UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
eQuorumNet
(Exact name of registrant as specified in its charter)
Commission file number: 000-27583
Nevada 88-0431508
(State of Other Jurisdiction of Incorporation or (I.R.S. Employer
Organization) Identification No)
3009 Rose Lane, Phoenix, AZ 85016
(Address of Principal Executive Office) (Zip Code)
877-603-4382
(Registrant'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 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 ( ) NO ( X )
As of December 31, 1999 registrant had 7,500,000 shares of Common Stock
outstanding.
PART I
ITEM 1. FINANCIAL STATEMENTS
EQUORUMNET
(A Development Stage Company)
TABLE OF CONTENTS
-----------------
Consolidated Financial Statements: Page
----
Consolidated Balance Sheet as of December 31, 1999 1
Consolidated Statement of Operations for the three months
ended December 31, 1999, and for the period from
Inception, July 15, 1999, to December 31, 1999 2
Consolidated Statement of Stockholders' Equity
for the period from inception, July 15, 1999,
to December 15, 1999 3
Consolidated Statement of Cash Flows for the
period from inception, July 15, 1999,
to December 31, 1999 4
Selected Notes to Consolidated Financial Statements 5
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1999
(UNAUDITED)
December
31, 1999
A S S E T S (UNAUDITED)
CURRENT ASSETS
Cash $ 135
-----------
TOTAL CURRENT ASSETS 135
-----------
TOTAL ASSETS $ 135
===========
L I A B I L I T I E S & S T O C K H O L D E R S ' E Q U I T Y
TOTAL LIABILITIES $ -
-----------
COMMITMENTS AND CONTINGENCIES -
-----------
STOCKHOLDER'S EQUITY
Common stock, 50,000,000 shares authorized,
$.0001 par value; 7,500,000 shares issued and outstanding 750
Additional paid-in capital 83,423
Accumulated deficit (84,038)
-----------
TOTAL STOCKHOLDERS' EQUITY 135
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 135
===========
See accompanying notes
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EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION, JULY 15, 1999
TO DECEMBER 31, 1999 (UNAUDITED)
July 15, 1999
Three Months (Inception)
Ended Through
December 31, 1999 December 31, 1999
-------------------------- ------------------
R E V E N U E S $
E X P E N S E S
Professional services 45,000 84,038
-------------------------- ------------------
TOTAL OPERATING EXPENSES 45,000 84,038
-------------------------- ------------------
NET LOSS $ (45,000) (84,038)
========================== ==================
Basic and diluted net loss per common share $ 0.01 0.01
========================== ==================
Weighted average number of
common stock shares outstanding 7,500,000 7,500,000
========================== ==================
See accompanying notes
2
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDTED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION, JULY 15, 1999, TO DECEMBER 31, 1999 (UNAUDITED)
Common Stock
------------------------ Total
Number Additional Accumulated Stockholders'
of Shares Amount Paid-in Capital Deficit Equity
------------- ---------- --------------- ------------- --------------
Issuance of common
stock in July 1999
for cash at an average of
$.0006 per share 7,500,000 $ 750 $ 3,423 $ - $ 4,173
Additional capital contributed
by the president
of the company 80,000 - 80,000
Loss for period ending,
August 31, 1999 - - - (84,038) (84,038)
------------- ------------- ---------------- ----------- ---------
Balance at August 31, 1999 7,500,000 $ 750 $ 83,423 $(84,038) $ 135
============= ============= ================ =========== =========
See accompanying notes
3
EQUORUMNET
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND THE PERIOD FROM
INCEPTION, JULY 15, 1999, TO DECEMBER 31, 1999
Cash flows from operating activities:
Net loss $ (84,038)
Direct payments for professional services by stockholder 80,000
------------------
Net cash used in operating activities (4,038)
------------------
Cash flows from investing activities: -
------------------
Cash flows from financing activities:
Issuance of stock 4,173
------------------
Net cash provided by financing activities 4,173
------------------
Net increase in cash 135
Cash, beginning of period -
------------------
Cash, end of period $ 135
==================
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest and income taxes:
Interest $ -
==================
Income taxes $ -
==================
NON-CASH INVESTING AND FINANCING ACTIVITIES
Professional services paid directly by stockholder $ 80,000
==================
See accompanying notes
4
EQUORUMNET
(A Development Stage Company)
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
-----------
1. BASIS OF PRESENTATION
The accompanying unaudited interim financial statements have been
prepared in accordance with generally accepted accounting principles and
the rules of the U.S. Securities and Exchange Commission, and should be
read in conjunction with the audited financial statements and notes
thereto contained in the Company's Form 10SB12(g) filed on October 7,
1999. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of financial
position the results of operations for the interim periods presented have
been reflected herein. The results of operations for the interim periods
are not necessarily indicative of the results to be expected for the full
year. Notes to the financial statements which would substantially
duplicate the disclosure contained in the audited financial statements
contained in the Form 10SB12(g), have been omitted.
2. GENERAL
The Company is a development stage enterprise because since its
inception, substantially all its efforts have been devoted to identifying
overseas manufacturers of consumer products that have a need for a
marketing arm in the United States and preparation and development of its
network marketing compensation plans, its marketing materials and support
programs and its e-commerce website.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Some of the statements contained in this Form 10-QSB discuss future
expectations, contain projections of results of operations or financial
condition or state other "forward-looking" information. These statements are
subject to known and unknown risks, uncertainties, and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The forward-looking information is based on various factors and is
derived using numerous assumptions. Important factors that may cause actually
results to differ from projections include, for example:\
- - the success or failure of management's efforts to implement their business
strategy
- - the Company's ability to rise sufficient capital to meet operating
requirements
- - the Company's ability to compete with major established companies
- - the Company's ability to attract and retain overseas manufacturers as
clients
- - the Company's ability to keep its website operational and manage the site
- - federal, state or local governmental regulations
- - foreign governmental regulations and import/export laws
- - seasonal effects on revenue for the products its markets
- - the success of the Company's marketing campaigns
- - the amount and timing of operating costs and capital expenditures relating
to maintaining and expanding the business, operations and infrastructure
of the company
- - the Company's ability to upgrade and develop its systems and
infrastructure to accommodate growth
- - the Company's ability to attract new personnel in a timely and effective
manner
- - the Company's ability to retain key employees in its network marketing
business
- - the timing, cost and availability of advertising in traditional media and
on other websites and online services
- - consumer trends and popularity of the products to be sold
- - the level of use of the Internet and online services
- - general economic conditions
GENERAL
eQuorumNet was organized by the filing of articles of incorporation with
the Secretary of State of the State of Nevada on July 15, 1999. The articles of
the Company authorized the issuance of fifty million (50,000,000) shares of
Common Stock at a par value of $0.0001 per share.
The Company is a developmental state company with the principal business
objective to provide network and e-commerce marketing for upscale and mass
market consumer products direct from the manufacturer. The Company intends to
distinguish itself and "the technology leader" in these fields with its quality
products, its network marketing compensation plans, its marketing materials and
support programs, and its e-commerce site.
The Company intends to identify overseas manufacturers of consumer products
that have a need for a marketing arm in the United States. According to the
Company's management, the development of new products such as nutritional aids
and electronics in the Far East is expansive and the need for a specialized
marketing company of the United States market has continued to grow in the last
ten years. eQuorumNet plans to market its network marketing and e-commerce
services to these manufacturers.
During its initial phase of development, the Company is formulating
profitability budgets, and marketing plans with the intention to make
presentations to overseas manufacturing firms to become its marketing company in
the United States. No specific manufacturing companies have signed a contract
with eQuorumNet as yet, and the Company anticipates 6 to 8 months until the
research phase is completed, and a manufacturer/client is identified and
contracted with in order to begin phase II, when revenues will be expected.
The Company intends to build a distributor base and attract a new
generation of distributor leadership by providing additional financial
incentives for the core leadership (i.e., short-term income incentives,
recruiting incentives). It plans to increase long-term stability by addressing
key distributor structure/compensation areas: 1) create several "base of tree"
distributor lines to foster competition and increase opportunities for
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aggressive new leadership 2) implement a compensation plan which fosters
long-term sustainable growth by continuing to highly reward aggressive, serious
business builders, while better rewarding the 95% of part-time
consumer/retailer-type distributor, and better ensuring that new distributor
leaders will have a solid organization under them before "breaking away", so
that they will better be able to qualify for leadership bonuses, and 3)
continually train distributor leadership to focus on building deep and wide with
a solid base of consumers and to nurture their networks.
The Company intends to focus on achieving and maintaining profitability
also ensuring tight financial and systems control by 1) being fully prepared
for cyclical sales performance while still providing top quality customer
service, 2) focusing on quality, not quantity, of new staff, 3) instituting
financial/accounting software systems to enable much tighter cash flow and
inventory control, and minimizing long-term contractual arrangements with
suppliers and keeping minimum order quantities as low as possible.
PLAN OF OPERATIONS
The Company has been in the development stage since its inception and has
not generated any revenues from operations. However, the Company anticipates
that expenses will continue to increase during 2000 with the development of its
website and the acquisition of contracts with overseas manufacturers.
Additional capital will be necessary to expand operations or continue current
operations. The Company has financed its growth primarily from the sale of
common stock. The Company's sources of external and internal financing are
limited, and it is not expected that its internal source of liquidity will
improve until net cash is provided by operating activities, and, until such
time, it will rely upon external sources for liquidity. The Company has not
established any lines of credit or other significant financing arrangement with
any third-part lenders. There can be no assurance that the Company will be able
to obtain financing on reasonable terms, if at all. Until the Company is able
to develop, construct and operate its website, and until the Company contracts
with an overseas manufacturer for its advertising in the United States, and
derive revenues there from, the Company will continue to use cash obtained from
outside sources for its operations and development of its business.
In the future, the Company may be required to seek debt or equity financing
(public or private), curtail operations, or otherwise bring cash flows in
balance if it approaches a condition of cash insufficiency. The Company
anticipates a need for additional capital, but has no specific commitments with
respect thereto. There is no assurance that the Company will be successful in
any such effort.
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PART II
Pursuant to the Instructions to Part II of the Form 10-QSB, Items 1, 2, 3, 4,
and 5 are omitted.
ITEM 6 EXHIBITS AND REPORTS
There are no exhibits to be filed as part of this Form 10-QSB.
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SIGNATURES
In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the undersigned, thereunto duly authorized.
eQuorumNet
Date: January 31, 2000 /S/ Richard Hung
Richard Hung, President
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