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 September 30, 2000.
[ ] Transition report under Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ______ to ______ .
Commission file number: 0-29383
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WICHITA DEVELOPMENT CORPORATION
-------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 88-0356200
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
268 West 400 South, Suite 300, Salt Lake City, Utah 84101
---------------------------------------------------------
(Address of principal executive office) (Zip Code)
(801) 575-8073
--------------
(Issuer's telephone number)
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 XX No
The number of outstanding shares of the issuer's common stock, $0.001 par value
(the only class of voting stock), as of November 13, 2000 was 19,492,000.
TABLE OF CONTENTS
PART I
ITEM 1. FINANCIAL STATEMENTS..................................................3
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.............4
PART II
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS..............................6
ITEM 5. OTHER INFORMATION.....................................................7
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K......................................7
SIGNATURES.....................................................................8
INDEX TO EXHIBITS..............................................................9
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PART I
ITEM 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to Wichita Development Corporation,
formerly known as Cyberbotanical, Inc., a Nevada corporation, and its
subsidiaries and predecessors unless otherwise indicated. Unaudited, condensed
interim financial statements including a balance sheet for the Company as of the
quarter ended September 30, 2000 and statements of operations, statements of
shareholders equity and statements of cash flows for the interim period up to
the date of such balance sheet and the comparable period of the preceding year
are attached hereto as Pages F-1 through F-5 and are incorporated herein by this
reference.
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INDEX TO FINANCIAL STATEMENTS
Unaudited Balance Sheet as of September 30, 2000.............................F-2
Unaudited Statement of Operations for the three and nine months ended
September 30, 2000 and 1999..................................................F-3
Unaudited Statement of Cash Flows for the three and nine months ended
September 30, 2000 and 1999..................................................F-4
Notes to Condensed Financial Statements......................................F-5
F-1
CYBERBOTANICAL, INC.
(A Development Stage Company until August 30, 2000)
Balance Sheets
As of September 30, 2000
(Unaudited)
September 30,
2000
--------------------
ASSETS
CURRENT ASSETS:
Cash $ 16,260
--------------------
TOTAL CURRENT ASSETS 16,260
Property, Plant & Equipment (net) 538,379
--------------------
TOTAL ASSETS $ 554,639
====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable - Related Parties 9,319
Accrued Expenses 7,776
--------------------
TOTAL CURRENT LIABILITIES 17,095
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value; authorized 5,000,000 shares; no
shares issued -
Common stock, $.001 par value; authorized 200,000,000 shares;
shares issued and outstanding: 19,492,000 on September 30, 2000 19,492
Additional paid-in capital 519,927
Accumulated deficit (1,875)
--------------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY) 537,544
--------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 554,639
====================
The accompanying notes are an integral part of these financial statements
F-2
CYBERBOTANICAL, INC.
(A Development Stage Company until August 30, 2000)
Unaudited Statements of Operations
For the Nine Months Ended September 30, 2000 and 1999
For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
-------------- ------------- ------------- -------------
Revenue:
Rental Income $ 27,264 $ - $ 27,264 $ -
-------------- ------------- ------------- -------------
Expenses
Costs associated with rental income 20,062 - 20,062 -
-------------- ------------- ------------- -------------
Gross Rental Profit (Loss) 7,202 - 7,202 -
Selling, General & Administrative Expenses 6,112 - 7,071 -
-------------- ------------- ------------- -------------
Operating Profit (Loss) 1,090 - 131 -
-------------- ------------- ------------- -------------
Provision for income taxes - - - -
Net Income (Loss) $ 1,090 $ - $ 131 $ -
============== ============= ============= =============
Net loss per common share - basic $ - - $ - $ -
============== ============= ============= =============
Weighted average number of shares
outstanding - basic 8,146,945 1,000,000 4,076,981 1,000,000
============== ============= ============= =============
The accompanying notes are an integral part of these financial statements
F-3
CYBERBOTANICAL, INC.
(A Developmental Stage Company until August 30, 2000)
Unaudited Statements of Cash Flows
For the Nine Months Ended September 30, 2000 and 1999
For the Three Months For the Nine Months
Ended Ended
September 30 September 30,
2000 1999 2000 1999
------------ ---------- ------------ ------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $ 1,090 $ - $ 131 $ -
------------ ---------- ------------ ------------
Adjustments to reconcile net (loss) to net cash
used byoperating activities:
Decrease in accounts receivable - - 360 -
Increase in accounts payable 8,309 - 9,319 -
Increase in accrued expenses 7,776 - 7,776 -
Stock issued for services 1,500 - 1,500 -
------------ ---------- ------------ ------------
Total adjustments 17,585 - 18,955 -
------------ ---------- ------------ ------------
Net cash provided (used) by operating activities 18,675 - 19,086 -
CASH FLOWS FROM INVESTING ACTIVITIES
Capital purchases (Board of Trade building) (538,379) - (538,370) -
------------ ---------- ------------ ------------
Net cash provided (used) by investing activities (538,379) - (538,370) -
CASH FLOWS FROM FINANCING
ACTIVITIES:
Common stock issued for cash 540,553 540,553
Common stock bought back for cash (5,000) - (5,000) -
------------ ---------- ------------ ------------
Net cash provided by financing activities 535,553 - 535,553 -
Net increase (decrease) in cash 15,849 - 16,260 -
------------ ---------- ------------ ------------
Cash, beginning 411 - - -
------------ ---------- ------------ ------------
Cash, ending $ 16,260 $ - $ 16,260 $ -
============ ========== ============ ============
The accompanying notes are an integral part of these financial statements
F-4
CYBERBOTANICAL, INC
NOTES TO CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS
September 30, 2000
1. Basis of Presentation
The accompanying consolidated unaudited condensed financial statements have been
prepared by management in accordance with the instructions in Form 10-QSB and,
therefore, do not include all information and footnotes required by generally
accepted accounting principles and should, therefore, be read in conjunction
with the Company's initial registration statement on Form 10-SB, filed with the
Securities and Exchange Commission on February 8, 2000. These statements do
include all normal recurring adjustments which the Company believes necessary
for a fair presentation of the statements. The interim operations results are
not necessarily indicative of the results for the full year ended December 31,
2000.
2. Related Party Transactions
At the conclusion of the third quarter, Hudson Consulting Group, Inc. billed the
Company $935.00 for services rendered in preparing disclosure documents and
general administrative tasks with regards to day to day operations. Richard
Surber is president of both Hudson Consulting Group, Inc. and the Company.
3. Additional footnotes included by reference
Except as indicated in Notes above, there have been no other material changes in
the information disclosed in the notes to the financial statements included in
the Company's initial registration statement on Form 10-SB, filed with the
Securities and Exchange Commission on February 8, 2000. Therefore, those
footnotes are included herein by reference.
F-5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
General
The Company's operations consist of the acquisition and lease of commercial real
estate. The Company intends to acquire additional properties that it believes
are undervalued in relation to cash flows and prospective resale. The Company
will attempt to acquire such properties by assuming existing favorable financing
and satisfying the balance of any purchase price with nominal cash payments
and/or the issuance of the Company's common stock. Once properties are acquired,
the Company intends to lease primarily to commercial tenants. The Company is
prepared to make limited improvements to its properties with the objective of
increasing occupancy, improving cash flows and increasing potential resale
value.
Description of Property
The Company currently owns, in fee, an office building in Wichita, Kansas (the
"Building"), known as the Board of Trade Center. The Building is located in the
downtown business district of Wichita, Kansas, at 120 South Market Street,
Wichita, Kansas and is a 48,500 square foot, eight story office building.
Occupancy rates at the Building currently exceed 83% and the prior management of
the Building has been retained to continue operation of the Building. The
Building is rented at an average of approximately $8.00 a square foot by the
current tenants, including the prior owners of the Building who remain as
tenants. The Company is of the opinion that the Building is adequately covered
by insurance.
The area in which the Building is located is part of the downtown business area
of Wichita, Kansas. The downtown area vacancy rate for office space similar to
the Building averages 15%, and has been rising in recent years as businesses
leave the downtown area to move to newer space in the suburbs. However, per
square foot rental rates in the downtown are as much as 50% less than suburban
office space, which contributes to the ability of downtown office buildings to
retain tenants.
The Building's operations are managed by R.E. & C.N. Black, Inc. ("Agent") by
way of a management agreement entered into on August 19, 1997, and renewed
effective September 1, 2000 between the Company and the Agent. The Company
agreed to compensate Agent at the rate of $3,500 per month, plus 3% of lease
value for leasing new space, and 2.5% of value for lease renewals. Agent agreed
to manage the property, and provide for maintenance and rent collection. Agent
is also responsible for renting vacant space in the Building.
The Company does not have any present plans to renovate the Building or
otherwise to carry out any capital improvements to the property. The Company
intends to continue to rent the existing space without renovation or
improvement, unless such renovations or improvements are paid for by an existing
or prospective tenants.
Expected Cash Requirements
The Building generates average monthly lease and rental revenues of Twenty-Seven
Thousand Two Hundred Sixty-Four Dollars ($27,264). Five Thousand One Hundred
Twenty Eight Dollars ($5,128) per month is received from tenants occupying 9,307
square feet of space on a month to month basis, Twenty-One Thousand Six Hundred
Ninety Six Dollars ($21,696) is generated from leases of 31,000 square feet, and
Four Hundred Thirty Eight Dollars ($438) per month is received from rental of
storage space on the premises.
4
Monthly expenses average $14,000. This creates a net monthly profit of
approximately $13,264. The Company believes that rental income will be
sufficient to meet cash requirements for operations for the next twelve months.
At the current time, it is estimated that the Company will need approximately
$210,000 to fund operations at their present level through the end of the 2001
calendar year. This estimate is based upon the assumption that monthly operating
costs will remain relatively constant. An unexpected increase or decrease in
operating costs could cause this estimate to vary. There can be no guarantee
that operating costs or rental income will remain constant through the end of
the year 2001. The Company expects to be able to fund its operating expenses
from rental income.
Of the Building's ten present tenants, four tenants rent a total of 9,307 feet
on a month-to-month basis. Five tenants have leases expiring December 31, 2001,
which leases represent 19,109 square feet or 39% of the available space. One
tenant has a lease on 8,809 square feet which expires August 31, 2002. This
lease represents 18% of the available space. One tenant has a lease on 3,082
square feet which expires February 28, 2003. This lease represents 6% of the
available space.
Of the existing tenants, three occupy more than 10% each of the available space
in the Building. The nature of the business of each of these tenants and the
principal provisions of their leases are outlined below:
1. Southwest Internet Access, Inc. is an Internet Service Provider which
rents 8,809 square feet of building space (18%) for $7,792 per month
pursuant to a lease which expires August 31, 2002.
2. New England Life Insurance Company is an insurance company which rents
9,537 square feet of building space (20%) for $6,786 per month
pursuant to a lease which expires December 31, 2001.
3. The Office and Technology Center is a secretarial service which rents
two spaces, one of which is 4,321 square feet of building space
pursuant to a lease which expires December 31, 2001 and the other is
4,724 square feet of building space on a month-to-month basis (a total
of 18%) for a total rental of $3,725.
Investment Policies
The Company's policy is to actively pursue the acquisition of real estate for
investment income and appreciation in property value. The Company intends to
place an emphasis on acquiring property which management feels is undervalued.
Rather than limiting itself to specific types of real estate, the Company's
policy will be to focus primarily on terms of financing and potential return on
capital. The Company intends to look for properties that can be purchased by
assuming the existing financing or by paying the balance of the purchase price
with a nominal cash expenditure and/or the issuance of shares of the Company's
common stock. The Company has no present intention to invest in first or second
mortgages, interests in Real Estate Investment Trusts or Real Estate Limited
Partnerships. However, the Company's board of directors is not precluded in the
future from considering or participating in such investments.
The Company currently has no limitations on the percentage of assets which may
be invested in any one investment, or the type of securities or investment in
which it may invest. However, the board of directors in its discretion may set
policies without a vote of the Company's security holders regarding the
percentage of assets which may be invested in any one investment, or type of
investment. The Company's current policy is to evaluate each investment based
upon its potential capital return to the Company on a relatively short term
basis. Furthermore, the Company does not plan to enter into the business of
originating, servicing or warehousing mortgages or deeds of trust, except as may
be incidental to its primary purpose of acquiring real estate.
5
Product Research and Development
We do not plan to conduct any significant research or development activities in
the coming twelve month period.
Expected Purchase or Sale of Plant and Equipment
We have no current plan for the purchase of any specific additional plant or
equipment. However, we are investigating the feasibility of purchasing
additional office properties in the Wichita area. Our current plan is to pursue
the purchase of additional office properties. We are using the services of a
licensed real estate broker in the Wichita area to suggest potential properties
for our consideration. We have investigated a number of potential properties and
are continuing to consider the purchase of additional office properties in the
Wichita area.
Employees
We currently have one part-time employee, Mr. Richard D. Surber, who serves as
the Company's President. The Wichita office building is currently managed by our
onsite Agent. We do not expect any significant change in the number of employees
in the coming twelve month period.
PART II
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
On August 29, 2000, the Company issued 18,400,000 shares of common stock at
$0.0293 per share to Kelly's Coffee Group, Inc. for cash pursuant to section
4(2) of the Securities Act of 1933 in an isolated private transaction by the
Company which did not involve a public offering. The Company made this offering
based on the following factors: (1) The issuance was an isolated private
transaction by the Company which did not involve a public offering; (2) there
was only one offeree who was issued stock for cash; (3) the offeree did not
resell the stock but has continued to hold it since the date of the transaction;
(4) there were no subsequent or contemporaneous public offerings of the stock;
(5) the stock was not broken down into smaller denominations; and (6) the
negotiations for the sale of the stock took place directly between the offeree
and the Company.
The entire $540,554 raised on the sale of said shares was used by the Company to
purchase an office building located in the downtown business district of
Wichita, Kansas, at 120 South Market Street, Wichita, Kansas.
ITEM 5. OTHER INFORMATION
Name Change
Subsequent to the close of the quarter ended September 30, 2000, the Company
filed with the State of Nevada an amendment to its articles of incorporation
changing the name of the Company to Wichita Development Corporation. The name
change was approved by a majority of outstanding shares as required by the
Nevada Revised Statutes.
6
Increase in Authorized Common Shares
Subsequent to the close of the quarter ended September 30, 2000, the Company
filed with the State of Nevada an amendment to its articles of incorporation
which increased its authorized common stock from 20,000,000 to 200,000,000
shares. The increase in authorized common shares was approved by a majority of
outstanding shares as required by the Nevada Revised Statutes.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits Exhibits required to be attached by Item 601 of Regulation S-B
are listed in the Index to Exhibits on page 9 of this Form 10-QSB, and
are incorporated herein by this reference.
(b) Reports on Form 8-K. The Company filed one report on Form 8-K during
the period ending September 30, 2000, which is covered by this Form
10-QSB. The report, which is herewith incorporated by reference,
reported the sale of 18,400,000 shares of the Company's stock to
Kelly's Coffee Group, Inc. for a cash price of $540,554, which cash was
used by the Company to purchase an office building located in the
downtown business district of Wichita, Kansas, at 120 South Market
Street, Wichita, Kansas.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, hereunto duly
authorized, this 13th day of November, 2000.
CYBERBOTANICAL, INC.
/s/ Richard D. Surber
-------------------------------------
Richard D. Surber
President and Director
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Richard D. Surber
- ----------------------------- President and Director November 13, 2000
Richard D. Surber
/s/ Ruairidh Campbell
- ----------------------------- Director November 13, 2000
Ruairidh Campbell
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INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
- ------- ---- -----------
3(i) * Articles of Incorporation of the Company (incorporated
herein by reference from Exhibit No.3(i) of the Company's
Form 10-SB as filed with the Securities and Exchange
Commission on February 8, 2000).
3(ii) * Bylaws of the Company, as amended (incorporated herein by
reference from Exhibit 3(ii) of the Company's Form 10-SB as
filed with the Securities and Exchange Commission on
February 8, 2000).
27 10 Financial Data Schedule "CE".
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