UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 30549
FORM 10-QSB
(MarkOne)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
of 1934
For the quarterly period ended June 30, 2001
[ ] TRANSACTION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission file number: 0-28363
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Inet Commerce Conduit Corporation
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(Exact name of small business issuer as specified in its charter)
Florida 59-28363
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(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
615 Mount Pleasant Road, Suite 318, Toronto, Ontario, Canada M453C5
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(Address of principal executive offices)
(416) 482-3191
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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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of each of the issuer's classes of common
equity, as of July 24, 2001 was 6,517,200 shares of common stock.
Transitional Small Business Disclosure Format (Check one): Yes [X] No [ ]
INDEX
Page
Number
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Part I. Financial Information
Item 1. Financial Statements
Balance Sheet as of June 30, 2001 and
December 31, 2000 3
Condensed Statement of Loss for the
Three Months Ended June 30, 2001 and 2000,
For the Six Months Ended June 30, 2001 and 2000
and since Inception 4
Condensed Statements of Cash Flows,
For the Six Months Ended June 30, 2001
and 2000 and since Inception 5
Notes to Financial Statements 6
Item 2. Plan of Operation 9
Part II. Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults in Senior Securities 10
Item 4. Submission of Matters to a Vote of Securities Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
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Inet Commerce Conduit Corp.
Condensed Balance Sheets
(A Development Stage Company)
(Unaudited)
06/30/2001 12/31/2000
ASSETS
Cash $139,739 $166,689
Deposits 6,750 6,750
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TOTAL ASSETS $146,489 $173,439
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LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts Payable $ 900
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TOTAL LIABILITIES $ 0 $ 900
STOCKHOLDERS' EQUITY
Common stock - par value $.001,
authorized 50,000,000 shares;
issued and outstanding
6,517,200 shares. 6,517 6,517
Additional Paid-in Capital 308,643 308,643
Accumulated Deficit (168,671) (142,621)
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TOTAL STOCKHOLDERS' EQUITY 146,489 172,539
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TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $146,489 $173,439
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Inet Commerce Conduit Corp.
Condensed Statements of Loss
(A Development Stage Company)
(Unaudited)
---------------------------- ------------------------------- ----------
Three Months Six Months Since
Inception
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6/30/01 6/30/00 6/30/01 6/30/00
REVENUES:
INTEREST INCOME $ 2,014
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TOTAL REVENUES $ 0 $ 0 $ 0 $ 0 $ 2,014
EXPENSES
DEVELOPMENT STAGE EXPENSES (11,759) (16,940) (26,050) (43,164) (170,685)
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NET LOSS $(11,759) $(16,940) $(26,050) $(43,164) $(168,671)
======== ======== ======== ======== =========
Loss per common share:
Basic Earnings per share $( .002) $( .003) $( .004) $( .007)
======== ======== ======== ========
Weighted average shares
Outstanding 6,517,200 6,517,200 6,517,200 6,517,200
========= ========= ========= =========
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Inet Commerce Conduit Corp.
Condensed Statements of Cash Flows
(A Development Stage Company)
(Unaudited)
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Since
For the Six Months Ended Inception
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2001 2000
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Cash flows from operating activities:
Net Loss $(26,050) $(43,165) $(168,671)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Deposits (6,750)
Accounts Payable (900) (82) 0
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Net cash utilized by operating activities (26,950) (43,247) (175,421)
Cash flows from investing activities:
Net cash utilized by investing activities 0 0 0
Cash flows from financing activities:
Proceeds from issuance of common stock 0 0 315,160
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Net cash provided from financing activities 0 0 315,160
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Net Decrease in Cash (26,950) (43,247) 139,739
Cash & Cash Equivalents balance at January 1, 166,689 221,417 0
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Cash & Cash Equivalents balance at June 30, $139,739 $178,170 $ 139,739
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Inet Commerce Conduit Corp.
(A Development Stage Company)
Notes to the Condensed Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying unaudited condensed financial statements have been Prepared in
accordance with generally accepted accounting principles for interim financial
information and with Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. All adjustments which,
in the opinion of management, are considered necessary for a fair presentation
of the results of operations for the periods shown are of a normal recurring
nature and have been reflected in the unaudited condensed financial statements.
The results of operations for the periods presented are not necessarily
indicative of the results expected for the full fiscal year or for any future
period. The information included in these unaudited condensed financial
statements should be read in conjunction with Plan of Operation and Results of
Operations contained in this report and the financial statements and
accompanying notes included in the Inet Commerce Conduit Corp. (the "Company")
Annual Report on Form 10-K for the fiscal year ended December 31, 2000.
Business and Organization
Inet Commerce Conduit Corp. (the "Company"), a development stage company, was
incorporated in the State of Florida on September 20, 1996 as Cosmetics
Consultants Corp. for the purpose of marketing sales and support services to
retailers of cosmetic companies. In November of 1999 the Company changed its
activities to acting as a consultant to internet related enterprises that are
seeking capital.
On November 25, 1996, Cosmetics Consultants Corp. changed its name to Lomillo
Consultants Corp.
On July 17, 1997, the Company amended and restated its articles of incorporation
and changed its name to Inet Commerce Conduit Corp.
Development Stage
The Company has operated as a development stage enterprise since its inception
by devoting substantially all its efforts to the ongoing development of the
Company.
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a calender year end of December 31.
Loss per Share
The computation of loss per share of common stock is based upon the weighted
average common shares outstanding during each period.
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NOTE 2 - DEPOSITS
This represents an amount deposited on November 15, 1999 with a bank for a
secured corporate credit card with a credit limit of $5,000. The deposit must be
kept in the account for twelve months not to forfeit the deposit. The deposit
can be returned any time after the initial twelve months provided the request is
made in writing and there is no balance outstanding on the account. Should any
balance be outstanding, the deposit would be applied against the balance due and
the remainder would be refunded to the Company. As of June 30, 2001 the balance
due on the card was $0.
NOTE 3 - STOCKHOLDER'S EQUITY
The Company had the following classes of capital stock as of June 30, 2001:
Common stock, $0.001 par value; authorized 50,000,000 shares; issued and
outstanding 6,517,200 shares at June 30, 2001.
NOTE 4 - RESEARCH AND DEVELOPMENT
Research and development cost related to future products are charged to
development stage expenses as incurred. The Company recognized research and
development costs of $0 and $12,725 during the six months ended June 30, 2001
and 2000.
NOTE 5 - GOING CONCERN
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. However, the Company has no current source of revenue. Without
realization of additional capital, it would be unlikely for the Company to
continue as a going concern. It is management's intention to seek additional
capital through a merger with an existing operating company and raising capital.
NOTE 6 - INCOME TAXES
For financial reporting purposes, a valuation allowance of $28,246 has been
recognized to offset the net deferred tax assets related to these carryforwards
and other deferred tax assets since realization of any portion of the Company's
deferred tax asset is not considered to be more likely than not. The change in
the valuation allowance for the years ended December 31, 2000 and 1999 was
$10,830 and $10,966 respectively.
Deferred income taxes reflect the net effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets are as follows:
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2001 2000
Deferred tax assets:
Net operating loss carryforwards $ 28,246 $ 17,416
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Total deferred tax assets 28,246 17,416
Valuation allowance for
deferred tax assets (28,426) (17,416)
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$ 0 $ 0
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The Company has incurred net operating losses since inception. At December 31,
2000 and 1999 the Company had approximately $87,078 and $141,723 in operating
loss carryforwards that expire in various amounts from 2016 through 2020.
NOTE 7 - RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. Fees totaling $2,950 and
$9,415 have been paid to officers and companies owned by shareholders during the
periods ended June 30, 2001 and 2000 for administrative fees, consulting
services rendered and, expenses paid on behalf of the Company. The officers and
directors of the Company are involved in other business activities and may, in
the future, become involved in other business opportunities.
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Item 2. Plan of Operation
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The Issuer is presently negotiating consulting arrangements with
experienced venture capitalists, investment bankers, systems analysts and
technical Internet consultants to put together a team able to evaluate and
assist emerging Internet companies and introduce them to potential capital
sources. The Issuer will only be paid for its services if its client is
successful in acquiring capital. The Issuer's activities will include: (i)
reviewing and evaluating the client's business plan, business operations,
personnel and facilities; (ii) advising the client as to its business and
capital structure; (iii) assisting the client in developing information and
documentation on its company, operations and an investment therein; and (iv)
introducing the client to capital sources interested in an investment in such a
business venture. The Issuer may take steps to facilitate negotiations between a
client and prospective capital sources; but will not engage in selling
activities as such.
If sufficient capital becomes available to the Issuer, it may also acquire
and hold direct venture capital investments in Internet related companies it has
evaluated. There are no present arrangements under which the Issuer can acquire
such capital, nor any assurance that such capital will become available. The
Issuer is of the opinion it has sufficient resources to continue limited
operations through December 31, 2001. It is the present intention of the Issuer,
that most venture capital investments will result in the Issuer holding a
majority voting interest in the company in which the investment is made and to
otherwise conduct its operations so that the Issuer does not become an
Investment Company under the Investment Company Act of 1940.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not Applicable
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS IN SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBIT AND REPORTS ON FORM 8-K
(a) Exhibits: Not applicable
(b) Form 8-Ks
No Reports of Form 8-K were filed during the three-month
period ended June 30, 2001.
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SIGNATURES
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In accordance with the Exchange Act, the registrant caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized.
INET COMMERCE CONDUIT CORPORATION
Dated: July 30, 2001 By: /s/ Paul H. Stone
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Paul H. Stone, President and Principal
Executive, Financial and Accounting
Officer and Sole Director
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