== ========== ========== ========== ==========
Basic & Diluted loss
per share $ .34 $ .15 $ .14 $ .08 $ .56
========== ========== ========== ========== ==========
Weighted average
basic and diluted
Shares outstanding 660,439 1,000,000 781,319 1,000,000 790,791
========== ========== ========== ========== ==========
See accompanying notes to financial statements
4
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Cumulative From
(October 20, 1999)
For the Nine Months ended Development Stage
Inception through
June 30, June 30, June 30,
2001 2000 2001
--------- --------- -----------------
Cash flows from operating activities:
Net loss $(222,275) $(154,372) $(443,977)
Adjustments to reconcile net loss to
net cash used in operating activities:
System development expense
Incurred by assumption of a related
party loan and advances payable -- 138,702 138,702
Other assets (353) 479 (353)
Increase in accounts payable 72,659 2,200 93,378
Increase in deposit -- (8,442) --
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Net cash used in operating activities (149,969) (21,433) (212,250)
--------- --------- ---------
Cash flows from investing activities:
Payments of amount due from
officers, (net) 2,515 -- --
Advances to related party (38,238) -- (38,835)
--------- --------- ---------
Net cash used in investing
activities: (35,723) -- (38,835)
--------- --------- ---------
Cash flows from financing activities:
Due to officers 40,403 -- 40,403
Proceeds from loans payable 142,005 118,311 348,418
Repayment of a related party loan -- (96,555) (96,555)
Repayment of advances payable -- -- (42,147)
Checks issued in excess of Cash in
Bank 340 -- 966
Capital contribution by shareholder -- 880 --
--------- --------- ---------
Net cash provided by financing
Activities 182,748 22,636 251,085
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Increase (Decrease) in cash (2,944) 1,203 --
Cash at beginning of period 2,944 -- --
--------- --------- ---------
Cash at end of period $ -- $ 1,203 $ --
========= ========= =========
See accompanying notes to financial statements
5
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
As of June 30, 2001
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of accounting policies for ISEmployment.com, Inc. (the
Company) (a development stage company) is presented to assist in understanding
the Company's financial statements. The accounting policies conform to generally
accepted accounting principles and have been consistently applied in the
preparation of the financial statements.
Interim Reporting
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-QSB. Therefore, they do
not include all information and footnotes necessary for a complete presentation
of financial position, results of operations, cash flows, and stockholders'
equity in conformity with generally accepted accounting principles. The
condensed balance sheet at September 30, 2000 was derived from the audited
balance sheet at that date which is not presented herein. Except as disclosed
herein, there has been no material change in the information disclosed in the
notes to the financial statements included in the Company's annual report on
Form 10-KSB for the year ended September 30, 2000. The unaudited statements
reflect, in the opinion of management, all adjustments (which include only
normal recurring adjustments) necessary to fairly state the financial position
and results of operations for the nine months. Operating results for interim
periods are not necessarily indicative of the results for the year ending
September 30, 2001.
Organization and Basis of Presentation
The Company was incorporated under the laws of the State of Wyoming on
February 27, 1997. The Company ceased all operating activities during the period
from February 27, 1997 to October 20, 1999 and was considered dormant. On June
30, 2000, ISEmployment.com, Inc. (ISEmployment), a Delaware corporation, and
Magical Marketing, Inc. (Magical Marketing), merged. Magical Marketing became
the surviving corporation and adopted the name ISEmployment.com, Inc. The
Company issued 400,000 shares of common stock to the shareholders of the former
ISEmployment.com, Inc. corporation and the Company's majority stockholder
cancelled his 800,000 shares of common stock upon the merger.
Nature of Business
The Company has no products or services that were available as of June 30,
2001. The Company is primarily engaged in raising capital and developing an
online human resources and recruiting service for the information systems
industry.
Cash and Cash Equivalents
The Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents to the extent the funds
are not being held for investment purposes.
6
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
As of June 30, 2001
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required management to make estimates and
assumptions that affect the reported 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
reporting period. Actual results could differ from those estimates.
NOTE 2 - INCOME TAXES
Deferred taxes are provided on a liability method whereby deferred tax
assets are recognized for deductible temporary differences and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amount of assets and
liabilities and their tax bases. 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. Deferred
tax assets and liabilities are adjusted for the effects of changes in tax laws
and rates on the date of enactment.
NOTE 3 - DEVELOPMENT STAGE COMPANY
The Company has not begun its principal operations and as is common with a
development stage company, the Company has had recurring losses during its
development stage.
NOTE 4 - RELATED PARTY RECEIVABLES
The Company has loaned monies in the amount of $38,835 to a related party.
These funds were borrowed by an entity related to the Company through common
ownership. The receivable is non-interest bearing and due on demand.
NOTE 5 - COMMITMENTS AND CONTINGENCIES
The Company has minimal capital resources presently available to meet
obligations that normally can be expected to be incurred by similar companies,
and with which to carry out its planned activities. These factors raise doubt
about the Company's ability to continue as a going concern. Management is
seeking additional equity financing to fund planned operations; management
believes actions currently being taken provide the opportunity for the Company
to continue as a going concern. However, there is no assurance that the Company
will be able to obtain such financing. The accompanying financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
7
ISEMPLOYMENT.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
As of June 30, 2001
NOTE 6 - STOCK SPLIT AND OTHER TRANSACTIONS
On October 20, 1999 the Board of Directors authorized a 1,000 for 1 stock
split, and changed the authorized number of shares to 100,000,000 shares and the
par value to $.001. As a result of the split, an additional 999,000 shares were
issued. All references in the accompanying financial statements to the number of
common shares and per-share amounts have been restated to reflect the stock
split.
The Company on June 30, 2000 issued 400,000 shares to the prior
shareholders of ISEmployment.com, Inc. (pre-merger company) and cancelled
800,000 shares of Magical Marketing, Inc. These shares were issued pursuant to
the Plan of Reorganization and Merger.
NOTE 7 - CAPITAL RESOURCES
To date, the Company's cash requirements have exceeded its cash flow from
operations. The Company historically has satisfied cash requirements through
borrowings.
The Company's success will be dependent upon its ability to generate
sufficient cash flow to meet its obligations on a timely basis, to obtain
financing or refinancing as may be required, and ultimately to attain
profitability. The Company believes that it has insufficient cash resources to
fund the Company's operations through fiscal 2001. The Company as of June 30,
2001 did not have any current arrangements or commitments for any future
financing. The Company may not be able to obtain sufficient financing to satisfy
its cash requirements. The Company may be required to obtain financing on terms
that are not favorable to it and its shareholders. If the Company is unable to
obtain additional financing when needed, it may be required to delay or scale
back, which could have a material adverse effect on its business, financial
condition and results of operations.
NOTE 8 - Purchase From Related Party
On June 19, 2001, the Company purchased all rights to certain software
developed by a company wholly owned by the Company's Co-Chief Executive Officers
in exchange for one million five hundred thousand shares of Company common
stock. This software was developed prior to the formation of the original
ISEmployment.com and its merger with Magical Marketing, Inc. and was developed
to be a part of the Company's recruiting data base and web site. The Company
recorded the transfer at transferors' historical cost basis of the assets which
approximates zero.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
As used herein the term "Company" refers to ISEmployment.com, Inc., a
Wyoming corporation and its predecessors, unless the context indicates otherwise
throughout this report.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (CONTINUED)
RESULTS OF OPERATIONS
FOR THE NINE MONTHS ENDED JUNE 30, 2001 AND 2000.
The Company had no sales or sales revenues for the nine months ended June
30, 2001 or 2000 due to its development stage operations. On June 30, 2000 the
Company acquired a business entity providing Internet based employment
solutions. All expenses were incurred in developing new technology for
web-design and general & administrative expenses.
The Company recorded a net loss of $222,275 for the nine months ended June
30, 2001 compared to a loss of $154,372 for the same period in 2000. The loss
for 2001 consisted of $35,055 in system development costs and $187,220 in
general and administrative costs while conducting the business development. The
Company has incurred significantly more general and administrative and
professional fees expenses in the past nine months due to its activities in
going public.
CAPITAL RESOURCES AND LIQUIDITY
As of June 30, 2001, the Company had total assets of $ 41,576 as compared
to $6,056 of total assets at September 30, 2000. The Company is actively
pursuing various financing sources to provide the necessary capital for its
expansion plans. The Company has secured financing from unrelated parties on a
short term borrowing totaling $348,418. The Company is pursuing further
financing opportunities to further the Company's business plan and the
development of the product and its implementation.
Net stockholders' deficit in the Company was $443,977 as of June 30, 2001.
Impact of the Year 2000. The Year 2000 (commonly referred to as "Y2K")
issue results from the fact that many computer programs were written using two,
rather than four, digits to identify the applicable year. As a result, computer
programs with time-sensitive software may recognize a two-digit code for any
year in the next century as related to this century. For example, "00", entered
in a date-field for the year 2000, may be interpreted as the year 1900,
resulting in system failures or miscalculations and disruptions of operations,
including, among other things, a temporary inability to process transactions or
engage in other normal business activities. While it is still too soon to state
positively that the Y2K transition has passed without mishap, we believe that
Y2K issues will not have a material adverse affect on our business.
9
Until 90 days after the effective date, all dealers that effect transactions in
these shares, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealers' obligation to deliver
a prospectus when acting as underwriters and with respect to their unsold
allotments or subscriptions.
No dealer, sales representative or any other person has been authorized to give
any information or to make any representations in connection with the offering
described in this prospectus other than those contained in this prospectus, and,
if given or made, such information or representations must not be relied upon as
having been authorized by ISEmployment.com, Inc. Neither the delivery of this
prospectus nor any sale made pursuant to this prospectus shall, under any
circumstances, create any implication that there has been no change in the
affairs of ISEmployment.com, Inc. since the date of this prospectus or that the
information contained in it is correct as of any time subsequent to its date.
10
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 SECURITIES HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
(a) None.
(b) None.
11
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.
ISEmployment.com, Inc.
/s/ Scott Murray
--------------------------
Scott Murray
President/CFO and Director
September 24, 2001
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