U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission File Number
HomeZipR Corp.
- --------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Colorado 84-0682860
State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
33161 Camino Capistrano, Suite F, San Juan Capistrano, California
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(949) 487-4992
--------------
(Issuer's telephone number)
Not applicable
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 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 X No
------- -------
As of February 22, 2002, the Company had 15,749,866 shares of its no par value
common stock issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No X
------- -------
HOMEZIPR CORP.
--------------
INDEX TO FORM 10-QSB
--------------------
FOR THE QUARTER ENDED DECEMBER 31, 2001
----------------------------------------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements Page
----
Condensed Consolidated Balance Sheet as of December 31, 2001.........3
Condensed Consolidated Statements of Operations for the three months
and nine months ended December 31, 2001 and 2000 and the period
March 14, 2000 (inception) through December 31, 2001.................4
Condensed Consolidated Statements of Cash Flows for the
nine months ended December 31, 2001 and 2000 and the period
March 14, 2000 (inception) through December 31, 2001...............5-6
Notes to Condensed Consolidated Financial Statements..............7-11
Item 2. Management's Discussion and Analysis or Plan of Operation...........12
PART II OTHER INFORMATION..........................................13
Signatures.................................................14
2
HOMEZIPR CORP.
--------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
CONDENSED CONSOLIDATED BALANCE SHEET
------------------------------------
DECEMBER 31, 2001
------------------
(UNAUDITED)
-----------
ASSETS
------
PROPERTY AND EQUIPMENT, net $ 100,963
--------------
Total assets $ 100,963
==============
LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
CURRENT LIABILITIES
Accounts payable and other accrued expenses $ 93,785
Accrued payroll and related liabilities 251,362
Stock subscriptions refund payable 45,000
Common stock redemption liability (Note 4) 750,000
--------------
Total current liabilities 1,140,147
--------------
REDEEMABLE COMMON STOCK (Note 4)
214,293 shares issued and outstanding 750,000
--------------
COMMITMENTS AND CONTINGENCIES (Note 5)
STOCKHOLDERS' DEFICIT
Preferred stock, no par value,
10,000,000 shares authorized no shares issued
Common stock, no par value,
50,000,000 shares authorized, 15,535,573 shares
issued and outstanding exclusive of 214,293 shares
of redeemable common stock issued and outstanding 1,700,723
Deficit accumulated during the development stage (3,489,907)
--------------
Total stockholders' deficit (1,789,184)
--------------
Total liabilities and stockholders' deficit $ 100,963
==============
See the accompanying notes to these condensed consolidated financial statements
3
HOMEZIPR CORP.
--------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
(UNAUDITED)
-----------
MARCH 14, 2000
(INCEPTION)
THREE MONTHS ENDED NINE MONTHS ENDED THROUGH
DECEMBER 31, DECEMBER 31, DECEMBER 31
2001 2000 2001 2000 2001
--------------- --------------- ---------------- ---------------- ----------------
REVENUES
Loan origination fees $ --- $ 80,626 $ --- $ 167,467 $ 131,599
--------------- --------------- ---------------- ---------------- ----------------
OPERATING EXPENSES:
Commissions, compensation and
benefits --- 252,556 --- 889,765 1,528,182
General and administrative 32,333 454,316 466,169 789,511 1,599,059
Loss on abandonment of fixed
assets --- --- --- --- 494,265
--------------- --------------- ---------------- ---------------- ----------------
Total expenses 32,333 706,872 466,169 1,679,276 3,621,506
--------------- --------------- ---------------- ---------------- ----------------
LOSS BEFORE INCOME TAXES (32,333) (626,246) (466,169) (1,511,809) (3,489,907)
PROVISION FOR INCOME TAXES --- --- --- --- ---
--------------- --------------- ---------------- ---------------- ----------------
NET LOSS $ (32,333) $ (626,246) $ (466,169) $ (1,511,809) $ (3,489,907)
=============== =============== =============== ================ ================
BASIC AND DILUTED LOSS PER SHARE $ (.002) $ (.04) $ (.03) $ (.10)
=============== =============== =============== ================
SHARES USED TO COMPUTE BASIC AND
DILUTED LOSS PER SHARE
INCLUDING 214,293 SHARES OF
REDEEMABLE COMMON STOCK 15,749,866 15,749,866 15,749,866 15,749,866
=============== =============== =============== ================
See the accompanying notes to these condensed consolidated financial statements
4
HOMEZIPR CORP.
--------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(UNAUDITED)
-----------
MARCH 14, 2000
(INCEPTION)
NINE MONTHS ENDED DECEMBER 31, THROUGH
------------------------------ DECEMBER 31,
2001 2000 2001
------------ ------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (466,169) $(1,511,809) $(3,489,907)
Adjustments to reconcile net loss to net cash used in
operating activities
Depreciation 21,359 31,395 40,569
Costs provided in exchange for common stock --- 196,875 472,500
Rent provided by a stockholder in exchange for
addition to common stock equity 3,000 --- 3,000
Loss from abandonment of fixed assets --- --- 494,265
Non-cash charge for mandatory redemption liability 375,000 --- 750,000
Changes in operating assets and liabilities
Receivables --- --- ---
Prepaid expenses 2,500 (34,476) ---
Deposits --- --- ---
Accounts payable and other accrued expenses 35,088 286,093 46,961
Accrued payroll and related liabilities 28,977 --- 251,362
------------ ------------ ------------
Net cash used in operating activities (245) (1,031,922) (1,431,250)
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Sale(Purchase) of property and equipment --- 15,885 (78,605)
------------ ------------ ------------
Net cash used in investing activities --- 15,885 (78,605)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock --- 95,649 666,105
Increase in stock subscriptions refund payable --- --- 45,000
Proceeds from issuance of redeemable common stock --- --- 750,000
Funds received from stock subscription receivable --- 852,450 48,750
------------ ------------ ------------
Net cash provided by financing activities --- 948,099 1,509,855
------------ ------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (245) (67,938) ---
CASH AND CASH EQUIVALENTS, beginning of period 245 81,350 ---
------------ ------------ ------------
CASH AND CASH EQUIVALENTS, end of period $ --- $ 13,412 $ ---
============ ============ ============
See the accompanying notes to these condensed consolidated financial statements
5
HOMEZIPR CORP.
--------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(UNAUDITED)
-----------
MARCH 14, 2000
(INCEPTION)
NINE MONTHS ENDED DECEMBER 31, THROUGH
------------------------------ DECEMBER 31,
2001 2000 2001
------------ ------------ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $ --- $ --- $ 10,949
Cash paid during the period for income taxes $ --- $ --- $ ---
See the accompanying notes to these condensed consolidated financial statements
6
HOMEZIPR CORP.
--------------
(A DEVELOPMENT STAGE COMPANY)
-----------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
DECEMBER 31, 2001 AND 2000
---------------------------
(UNAUDITED)
-----------
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS - HomeZipR Corp. a Colorado corporation
formerly known as MRI Medical Diagnostics, Inc. (the "Company") is a development
stage company. The Company plans to develop a consumer direct business that will
utilize e-commerce as a delivery mechanism dedicated to providing resources to
homeowners. The Company was engaged in the business of securing home equity and
residential mortgages in several states across the nation. In December 2000, the
Company ceased its mortgage brokerage activities and focused its efforts on
developing the consumer direct business and raising funds to finance its new
business strategy. Accordingly, the Company is classified as a development stage
company in accordance with Statement of Financial Accounting Standards No. 7,
"Accounting and Reporting by Development Stage Enterprises".
PRINCIPLES OF CONSOLIDATION - The accompanying condensed consolidated
financial statements include the accounts of HomeZipR Corp. and its wholly owned
subsidiary, HomeZipR.com. All significant intercompany accounts and
transactions, if any, have been eliminated.
BASIS OF PRESENTATION - The accompanying unaudited financial statements of the
Company have been prepared in accordance with generally accepted accounting
principles for interim financial information. Accordingly, they do not include
all of the information required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation have been included. Operating results for the interim periods are
not necessarily indicative of the results for any future period. These
statements should be read in conjunction with the Company's audited financial
statements and notes thereto for the year ended March 31, 2001. The results for
the nine month period ended December 31, 2001 are not necessarily indicative of
the results to be expected for the full fiscal year.
On July 31, 2000, MRI Medical Diagnostics, Inc. ("MRI") conducted a
reorganization with HomeZipR.com Corp. ("HomeZipR"), a Delaware Corp. Pursuant
to the terms of a Securities Purchase and Plan or Reorganization between MRI and
the stockholders of HomeZipR, MRI acquired all of the outstanding shares of
HomeZipR's common stock in exchange for 22,393,671 shares of MRI's common stock
and 5,000,000 shares of its Series A Preferred Stock (the "Reorganization").
Following the Reorganization, the former stockholders of HomeZipR owned
approximately 42% of the Registrant's outstanding common stock and approximately
94% of its outstanding preferred stock. Together, this accounted for
approximately 90% of the Registrant's total outstanding voting power. Effective
after the reverse acquisition, the Company approved a 1 for 18.85077263 reverse
split (the "Reverse Split") of its common stock. Also effective after the
reverse acquisition the stockholders of the Series A Preferred Stock converted
into common stock. Because the stockholders of HomeZipR owned approximately 90%
of the outstanding shares of the common stock of the Company after giving effect
to the Reorganization, the acquisition of HomeZipR was considered a reverse
merger, and HomeZipR has been deemed the acquirer for accounting purposes. In a
reverse merger, the historical stockholders' equity of the acquirer prior to the
merger is retroactively restated (a recapitalization) for the equivalent number
of shares received in the merger after giving effect to any difference in par
value of the issuers and acquirers stock by an offset to capital. All share and
per share information has been presented in the accompanying condensed
consolidated financial statements as if the recapitalization had occurred as of
the first day presented in the condensed consolidated financial statements.
Subsequent to the reorganization, the Company changed its name to HomeZipR Corp.
7
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
GOING CONCERN - The accompanying condensed consolidated financial statements
have been prepared assuming the Company will continue as a going concern, which
contemplates, among other things, the realization of assets and satisfaction of
liabilities in the normal course of business. As of December 31, 2001, the
Company has negative working capital, negative cash flows from operations,
liabilities from underpayment of payroll taxes and a stockholders' deficit of
$3,489,907. In addition, the Company has ceased its only revenue producing
activity, and the Company's subsidiary (HomeZipR.com) has filed for voluntary
Chapter 7 bankruptcy. All of these facts raise substantial doubt about its
ability to continue as a going concern.
The Company's continued existence is dependent upon several factors including
the Company's ability to fund its operations and its ability to restructure its
business plan. Management believes the Company will be able to obtain the
necessary funding for its operations through private placement offerings of
company stock. Management also believes that its future business plan will
materialize once the Company has the ability to fund its operations. The
successful outcome of future activities cannot be determined at this time, and
there are no assurances that if achieved, the Company will have sufficient funds
to execute its intended business plan or generate positive operating results.
These circumstances raise substantial doubt about the Company's ability to
continue as a going concern. The accompanying condensed consolidated financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
ACCOUNTING PRONOUNCEMENTS - On July 20, 2001, the FASB issued SFAS No. 141,
"Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible
Assets." These statements make significant changes to the accounting for
business combinations, goodwill, and intangible assets.
SFAS No. 141 establishes new standards for accounting and reporting requirements
for business combinations and will require that the purchase method of
accounting be used for all business combinations initiated after June 30, 2001.
Use of the pooling-of-interests method will be prohibited. This statement is
effective for business combinations completed after June 30, 2001.
SFAS No. 142 establishes new standards for goodwill acquired in a business
combination and eliminates amortization of goodwill and instead sets forth
methods to periodically evaluate goodwill for impairment. Intangible assets with
a determinable useful life will continue to be amortized over that period. This
statement is effective January 1, 2002.
Management is in the process of evaluating the requirements of SFAS No. 141 and
142, but does not expect these pronouncements will materially impact the
Company's financial position or results of operations.
In October 2001, the FASB issued Statement of Financial Accounting Standards No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144).
SFAS 144 supersedes SFAS 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be Disposed of, and APB Opinion No. 30, Reporting
the Results of Operations - Reporting The Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions. SFAS 144 is effective for fiscal years beginning after December
15, 2001 and will carry forward many of the provisions of SFAS 121 and Opinion
30. Under SFAS 144, if a long-lived asset is part of a group that includes other
assets and liabilities, then the provisions of SFAS 144 apply to the entire
group. In addition, SFAS 144 does not apply to goodwill and other intangible
assets that are not amortized. Management does not expect the adoption of SFAS
144 to have a material impact on the results of operations or financial position
of the Company.
STOCK SPLIT - In September 2000, the Company completed a 18.85077263 for 1
reverse stock split of its common stock. Accordingly, all share and per share
amounts have been retroactively restated in the condensed consolidated financial
statements to reflect this split.
8
NOTE 2 - ACQUISITION OF ASSETS
On July 31, 2000, concurrent with the closing of the reorganization
described above, the Company acquired certain fixed assets in exchange for
320,463 shares of the Company's Series A Preferred Stock. The stockholders of
the Series A Preferred Stock have subsequently converted their shares into
850,000 shares of common stock.
The assets from this acquisition were used for the subsidiary's
operations in Atlanta, Georgia. Operations have subsequently ceased in Atlanta
and the subsidiary has filed for bankruptcy. The fixed assets from Atlanta have
been abandoned due to the shut down of the subsidiary. It is management's belief
that the assets cannot be retained. Therefore, the Company elected to remove the
assets and record a loss from abandonment. For the fiscal year ended March 31,
2001 the loss from abandonment was $494,264.
NOTE 3 - LOSS PER SHARE
The following table sets forth the computation of basic and diluted
loss per share:
NINE MONTHS ENDED
DECEMBER 31,
---------------------------------
2001 2000
-------------- --------------
Numerator for basic and diluted loss
per common share:
Net loss $ (466,169) $ (1,511,809)
============== ==============
Denominator for basic and diluted loss
per common share:
Weighted average
Common shares outstanding 15,749,866 15,749,866
============== ==============
Net loss per common share $ (.03) $ (.10)
============== ==============
NOTE 4 - REDEEMABLE COMMON STOCK AND COMMON STOCK REDEMPTION LIABILITY
The Company has entered into certain agreements with investors for the sale of
its common stock. In October 2000, the Company issued to three investors 214,293
shares of its common stock at $3.50 a share in exchange for cash of $750,000.
The Company has guaranteed that each share can be sold on the open markets at a
price of $7.00 per share or more. If the market price does not meet or exceed
the $7.00 per share price the Company has agreed to repurchase the shares at
that price. The effective term of the guarantee is one year beginning October 9,
2000. Any amounts payable may be made, at the option of the Company, in cash or
in additional shares of the Company's common stock, provided, however, that in
the event that the Company elects to make such payment in shares of stock, such
stock shall be registered for resale under the securities act. The Company's
majority shareholder has personally guaranteed the Company's obligations. If the
Company defaults on the guaranteed return the investor can be remedied by
proceeding against the Company and/or foreclosing on a mortgage that was used as
security for the agreement. The mortgage was pledged by a Company shareholder.
The shareholder has subsequently filed for personal bankruptcy, and a sale of
the underlying real estate associated with the mortgage has occurred.
Approximately $575,000 of proceeds related to the sale is being held in escrow
as potential collateral for the redeemable common stock shareholders.
The Company has elected to amortize the difference between the guaranteed stock
price of $7.00 and the stock purchase price of $3.50 over a twelve month period
beginning October 9, 2000. The common stock redemption liability as of December
31, 2001 is $750,000.
9
NOTE 5 - COMMITMENTS AND CONTINGENCIES
On October 3, 2000, Household Commercial Financial Services, Inc. ("Household")
filed a complaint against the Company's subsidiary (HomeZipR.com Corp., a
Delaware corporation, one of its former directors, Kenneth C. Ketner, and
Mortgage Capital Resource Corporation ("MCR"), among others. Household alleged
that it had provided a mortgage banking warehouse line of credit to MCR and that
the line of credit has been personally guaranteed by Mr. Ketner. The Household
complaint alleges that MCR committed certain acts of default under the line of
credit and seeks recovery of monies owed from MCR and Mr. Ketner. The
allegations in the Household complaint concerning HomeZipR.com Corp. are that
the sale of certain assets by MCR to HomeZipR.com Corp. constituted a fraudulent
conveyance based on the failure of HomeZipR.com Corp. to provide adequate
consideration to MCR for the purchased assets. The complaint seeks to set aside
the sale of the assets by MCR to HomeZipR.com Corp. and an accounting by
HomeZipR.com Corp. for all profits and proceeds earned or acquired in exchange
for the assets purchased from MCR. The Company intends to vigorously defend the
action.
In October 2000, Regions Bank filed a compliant against HomeZipR.com Corp., Mr.
Ketner and MCR. Regions alleged that it had provided a mortgage banking
warehouse line of credit to MCR and that the line of credit has been personally
guaranteed by Mr. Ketner. The Regions complaint includes allegations against
HomeZipR.com Corp. and Mr. Ketner similar to those included in the Household
compliant. The Company intends to vigorously defend the action.
The Company's subsidiary has recorded an accrual for unpaid federal and state
payroll tax liabilities. The tax liabilities have been unpaid for several
months. Because the taxes have not been paid, an accrual for penalties and
interest has also been made. As of December 31, 2001, accrued payroll tax
liabilities were approximately $251,000. As previously discussed, the subsidiary
has filed for voluntary Chapter 7 bankruptcy. The Company has potential
liability for its subsidiary's liability relating to the unpaid payroll taxes
and penalties.
NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT)
PREFERRED STOCK - The Company's articles of incorporation authorize up to
10,000,000 shares of no par value preferred stock. Shares of preferred stock may
be issued in one or more classes or series at such time and in such quantities
the board of directors may determine. All shares of any one series shall be
equal in rank and identical in all respects.
In July 2000, the Company issued an aggregate of 320,463 shares of its Series A
Preferred Stock to Mortgage Capital Resource Corporation in consideration for
the purchase of certain fixed assets of Mortgage Capital Resource Corporation.
The shares were converted into 850,000 shares of common stock giving effect to
the previously disclosed reverse stock split. Upon conversion the Series A
Preferred stock reverted to its original preferred stock status and is available
for designation.
COMMON STOCK - During the period ended March 31, 2000, the Company sold an
aggregate of 2,113,392 shares of its common stock to investors for an aggregate
purchase price of $112,500.
During the year ended March 31, 2001, the Company sold an aggregate of 2,845,936
shares of its common stock to investors for an aggregate purchase price of
$602,355.
STOCK OPTION PLAN - The Company's Stock Option Plan (the "Plan") became
effective on September 5, 2000. The Plan provides for the issuance of incentive
and non-qualified stock options to the Company's employees, officers, directors,
consultants and independent contractors. The maximum number of shares which may
be issued pursuant to options was fixed at 2,000,000 by the Company's board of
directors.
10
NOTE 6 - STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
The Plan is administered by the Company's board of directors. Generally, the
board may amend or terminate the Plan if it does not cause any adverse effect on
any then outstanding options or unexercised portions thereof. The board of
directors must obtain the consent of the stockholders to increase the number of
shares covered by the Plan, to change the class of persons eligible to receive
options, or to extend the term of the Plan beyond 10 years. The board of
directors sets the exercise price for each option award. Incentive stock options
must have an exercise price equal to at least 100% of the fair value of the
underlying common stock on the date of the grant, and options granted to a
person who owns more than 10% of the voting power of the outstanding common
stock and any outstanding common stock of our subsidiaries must have an exercise
price equal to at least 110% of the fair value of the underlying common stock on
the date of grant.
As of December 31, 2001 no options have been granted under the Plan.
STOCK WARRANTS - Pursuant to stock purchase agreements associated with the
redeemable common stock, the Company issued warrants to purchase 214,286 shares
of the Company's common stock at an exercise price of $5.00 per share. The
warrants vested on the date of grant and are exercisable through December 2003.
As these warrants were issued in connection with fundraising activities, no
consulting expense was recognized for these warrants in the statements of
operations.
The following represents a summary of the warrants outstanding at December 31,
2001:
WEIGHTED
AVERAGE
EXERCISE
WARRANTS PRICE
----------------- ----------------
Outstanding, March 31, 2001 214,286 $ 5.00
Granted --- ---
Exercised --- ---
Expired/forfeited --- ---
----------------- ----------------
Outstanding, December 31, 2001 214,286 $ 5.00
================= ================
Exercisable, December 31, 2001 214,286 $ 5.00
================= ================
Weighted average fair value of warrants granted $ 5.00
================
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
- -------
Results of Operations and Financial Condition
---------------------------------------------
During the fiscal year ended March 31, 2001, and pending the roll-out
of its Internet portal, the Company commenced providing mortgage brokerage
services on a limited basis. However, the Company had to cease all operations
and lay off all of its employees in December 2000 due to a lack of capital and
its operating subsidiary filed a petition under Chapter 7 of the Bankruptcy Code
in April 2001. The Company intends to launch its Internet portal when, if ever,
it receives the required additional capital. The Company had no revenue during
the nine month and three month periods ended December 31, 2001 as compared to
$167,467 and $80,626, respectively, for the same periods last year. The total
expenses for the nine month and three month periods ended December 31, 2001 were
$466,169 and $32,333, respectively, as compared to $1,679,276 and $706,872,
respectively, for the corresponding periods last year. Decrease in expenses is
due to the amortization of the remaining portion of common stock redemption
liability amounting to $20,833 during the three month period ended December 31,
2001 as compared to amortization expense of $166,667 in the prior period. Total
loss for the nine month and three month periods ended December 31, 2001 were
$466,169 and $32,333, respectively, as compared to $1,511,809 and $626,246 in
the corresponding periods last year.
As of December 31, 2001, the Company had negative working capital of
$(1,039,184). The Company expects to incur losses from operations for, at least,
the next several months and the Company will require significant additional
capital.
Plan of Operations
- ------------------
As of the date of this report, the Company has limited assets and no
revenue producing operations. The Company believes that it will require a
minimum of $2,000,000 over the next 12 months in order to implement its business
plan. The Company intends to raise the necessary capital from the sale of its
securities. However, there are no commitments, understandings or arrangements
for the purchase of the Company's securities by any third parties and there can
be no assurance that the Company will be able to raise the necessary capital as
and when needed. The Company's failure to raise the necessary capital on a
timely basis will prevent the Company from implementing its proposed business
plan and may cause the Company to terminate its operations. The report of the
Company's independent accountants for the fiscal year ended March 31, 2001
states that due to the absence of operating revenues and the Company's limited
capital resources, there is doubt about the Company's ability to continue as a
going concern.
Forward Looking Statements
- --------------------------
This report contains forward-looking statements that are based on the
Company's beliefs as well as assumptions made by and information currently
available to the Company. When used in this report, the words "believe,"
"expect," "anticipate," "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements are subject to certain
risks and uncertainties including, but no limited to, the Company's present
financial condition and its ability to obtain additional capital as and when
needed; its ability to roll-out its Internet portal on a timely basis and the
commercial acceptance of the services and products offered through the portal;
litigation claims relating to its acquisition of certain assets from Mortgage
Capital Resource; technological changes; increased competition; and general
economic conditions. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those anticipated, estimated, or projected. The Company
cautions potential investors not to place undue reliance on any such
forward-looking statements all of which speak only as of the date made.
12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
Inapplicable.
Item 2. Changes in Securities and Use of Proceeds.
-----------------------------------------
Inapplicable.
Item 3. Defaults Upon Senior Securities.
-------------------------------
Inapplicable.
Item 4. Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
Inapplicable
Item 5. Other Information.
-----------------
Inapplicable.
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
13
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.
HomeZipR Corp.
(Registrant)
Dated: February 22, 2002 By: /s/ Michael Reza
--------------------------
Michael Reza,
Chief Executive Officer
14