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 September 30, 1999
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[ ] Transition Report under Section 13 or 15(d)of the Exchange Act For the
Transition Period from ________ to ___________
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Commission File Number: 0-26181
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eCLIC, INC.
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(Exact name of small business issuer as specified in its charter)
Nevada 86-0931332
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8455 W. Sahara, Suite 130
Las Vegas, NV 89117
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(Address of principal executive offices)
(888) 971-1336
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(Issuer's telephone number)
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Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or 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 [ ] No [X]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Check whether the Registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
1
The Registrant has 1,500,000 shares of Common stock issued and outstanding,
par value $.001 per share as of September 30, 1999. The Registrant has no
Preferred Stock issued nor outstanding as of September 30, 1999.
Traditional Small Business Disclosure Format (check one) Yes [ ] No [X]
2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements................................. 3
Balance Sheet (unaudited)............................ 4
Statements of Operations (unaudited)................. 5
Statements of Cash Flows (unaudited)................. 6
Notes to Financial Statements........................ 7-11
Item 2. Management's Discussion and Analysis of Plan
of Operation........................................ 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................... 17
Item 2. Changes in Securities and Use of Proceeds............ 17
Item 3. Defaults upon Senior Securities...................... 17
Item 4. Submission of Matters to a Vote
of Security Holders................................. 17
Item 5. Other Information..................................... 17
Item 6. Exhibits and Reports on Form 8-K...................... 17
Signatures...................................................... 18
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
(Financial Statements Commence on Following Page)
3
BALANCE SHEET
eCLIC, INC.
(A Development Stage Company)
BALANCE SHEET
September 30, 1999
Unaudited Audited
Sept 30, 1999 April 12, 1999
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CURRENT ASSETS
Cash $ 24,646 $ 50,075
Organization costs, less
Accumulated amortization of $6 318 353
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Total Assets $ 24,964 $ 50,429
========== =============
LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable $ 0 $ 3,360
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Total Liabilities 0 3,360
Stockholders' Equity
Common stock, authorized 20,000,000
Shares at $0.001 par value, issued
and outstanding 1,500,000 shares 1,500 1,500
Preferred stock, authorized 5,000,000
Shares at $.001 par value, none issued
or outstanding 0 0
Additional paid-in capital 50,500 47,700
Deficit accumulated during
the development stage (27,036) (2,131)
Total Stockholders' Equity 24,964 47,069
Total Liabilities and
Stockholders' Equity $ 24,964 $ 50,429
========== ============
See accompanying notes to financial statements
4
STATEMENT OF OPERATIONS
eCLIC, Inc.
(A Development Stage Company)
STATEMENT OF OPERATIONS AND DEFICIT
ACCUMULATED DURING THE DEVELOPMENT STAGE
Unaudited Audited
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March 1, 1999
Three months ended (Inception) to For the Period
September 30, September 30, Mar 1, 1999
(Inception) to
1999 1998 1999 1998 Apr 12, 1999
------- ------ -------- ------- -------------
INCOME:
Revenue $ 675 $ 0 $ 675 $ 0 $ 0
COSTS AND EXPENSES
Selling, General and
Administrative 7,917 0 27,669 0 $ 2,125
Amortization 18 0 42 0 6
TOTAL EXPENSES: $ 7,935 0 $ 27,711 0 $ 2,131
NET PROFIT/LOSS (-) $-7,260 0 -27,036 0 $ -2,131
Net Profit/Loss (-)
per weighted share
(Note 2): $ -.005 0 $ -0.019 0 $ -0.00
Average Weighted
number of common
shares outstanding
at end of reporting
period: 1,500,000 1,428,571 651,160
See accompanying notes to financial statements
5
eCLIC, Inc.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
Unaudited
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
AND FOR PERIOD MARCH 1, 1999 (INCEPTION) TO SEPT 30, 1999
For the Three Months Ended For the Period
Mar 1, 1999
Sept 30, 1999 Sept 30, 1998 (Inception) to
(Unaudited) (Unaudited) Sept. 30, 1999
------------------ -------------- ---------------
Cash Flows from
Operating Activities
Cash Flows from
Operating Activities
Net Loss $ -7,260 $ 0 $ -27,036
Adjustment to
Reconcile net loss
To net cash provided
by operating
Activities
Amortization +18 0 +42
Changes in assets and
Liabilities:
Organization Costs 0 0 -360
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Net cash used in
Operating activities: $ -7,242 $ 0 $ -27,354
Cash Flows from
Investing Activities: 0 0 0
Cash Flows from
Financing Activities:
Additional Paid-in
Capital: 0 0 +50,500
Issuance of Common
Stock for Cash: +1,500 0 +1,500
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Net Increase (decrease) $ -7,242 $ 0 $ -24,646
Cash,
Beginning of period: $ 31,888 $ 0 $ 0
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Cash, End of Period: $ 24,646 $ 0 $ 24,646
See accompanying notes to financial statements.
6
eCLIC, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
The Company was organized March 1, 1999, under the laws of the State of
Nevada as eCLIC, Inc. The Company currently has yet to generate any revenues
and in accordance with SFAS #7, is considered a developmental stage company.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the first seven months and third Quarter ended September 30, 1999, they
are not necessarily indicative of the results that may be expected for the
year ended December 31, 1999. For further information, refer to the audited
financial statements and the footnotes thereto included in the company's
report on Form 10SB12G for period ended April 12, 1999.
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 disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and equivalents
The Company maintains a cash balance in a non-interest-bearing bank that
currently does not exceed federally insured limits. For the purpose of the
statements of cash flows, all highly liquid investments with the maturity of
three months or less are considered to be cash equivalents. There are no
cash equivalents as of September 30, 1999.
7
eCLIC, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Organization Costs
Costs incurred to organize the Company are being amortized on a straight-line
basis over a sixty-month period.
OFFERING COSTS
The offering costs that were incurred by the Company in connection with the
public stock offering were deducted from the proceeds of the stock offering.
PUBLIC STOCK OFFERING
The Company completed a securities offering and sold 500,000 shares of its
common stock at $.10 per share.
EARNINGS (LOSS) PER SHARE
Based EPS is determined using net income divided by the weighted average
shares outstanding during the period. Diluted EPS is computed by dividing
net income by the weighted average shares outstanding, assuming all dilutive
potential common shares were issued. Since the Company has no common shares
that are potentially issuable, such as stock options, convertible preferred
stock and warrants, basic and diluted earning per share are the same.
The Company had no dilative common stock equivalents such as stock options.
Year End
The Company has selected December 31st as its year-end.
8
eCLIC, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Year 2000 Disclosure
Computer programs that have time sensitive software may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruption of normal business
activities.
Based on a recent and ongoing assessment, the Company has determined that any
purchased software will be off-the-shelf software and will be certified Year
2000 compatible for all of its computing requirements. The Company presently
believes that with modifications to existing off-the-shelf software or
conversions to new software, the Year 2000 issue will not pose significant
operational problems and will not materially affect future financial results.
The Company currently anticipates purchasing new off-the-shelf Year 2000
compatible software in the near future, which is prior to any anticipated
impact on its operating systems. The total cost of this new software is not
anticipated to be a material expense to the Company at this time. However,
there can be no guarantee that these new off-the-shelf software products will
be adequately modified which could have a material adverse effect on the
Company's results of operations.
9
eCLIC, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1999
NOTE 3 - INCOME TAXES
Income Taxes
Income taxes are provided for using the liability method of accounting in
accordance with Statement of Financial Accounting Standards No. 109 (SFAS
#109) "Accounting for Income Taxes." A deferred tax asset or liability is
recorded for all temporary difference between financial and tax reporting.
Deferred tax expense (benefit) results from the net change during the year of
deferred tax assets and liabilities.
There is no provision for income taxes for the period ended September 30, 1999,
due to the net loss and no state income tax in Nevada, the state of the
Company's domicile.
NOTE 4 - STOCKHOLDERS' EQUITY
Common Stock
The authorized common stock of the corporation consists of 20,000,000 shares
with a par value of $0.001 per share.
Preferred Stock
The authorized preferred stock of the corporation consists of 5,000,000
shares with a par value of $0.001 per share.
On March 16, 1999 the company issued 1,000,000 shares of its $0.001 par value
common stock for cash of $1,000.00 to a director.
Between March 20 and April 4, 1999, the Company sold Five Hundred Thousand
(500,000) shares of its common stock in connection with a public offering
at a price of $0.10 per share. On April 5, 1999, the Company completed a
public offering of shares of common stock of the Company pursuant to
Regulation D, Rule 504 of the Securities Act of 1933, as amended, whereby
it sold 500,000 shares of the Common Stock of the Company to approximately
forty (40) unaffiliated shareholders of record. The Company filed an
original Form D with the Securities and Exchange Commission on or about March
22, 1999.
10
eCLIC, Inc.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
September 30, 1999
NOTE 5 - GOING CONCERN
The Company's 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. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern. At this time, and for at least the next approximately twelve
(12) months, the Company does not believe it will need to raise any additional
funds to remain a going concern. If in the future the Company should seek to
raise additional capital it would be accomplished via a private placement
offering pursuant to Regulation D, Rule 505/506. Until that time, the
stockholders/officers and or directors have committed to advancing the
operating costs of the Company interest free.
NOTE 6 - RELATED PARTY TRANSACTIONS
The Company, by Board of Directors Resolution, has retained two of its
stockholders as suppliers and has agreed to pay them for administrative
services, normal and customary fees for their services, and their help in
developing a Web site for the Company.
The Company has agreed to pay 10% of sales of the Company to two of its
officers as compensation to them, instead of any salaries, until the Company
becomes profitable.
The company neither owns nor leases any real or personal property. An
officer of the corporation provides office services without charge. Such
costs are immaterial to the financial statements and accordingly, have not
been reflected therein. The officers and directors of the Company are
involved in other business activities and may, in the future, become
involved in other business opportunities. If a specific business opportunity
becomes available, such persons may face a conflict in selecting between the
Company and their other business interests. The Company has not formulated a
policy for the resolution of such conflicts.
NOTE 7 - WARRANTS AND OPTIONS
There are no warrants or options outstanding to acquire any additional shares
of common or preferred stock.
11
Iem 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATIONS
The current core business of eClic, Inc. (eClic.com) is to market and sell
health care products through an Internet Web Site. The Company plans to
seek outside suppliers who would be willing to allow eClic.com to
merchandise, market and sell their products through the Company's Internet
Web site, for a nominal fee. These suppliers would be responsible for
inventory, billing and shipping their products to the potential customers
generated through the Company's Web site. The company plans to focus, but
not limit itself to health care products. There are a number of personal
care products where consumers might prefer the ease, convenience and privacy
of ordering these products through the Internet. Additionally, the Company
plans to seek advertisers, to advertise their product(s) on the Company's Web
site. For any advertisers on the Company's Web site, the Company will
provide a link to the advertisers' Web site and charge a customary/nominal
fee, for each customer who links to their advertisers Web site.
The Company has a limited operating history upon which an evaluation of the
Company, its current business and its prospects can be based, each of which
must be considered in light of the risks, expenses and problems frequently
encountered by all companies in the early stages of development, and
particularly by such companies entering new and rapidly developing markets
like the Internet. The Company's prospects must be considered in light of
the risks, uncertainties, expenses and difficulties frequently encountered by
companies in their early stages of development, particularly companies in new
and rapidly evolving markets such as online commerce. Such risks include,
without limitation, the lack of broad acceptance of the company's products on
the Internet, the possibility that the Internet will fail to achieve broad
acceptance, the inability of the Company to generate significant e-Commerce
based revenues from Internet customers, the company's inability to
anticipate and adapt to a developing market, the failure of the company's
network infrastructure (including its server, hardware and software) to
efficiently handle its Internet traffic, changes in laws that adversely
affect the company's business, the ability of the Company to manage its
operations, including the amount and timing of capital expenditures and other
costs relating to the expansion of the company's operations, the introduction
and development of different or more extensive communities by direct and
indirect competitors of the Company, including those with greater financial,
technical and marketing resources, the inability of the Company to maintain
and increase levels of traffic on its Web site, the inability of the Company
to attract, retain and motivate qualified personnel and general economic
conditions.
12
The Company has not achieved profitability to date, and the Company anticipates
that it will continue to incur net losses for the foreseeable future. The
extent of these losses will depend, in part, on the amount of growth in the
Company's revenues from sales of its products, and possibility advertising
revenues on its Web site. As of September 30, 1999, the Company had an
accumulated deficit of $27,036 from its Operating Activities. The Company
expects that its operating expenses will increase significantly during the
next several months, especially in the areas of sales and marketing, and brand
promotion. Thus, the Company will need to generate increased revenues to
achieve profitability. To the extent that increases in its operating expenses
precede or are not subsequently followed by commensurate increases in revenues,
or that the Company is unable to adjust operating expense levels accordingly,
the Company's business, results of operations and financial condition would be
materially and adversely affected. There can be no assurances that the Company
can achieve or sustain profitability or that the Company's operating losses
will not increase in the future.
The Company's future success is substantially dependent upon continued growth
in the use of the Internet. To generate product sales, advertising sales,
e-Commerce service fees for eClic, Inc., the Internet's recent and rapid
growth must continue, and e-Commerce on the Internet must become widespread.
None of these can be assured. The Internet may prove not to be a viable
commercial marketplace. Additionally, due to the ability of consumers to
easily compare prices of similar products or services on competing Web sites,
gross margins for e-Commerce transactions may narrow in the future and,
accordingly, the Company's revenues from e-Commerce arrangements may be
materially negatively impacted. If use of the Internet does not continue to
grow, the Company's business, results of operations and financial condition
would be materially and adversely affected. Additionally, to the extent that
the Internet continues to experience significant growth in the number of
users and the level of use, there can be no assurance that its technical
infrastructure will continue to be able to support the demands placed upon
it. The necessary technical infrastructure for significant increases in
e-Commerce, such as a reliable network backbone, may not be timely and
adequately developed. In addition, performance improvements, such as
high-speed modems, may not be introduced in a timely fashion. Furthermore,
security and authentication concerns with respect to transmission over the
Internet of confidential information, such as credit card numbers, may
remain. Issues like these could lead to resistance against the acceptance of
the Internet as a viable commercial marketplace. Also, the Internet could
lose its viability due to delays in the development or adoption of new
standards and protocols required to handle increased levels of activity, or
due to increased governmental regulation. Changes in or insufficient
availability of telecommunications services could result in slower response
times and adversely affect usage of the Internet. Demand and market
acceptance for recently introduced services and products over the Internet
are subject to a high level of uncertainty, and there exist few proven
services and products.
Going Concern - The Company experienced operating losses for the period ended
September 30, 1999. The financial statements have been prepared assuming the
Company will continue to operate as a going concern which contemplates the
realization of assets and the settlement of liabilities in the normal course
of business. No adjustment has been made to the recorded amount of assets or
the recorded amount or classification of liabilities which would be required
if the Company were unable to continue its operations. As discussed in Note
5, of the notes to the financial statements, management believes it has enough
funds to operate for the next twelve (12) months without the need to raise
additional capital to meet its obligations in the normal course of business.
Unclassified Balance Sheet - In accordance with the provisions of SFAS No.
53, the Company has elected to present an unclassified balance sheet.
13
Loss Per Share - The Company adopted the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" that
established standards for the computation, presentation and disclosure of
earnings per share ("EPS"), replacing the presentation of Primary EPS with
a presentation of Basic EPS. It also requires dual presentation of Basic
EPS and Diluted EPS on the face of the income statement for entities with
complex capital structures. The Company did not present Diluted EPS since
it has a simple capital structure.
The Company has not pursued or explored any opportunities for an acquisition
or merger. This does not preclude that the Company may not explore any
opportunities in the future.
Results of Operations
As of September 30, 1999, the Company generated $675 in revenues. Management
does not believe that the Company will be able to generate profit from its
operations until it can satisfactorily develop its website, and attract new
customers to it. They expect this will take a minimum of at least the next
two Quarters, as it works through its developmental processes. There are
no assurances that this will be successfully completed during the next
two Quarters.
In its most recent three month operating period ended September 30, 1999, the
Company generated revenues of $675, and operating expenses of $7,935, for a
net loss of approximately $7,260 and a negative cash flow $7,242 for the
Third Quarter. During the Third Quarter, the Company continued to run tests
with its Website, and generated minimal revenues. The majority of the
Company's expenses for the Quarter included Website development fees, and
developing its secure Website.
Plan of Operation
Management believes that the Company will be able to generate minimal
revenues during the Fourth Quarter or First Quarter of next calendar year.
Management does not believe the company will generate any profit until
sometime in Calendar Year 2000, as developmental and marketing costs will most
likely exceed any anticipated revenues.
As stated earlier in this filing, the Company believes it has enough monies
to sustain itself for the next twelve months, during this developmental process.
14
Liquidity and Capital Resources
On April 5, 1999, the Company completed a public offering of shares of common
stock of the Company pursuant to Regulation D, Rule 504 of the Securities Act
of 1933, as amended, whereby it sold 500,000 shares of the Common Stock of
the Company to 40 unaffiliated shareholders of record. The Company filed an
original Form D with the Securities and Exchange Commission on or about March
22, 1999. As of April 5, 1999, the Company has 1,500,000 shares of common
stock issued and outstanding held by 41 shareholders of record.
The Company is a development stage Internet e-Commerce company with a
principal business objective to sell and market health related products or
products which offer the Company potential revenues, and generate advertising
revenues from other vendors who sell and market products through the World
Wide Internet.
The Company currently has 2 employees who are both officers and directors of
the Company. These employees received no compensation through September 30,
1999. The Company does not plan to hire any additional employees until it can
become an profitable entity. (See employment agreements in 10-SB12G).
The Company has no material commitments for capital expenditures nor does it
foresee the need for such expenditures over the next year.
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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), finding
suitable merger or acquisition candidates, 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.
This Form10-QSB contains statements that constitute "forward-looking
statements." These forward-looking statements can be identified by the use of
predictive, future-tense or forward-looking terminology, such as "believes,"
"anticipates," "expects," "estimates," "plans," "may," "will," or similar
terms. These statements appear in a number of places in this Registration and
include statements regarding the intent, belief or current expectations of
the Company, its directors or its officers with respect to, among other
things: (i) trends affecting the Company's financial condition or results of
operations for its limited history; (ii) the Company's business and growth
strategies; (iii) the Internet and Internet commerce; and, (iv) the Company's
financing plans. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve significant
risks and uncertainties, and that actual results may differ materially from
those projected in the forward-looking statements as a result of various
factors. Factors that could adversely affect actual results and performance
include, among others, the Company's limited operating history, dependence
on continued growth in the use of the Internet, the Company's inexperience
with the Internet, potential fluctuations in quarterly operating results and
expenses, security risks of transmitting information over the Internet,
government regulation, technological change and competition.
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.
16
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
The Company is not a party to any legal proceedings.
ITEM 2. Changes in Securities and Use of Proceeds
None.
ITEM 3. Defaults upon Senior Securities
None.
ITEM 4. Submission of Matters to a Vote of Security Holders
During the quarter ended September 30, 1999, no matters were submitted to the
Company's security holders.
ITEM 5. Other Information
None.
ITEM 6. Exhibits and Reports on Form 8-K
None.
17
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
eClic, INC.
(Registrant)
Dated: October 27, 1999
/s/ Justine M. Daniels
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Justine M. Daniels
President and Chief Executive Officer
18