U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
[ ] Transition report under section 13 or 15(d)
of the Exchange Act.
COMMISSION FILE NUMBER 0-28755
COMMUNICATION VENTURES, INC.
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(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-4737492
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(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
860 VIA DE LA PAZ, SUITE E-1, PACIFIC PALISADES, CA 90272
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(310) 230-6100
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(ISSUER'S TELEPHONE NUMBER)
22147 PACIFIC COAST HIGHWAY, SUITE 4, MALIBU, CA 90265
(Former Address, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days.
YES X NO
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As of August 15, 2000, there were 1,018,400 shares of Common Stock, $0.001
par value, of the issuer outstanding.
Transitional Small Business Disclosure Format (check one)
YES NO X
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COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
INDEX
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements
BALANCE SHEET AS OF JUNE 30, 2000 (UNAUDITED) AND
DECEMBER 31, 1999 2
STATEMENTS OF OPERATIONS FOR THE THREE MONTHS AND SIX
MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999 AND FROM
SEPTEMBER 15, 1998 (INCEPTION) TO JUNE 30, 2000
(UNAUDITED) 3
STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE
30, 2000 AND JUNE 30, 1999 AND FOR THE PERIOD FROM
SEPTEMBER 15, 1998 (INCEPTION) TO JUNE 30, 2000
(UNAUDITED) 4
NOTES TO FINANCIAL STATEMENTS AS OF JUNE 30, 2000
(UNAUDITED) 5-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports filed on Form 8-K 8
Signatures 9
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
June 30,
2000 December 31,
(unaudited) 1999
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TOTAL ASSETS $ - $ -
- ------------ ============= ============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
LIABILITIES
Loan payable to stockholder $ 16,395 $ 95
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TOTAL LIABILITIES 16,395 95
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STOCKHOLDERS' DEFICIENCY
Preferred stock, $0.001 par value, 8,000,000
shares authorized, none issued and
outstanding - -
Common stock, $0.001 par value, 100,000,000
shares authorized, 1,018,400 issued and
outstanding 1,018 1,018
Accumulated deficit during development stage (17,413) (1,113)
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TOTAL STOCKHOLDERS' DEFICIENCY (16,395) (95)
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TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ - $ -
- ---------------------------------------------- ============= ============
See accompanying notes to financial statements
2
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the
For the For the For the Period From
For the Three Six Six September
Three Months Months Months 15, 1998
Months Ended Ended Ended (Inception)
Ended June June 30, June 30, June 30, to June 30,
30, 2000 1999 2000 1999 2000
------------ ----------- ---------- ----------- -------------
REVENUES $ - $ - $ - $ - $ -
------------ ----------- ---------- ----------- -------------
EXPENSES
Accounting fees 2,000 500 4,000 500 4,500
Bank charges - 30 - 30 95
Consulting fees - 18 - 18 18
Legal fees 3,000 500 6,000 500 6,500
Office & postage expense 750 - 1,500 - 1,500
Rent 2,400 - 4,800 - 4,800
------------ ----------- ---------- ----------- -------------
NET LOSS $ (8,150) $ (1,048) $ (16,300) $ (1,048) $ (17,413)
- --------
============ =========== ========== =========== =============
Net loss per share - basic and diluted $ (0.0080) $ (0.0011) $ (0.0160) $ (0.0022) $ (0.0247)
============ =========== ========== =========== =============
Weighted average number of shares
outstanding during the period - basic
and diluted 1,018,400 941,477 1,018,400 482,488 705,423
============ =========== ========== =========== =============
See accompanying notes to financial statements
3
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
September
For the For the 15, 1998
six months six months (inception)
ended June ended June to June
30, 2000 30, 1999 30, 2000
------------ ------------ ------------
Cash flows from operating activities
Net loss $ (16,300) $ (1,048) $ (17,413)
Adjustments to reconcile net loss to net cash
used in operating activities: - - -
Stock issued for consulting services - 18 18
------------ ------------ ------------
Net cash used in operating activities (16,300) (1,030) (17,395)
------------ ------------ ------------
Cash flows from financing activities
Proceeds from issuance of common stock - 1,000 1,000
Loan proceeds from stockholder 16,300 770 16,395
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Net cash provided by financing activities 16,300 1,770 17,395
------------ ------------ ------------
Net increase in cash - 740 -
Cash and cash equivalents - Beginning - - -
------------ ------------ ------------
Cash and cash equivalents - ending $ - $ 740 $ -
============ ============ ============
See accompanying notes to financial statements
4
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2000
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Organization and Business Operations
Communication Ventures, Inc. (a development stage company) ("the
Company") was incorporated in Delaware on September 15, 1998 to
engage in an internet-based business. At June 30, 2000, the
Company had not yet commenced any revenue-generating operations,
and all activity to date relates to the Company's formation,
proposed fund raising and business plan development.
The Company's ability to commence revenue-generating operations
is contingent upon its ability to implement its business plan and
raise the capital it will require through the issuance of equity
securities, debt securities, bank borrowings or a combination
thereof.
(B) Basis of Presentation
The accompanying unaudited financial statements have been
prepared in accordance with generally accepted accounting
principles, and the rules and regulations of the Securities and
Exchange Commission for interim financial information.
Accordingly, they do not include all the information necessary
for a comprehensive presentation of financial position and
results of operations.
It is management's opinion, however that all material adjustments
(consisting of normal recurring adjustments) have been made which
are necessary for a fair financial statements presentation. The
results for the interim period are not necessarily indicative of
the results to be expected for the year.
For further information, refer to the financial statements and
footnotes included the Company's Form 10-KSB for the year ended
December 31, 1999.
(C) Use of Estimates
The preparation of the 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 revenues and expenses during the reporting
period. Actual results could differ from those estimates.
5
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2000
(UNAUDITED)
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(D) Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company
considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
(E) Income Taxes
The Company accounts for income taxes under the Financial
Accounting Standards Board Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("Statement
109"). Under Statement 109, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis.
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax assets
and liabilities of a change in tax rates is recognized in income
in the period that includes the enactment date. There were no
current or deferred income tax expenses or benefits due to the
Company not having any material operations for the six months
ended June 30, 2000.
(F) Loss Per Share
Net loss per common share for the six and three months ended June
30, 2000 and for the period from September 15, 1998 (inception)
to June 30, 2000 is computed based upon the weighted average
common shares outstanding as defined by Financial Accounting
Standards No. 128 "Earnings Per Share". There were no common
stock equivalents outstanding at June 30, 2000.
NOTE 2 LOAN PAYABLE - RELATED PARTY
The loan payable - related party is a non-interest-bearing loan
payable to PageOne Business Productions, LLC arising from funds
advanced to the Company. The amount is due and payable upon
demand.
6
COMMUNICATION VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
AS OF JUNE 30, 2000
(UNAUDITED)
NOTE 3 STOCKHOLDERS' DEFICIENCY
The Company was originally authorized to issue 100,000 shares of
preferred stock at $.01 par value, with such designations,
preferences, limitations and relative rights as may be determined
from time to time by the Board of Directors. In addition, the
Company was originally authorized to issue 10,000,000 shares of
common stock at $.01 par value. The Company issued 909,200 and
109,200 shares to Appletree Investments Company, Ltd. and PageOne
Business Productions, LLC, respectively.
Management filed a restated certificate of incorporation with the
State of Delaware which increased the number of authorized common
shares to 100,000,000, increased the number of authorized
preferred shares to 8,000,000 and decreased the par value of the
common and preferred shares to $.001 per share. The financial
statements at June 30, 2000 give effect to common and preferred
stock amounts and par values enumerated in the restated
certificate of incorporation.
NOTE 4 GOING CONCERN
As reflected in the accompanying financial statements, the
Company has accumulated losses of $17,413 since inception, a
working capital deficiency of $16,395 and has not generated any
revenues since it has not yet implemented its business plan. The
ability of the Company to continue as a going concern is
dependent on the Company's ability to raise additional capital
and implement its business plan. The financial statements do not
include any adjustments that might be necessary if the Company is
unable to continue as a growing concern.
The Company intends to implement its business plan and is seeking
funding through the private placement of its equity or debt
securities or may seek a combination with another company already
engaged in its proposed business. Management believes that
actions presently being taken provide the opportunity for the
Company to continue as a going concern.
7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
The following discussion and analysis below should be read in conjunction
with the financial statements, including the notes thereto, appearing elsewhere
in this report. For the period since inception (September 15, 1998) through June
30, 2000, during the Company's development stage, the Company has a zero cash
balance and has accumulated losses of ($17,413).
FINANCIAL CONDITION AND LIQUIDITY
The Company has a working capital deficiency of $16,395 and has an ongoing
need to finance its activities. To date, the Company currently has funded these
cash requirements by offering and selling its Common Stock, in addition to cash
advances from its current stockholders, and has issued 1,018,400 shares of
Common Stock for net proceeds of $1,000.00. Operating costs for the current
period were funded by a loan from a stockholder.
PLAN OF OPERATION
The Company has registered a dot.com name and has determined it can begin
conducting its business with limited financing that it has arranged.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports filed on Form 8-K
(a) Exhibits
Exhibit No. Description
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27 Financial Data Schedule
(b) Reports on Form 8-K
None.
8
SIGNATURES
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In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
COMMUNICATION VENTURES, INC.
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Registrant
August 15, 2000 By: /s/ James P. Walters
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James P. Walters
Chief Financial Officer
(Principal Financial Officer)
9
EXHIBIT INDEX
Exhibit No. Description
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27 Financial Data Schedule