SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2000
Commission file number 000-26539
ACCESS NETWORK CORPORATION
________________________________________________________________
(Exact name of small business issuer as specified in its charter)
Nevada 88-0409450
____________________________ ________________________________
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization
2995 El Camino Road, Las Vegas, Nevada 89146
________________________________________________ _____________
(Address of principal executive offices) (Zip Code)
(702) 251-3211
________________________________________________
(Issuer'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 Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file
such reports) Yes [XX] No [ ], and (2) has been subject to such filing
requirements for the past 90 days. Yes [XX] No [ ]
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:
As of the date hereof, the issuer had outstanding 601,200 shares of its
Common Stock, $0.001 par value.
1
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The unaudited financial statements of Access Network Corporation, a
Nevada corporation (the "Company"), as of June 30, 2000 were prepared by
Management and commence on the following page. In the opinion of Management
the financial statements fairly present the financial condition of the
Company.
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
JUNE 30, 2000, AND JUNE 30, 1999
2
TABLE OF CONTENTS
Page
Number
Balance Sheets ......................................................F2
Statements of Operations and Deficit
Accumulated During the Development Stage.............................F3
Statement of Changes in Stockholders' Equity ........................F4
Statements of Cash Flows.............................................F5
Notes to the Financial Statements....................................F6-7
F1
3
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
June 30, June 30,
2000 1999
------------- -------------
ASSETS
Cash $ 23,854 $ 44,865
Accounts receivable 215 220
Inventory 5,465 201
Prepaid expenses 409 0
Deposits 109 109
------------- -------------
Total Assets $ 30,052 $ 45,395
============= =============
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 0 $ 0
------------- -------------
Total Liabilities 0 0
Stockholders' Equity
Common stock, authorized 25,000,000
shares at $.001 par value, issued and
outstanding 601,200 shares and 401,200
shares, respectively 601 401
Additional paid-in capital 46,835 46,835
Income (deficit) accumulated during the
development stage (17,384) (1,841)
------------- -------------
Total Stockholders' Equity 30,052 45,395
Total Liabilities and Stockholders' Equity $ 30,052 $ 45,395
============= =============
The accompanying notes are an integral part of
these financial statements.
- F2 -
4
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
Inception
For the three For the three For the six For the six Sept. 8, 1998
months ended months ended months ended months ended to June
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 30, 2000
-------------- -------------- ------------- ------------- --------------
Sales $ 0 $ 0 $ 0 $ 0 $ 20,445
Cost of sales 0 0 0 0 17,823
Gross margin 0 0 0 0 2,622
-------------- -------------- ------------- ------------- --------------
Expenses
Organizational expense 0 0 0 0 185
Advertising 0 0 0 0 351
Consulting 1,500 1,500 3,000 3,000 9,100
Licenses and fees 60 103 68 103 747
Office expenses 0 0 0 0 535
Professional fees 1,727 0 4,179 0 7,579
Rent 245 0 490 0 572
Travel 0 0 0 0 737
Bonus stock 200 0 200 0 200
-------------- -------------- ------------- ------------- --------------
Total expenses 3,732 1,603 7,937 3,103 20,006
Net income (loss) before
provision for income taxes (3,732) (1,603) (7,937) (3,103) (17,384)
Income taxes 0 220 0 220
-------------- -------------- ------------- ------------- ---------------
Net income (loss) (3,732) (1,383) (7,937) (2,883) $ (17,384)
==============
Retained earnings
(deficit)beginning
of period (13,652) (458) (9,447) 1,042
-------------- -------------- ------------- -------------
Deficit accumulated
during the development
stage $ (17,384) $ (1,841) $ (17,384) $ (1,841)
============== ============== ============= =============
Earnings (loss) per
share assuming dilution $ (0.01) $ (0.01) $ (0.02) $ (0.01) $ (0.05)
============== ============== ============= ============= ==============
Weighted average shares
outstanding 467,867 267,067 434,533 233,533 340,780
============== ============== ============= ============= ==============
The accompanying notes are an integral part of these financial statements.
- F3 -
5
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM SEPTEMBER 8, 1998, (Date of Inception) TO
JUNE 30, 2000
Additional
Common Stock Paid-in
Shares Amount Capital Total
------------- ------------- ------------ -------------
Balance, September 8, 1998 - $ - $ - $ -
Issuance of common stock for cash,
November 19, 1998 200,000 200 9,800 10,000
Retained earnings 0 0 0 1,042
------------- ------------- ------------ -------------
Balance, December 31, 1998 200,000 200 9,800 11,042
Issuance of common stock for cash,
June 11, 1999 201,200 201 50,099 50,300
Less offering costs 0 0 (13,064) (13,064)
Less net loss 0 0 0 (10,489)
------------- ------------- ------------ -------------
Balance, December 31, 1999 401,200 401 46,835 37,789
Issuance of stock as bonus,
June, 2000 200,000 200 0 200
Less net loss 0 0 0 (7,937)
------------- ------------- ------------ -------------
Balance, June 30, 2000 601,200 $ 601 $ 46,835 $ 30,052
============== ============= ============ =============
The accompanying notes are an integral part of
these financial statements
-F4 -
6
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
For the three For the three For the six For the six Inception
months ended months ended months ended months ended Sept.8, 1998 to
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 June 30, 2000
-------------- -------------- ------------- ------------- --------------
CASH FLOWS PROVIDED BY
OPERATING ACTIVITIES
Net income or (loss) $ (3,732) $ (1,383) $ (7,937) $ (2,883) $ (17,384)
Adjustments to reconcile
net loss to cash used by
operating activity
Accounts payable (1,500) (2,005) (3,132) (720) 0
Accounts receivable 0 (220) 1,069 867 (215)
Inventories 0 0 0 0 (5,465)
Prepaid expenses 245 0 490 0 (409)
Stock bonus 200 0 200 0 200
Deposits 0 (109) 0 (109) (109)
-------------- -------------- ------------- ------------- --------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES (4,787) (3,717) (9,310) (2,845) (23,382)
CASH FLOWS USED BY
INVESTING ACTIVITIES 0 0 0 0 0
-------------- -------------- ------------- ------------- --------------
NET CASH USED BY
INVESTING ACTIVITIES 0 0 0 0 0
CASH FLOWS FROM
FINANCING ACTIVITIES
Sale of common stock 0 201 0 201 401
Paid-in capital 0 43,234 0 43,234 59,899
Less offering costs 0 (2,794) 0 (3,199) (13,064)
-------------- -------------- ------------- ------------- --------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 40,641 0 40,236 47,236
NET INCREASE IN CASH (4,787) 36,924 (9,310) 37,391 23,854
CASH AT BEGINNING
OF PERIOD 28,641 7,941 33,164 7,474 0
-------------- -------------- ------------- ------------- --------------
CASH AT END OF PERIOD $ 23,854 $ 44,865 $ 23,854 $ 44,865 $ 23,854
============== ============== ============= ============= ==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Issuance of 200,000 shares as bonus $ 200
==============
The accompanying notes are an integral part of these financial statements.
- F5 -
7
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000, AND JUNE 30, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company was incorporated on September 8, 1998, under
the laws of the State of Nevada. The business purpose of
the Company is to distribute, on a wholesale basis, specialty
packaging for small businesses nation wide.
The Company will adopt accounting policies and procedures
based upon the nature of future transactions.
NOTE B - INVENTORY
Inventory is stated at the lower of cost or market determined
on a first-in, first-out basis.
NOTE C - OFFERING COSTS
Offering costs are reported as a reduction in the amount of
paid-in capital received for sale of the shares.
NOTE D - EARNINGS (LOSS) PER SHARE
Basic EPS is determined using net income divided by the
weighted average shares outstanding during the period.
Diluted EPS is computed by dividing net income by the
weighted average shares outstanding, assuming all dilutive
potential common shares were issued. Since the Company
has no common shares that are potentially issuable, such as
stock options, convertible securities or warrants, basic and
diluted EPS are the same.
NOTE E - PUBLIC STOCK OFFERING
In June of 1999, the Company sold 201,200 shares of its
common stock at $.25 per share for a total of $50,300.
The net proceeds were to be used to distribute, on a wholesale
basis, specialty packaging for small businesses nation wide.
NOTE F - RELATED PARTY TRANSACTIONS
The Company has entered into an agreement with a company,
- F6-
8
ACCESS NETWORK CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2000 AND JUNE 30, 1999
(continued)
NOTE F - RELATED PARTY TRANSACTIONS (continued)
in which one of its shareholders has a controlling interest,
for the processing of credit card sales of its products. Under
terms of the agreement, the Company will pay 2.5% of all
of the sales processed by the Company using credit cards
as a method of payment. The credit card processing fees are
deducted as processed to arrive at net sales. The agreement
was effective December 1, 1998.
On June 1, 2000, the Company issued 200,000 shares of its
common stock to two of its officers for their dedication and
efforts to make the Company a success. The stock was
valued at the par value of $.001 per share for a total of $200.
NOTE G - STOCK BONUS
On June 1, 2000, the Company issued 200,000 shares of its
common stock to two of its officers for their dedication and
efforts to make the Company a success. The stock was
valued at the par value of $.001 per share for a total of $200.
The policy of the Company is that, when stock is issued as a
bonus, the assigned value is expensed in the Statement of
Operations.
F7
9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR
PLAN OF OPERATION
The following discussion provides information which Management believes
is relevant to an assessment and understanding of the Company's plan of
operation. This discussion should be read in conjunction with the Company's
financial statements and notes.
Forward Looking Statements
- --------------------------
This Form 10-QSB includes, without limitation, certain statements
containing the words "believes", "anticipates", "estimates", and words of a
similar nature, which constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. This Act
provides a "safe harbor" for forward-looking statements to encourage companies
to provide prospective information about themselves so long as they identify
these statements as forward looking and provide meaningful, cautionary
statements identifying important factors that could cause actual results to
differ from the projected results. All statements other than statements of
historical fact made in this Form 10-QSB are forward-looking. In particular,
the statements herein regarding the future purchase of equipment, hiring
additional personnel, potential contracts with third parties, future cash
requirements, and future profitability are forward-looking statements.
Forward-looking statements reflect management's current expectations and are
inherently uncertain. The Company's actual results may differ significantly
from management's expectations.
General
- -------
The Company currently operates at 2995 El Camino Road, Las Vegas, Nevada
89146. The Company's principal business is providing speciality gift packaging
to small businesses, especially independent sale personnel of direct marketing
entities. The Company's fiscal year end is December 31 of each year.
Results of Operations
- ---------------------
Revenues and Costs of Revenues
The Company achieves revenues from sale of its gift boxes. Cost of
revenues include inventory costs, inventory storage and shipping expenses.
Total revenues for the the three months ended June 30, 2000 were -0-. The
Company attributes this to the fact that (1) its gift box sales are not what
the Company had hoped they would be after almost two years of operations, and
(2) the majority of the Company's sales typically take place before Christmas
during the Company's fourth quarter. The Company had no costs associated with
sales in its first quarter of 2000. The Company's total revenues since
inception are $20,445 with total costs of sales equaling $17,823. Average net
profits since inception are 12%. The Company's costs of sales include mostly
the purchase of inventory of its Gable Boxes.
Assets
The Company's assets consist mainly of approximately $23,854 cash on
hand, inventory valued at $5,465, and accounts receivable of $215. The Company
has also prepaid approximately $400 in expenses. In the Company's first
quarter of 2000, the Company's inventory on hand increased from approximately
1,000 Gable Boxes to approximately 25,000 Gable Boxes; such inventory has
remained the same in the second quarter.
10
General and Administrative Expenses
General and Administrative expenses consist of advertising, consulting
fees, licenses and other fees, office expenses, professional fees, rent and
travel.
Comparative Periods - Second quarters June 30, 2000 and 1999
The Company total assets decreased approximately $15,000 from $45,395 in
the second quarter 1999 to $30,052 in the second quarter 2000. Cash at June
30, 2000 was $23,854 as compared to $ 44,865 as of June 30, 1999. The change
was primarily due to the close of the Company's offering on April 6, 1999 with
201,200 shares sold, for gross proceeds of $50,300. The Company at June 30,
1999 had not yet expended a large portion of these offering proceeds. The
decrease in cash was partially due to an inventory purchase which reflects as
an increase from $201 in June 1999 to $5,465 in June 2000.
Net losses for the six months ended June 30, 2000 were $ 7,937 as
opposed to a loss of $ 2,883 in the first six months of 1999. The increase in
the Company's net losses during the first half of 2000 is mainly due to both
an increase in general and administrative expenses reflected in professional
fees and the rent of storage space. There are no such expenses in the first
half of 1999.
Liquidity and Capital Resources
- --------------------------------
Cash Flows from Operations
The Company received payments on accounts receivable of over $1,000
during the first six months of 2000, although this occurred in the first
quarter. Accounts receivable are a result of sales during the last 1999
quarter. It also reduced its accounts payable from $3,132 at December 31,
1999 to $0 at the end of its second quarter, with a $1,500 reduction during
the first three months and the balance during the quarter ended June 30, 2000.
The Company continues to fund its losses through the cash on hand raised in
its offering of common stock conducted during early 1999. The Company's goal
in 2000 is to research the manufactures of Gable Boxes in an effort to achieve
the same net profit margin as in 1998 (24%) as well as increase its volume of
sales. If it is able to achieve and increase of sales at 24% profit margin,
its cash flows from operations will be sufficient to funds its business
operations so long as the Company did not significantly expand its operations.
The Company does not necessarily believe that revenues received during
1999 are indicative of its results of operations in the fiscal year of 2000,
nor does it believe that its first half year results are necessarily
indicative of what the Company can expect in sales during the 2000 fiscal
year. The Company expects that the majority of its revenues, if any, will be
generated through Christmas sales.
Financing Activities
The Company has funded its operations mostly through its contributions by
officers and directors through September of 1998, and through an offering of
its common stock which closed in April of 1999. The Company has 601,200
shares outstanding, the 201,200 of which were issued in that offering for
gross proceeds of $50,300; 200,000 were issued for cash contributions to
founders. The balance was issued during the Company's last fiscal quarter as
discussed under:
11
Cash Requirements over the Next Twelve Months
During the next twelve months, its cash requirements will include the
following: (1) $500 per month to its consultant, Progressive Management.
Progressive Management takes care of the Company's bookkeeping, audit
preparation and SEC filings and is controlled by the husband of Marci Evans,
Mr. Dennis Evans.;(2) Lease payments on a 10x15 feet storage unit from West
Sahara Mini Storage at 6318 W. Sahara Ave., Las Vegas, NV 89146; the lease is
prepaid to October of 2000 and is $96.00 per month;(4) expenses associated
with SEC reporting compliance of approximately $850 per month with the highest
estimated such expenses occurring during the Company's first quarter when its
annual report is due. Marci Evans has agreed to continue to forego her salary
of $1,000 and the Company does not intend to rent office space but will
continue to use the home of Marci Evans at no charge. The Company, therefore,
will require a minimum of $17,500 for the next 12 month for compensation for
services and lease payments. The Company believes that its cash on hand of
approximately $23,800 will be sufficient to provide for the foregoing cash
requirements in the next twelve months, including some extra expenses
associated with setting up a web site, advertising, purchasing some additional
inventory if warranted as well as other miscellaneous expenses.
There is no guarantee, however, that the funds available to the
Company will be sufficient to achieve the Company's goal of penetrating the
highly competitive market of specialty packaging. The Company will use every
effort to minimize its expenses during its next year of operations. It has no
plans for additional employees until or unless warranted due to business needs
and it will likely not rent office space. The Company will utilize the
services of Susan Stankiewicz, if needed, when and if business is such that it
requires additional employees especially to take and process orders.
The Company attributes all of its sales to personal business contacts of
management and believes the sales season during 2000 will also follow the same
trend. Management increased the Company's client base to over 100 from
referrals from 1998 years sales season to 1999. The Company hopes to rely on
that new customer base during 2000, although it is likely the Company will see
any significant sales activity until the Christmas season. The Company does
not plan to use any advertisement a this point. The Company will continue to
pursue its current market aggressively in the year 2000 holiday season.
Although the profit margin on sales to date has been minimal, revenues were
sufficient to cover costs; the Company intends to purchase products at a
better price if possible this year to keep competitive with its competitors.
Need for Additional Financing
If the Company does experience an increase in volume of sales as well as
an improved profit margin in the next twelve months, it may be forced to
discontinue operations unless it is able to raise sufficient capital to
continue pursuing its business plan. Management is not experienced
in developmental companies and may not have estimated its needs for
advertising and associated expenses in acquiring a client base accurately.
The Company may require additional funds and time to achieve these goals.
Even if the Company begins generating revenues, it could require additional
funding for expansion. It may be difficult for the Company to succeed in
securing additional financing. The Company may be able to attract some private
investors, or officers and directors may be willing to make additional cash
contributions, advancements or loans. Or, in the alternative, the Company
could attempt some form of debt or equity financing. However, there is no
guarantee that any of the foregoing methods of financing would be successful.
12
If the Company fails to achieve at least a portion of its business goals
in the next twelve months with the funds available to it, there is substantial
uncertainty as to whether it will continue operations.
Ms Evans intends to aggressively pursue a customer base of independent
sales directors for Mary Kay Inc. and other direct marketing companies over
the next 12 months.
Year 2000 Issues
- -----------------
Management has not encountered any problems with the Company's accounting
and operational systems. Management believes the operating systems in which
the company utilizes be to compliant and fully operational.
The Company is not dependent on computers other than for its internal
bookkeeping which is done on a Microsoft office 2000 system. The Company has
no relationship with any third parties which are dependent on computers other
than its bank.
Risks, Trends, Uncertainties
- ----------------------------
Lack of Operating History -The Company was only recently organized in
September of 1998, and has conducted minimal operations since to date.
The Company has limited assets of approximately $30,000. The Company conducted
operations during the last quarter of 1998 to test its ability to market
specialty packaging and met with some limited success with gross revenues for
that quarter of approximately $8,600 and net revenues of $2,100. In 1999, The
Company realized $11,854 as compared to $8,951 in 1998, respectively, in gross
sales from its Gable Boxes and related products. The Company had no revenues
in the first six months of 2000, however. Because of its limited capital and
its lack of significant operating history, the Company must be considered a
development stage company. Development stage companies are inherently more
risky than established companies because there is no earnings history and no
assurance that future revenues will develop.
Competition -The Company plans to develop a niche in a market, that is
the specialty packaging business, which is highly competitive with respect to
name recognition, volume discounts, and quality of experienced service. There
are many well established competitors possessing substantially greater
financial, marketing, personnel and other resources than the Company. The
Company can expect to face significant competition from a broad range of
companies involved in the wholesale distribution and sales of specialty
packaging. Many of these competitors are innovators in the area of single-ply
paperboard folding cartons in the packing industry and represent years of
research in products and services. The Company, therefore, expects intense
competition from such companies involved in the paper goods markets which have
already achieved success in the industry and also have the resources,
technology and marketing know-how to readily address changes in the industry.
No Formal Market Feasibility Study - The Company has not conducted a
formal market feasibility study or analysis to see if the product/services the
Company proposes to offer will be widely accepted locally or nationally. This
lack of market analysis poses an additional risk to the Company. The Company
has based its decision to continue forward in the specialty packaging business
based its operations in the fourth quarter of 1998 and fiscal year 1999, as
well as its first quarter of 2000 which was comprised of very limited product
line marketed to a limited number of small business users. The Company does
not consider its limited success during last year's fourth quarter to be
13
indicative of what it can expect in the future, nor of the feasibility of the
Company to be able to succeed with its business purposes.
Lack of Market Definition and Plan - Defining and measuring the
wholesale distribution of specialty packaging market has been difficult.
Wholesale trade is immense and almost all products sold to retail, commercial,
institutional and industry markets move through wholesale trade. The industry
has evolved into six distinct areas, one of which is wholesale paper goods and
services. The Company believes there is a specialty niche within the paper
goods market: specialty packaging. Although the Company has established that
a market for its goods and services exists, it has had no experience in
wholesale marketing nor in packaging and may have a difficult time defining
its market and narrowing the scope of its focus in order to best penetrate a
highly competitive industry with the limited funds available to it. The
Company must be able to identity and recognize industry trends, which change
frequently, and be flexible enough to address changes to meet customers'
needs. Although Management has formulated certain approaches it has used on a
limited basis and intends to continue to use regarding product line and
initial marketing approach, the Company has no definitive overall marketing
approach which will evolve as the Company conducts operations.
Conflicts of Interest and Potential Conflicts of Interest - All of the
Company's officers/directors are involved with other business and/or interests
which will take a portion of their time. Although these individuals are
willing to work full-time for the Company, they may not be able to devote 100%
of their time to the Company. Marci Evans, the Company's President, Secretary,
and a Director, is an independent Senior Sales Director for Mary Kay Cosmetics
and such position will require a portion of her time and efforts; Susan
Stankiewicz currently serves as Vice-President and a Director of another
corporation, which will require a portion of her time; and, Michael
Stankiewicz intends to attend school at the University of Nevada at least
part-time. Each of the directors, therefore, has other interests which will
demand a certain amount of their time, which, in some instances, could be
substantial. There is no assurance, therefore, if a conflict of interest
arose, that it would be resolved in favor of the Company. In addition, members
of Management may become involved in other business entities which have the
same or similar activities as the Company and unforseen conflicts of interest
could develop.
Inexperience of Management - Although Ms. Evans and Ms. Stankiewicz
have a varied background and business experience between them, and both have
served in various capacities with other start-up companies in the past,
neither have had experience in running a company in the start-up and
development stage, nor has either of these individuals had any experience in
the marketing, on a wholesale basis, of specialty packaging.
Dependence on Management/Key Personnel -The Company is extremely
dependent on Management. The loss of any of its officers could have a
material adverse effect on the Company's business. Because of the Company's
limited resources, no key person insurance has been, or will be purchased on
any of its officers. In addition, the future success of the Company is
dependent on the performance of Management, especially Marci Evans, and her
ability to attract and motivate and retain highly qualified employees, when
and if the Company has sufficient funds to do so. In the meantime, the
Company's business plan is based almost entirely on Marci Evans' analysis of
market trends, her product choices in response to such marketing analysis, her
ability to attract and maintain a steady customer base, and her ability to
market the product line to such clientele. The Company, as of this date cannot
14
afford to hire additional personnel to perform marketing services and all will
be performed by Management, mostly Ms. Evans. The Company is highly dependent,
therefore, on Ms. Evans ability to market its products. Because substantially
all of the Company's current customers are a result of Ms. Evans business and
personal contacts in the Mary Kay network, the loss of Marci Evans' services
would have a material adverse effect on the Company. In addition, in the
start-up phase, Management will continue to provide the Company, without
charge, the usage of a personal computer, copier, miscellaneous office
equipment, and a vehicle.
Dependence on Suppliers - Management believes that in order to compete
in the wholesale marketing and distribution of specialty packaging, it must
offer products which are readily available, high in quality and competitively
priced. The Company has begun establishing relationships with a number of
manufacturer/suppliers which it believes can meet the foregoing criteria. It
has not entered into nor plans to enter into any long term purchase contracts
with any of these manufacturer/suppliers. In 1999, the Company purchased
products from the following, Floral Supply Syndicate, Gift Box Corporation and
Costco Wholesalers. The Company must be able to purchase from its suppliers at
a price which will allow it to be competitive in the market place or find
others. In 1999, a buyout of its existing supplier, cut Company's profit
margin when the new owner did not offer the same volume discounts as it's
predecessor.
Seasonality of Specialty Packaging - Distribution of specialty packaging
is extremely seasonable especially in the target market niche the Company is
soliciting. In general, traditional holidays spur seasonal consumer buying.
The fourth calendar quarter is typically the highest sales volume quarter for
sales in the industry as a whole. The Company will have a more difficult type
forecasting purchasing and sales patterns, and, as a result, it may be very
difficult for the Company to survive the seasonableness of the industry.
ANY FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-QSB REFLECT
MANAGEMENT'S BEST JUDGMENT BASED ON FACTORS CURRENTLY KNOWN AND INVOLVE RISKS
AND UNCERTAINTIES. ACTUAL RESULTS MAY VARY MATERIALLY.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. Changes in Securities
During the Company's second fiscal quarter, it issued an aggregate
of 200,000 unregistered common shares to two of its officers: 150,000 shares
to Marci Evans and 50,000 shares to Michael Stankiewicz. The shares were
issued as a bonus to the two officers/directors for their efforts and
dedication to the Company. Marci Evans has foregone her $1,000 per month
salary since inception due to the Company's lack of revenues and will continue
to do so although she will continue to provide executive services to the
Company as well as provide potential contacts and sales efforts. The shares
were issued pursuant to the exemption provided under Section 4(2) as "an
isolated transaction, not involving a public offering" and were issued at par
value, $0.001.
15
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits filed with this Report
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on 8-K were filed during the quarter reported on.
15
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ACCESS NETWORK CORPORATION
(Registrant)
Date: August 7, 2000 By: /s/ Marci Evans
------------------------
Marci Evans, President
and Director