U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
THE EXCHANGE ACT
For the transition period from to
Commission File No. 0-32033
I-TELECO.COM, INC.
(Name of Small Business Issuer in Its Charter)
Florida
(State of Other Jurisdiction of
Incorporation or Organization)
65-0928369
(I.R.S. Employer
Identification No.)
1221 Brickell Avenue, Suite 900, Miami, Florida 33131
(Address of Principal Executive Offices) (Zip Code)
(305) 358-3678
(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 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 X No
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of May 15, 2002 the Company
had 40,398,185 shares of Common Stock outstanding, $0.0001 par value.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
BASIS OF PRESENTATION
The accompanying unaudited financial statements are presented in accordance with
generally accepted accounting principles for interim financial information and
the instructions to Form 10-QSB and item 310 under subpart A of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
The accompanying statements should be read in conjunction with the audited
financial statements for the year ended December 31, 2001. In the opinion of
management, all adjustments (consisting only of normal occurring accruals)
considered necessary in order to make the financial statements not misleading,
have been included. Operating results for the three months ended March 31,
2002 are not necessarily indicative of results that may be expected for the year
ending December 31, 2002. The financial statements are presented on the accrual
basis.
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
FINANCIAL STATEMENTS
AS OF AND FOR THE THREE MONTHS
ENDED MARCH 31, 2002 AND FOR THE PERIOD
DECEMBER 16, 1998 (DATE OF INCEPTION)
THROUGH DECEMBER 31, 2001
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
Page(s)
Balance sheets 1
Statements of operations 2
Statements of changes in stockholders' deficit 3 - 4
Statements of cash flows 5 - 6
Notes to financial statements 7 - 10
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
- -----------------------------------------------------------------------------------------------------------------------------------
UNAUDITED
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
2002 2001
-------------------------- -----------------------
ASSETS
CURRENT ASSETS:
Cash $ 0 $ 0
----------------------- ------------------------
Total current assets 0 0
----------------------- ------------------------
TOTAL ASSETS $ 0 $ 0
======================= ========================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 96,639 $ 89,906
Loan payable 25,000 25,000
Notes payable-related parties 3,600 96,100
Loans and advances payable-related party 1,582 0
----------------------- ------------------------
Total current liabilities 126,821 211,006
----------------------- ------------------------
STOCKHOLDERS' DEFICIT:
Common Stock, par value $.0001 per share; 50,000,000
shares authorized; 40,398,148 and 20,014,120 shares
issued and outstanding at March 31, 2002 and
December 31, 2002, respectively 4,040 2,001
Additional paid-in capital 200,445 100,563
Deficit accumulated during the development stage (331,306) (313,570)
----------------------- ------------------------
Total stockholders' deficit (126,821) (211,006)
----------------------- ------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 0 0
======================= ========================
The accompanying notes are an integral part of
these financial statements.
- 1 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
THREE MONTHS ENDED DECEMBER 16, 1998
MARCH 31, (DATE OF INCEPTION) TO
2002 2001 MARCH 31, 2002
-------------------- --------------------- -------------------------
DEVELOPMENT STAGE REVENUES $ 0 $ 0 $ 0
-------------------- --------------------- ----------------------
DEVELOPMENT STAGE REVENUES
Amortization 0 0 100
Accounting 9,660 3,000 38,783
Bank charges 30 57 758
Corporate fees 2,022 2,447 17,346
Consulting fees 0 0 2,037
Dues and subscriptions 0 0 175
Equipment rental 0 0 1,599
Insurance 0 860 7,783
Legal fees 1,130 3,330 21,632
Office general 1,451 0 2,319
On-line services 75 75 500
Payroll taxes 0 2,596 12,171
Printing 0 315 315
Salary 0 28,846 179,738
Seminars and conferences 0 0 2,115
Shareholder related services 0 163 0
Telephone 0 89 4,790
Transfer agent fees 0 1,424 0
Travel 0 302 8,954
Website development fee 0 0 18,538
Miscellaneous 0 0 230
-------------------- --------------------- ----------------------
TOTAL DEVELOPMENT STAGE EXPENSES 14,368 43,504 319,883
-------------------- --------------------- ----------------------
LOSS FROM OPERATION $ (14,368) $ (43,504) $ (319,883)
-------------------- --------------------- ----------------------
OTHER INCOME (EXPENSE):
Cancellation of debt (as restated) 0 0 0
Interest expense (3,368) (1,565) (11,423)
-------------------- --------------------- ----------------------
(3,368) (1,565) (11,423)
-------------------- --------------------- ----------------------
NET LOSS $ (17,736) $ (45,069) $ (331,306)
==================== ===================== ======================
LOSS PER COMMON SHARE
Basic and Diluted $ 0 $ (0.002)
==================== =====================
Weighted-average number of common shares
outstanding 23,864,436 19,007,217
==================== =====================
The accompanying notes are an integral part of
these financial statements.
- 2 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
- ----------------------------------------------------------------------------------------------------------------------------------
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------ ------ ------- ----- -----
Balance, December 16, 1998 (inception) 0 $ 0 $ 0 $ 0 $ 0
Common stock issued to related party for 19,000,000 1,900 (1,800) 0 100
management services
Loss for the period December 16, 1998 (Date
of Inception) through December 31, 1998 0 0 0 (100) (100)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1998 19,000,000 1,900 (1,800) (100) 0
Loss for the year ended December 31, 1999 0 0 0 (7,549) (7,549)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1999 19,000,000 1,900 (1,800) (7,649) (7,549)
Loss for the year ended December 31, 2000 0 0 0 (228,960) (228,960)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 2000 19,000,000 1,900 (1,800) (236,609) (236,509)
The accompanying notes are an integral part of
these financial statements.
- 3 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED)(continued)
- ----------------------------------------------------------------------------------------------------------------------------------
DEFICIT
ACCUMULATED
ADDITIONAL DURING THE
COMMON STOCK PAID-IN DEVELOPMENT
SHARES AMOUNT CAPITAL STAGE TOTAL
------ ------ ------- ----- -----
Balance, December 31, 2000 19,000,000 1,900 (1,800) (236,609) (236,509)
Cancellation of debt - related party 0 0 102,364 0 102,364
Increase in common stock issued resulting from
agreement and plan of distribution ("spin-off") 14,120 1 (1) 0 0
Common stock issued for management services 1,000,000 100 0 0 100
Loss for the year ended December 31, 2001 0 0 0 (76,961) (76,961)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 2001 20,014,120 2,001 100,563 (313,570) (211,006)
Common stock issued for the conversion of
promissory notes 20,384,028 2,039 99,882 0 101,921
Loss for the three months ended March 31, 2002 0 0 0 (17,736) (17,736)
---------- ---------- ---------- ---------- ----------
Balance, March 31, 2002 40,398,148 $ 4,040 $ 200,445 $ (331,306) $ (126,821)
========== ========== ========== ========== ==========
The accompanying notes are an integral part of
these financial statements.
- 4 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD
THREE MONTHS ENDED DECEMBER 16, 1998
MARCH 31, (INCEPTION) TO
2002 2001 MARCH 31, 2002
-------------------- --------------------- ------------------------
OPERATING ACTIVITIES
Loss accumulated during the development stage $ (17,736) $ (45,069) $ (331,306)
Adjustments to reconcile net loss to net cash
(used in) provided by operations:
Cancellation of debt relating to domain name 0 0 (50,000)
Amortization 0 0 100
Changes in assets and liabilities:
(Increase) Decrease in prepaid expenses 0 425 100
Increase (Decrease) in accounts payable and
accrued expenses 16,154 16,155 156,059
-------------------- --------------------- ----------------------
Net cash (used in) provided by operating activities (1,582) (28,489) (225,047)
-------------------- --------------------- ----------------------
FINANCING ACTIVITIES
Proceed from loans and advances -
related party (as restated) 1,582 0 164,697
Proceed from short term borrowings 0 32,600 60,350
-------------------- --------------------- ----------------------
Net cash provided by financing activities 1,582 32,600 225,047
-------------------- --------------------- ----------------------
Decrease in cash 0 4,111 0
-------------------- --------------------- ----------------------
Cash, beginning of year 0 49 0
-------------------- --------------------- ----------------------
Cash, end of year $ 0 $ 4,160 $ 0
==================== ===================== ======================
The accompanying notes are an integral part of these financial statements.
- 5 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
During the three months ended March 31, 2002 and 2001 and for the cumulative
period December 16, 1998 (inception) to March 31, 2002, the Company did not pay
any interest.
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
The Company entered into the following non-cash transactions:
During the period ended December 31, 1998, the Company issued 19,000,000, post
split, shares of common stock to i-Incubator.Com, Inc. ("Incubator") formerly
known as Master Communications, Corp. in consideration of management services in
connection with the formation of the Company. This transaction was valued at
$100.
On September 1, 2000, the Company entered into an agreement with Michael D.
Farkas, the director of Incubator and a related party, to purchase a domain
name, i-Teleco.com, for $50,000. On August 24, 2001, the Company and Michael D.
Farkas entered into an agreement to cancel this transaction. Accordingly, the
$50,000 due to Michael D. Farkas under the original agreement was cancelled by
Mr. Farkas in consideration for the return of the Company's domain names.
On January 19, 2001, the Company entered into an agreement and plan of
distribution ("spin-off") with its parent company Incubator. Shareholders of
Incubator received .7810 shares of the Company's common stock for each share of
Incubator. The spin-off resulted in 14,120 additional shares issued due to
rounding. This transaction was valued at $1. In addition, prior to the
distribution, the total amount of debt owed to Incubator of $102,364 was
cancelled and recorded as additional paid-in capital.
On May 22, 2001, the Company issued 1,000,000 shares of common stock in
consideration of management services rendered to the Company. This transaction
was valued at $100.
On March 14, 2002, the Company issued 14,201,502 shares of common stock to Atlas
Equity Group at $0.005 per share for the conversion of promissory notes in the
amount of $64,750 and accrued interest of $6,257.
On March 14, 2002, the Company issued 6,182,526 shares of common stock to
Ostonian Securities Ltd. at $0.005 per share for the conversion of past due
promissory notes in the amount of $27,750 and accrued interest of $3,164.
The accompanying notes are an integral part of these financial statements.
- 6 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
1. ORGANIZATION
i-TeleCo.com, Inc. ("the Company"), formerly Mastertel Communications
Corp., was incorporated on December 16, 1998 under the laws of the State of
Florida. The Company's operations have been devoted primarily to
structuring and positioning itself to provide telecommunication services in
various markets throughout the United States. The Company intends to grow
through internal development, strategic alliances and acquisitions of
existing business. The company has the authority to issue 50,000,000 shares
of common stock. The Company is a development stage company and has had
limited activity.
The Company was a wholly owned subsidiary of i-Incubator.com, Inc.
("Incubator"), formerly known as Master Communication, Inc., a publicly
traded company listed on the OTC Electronic Bulletin Board (OTCBB:INQU). On
January 19, 2001, the Company entered into an agreement and plan of
distribution ("spin-off") with Incubator. On spin-off, the shareholders of
i-Incubator received 0.7810 shares of the Company's common stock for each
share of Incubator owned as of February 13, 2001, totaling 19,014,120
common shares. As a result of this spin-off and share distribution, Atlas
Equity Group, Inc., a related party, in which Michael D. Farkas is a
beneficial owner, received 3,999,985 shares, representing approximately 21%
of the Company's outstanding common stock, The Farkas Group, Inc., in which
Michael D. Farkas is a beneficial owner, received 2,577,300 shares
representing approximately 13.5% of the Company's common stock and GSM
Communications, Inc. in which Michael D. Farkas is a beneficial owner,
received 2,153,217 shares representing approximately 11.3% of the Company.
Also, as a result of the spin off, i-Incubator agreed to cancel the debt
owed by the Company of $102,364.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information.
In the opinion of management, all adjustments consisting of normal
recurring accruals considered necessary in order to prepare the interim
financial statements have been included. Results for the interim periods
are not necessarily indicative of the results that may be expected for the
year.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities as of the date of the
financial statements and reporting period. Accordingly, actual results
could differ from those estimates.
CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, the company considers all highly
liquid investments purchased with an original maturity of three months or
less to be cash equivalents.
CARRYING VALUES
The Company reviews the carrying values of its long-lived and identifiable
intangible assets for possible impairment. Whenever events or changes in
circumstances indicate that the carrying amount of assets may not be
recoverable, the Company will reduce the carrying value of the assets and
charge operations in the period the impairment occurs.
- 7 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INCOME TAXES
The Company utilizes Statement of Financial Standards ("SFAS") No. 109,
"Accounting for Income Taxes", which requires the recognition of deferred
tax assets and liabilities for the expected future tax consequences of
events that have been included in financial statements or tax returns.
Under this method, deferred income taxes are recognized for the tax
consequences in future years of differences between the tax basis of assets
and liabilities and their financial reporting amounts at each period end
based on enacted tax laws and statutory tax rates applicable to the periods
in which the differences are expected to affect taxable income. Valuation
allowances are established when necessary to reduce deferred tax assets to
the amount expected to be realized. The accompanying financial statements
have provided a valuation allowance to offset net deferred tax assets.
NET LOSS PER SHARE
The Company has adopted SFAS No. 128 "Earnings Per Share". Basic loss per
share is computed by dividing the loss available to common shareholders by
the weighted-average number of common shares outstanding. Diluted loss per
share is computed in a manner similar to the basic loss per share, except
that the weighted-average number of shares outstanding is increased to
include all common shares, including those with the potential to be issued
by virtue of warrants, options, convertible debt and other such convertible
instruments. Diluted earnings per share contemplates a complete conversion
to common shares of all convertible instruments only if they are dilutive
in nature with regards to earnings per share. Since the Company has
incurred net losses for all periods, and since there are no convertible
instruments, basic loss per share and diluted loss per share are the same.
FAIR VALUE OF FINANCIAL INSTRUMENTS
SFAS No. 107 "Disclosures about Fair Value of Financial Instruments"
requires the disclosure of the fair value of financial instruments. The
Company's management, using available market information and other
valuation methods, has determined the estimated fair value amounts.
However, considerable judgment is required to interpret market data in
developing estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts the Company could
realize in a current market exchange.
STOCK COMPENSATION
Stock-based compensation is recognized using the intrinsic value method
prescribed in Accounting Principles Board ("APB") Opinion No. 25,
Accounting for Stock Issued to Employees, and related interpretations.
Accordingly, compensation expense for stock options is measured as the
excess, if any, of the fair value of the Company's stock at the date of the
grant over the amount an employee must pay to acquire the stock and is
amortized over the vesting period. The Company has adopted the disclosure
provisions of SFAS No. 123, Accounting for Stock-Based Compensation, which
requires the Company to disclose the pro forma effects on earnings and
earnings per share as if SFAS No. 123 had been adopted.
3. DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN MATTERS
The Company's initial activities have been devoted to developing a business
plan, structuring and positioning itself to take advantage of opportunities
available in the internet industry and raising capital for future
operations and administrative functions.
- 8 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
3. DEVELOPMENT STAGE OPERATIONS AND GOING CONCERN MATTERS (continued)
The ability of the Company to achieve its business objectives is contingent
upon its success in raising additional capital until adequate revenues are
realized from operations.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. As shown in the financial
statements, development stage losses from December 16, 1998 (date of
inception) to March 31, 2002 aggregated $331,306. The Company's cash flow
requirements during this period have been met by contributions of capital
and debt financing. No assurance can be given that these sources of
financing will continue to be available. If the Company is unable to
generate profits, or unable to obtain additional funds for its working
capital needs, it may have to cease operations.
The financial statements do not include any adjustments relating to the
recoverability and classification of assets or liabilities that might be
necessary should the Company be unable to continue as a going concern.
4. INCOME TAXES
No provision for income taxes has been made because the Company has
sustained cumulative losses since the commencement of operations. As of
March 31, 2002 and December 31, 2001, the Company had net operating loss
carryforwards ("NOL's") of approximately $331,000 and $313,000,
respectively, which will be available to reduce future taxable income
through December 31, 2022 and 2021, respectively.
In accordance with SFAS No. 109 the Company has computed the components of
deferred income taxes as follows.
(UNAUDITED)
MARCH 31, DECEMBER 31,
2002 2001
----------------------- ------------------------
Deferred tax assets $ 131,000 $ 123,000
Valuation allowance (131,000) (123,000)
----------------------- ------------------------
Deferred tax asset, net $ 0 $ 0
======================= ========================
At March 31, 2002 and December 31, 2001, a valuation allowance has been
provided as the realization of the deferred tax benefit is not likely.
The effective tax rate varies from the U.S. Federal statutory tax rate for
both the periods ended March 31, 2002 and December 31, 2001, principally
due to the following:
U.S. statutory tax rate 34.0 %
State and local taxes 5.5
Valuation allowance (39.5)
------------
Effective rate 0.0 %
============
- 9 -
I-TELECO.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses as of March 31, 2002 and December 31,
2001 consisted of the following:
(UNAUDITED)
MARCH 31, DECEMBER 31,
2002 2001
---------------------------- --------------------
Accounts payable $ 77,928 $ 74,224
Accrued expenses 16,707 7,625
Accrued interest 2,004 8,057
----------------------- ------------------------
Total accounts payable and accrued expenses $ 96,639 $ 89,906
======================= ========================
6. LOAN PAYABLE
On November 29, 2001, the Company received a loan in the amount of $25,000,
due and payable January 20, 2002. The loan bears interest at the rate of
one and a half percent (1.5%) per month on the unpaid portion of the loan
or the highest interest allowed by the laws and regulations of the State of
New York, whichever is the higher, compounded monthly.
The amount of interest accrued as of March 31, 2002 and December 31, 2001
were $1,525 and $375, respectively.
7. NOTES PAYABLE
As of March 31, 2002 and December 31, 2001, notes payable totalled $3,600
and $96,100, respectively. These notes are short-term borrowings with
maturities of less than or equal to one year, with a interest rates ranging
from 8.25% to 11%.
8. STOCKHOLDERS' EQUITY
On January 19, 2001, the Company entered into an agreement and plan of
distribution ("spin-off") with its parent company Incubator. Shareholders
of Incubator received .7810 shares of the Company's common stock for each
share of Incubator. The spin-off resulted in the issuance of 14,120
additional shares due to rounding. This transaction was valued at $1. In
addition, prior to distribution, the total debt owed to Incubator of
$102,364 was cancelled and recorded as additional paid-in capital. The
statement of operations and cash flows for the three months ended March 31,
2001 has been restated to reflect the cancellation of debt as an adjustment
to additional paid-in capital.
On March 14, 2002, the Company issued 14,201,502 shares of common stock to
Atlas Equity Group at $0.005 per share for the conversion of promissory
notes in the amount of $64,750 and accrued interest of $6,257.
On March 14, 2002, the Company issued 6,182,526 shares of common stock to
Ostonian Securities Ltd. at $0.005 per share for the conversion of past due
promissory notes in the amount of $27,750 and accrued interest of $3,164.
- 10 -
Item 2. Management's Discussion and Analysis or Plan of Operation
- ------------------------------------------------------------------
The following plan of operation provides information which management believes
is relevant to an assessment and understanding of our results of operations and
financial condition. The discussion should be read along with our financial
statements and notes thereto. i-TeleCo.com, Inc., is a development - stage
company. Because the Company has not generated any revenue, it intends to report
its plan of operation below.
The following discussion and analysis contains forward-looking statements, which
involve risks and uncertainties. The Company's actual results may differ
significantly from the results, expectations and plans discussed in these
forward-looking statements.
The Company's operations have been devoted primarily to developing a business
plan and raising capital for future operations and administrative functions. The
Company intends to grow through internal development, strategic alliances, and
acquisitions of existing businesses. Because of uncertainties surrounding its
development, the Company anticipates incurring development stage losses in the
foreseeable future. The ability of the Company to achieve its business
objectives is contingent upon its success in raising additional capital until
adequate revenues are realized from operations.
PERIOD FROM DECEMBER 16, 1998 (DATE OF INCEPTION) THROUGH MARCH 31, 2002
Our cumulative net losses since the inception are attributable to the fact that
we have not derived any revenue from operations to offset out business
development expenses.
Operating expenses since inception have amounted to ($331,306), primarily
consisting of accounting ($38,783), legal ($21,632), salary ($179,738) and
website development fees ($18,538).
THREE MONTHS ENDED MARCH 31, 2002 AND MARCH 31, 2001
Development stage loss during the three months ended March 31, 2002 was
($17,736) as compared to development stage loss during the three months ended
March 31, 2001 was $(45,069).
Expenses for the three months ended March 31, 2002 were primarily accounting
($9,660), legal ($1,130), and corporate fees ($2,022). These fees are related to
the Company's regulatory filings.
Item 2. Management's Discussion and Analysis (cont.)
- -----------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
Despite capital contributions and both related party and third party loan
commitments, the company from time to time experienced, and continues to
experience, cash flow shortages that have slowed the Company's growth.
The Company has primarily financed its activities from sales of capital stock of
the Company and from loans from related and third parties. A significant portion
of the funds raised from the sale of capital stock has been used to cover
working capital needs such as office expenses and various consulting fees.
For the year three months ended March 31, 2002, we had a net loss of $17,736.
Our accumulated deficit since inception is $331,306. Such accumulated losses
have resulted primarily from costs incurred in the development of website,
salary and various professional fees.
The Company continues to experience cash flow shortages, and anticipates this
continuing through the foreseeable future. Management believes that additional
funding will be necessary in order for it to continue as a going concern. The
Company is investigating several forms of private debt and/or equity financing,
although there can be no assurances that the Company will be successful in
procuring such financing or that it will be available on terms acceptable to the
Company.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. None
Item 2. Changes in Securities. None
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 of Form 8-K. None
(a) Exhibits required by Item 601 of Regulation S-B. None
(b) Reports of Form 8-K. None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed in its
behalf by the undersigned, thereunto duly authorized, on May 16, 2002.
I-Teleco.com, Inc.
(Registrant)
Date: May 16, 2002 /s/ Jamee Kalimi
---------------------
President