U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: September 30, 2000
Commission file no.: 000-30807
CEO-Channel.net, Inc.
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(Name of Small Business Issuer in its Charter)
Florida 65-0904572
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(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
222 Lakeview Avenue, Suite 160-417
West Palm Beach, Florida 33401
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (561) 832-5696
Securities to be registered under Section 12(b) of the Act:
Title of each class Names of each exchange
on which registered
None
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Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value per share
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(Title of class)
Copies of Communications Sent to:
Donald F. Mintmire
Mintmire & Associates
265 Sunrise Avenue, Suite 204
Palm Beach, FL 33480
Tel.: (561) 832-5696 - Fax: (561) 659-5371
Indicate by 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 periods 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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As of September 30, 2000, there are 2,200,000 shares of voting stock of
the registrant issued and outstanding.
PART I
Item 1. Financial Statements
INDEX TO FINANCIAL STATEMENTS
Balance Sheets..........................................................F-2
Statements of Operations................................................F-3
Statements of Stockholders' Equity......................................F-4
Statements of Cash Flows................................................F-5
Notes to Financial Statements...........................................F-6
CEO-Channel.com, Inc.
(A Development Stage Enterprise)
Balance Sheets
September 30, December 31,
2000 1999
----------------- ------------------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and equivalents $ 4,510 $ 104,568
Overpaid payroll taxes 5,272 0
----------------- ------------------
Total current assets 9,782 104,568
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PROPERTY AND EQUIPMENT
Equipment 32,608 30,866
Less: Accumulated depreciation (8,901) (3,280)
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Net property and equipment 23,707 27,586
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OTHER ASSETS
Deposits 125 125
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Total other assets 125 125
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Total Assets $ 33,614 $ 132,279
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued payroll and related liabilities $ 0 $ 11,160
Accrued expenses 0 0
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Total current liabilities 0 11,160
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STOCKHOLDERS' EQUITY
Preferred stock, no par value, authorized 10,000,000
shares, 0 issued and outstanding 0 0
Common stock, $0.0001 par value, authorized 50,000,000
shares; issued and outstanding 2,200,000 220 220
Additional paid-in capital 224,760 224,760
Deficit accumulated during the development stage (191,366) (103,861)
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Total stockholders' equity 33,614 121,119
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Total Liabilities and Stockholders' Equity $ 33,614 $ 132,279
================= ==================
The accompanying notes are an integral part of the financial statements
F-2
CEO-Channel.com, Inc.
(A Development Stage Enterprise)
Statements of Operations
Period from
February 3, 1999
Three Months Nine Months (Inception)
Ended September 30, Ended September 30, through
------------------------------ --------------------------------
2000 1999 2000 1999 September 30, 2000
-------------- -------------- --------------- --------------- --------------------
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
REVENUES $ 17,000 $ 0 $ 17,000 $ 0 $ 17,000
-------------- -------------- --------------- --------------- -------------------
OPERATING EXPENSES
Compensation:
Officers 0 20,923 48,000 29,538 105,538
Others 800 0 3,890 275 18,021
General and administrative 12,957 11,489 48,082 27,743 77,319
Depreciation 1,874 1,154 5,621 1,656 8,902
-------------- -------------- --------------- --------------- -------------------
Total expenses 15,631 33,566 105,593 59,212 209,780
-------------- -------------- --------------- --------------- -------------------
Income (loss) from operations 1,369 (33,566) (88,593) (59,212) (192,780)
-------------- -------------- --------------- --------------- -------------------
OTHER INCOME
Interest income 5 0 1,088 6 1,414
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Total other income 5 0 1,088 6 1,414
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Net income (loss) $ 1,374 $ (33,566) $ (87,505) $ (59,206) $ (191,366)
============== ============== =============== =============== ===================
Basic net income (loss) per weighted
average share $ 0.01 $ (0.02) $ (0.04) $ (0.04)
============== ============== =============== ===============
Weighted average number of shares 2,200,000 2,200,000 2,200,000 1,466,797
============== ============== =============== ===============
The accompanying notes are an integral part of the financial statements
F-3
CEO-Channel.com, Inc.
(A Development Stage Enterprise)
Statements of Stockholders' Equity
Period from February 3, 1999 (Inception) through
September 30, 2000
Deficit
Accumulated
Additional During the Total
Number of Common Paid-in Development Stockholders'
Shares Stock Capital Stage Equity
----------- ----------- ------------- ---------------- ---------------
BEGINNING BALANCE, February 3, 1999 (Inception) 0 $ 0 $ 0 $ 0 $ 0
Year Ended December 31, 1999:
- ----------------------------
Shares issued for cash 2,200,000 220 224,760 0 224,980
Net loss 0 0 0 (103,861) (103,861)
----------- ----------- ------------- ---------------- ---------------
BALANCE, December 31, 1999 2,200,000 220 224,760 (103,861) 121,119
Six Months Ended September 30, 2000:
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Net loss 0 0 0 (87,505) (87,505)
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ENDING BALANCE, September 30, 2000 (unaudited) 2,200,000 $ 220 $ 224,760 $(191,366) $33,614
=========== =========== ============= ================ ===============
The accompanying notes are an integral part of the financial statements
F-4
CEO-Channel.com, Inc.
(A Development Stage Enterprise)
Statements of Cash Flows
Period from
Nine Months February 3,1999
Ended September 30, (Inception)
------------------------------- through
2000 1999 September 30, 2000
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(unaudited) (unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (87,505)$ (59,206)$ (191,366)
Adjustments to reconcile net loss to net cash used by
operating activities:
Depreciation 5,621 1,656 8,902
Changes in operating assets and liabilities:
(Increase) decrease in deposits 0 (125) (125)
Increase (decrease) accrued expense 0 0 0
Increase (decrease) accrued payroll and related liabilities (16,432) 6,447 (5,273)
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Net cash used by operating activities (98,316) (51,228) (187,862)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,742) (22,336) (32,608)
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Net cash used by investing activities (1,742) (22,336) (32,608)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net 0 224,980 224,980
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Net cash provided by financing activities 0 224,980 224,980
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Net increase (decrease) in cash (100,058) 151,416 4,510
CASH, beginning of period 104,568 0 0
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CASH, end of period $ 4,510 $ 151,416 $ 4,510
=============== =============== ====================
The accompanying notes are an integral part of the financial statements
F-5
CEO-Channel.com, Inc.
(A Development Stage Enterprise)
Notes to Financial Statements
(Unaudited)
(1) Summary of Significant Accounting Policies
(a) The Company CEO-Channel.com, Inc. is a Florida chartered
development stage corporation which conducts business from its
headquarters in West Palm Beach, Florida. The Company was incorporated
on February 3, 1999.
The Company has not yet engaged in its expected operations. The Company
is developing several internet sites that it expects to be operational
in 2000. Current activities include raising additional capital and
negotiating with potential key personnel and facilities. There is no
assurance that any benefit will result from such activities. The
Company will not receive any operating revenues until the commencement
of operations, but will nevertheless continue to incur expenses until
then.
The following summarize the more significant accounting and reporting
policies and practices of the Company:
(b) Use of estimates The financial statements have been prepared in
conformity with generally accepted accounting principles. In preparing
the financial statements, management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities
as of the date of the statements of financial condition and revenues
and expenses for the year then ended. Actual results may differ
significantly from those estimates.
(c) Start-up costs Costs of start-up activities, including organization
costs, are expensed as incurred, in accordance with Statement of
Position (SOP) 98-5.
(d) Net income (loss) per share Basic loss per share is computed by
dividing the net income (loss) by the weighted average number of common
shares outstanding during the period.
(e) Property and equipment All property and equipment are recorded at
cost and depreciated over their estimated useful lives, using the
straight-line method. Upon sale or retirement, the cost and related
accumulated depreciation are eliminated from their respective accounts,
and the resulting gain or loss is included in the results of
operations. Repairs and maintenance charges, which do not increase the
useful lives of the assets, are charged to operations as incurred.
(f) Interim financial information The financial statements for the nine
months ended September 30, 2000 and 1999 are unaudited and include all
adjustments which in the opinion of management are necessary for fair
presentation, and such adjustments are of a normal and recurring
nature. The results for the nine months are not indicative of a full
year results.
(2) Stockholders' Equity The Company has authorized 50,000,000 shares of
$0.0001 par value common stock and 10,000,000 shares of no par value
preferred stock. Rights and privileges of the preferred stock are to be
determined by the Board of Directors prior to issuance. The Company had
2,200,000 shares of common and preferred stock issued and outstanding
at September 30, 2000 and 1999. In 1999, the Company issued 2,200,000
shares of common stock under Regulation D offerings in exchange for
$224,980 in cash.
F-6
CEO-Channel.com, Inc.
(A Development Stage Enterprise)
Notes to Consolidated Financial Statements
(5) Income Taxes Deferred income taxes (benefits) are provided for certain
income and expenses which are recognized in different periods for tax
and financial reporting purposes. The Company had net operating loss
carry- forwards for income tax purposes of approximately $191,000
expiring at December 31, 2019 and 2020.
The amount recorded as deferred tax assets as of September 30, 2000 is
approximately $29,000, which represents the amount of tax benefit of
the loss carry-forward. The Company has established a valuation
allowance against this deferred tax asset, as the Company has no
history of profitable operations.
F-7
Item 2. Management's Discussion and Analysis or Plan of Operation.
Discussion and Analysis
The Company was founded in February 1998 to develop an interactive
financial information services web site. It is a Florida chartered development
stage corporation which conducts business from its headquarters in West Palm
Beach, Florida. The Company has been focused upon the development of several
internet sites that it expects to be operational in late 2000 in accord with its
business plan, and has not generated revenues from operations from inception
(February 8, 1999) through September 30, 2000. Due to the Company's operating
history and limited resources, among other factors, there can be no assurance
that profitability or significant revenues on a quarterly or annual basis will
occur in the future. Moreover, the Company expects to continue to incur
operating losses through at least the fourth quarter 2000. And there can be no
assurance that losses will not continue after such date.
12 Month Plan of Operations
Over the next twelve months the Company will focus on completing the
development of its internet sites and content to be provided therein. The
completion of the development of the Company's CEO-Channel.net will rely
significantly upon the Company's ability to obtain the commitment of various
CEO's of NASDAQ Small-Cap Securities companies to utilize these web sites as
viable alternative means of providing informative and valuable insights to the
public at large. It is the Company's belief that within the next twelve(12)
months by utilizing the full potential of next-generation multimedia technology
it will bring multimedia internet broadcasting of Financial and Company specific
information into the popular mainstream as a preferred communication and
information medium.
Over the next twelve months the Company expects that it will be
necessary to raise additional funds to meet operating capital needs.
Accordingly, management is presently exploring all available alternatives for
debt and/or equity financing, including but not limited to private and public
securities offerings. The Company anticipates that it will offer over the next
twelve months as its central revenue raising alternative additional securities
under Rule 506 of Regulation D under the Act ("Rule 506) to fund its short and
medium term expansion plans. All anticipated offerings may be made to Florida
residents located in the State of Florida.
Net Sales
For the date of inception, February 3, 1999 to September 30, 2000, a
discussion regarding net sales and the cost of sales is not applicable basis due
to the fact that research and development costs were not able to be offset to
any extent.
Operating Expenses
Sales and Marketing: These expenses of the Company consist mainly of
compensation and general and administrative expenses. Since inception through
September 30, 2000, the Company spent approximately $ 123,559 on executive
salaries, contract labor, related payroll expenses. The Company expects that
such expenses in 2000 will increase in absolute dollars as compared to 1999.
General and Administrative: These expenses of the Company consist
primarily of the general and administrative expenses as well as other expenses
for management and finance and accounting, legal and other professional
services. From inception until the quarter ended September 30, 2000 on an
unaudited basis general and administrative expenses were $77,319. The Company
expects general and administrative expenses to increase in absolute dollars in
2000 as compared to 1999, as the Company begins to evolve from its research and
development stage to its marketing and active sales stage.
Results of Operations - For the Three Months ended September 30, 1999 and 2000
During the three months ended September 30, 2000, the Company received
$17,000 for certain non-recurring consulting services to a third party entity.
For the three months ended September 30, 1999 and three(3) months ended
September 30, 2000, general and administrative expenses were $11,489 and
$12,957, respectively. The increase of $1,468 is due primarily to rent and
office expenses.
As of September 30, 1999 the Company had total cumulative expenses of
$209,780 of which $105,538 is attributable to compensation expenses and $77,319
is attributable to general and administrative expenses.
Net Losses For the three month period from July 1, 2000 and 1999 to
September 30, 2000 and 1999, the Company reported a net income (loss) from
operations of $1,374 and ($33,566) respectively. During the three months ended
September 30, 2000, the Company received $17,000 for certain non-recurring
consulting services to a third party entity. The third quarter 2000 net income
included the zero compensation to officers and $12,957 in general and
administrative expenses reflecting the Company's elimination of compensation to
officers and increased office expenses related to the anticipated launch of its
business plan upon completion of its web site development. The third quarter
1999 net losses include $20,923 in compensation to officers and $11,489 in
general and administrative expenses.
Financial Condition, Capital Resources and Liquidity
As of the three months ended September 30, 2000, the Company had assets
totaling $33,614 and no liabilities. Since the Company's inception, it has
accepted $224,980 in cash as consideration for the issuance of shares of Common
Stock.
In 1999, the Company accepted subscriptions in the amount of $224,980
from the sale of 2,200,000 shares of common stock in a private placement
conducted pursuant to an exemption from registration contained in sections 3(b)
of the Act and Rule 504 of Regulation D promulgated thereunder. The offering was
made in the State of Florida.
Net Operating Losses
The Company
The Company has net operating loss carry-forwards of $191,000 which
expire in the year ending December 31, 2019 and 2020. The company has deferred
tax assets, cumulative as of September 30, 2000 of $29,000 resulting from the
loss carry-forwards, for which it has established a valuation allowance as the
Company has no history of profitable operations. Until the Company's current
operations begin to produce earnings, it unclear as to the ability of the
Company to utilize such carry-forwards.
Year 2000 Compliance
The Company has determined that the Year 2000 impact has not been
material to the Company and that it will not impact its business, operations or
financial condition since all of the internal software utilized by the Company
has been upgraded on site at minimal cost to support Year 2000 versions.
Forward-Looking Statements
This Form 10-QSB includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical facts, included or incorporated by reference in
this Form 10-QSB which address activities, events or developments which the
Company expects or anticipates will or may occur in the future, including such
things as future capital expenditures (including the amount and nature thereof),
demand for the Company's products and services, expansion and growth of the
Company's business and operations, and other such matters are forward-looking
statements. These statements are based on certain assumptions and analyses made
by the Company in light of its experience and its perception of historical
trends, current conditions and expected future developments as well as other
factors it believes are appropriate in the circumstances. However, whether
actual results or developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, general economic
market and business conditions; the business opportunities (or lack thereof)
that may be presented to and pursued by the Company; changes in laws or
regulation; and other factors, most of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this Form
10-QSB are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequence to or effects on the Company or its business or operations.
The Company assumes no obligations to update any such forward-looking
statements.
PART II
Item 1. Legal Proceedings.
The Company knows of no legal proceedings to which it is a party or to
which any of its property is the subject which are pending, threatened or
contemplated or any unsatisfied judgments against the Company.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults in Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted during the quarter ending September 30, 2000,
covered by this report to a vote of the Company's shareholders, through the
solicitation of proxies or otherwise.
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits required to be filed herewith by Item 601 of Regulation
S-B, as described in the following index of exhibits, are incorporated
herein by reference, as follows:
Item 1. Index to Exhibits
3(i).1 Articles of Incorporation of Ceo-Channel.net, Inc. f/k/a/ Ceo-Channel.com, Inc., f/k/a
See You Online, Inc., effective February 8, 1999. (1)
3(i).2 Amended Articles of Incorporation of Ceo-Channel.com, Inc. f/k/a/ See You Online,
Inc., filed March 4, 1999. (1)
3(i).3 Amended Articles of Incorporation of Ceo-Channel.net, Inc. f/k/a/ Ceo-Channel.com,
Inc., filed April 4, 2000. (1)
3(ii).1 Bylaws of Ceo-Channel.net, Inc. f/k/a/ Ceo-Channel.com, Inc., f/k/a/ See You
Online, Inc. (1)
27.1 * Financial Data Schedule
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(1) Incorporated herein by reference to the Company's Registration Statement on
Form 10-SB. and subsequent amendments filed thereto.
* Filed herewith
(b) No Reports on Form 8-K were filed during the quarter ended September
30, 2000.
SIGNATURES
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In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Ceo-Channel.net, Inc.
(Registrant)
Date:
By: /s/ Christian Patrick Gutierrez
--------------------------------------
December 5, 2000 Christian Patrick Gutierrez, President
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.
Date Signature Title
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December 5, 2000 By: /s/ Christian Patrick Gutierrez
----------------------------------- President, Secretary
Christian Patrick Gutierrez & Director