UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: JUNE 30, 2002
OR
[ ] 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: 0-25631
ALPHATRADE.COM
(Exact name of registrant as specified in its charter)
NEVADA 98-0211652
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 400, 1111 West Georgia Street, Vancouver, B.C. V6E 4M3
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(Address of principal executive offices) (Zip code)
(604) 681-7503
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(Registrant's telephone number, including area code)
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(Former name, address or fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
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Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As of June 30, 2002 the registrant had 4,390,797 shares of Common Stock
issued and outstanding.
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statement
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
The unaudited balance sheet of the Company as of June 30, 2002, and the
related balance sheet of the Company derived from the Companys audited financial
statements as of September 30, 2001, the unaudited statement of operations and
cash flows for the six months ended March 31, 2002 and the statements of
stockholders equity for the period from September 1, 1998 through through March
31, 2002 are attached hereto and incorporated herein by this reference.
Operating results for the quarter ended March 31, 2002 are not necessarily
indicative of the results that can be expected for the year ending September 30,
2002.
ALPHATRADE.COM
FINANCIAL STATEMENTS
June 30, 2002 and December 31, 2001
ALPHATRADE.COM
Balance Sheets
The accompanying notes are an integral part of these financial statements.
ASSETS
June 30, December 31,
2002 2001
(Unaudited)
CURRENT ASSETS
Cash$ - $ 20,650
Accounts receivable trade, net 12,271 6,817
Prepaid expenses 851 11,880
Total Current Assets 13,122 39,347
FIXED ASSETS
Computer equipment 138,044 133,044
Office equipment 21,337 21,337
Software 68,175 68,175
Accumulated depreciation (128,112) (105,356)
Total Fixed Assets 99,444 117,200
TOTAL ASSETS $ 112,566 $ 156,547
ALPHATRADE.COM
Balance Sheets (Continued)
LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
June 30 December 31,
2002 2001
(Unaudited)
CURRENT LIABILITIES
Accounts payable $ 552,043 $ 551,219
Bank overdraft 1,188 -
Accrued liabilities 20,107 150,077
Related party payable 111,431 632,350
Note payable - 351,559
Deferred revenue 31,443 23,833
Total Current Liabilities 716,212 1,709,038
Total Liabilities 716,212 1,709,038
STOCKHOLDERS EQUITY (DEFICIT)
Convertible preferred stock: par value $0.001 per share;
10,000,000 shares authorized, 2,000,000 shares issued
and outstanding 2,000 2,000
Common stock: $0.001 par value 100,000,000 shares
authorized; 4,390,797 and 846,517 shares issued and
outstanding, respectively 4,391 847
Additional paid-in capital 11,873,192 9,693,254
Stock subscription receivable (25,000) -
Services prepaid with common stock (584) (11,848)
Accumulated deficit (12,457,645) (11,236,744)
Total Stockholders Equity (Deficit) (603,646) (1,552,491)
TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY (DEFICIT) $ 112,566 $ 156,547
ALPHATRADE.COM
Statements of Operations
(Unaudited)
For the Three Months Ended
June 30,
2002 2001
REVENUE
Subscription revenue $ 105,777 $ 41,181
Total Revenue 105,777 41,181
EXPENSES
Depreciation expense 11,378 12,027
Rent expense 24,041 22,710
General and administrative
expenses 966,211 998,547
Total Expenses 1,001,630 1,033,284
LOSS FROM OPERATIONS (895,853) (992,103)
OTHER INCOME (EXPENSES)
Gain on settlement of debt 19,941 -
Interest expense (17,627) (37,886)
Other income 16,266 500
Total Other (Expenses) 18,580 (37,386)
NET LOSS $ (877,273) $ (1,029,489) $
NET LOSS PER SHARE $ (0.25) $ (1.56) $
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,460,746 659,929
For the Six Months Ended
June 30,
2002 2001
REVENUE
Subscription revenue $ 203,311 $ 77,025
Total Revenue 203,311 77,025
EXPENSES
Depreciation expense 22,756 23,952
Rent expense 46,126 45,665
General and administrative
expenses 1,363,961 2,028,604
Total Expenses 1,432,843 2,098,221
LOSS FROM OPERATIONS (1,229,532) (2,021,196)
OTHER INCOME (EXPENSES)
Gain on settlement of debt 19,941 -
Interest expense (33,251) (51,746)
Other income 21,941 500
Total Other (Expenses) 8,631 (51,246)
NET LOSS $ (1,220,901) $ (2,072,442)
NET LOSS PER SHARE $ (0.51) $ (2.61)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 2,403,960 792,550
ALPHATRADE.COM
Statement of Stockholders Equity (Deficit)
Preferred Stock Common Stock
Shares Amount Shares
Balance, December 31, 2001 2,000,000 $ 2,000
Warrants granted at
market value (unaudited) - - -
Common stock issued for
charity at $2.30 per share
(unaudited) - - 10,000
Common stock issued for debt
at $0.55 to $2.55 per share
(unaudited) - - 1,713,100
Common stock issued for
services at $1.24 to $2.70
per share (unaudited) - - 1,561,180
Common stock issued for cash
at $0.50 per share (unaudited) - - 10,000
Common stock issued for a
subscription receivable at
$0.10 per share (unaudited) - - 250,000
Authorization of services prepaid
with common stock (unaudited) - - -
Net loss for the six months
ended June 30, 2002
(unaudited) - - -
Balance, June 30, 2002
(unaudited) 2,000,000 $ 2,000 4,390,797
Stock
Common Stock Additional Subscription
Paid in
Amount Capital Receivable
Balance, December 31, 2001 $ 847 $ 9,693,2$ -
Warrants granted at
market value (unaudited) - 42,314 -
Common stock issued for
charity at $2.30 per share
(unaudited) 10 22,990 -
Common stock issued for debt
at $0.55 to $2.55 per share
(unaudited) 1,713 1,200,822 -
Common stock issued for
services at $1.24 to $2.70
per share (unaudited) 1,561 884,072 -
Common stock issued for cash
at $0.50 per share (unaudited) 10 4,990 -
Common stock issued for a
subscription receivable at
$0.10 per share (unaudited) 250 24,750 (25,000)
Authorization of services prepaid
with common stock (unaudited) - - -
Net loss for the six months
ended June 30, 2002
(unaudited) - - -
Balance, June 30, 2002
(unaudited) $ 4,391 $11,873,192 $ (25,000)
Prepaid
with Common
Stock Deficit
Balance, December 31, 2001 $ (11,848) $(11,236,744)
Warrants granted at
market value (unaudited) - -
Common stock issued for
charity at $2.30 per share
(unaudited) - -
Common stock issued for debt
at $0.55 to $2.55 per share
(unaudited) - -
Common stock issued for
services at $1.24 to $2.70
per share (unaudited) - -
Common stock issued for cash
at $0.50 per share (unaudited) - -
Common stock issued for a
subscription receivable at
$0.10 per share (unaudited) - -
Authorization of services prepaid
with common stock (unaudited) 11,264 -
Net loss for the six months
ended June 30, 2002
(unaudited) - (1,220,901)
Balance, June 30, 2002
(unaudited) $ (584) $(12,457,645)
ALPHATRADE.COM
Statements of Cash Flows
(Unaudited)
For the Six Months Ended
June 30,
2002 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,220,901) $ (2,072,442)
Adjustments to reconcile net loss to net
cash provided (used)
by operating activities:
Common stock issued for
services 885,633 1,397,200
Common stock issued for
charitable contributions 23,000 -
Common stock issued for
prepaid services 11,264 -
Compensation on warrants
issued at market value 42,314 -
Depreciation expense 22,756 23,952
Changes in operating assets
and liabilities:
(Increase) decrease in
accounts receivable (5,454) (2,550)
(Increase) decrease in
prepaid expenses, net 11,029 57,318
Increase (decrease) in
accounts payable and accrued
expenses 927 (246,900)
Increase (decrease) in
deferred revenue 7,610 -
Net Cash (Used) by
Operating Activities (221,822) (843,422)
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of fixed assets (5,000) (17,984)
Net Cash Used by
Investing Activities (5,000) (17,984)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in bank overdraft 1,188 21,342
Proceeds from notes payable
related parties 199,984 580,800
Common stock issued for cash 5,000 257,375
Net Cash Provided by
Financing Activities 206,172 859,517
NET CHANGE IN CASH (20,650) (1,889)
CASH AT BEGINNING OF PERIOD 20,650 1,889
CASH AT END OF PERIOD $ $ -
ALPHATRADE.COM
Statements of Cash Flows (Continued)
(Unaudited)
For the Six Months Ended
June 30,
2002 2001
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 2 $ 21,205
Income taxes paid $ - $ -
SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
Common stock issued
for charitable contributions $ 23,000 $ -
Common stock issued
for prepaid services $ 11,264 $ -
Common stock issued
for services $ 885,633 $1,397,200
Warrants issued at
fair market value $ 42,314 $ -
Common stock issued
for debt $1,202,535 $ -
ALPHATRADE.COM
Notes to the Financial Statements
June 30, 2002 and December 31, 2001
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared by the Company pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted in accordance with such
rules and regulations. The information furnished in the interim condensed
consolidated financial statements include normal recurring adjustments and
reflects all adjustments, which, in the opinion of management, are necessary for
a fair presentation of such financial statements. Although management believes
the disclosures and information presented are adequate to make the information
not misleading, it is suggested that these interim condensed consolidated
financial statements be read in conjunction with the Companys most recent
audited financial statements and notes thereto included in its December 31, 2001
Annual Report on Form 10-KSB. Operating results for the six months ended June
30, 2002 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2002.
NOTE 2 - GOING CONCERN
The Companys financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course of
business. The Company has had limited activities since inception and is
considered a development stage company because it has no significant operating
revenues and, planned principal operations have not yet commenced. The Company
has incurred losses from its inception through June 30, 2002 of approximately
$12,460,000. The Company does not have an established source of funds sufficient
to cover its operating costs and, accordingly, there is substantial doubt about
its ability to continue as a going concern. In order to develop a reliable
source of revenues, and achieve a profitable level of operations, the Company
will need, among other things, additional capital resources. Managements plans
include concentrating its efforts on marketing the Companys services and
products and raising additional capital through the sale of exclusive marketing
territories, or through the sale of its common stock. The proceeds will be used
to pay for general operating expenses, pursue acquisitions and form strategic
alliances that could expedite the Companys growth. The Company expects that it
will need $1,000,000 of additional funds for operations and marketing during the
balance of 2002. However, management cannot provide any assurances that the
Company will be successful in accomplishing any of its plans.
NOTE 2 - GOING CONCERN (Continued)
The ability of the Company to continue as a going concern is dependent upon its
ability to successfully accomplish the plan described in the preceding paragraph
and to eventually attain profitable operations. The accompanying financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
THE CORPORATION'S BUSINESS
The Company currently is in the marketing phase of its business development and
growth. AlphaTrade is marketing its high-performance stock market data system
called E-Gate, which is a cost-effective consumer product, designed for use by
professionals and traders.
AlphaTrades operating revenues are mainly from its monthly subscriptions of
E-Gate and a small portion of the revenue is derived from advertising on our
login page and from web design.
AlphaTrades first national marketing campaign is planned for the fall of 2002.
Management believes that further growth will be stimulated by a comprehensive
marketing campaign and will also aid the company in generating the needed
exposure to the financial community.
In general revenues in this quarter were increased 39% over the same period in
2001. It is anticipated that growth will continue throughout 2002 due to the
cost savings the E-Gate product provides for the financial community. Similar
market data products could be as much as nine (9) times as much as E-Gate on a
monthly basis.
AlphaTrade trades under the symbol, APTD on the OTC:BB market and in Frankfurt
under the symbol TDR WKN 529988. Further Information may be found at the
Company's website www.alphatrade.com
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
THE CORPORATION'S BUSINESS
The Company currently is in the marketing phase of its business development
and growth. AlphaTrade is marketing its high-performance stock market data
system called E-Gate, which is a cost-effective consumer product, designed for
use by professionals and traders.
AlphaTrades operating revenues are mainly from its monthly subscriptions of
E-Gate and a small portion of the revenue is derived from advertising on our
login page and from web design.
AlphaTrades first national marketing campaign is planned for the fall of
2002. Management believes that further growth will be stimulated by a
comprehensive marketing campaign and will also aid the company in generating the
needed exposure to the financial community.
In general revenues in this quarter were increased 253% over the same
period in 2001. It is anticipated that growth will continue throughout 2002 due
to the cost savings the E-Gate product provides for the financial community.
Similar market data products could be as much as nine (9) times as much as
E-Gate on a monthly basis.
AlphaTrade trades under the symbol, APTD on the OTC:BB market and in
Frankfurt under the symbol TDR WKN 529988. Further Information may be found at
the Company's website www.alphatrade.com MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis relate to factors, which have
affected the financial condition and results of our operations for the
quarter ended June 30, 2002, and June 30, 2001.
The results of operations for the second quarter of 2002 are reflecting an
increased awareness of the E-Gate product resulting from the test-marketing
efforts deployed by the Company. During the quarter we added a total of 17 new
affiliate sites including financial companies and websites. In comparison to the
same quarter in 2001, there were no marketing efforts underway as the company
was still actively involved in the continued development of the E-Gate product.
For this reason, any comparison of the historic data with current data is not
very meaningful.
Discussion of Financial Information
The discussion respecting our financial position utilizes the unaudited,
reviewed financial statements attached to this Report for the quarters ended
June 30, 2002 and June 30, 2001.
Operating revenues for the quarter ended June 30, 2002 were $105,777 with
the loss from operations being $895,853 and the Company showing a net loss of
($877,273). The primary reason for the net loss of $877,273 was that the current
quarter was AlphaTrades first operating quarter with a focus on marketing the
E-Gate product and a number of the shares issued for services were non-recurrent
charges. Examples of these costs were the set up of marketing activities and
promotion of the E-Gate product.
Operating revenues for the quarter ended June 30, 2001 reflect low revenue
since AlphaTrade was still in ongoing development of the E-Gate product and had
not wanted to engage in any marketing activity until the product was proven to
be commercially viable. On that basis, the Company had revenues of only $41,181
which was comprised mainly of realizing deferred revenue for delayed market
information.
General and administrative expenses were $966,211 for the quarter
ended June 30, 2002, as compared to $998,547 for the same period in 2001.
Management feels that as the year progresses, the results from the general and
administrative expenses will bring greater revenue to the company.
Net losses for the second quarter of 2002 were ($877,273), as compared to
($1,029,489) for the same period in 2001. The net loss for the first quarter of
2002 translates into a loss of ($0.25) per share as compared to a net loss of
(1.56)per share for the same period in 2001. Liquidity
We believe that we will receive the cash funds and necessary liquidity to
meet the needs of the company over the next year. However, should we fail to
obtain the necessary funds, the Company may have to curtail some or all of its
operations.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
The following unregistered securities have been issued since April 1st, 2002:
Valued
Date No. of Shares Title At Reason
Apr. 5/02 93,000 Common $ 1.50 Exercise of Option
Apr. 5/02 10,500 Common $ 1.50 Services
Apr. 11/02 118,700 Common $ 1.25 Exercise of Option
Apr. 11/02 7,500 Common $ 1.25 Services
Apr. 11/02 50,000 Common $ 1.15 Exercise of Option
May 8/02 62,300 Common $ 0.46 Exercise of Option
May 8/02 407,500 Common $ 0.25 Private Placement
May 8/02 100,000 Common $ 0.46 Services
May 8/02 11,250 Common $ 0.46 Settle debt
May 8/02 220,000 Common $ 0.46 Exercise of Option
May 24/02 10,000 Common $ 0.50 Private Placement
June 4/02 25,000 Common $ 0.42 Service
June 12/02 150,000 Common $ 0.35 Exercise of Option
June 20/02 400,000 Common $ 0.18 Services - officers
June 20/02 250,000 Common $ 0.10 Private Placement
June 20/02 50,000 Common $ 0.10 Services
The above noted shares were issued without registration under the
Securities Act in reliance on the exemption provided by Rule 506 and/or Section
4(2) of the Securities Act as a transaction by an issuer not involving a public
offering to Consultants or to companies owned or controlled by Consultants or
Officers of the Company. The shares issued to retire the liability were issued
to insiders of the Company.
Item 3. Defaults Upon Senior Securities
None; not applicable
Item 4 Submission of Matters to a Vote of Security Holders
None; not applicable
Item 5. Other Information
None; not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
None
(b) Report on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ALPHATRADE.COM
Date: 08/14/2002
By / s / Penny Perfect
President / Director
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:
ALPHATRADE.COM
Date: 08/14/2002 By / s / Penny Perfect
President / Director
Date: 08/14/2002 By / s / Gordon Muir
CEO/Director
Date: 08/14/2002 By / s / Victor Cardenas
COO/Secretary/Director
Date: 08/14/2002 By / s / Lisa McVeigh
Director
Date: 08/14/2002 By / s / Raymond Hatch
Director
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of AlphaTrade.com (the Company) on
Form 10-Q(SB) for the period ending June 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the Report), I, GORDON MUIR, Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C. 1350, as
adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ GORDON MUIR
Chief Executive Officer
Date: August 14, 2002