TABLE OF CONTENTS Page Independent Accountant's Review Report 1 Balance Sheet 2 Statement of Operations 3 Statement of Cash Flows 4 Footnotes 5 G. BRAD BECKSTEAD Certified Public Accountant 330 E. Warm Springs Las Vegas, NV 89119 702.528.1984 425.928.2877 (efax) INDEPENDENT ACCOUNTANT'S REVIEW REPORT Board of Directors Future Carz.com, Inc. (a Development Stage Company) Las Vegas, NV I have reviewed the accompanying balance sheet of Future Carz.com, Inc. (a Nevada corporation) (a development stage company) as of June 30, 2000 and the related statements of operations for the three-month and six-month periods ended June 30, 2000 and for the period July 13, 1999 (Inception) to June 30, 2000, and cash flows for the six months ending June 30, 2000 and for the period July 13, 1999 (Inception) to June 30, 2000. These financial statements are the responsibility of the Company's management. I conducted my reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, I do not express such an opinion. Based on my reviews, I am not aware of any material modifications that should be made to the accompanying financial statements referred to above for them to be in conformity with generally accepted accounting principles. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company has had limited operations and has not commenced planned principal operations. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 5. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. I have previously audited, in accordance with generally accepted auditing standards, the balance sheet of Future Carz.com, Inc. (a development stage company) as of December 31, 1999, and the related statements of operations, stockholders' equity, and cash flows for the period July 13, 1999 (Inception) to December 31, 1999 (not presented herein) and in my report dated April 17, 2000, I expressed an unqualified opinion on those financial statements. /s/G. Brad Beckstead, CPA August 9, 2000 Future Carz.com, Inc. (a Development Stage Company) Balance Sheet June 30, 2000 and December 31, 1999 (unaudited) June 30, December 31, 2000 1999 Assets Current assets: Cash 220 5,082 Total current assets 220 5,082 Fixed assets: Office equipment 8,473 8,473 Less accumulated depreciation (847) - Total fixed assets 7,626 8,473 Other assets: Website development 20,000 20,000 Less accumulated amortization (2,000) (333) Total other assets 18,000 19,667 Total Assets 25,846 33,222 Liabilities and Stockholders' Equity Current liabilities Subscription refund 375 375 Loan from stockholder 2,000 - Total current liabilities 2,375 375 Long-term liabilities - - Total liabilities 2,375 375 Stockholders' Equity: Preferred stock, $0.001 par value, 5,000,000 shares authorized, zero shares issued and outstanding - - Common stock, $0.001 par value, 20,000,000 shares authorized, 5,328,087 shares issued and outstanding 5,328 5,328 Additional paid-in capital 65,076 65,076 Deficit accumulated during development (46,933) (37,557) stage Total stockholders' equity 23,471 32,847 Total Liabilities and Stockholders' 25,846 33,222 Equity Future Carz.com, Inc. (a Development Stage Company) Statement of Operations (unaudited) For the Three Months and Six Months Ending June 30, 2000 and For the Period July 13, 1999 (Inception) to June 30, 2000 Three Months Six Months July 13, 1999 Ending Ending (Inception) to June 30, June, 30 June 30, 2000 2000 2000 Revenue - - - Expenses: Advertising Amortization expense 667 1,667 2,000 Depreciation expenses 424 847 847 General and 558 6,862 44,086 administrative expenses Total expenses 1,649 9,376 46,933 Net loss (1,649) (9,376) (46,933) Weighted average number of common shares 5,328,087 5,328,087 5,328,087 outstanding Net loss per share - - - Future Carz.com, Inc. (a Development Stage Company) Statement of Cash Flows (unaudited) For the Six Months Ending June 30, 2000 and For the Period July 13, 1999 (Inception) to June 30, 2000 Six Months July 13, 1999 Ending (Inception) to June 30, June 30, 2000 2000 Cash flows from operating activities Net loss (9,376) (46,933) Adjustments to reconcile net income to net cash used by operating activities: Amortization expense 1,667 2,000 Depreciation expense 847 847 Common stock issued for services 10,259 provided Increase (decrease) in: Subscription refund - 375 Loan from stockholder 2,000 2,000 Net cash used by operating activities (4,862) (31,452) Cash flows from investing activities Purchase of fixed assets - (8,473) Development of website - (20,000) Net cash provided (used) by investing - (28,473) activities Cash flows from financing activities Issuance of common stock - 60,145 Net cash provided by financing - 60,145 activities Net (decrease) increase in cash (4,862) 220 Cash - beginning 5,082 - Cash - ending 220 220 Supplemental disclosures: Interest paid - - Income taxes paid - - Non-cash investing and financing activities: Common stock issued for services - 10,259 provided Future Carz.com,, Inc. Footnotes to Financial Statements Note 1 - History and organization of the company The Company was organized July 13, 1999 (Date of Inception) under the laws of the State of Nevada, as Future Carz.com, Inc. The Company has limited operations and in accordance with SFAS #7, the Company is considered a development stage company. The Company is authorized to issue 20,000,000 shares of $0.001 par value common stock and 5,000,000 shares of $0.001 par value preferred stock. Note 2 - Accounting policies and procedures Accounting policies and procedures have not been determined except as follows: Accounting method The Company reports income and expenses on the accrual method. Estimates The preparation of financial statements in conformity with generally accepted accounting principals 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 form those estimates. Cash and equivalents The Company maintains a cash balance in a non-interest-bearing account 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 June 30, 2000. Reporting in the costs of start-up activities Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up Activities" which provides guidance on the financial reporting of start-up costs and organizational costs. It requires most costs of start-up activities and organizational costs to be expensed as incurred. SOP 98-5 is effective for its fiscal years beginning after December 15, 1998. With the adoption of SOP 98-5, there has been little or no effect on the Company's financial statements. Loss per share Net loss per share is provided in accordance with Statement of Financial Accounting Standards No. 128 (SFAS #128) "Earnings Per Share". Basic loss per share is computed by dividing losses available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share reflects per share amounts that would have resulted if dilutive common stock equivalents had been converted to common stock. As of June 30, 2000, the Company had no dilutive common stock equivalents such as stock options. Dividends The Company has not yet adopted any policy regarding payment of dividends. No dividends have been paid since inception. Website development Website development costs are amortized over a period of 60 months using the straight-line method. Equipment The cost of equipment is depreciated over the estimated useful life of the equipment of five years utilizing the straight-line method of depreciation. Year end The Company has adopted December 31 as its fiscal year end. Note 3 - 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 differences 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 June 30, 2000, due to the net loss and no state income tax in Nevada, the state of the Company's domicile and operations. Note 4 - Stockholders' equity The Company is authorized to issue 20,000,000 shares of $0.001 par value common stock and 5,000,000 shares of $0.001 par value preferred stock. On July 29, 1999, the Company issued 4,000,000 shares of its $0.001 par value common stock to a shareholder in exchange for cash. On November 30, 1999, the Company issued 1,328,087 shares of its $0.001 par value common stock to shareholders in exchange for cash of $56,145 and in exchange for services rendered of $10,259. Of the total amount, $1,328 is considered common stock and $65,076 is considered additional paid-in capital. There have been no other issuances of common or preferred stock. Note 5 - Going concern The Company's financial statements are prepared using the 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. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. The Company does not have significant cash or other assets readily convertible to cash nor does it an established source of revenue sufficient to cover its operating costs. Until that time, the officers have committed to make cash advances to the Company to cover its operating costs. The cash advances do not bear any interest. Note 6 - Related party transactions The Company does not lease or rent any property. Office services are provided without charge by a director/shareholder. 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 stock. Note 8 - Year 2000 issue The Company uses a significant number of computer software programs and operating systems in its internal operations, including applications used in financial business systems and various administrative functions. Although the Company's software applications contain source code that appropriately interpreted the calendar year 2000, failure by the Company to make any future modifications resulting from "Year 2000" could result in systems interruptions or failures that could have a material adverse effect on the Company's business. The Company has not incurred, nor anticipates that it will incur material expenses to make its computer software programs and operating systems "Year 2000" compliant. However, there can be no assurance that unanticipated costs necessary to update software, or potential systems interruptions, will not exceed the Company's expectations and have a material adverse effect on the Company's business, financial condition and results of operations. Item 2. Management's Discussion and Plan of Operation General Future Carz.com, Inc. (the "Company") is a developmental stage company with a principal business objective to provide automobile information and purchasing services via the Internet to assist consumers in researching, evaluating and buying new and pre-owned vehicles. In addition, the Company seeks to offer services to enable consumers to purchase automotive-related products and services such as insurance, financing, extended warranties, and automobile parts. The Company currently operates a web site at www.futurecarz.com, where visitors can search for automobile-related information and services from the privacy of their home or office. Future Carz.com, Inc. believes its process will insulate consumers from unpleasant price negotiations by requiring member dealers to provide a competitive, firm, upfront price to consumers. Using the www.futurecarz.com web site allows consumers to obtain access to a wide range of comprehensive, up-to-date information about vehicle models, options and dealer costs at no charge. Information such as vehicle specifications, Kelly Blue Book pre-owned vehicle values and automobile reviews will be aggregated in a central location, providing consumers with an objective, convenient means to make an informed purchase decision. The Company is enrolled in an affiliate program, through which it receives remuneration for referrals to other automotive web site. Remuneration is based upon the following factors: (i) the level of traffic directed to affiliates, (ii) the number of price inquiries submitted and (iii) the number of sales realized as a result of referrals. The Company, however, has limited operating history, and must be considered a developmental stage company. Future operations are dependent upon management's ability to attract and retain users, of which there can be no assurance. Management must, among other things, develop and market the Company's vehicle information and purchasing services. Results of Operations The Company has not generated any revenues since its inception. The Company has limited operating history. The Company was organized on July 13, 1999. Activities to date have been limited primarily to organization, initial capitalization, finding and securing a management team and board of directors, the development of a business plan and web site operations and commencing with initial operational plans. As of March 31, 2000, the Company has developed a business plan, recruited and retained a management team, developed a web site at www.futurecarz.com and raised capital via a private placement offering of stock made pursuant to Section 4(2) of the Securities Act of 1933, as amended, and an offering made in reliance upon an exemption from the registration provisions of the Securities Act of 1933, as amended, in accordance with Regulation D, Rule 504. As a start-up and development stage company, the Company has no new products or services to announce. Liquidity and Capital Resources To date, the Company has attained cash from offerings of its common stock. On July 29, 1999, the Company issued 4,000,000 shares of its $0.001 par value common shares for cash. On November 30, 1999, the Company issued 1,328,087 shares of its common stock for cash of $56,145 and in exchange for services rendered of $10,259. Of the total amount, $1,328 is considered common stock and $65,076 is additional paid-in capital. The Company has yet to generate any revenues. Without the realization of additional capital, it would be unlikely for the Company to continue as a going concern. It is management's plan to seek additional capital through a private offering of its securities once it gets listed on the NQB's "Pink Sheets" or the OTC-BB. The Company does not have significant cash or other material assets nor does it have an established source of revenue sufficient to cover its operating costs to allow it to continue as a going concern indefinitely. Until that time, the officers have committed to advance the operating costs the company interest free. 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. PART II - OTHER INFORMATION Item 6. Exhibits Exhibit Name and/or Identification of Exhibit Number 3 Articles of Incorporation & By-Laws (a)Articles of Incorporation of the Company filed July 13, 1999. Incorporated by reference to the exhibits to the Company's General Form For Registration Of Securities Of Small Business Issuers on Form 10-SB, previously filed with the Commission. (b)By-Laws of the Company adopted July 16, 1999. Incorporated by reference to the exhibits to the Company's General Form For Registration Of Securities Of Small Business Issuers on Form 10-SB, previously filed with the Commission. 23 Consent of Experts and Counsel Consents of independent public accountants 27 Financial Data Schedule Financial Data Schedule of Future Carz.com, Inc. ending June 30, 2000 SIGNATURES Pursuant to the requirements of the Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Future Carz.com, Inc. (Registrant) Date: August 11, 2000 By:/s/ Hal Crawford Hal Crawford, President