UNITED STATES
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, 2002
[ ] 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: 0-49763
eXmailit.com
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(Exact name of Registrant as specified in its charter)
Nevada 88-0469593
--------------------------- -----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
530-999 West Hastings St.
Vancouver, B.C., Canada V6C 2W2 (604) 688-4060
- --------------------------------- -----------------------------
(Address of principal executive (Registrant's telephone number,
offices) including area code)
None
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Former Name, Address and Fiscal Year, 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
The number of shares outstanding of the registrant's common stock as of
June 30, 2002 was 4,000,000.
Registrant's common stock is listed on the OTC Bulletin Board under
the symbol "EXMA".
Transitional Small Business Disclosure Format: Yes No X
1
Part I - Financial Information
Item 1. Financial Statements
The interim financial statements for eXmailit.com (the Company)
included herein are unaudited but reflect, in management's opinion, all
adjustments, consisting only of normal recurring adjustments, that are
necessary for a fair presentation of the Company's financial position
and the results of its operations for the interim periods presented.
Because of the nature of the Company's business, the results of
operations for the three and six months ended June 30, 2002 are not
necessarily indicative of the results that may be expected for the full
fiscal year. The financial statements included herein should be read in
conjunction with the financial statements and notes thereto included in
the Form 10SB/A, filed August 7, 2002.
2
eXmailit.com
A DEVELOPMENT STAGE COMPANY
I N T E R I M F I N A N C I A L S T A T E M E N T S
FROM INCEPTION, 30 JUNE 2002 AND FOR THE THREE MONTHS AND
SIX MONTHS ENDED 30 JUNE 2002 AND 2001
Unaudited - See the Review Engagement Report
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Parker & Co., Chartered Accountants
3
eXmailit.com
A DEVELOPMENT STAGE COMPANY
I N T E R I M F I N A N C I A L S T A T E M E N T S
FROM INCEPTION, 30 JUNE 2002 AND FOR THE THREE MONTHS AND
SIX MONTHS ENDED 30 JUNE 2002 AND 2001
Unaudited - See the Review Engagement Report
- -----------------------------------------------------------------
C O N T E N T S
Page
============
INDEPENDENT REVIEW ENGAGEMENT REPORT 1
INTERIM STATEMENT OF FINANCIAL POSITION 2
INTERIM STATEMENT OF RESULTS OF OPERATION 3
INTERIM STATMENT OF CASH FLOWS 4
INTERIM STATEMENT OF STOCKHOLDER'S EQUITY 5
NOTES TO THE INTERIM FINANCIAL STATEMENTS 6-8
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Parker & Co., Chartered Accountants
4
P A R K E R & C O. Page 1 of 8
CHARTERED ACCOUNTANTS
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200 - 2560 Simpson Road, Richmond BC V6X 2P9
Tel: (604) 276-9920 Fax: (604) 276-4577
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INDEPENDENT REVIEW ENGAGEMENT REPORT
To the Board of Directors
eXmailit.com
We have reviewed the interim statement of financial position of
eXmailit.com, a development stage company, as at 30 June 2002
and as at 31 December 2001 and the interim statements of results
of operations and cash flows for the three months and six months
ended 30 June 2002 and 2001 and the interim statement of changes
in stockholders' equity from inception, 6 April 2000, to 30 June
2002, in accordance with the standards established by the American
Institute of Certified Public Accountants. These interim financial
statements are the responsibility of the company's management.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of
interim financial information, applying analytical review procedures
to financial data, and making inquiries of persons responsible for
financial and accounting matters. A review is substantially less in
scope than an audit in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statement taken as a whole. Accordingly, we
do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the interim financial statements referred to
above for them to be in conformity with generally accepted
accounting principles in the United States of America.
We have previously audited, in accordance with generally accepted
auditing standards in the United States, the statements of financial
position as at 31 December 2001, and the statements of results of
operation and cash flow for the year then ended and the statement of
changes in shareholders' equity from inception, 6 April 2000, to 31
December 2001; and in our report dated 12 April 2002, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying interim statement of
financial position as of 30 June 2002, is fairly stated in all material
respects in relation to the statement of financial position from which
it has been derived.
These interim financial statements have been prepared assuming the
company will continue as a going concern. As stated in Note 2 to the
interim financial statements, the company will require an infusion of
capital to sustain itself. This requirement for additional capital
raises substantial doubt about the company's ability to continue as a
going concern. The interim financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Richmond, British Columbia, Canada
29 July 2002
/s/ PARKER & CO.
CHARTERED ACCOUNTANTS
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Parker & Co., Chartered Accountants
5
eXmailit.com
A DEVELOPMENT STAGE COMPANY
INTERIM STATEMENT OF FINANCIAL POSITION
Unaudited - see the Review Engagement Report Page 2 of 8
- ------------------------------------------------------------------------------
AS AT AS AT
30 JUNE 31 DECEMBER
2002 2001
--------------- ---------------
CURRENT ASSETS
Cash $ 32,492 $ 46,613
----------- -----------
Total current assets 32,492 46,613
----------- -----------
EQUIPMENT AND SOFTWARE, NOTE 3
Office and computer equipment
and software, at cost 14,560 11,732
Accumulated amortization 6,557 3,772
----------- -----------
Unamortized cost 8,003 7,960
----------- -----------
----------- -----------
TOTAL ASSETS $ 40,495 $ 54,573
=========== ===========
CURRENT LIABILITIES
Accounts payable $ 490 $ 1,038
Loans payable, Note 4 75,000 75,000
----------- -----------
Total current liabilities 75,490 76,038
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STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS)
Share capital, Note 5 4,000 4,000
Additional paid in capital 49,000 49,000
Currency translation adjustment 2,448 -
Deficit accumulated during the development stage (90,443) (74,465)
----------- -----------
Total stockholders'equity (deficiency in assets) (34,995) (21,465)
----------- -----------
----------- -----------
TOTAL LIABILITIES AND DEFICIENCY IN ASSETS $ 40,495 $ 54,573
=========== ===========
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Parker & Co., Chartered Accountants
6
eXmailit.com
A DEVELOPMENT STAGE COMPANY
INTERIM STATEMENT OF RESULTS OF OPERATIONS
Unaudited - see the Review Engagement Report Page 3 of 8
- ------------------------------------------------------------------------------
FROM
INCEPTION,
6 APRIL
FOR THE THREE FOR THE SIX 2000
MONTHS ENDED MONTHS ENDED TO
30 JUNE 30 JUNE 30 JUNE 30 JUNE 30 JUNE
2002 2001 2002 2001 2002
--------- -------- -------- --------- --------
<c> <c> <c> <c> <c>
EXPENSES
Accounting, legal and
professional fees $ 3,860 $ 8,369 $ 7,196 $ 11,304 $ 45,974
Advertising - 21 - 21 647
Bank charges 58 33 87 42 725
Dues and subscriptions - 1,193 75 1,252 1,513
Telephone 356 1,024 721 1,213 3,492
Utilities - - - - 153
Rent - 187 - 187 7,445
Postage and courier - 30 53 71 462
Office supplies 75 - 165 2,181 3,139
Miscellaneous - 137 - 137 -
Travel and entertainment - 2,011 - 5,079 7,621
Registration fees 3,753 - 3,753 - 3,753
Amortization 2,047 1,680 2,787 2,829 11,271
Exchange losses 167 (2,953) 1,141 - 4,802
--------- -------- -------- --------- --------
Total expenses 10,316 11,732 15,978 24,316 90,997
--------- -------- -------- --------- --------
OTHER INCOME
Interest earned - - - - 554
Miscellaneous income - 34 - 34 -
--------- -------- -------- --------- --------
LOSS BEFORE INCOME TAXES (10,316) (11,698) (15,978) (24,282) (90,443)
INCOME TAXES, NOTE 7 - - - - -
--------- -------- -------- --------- --------
LOSS ($10,316) ($11,698) ($15,978) ($24,282) ($90,443)
========= ======== ======== ========= ========
LOSS PER SHARE, NOTE 8 ($0.00) ($0.00) ($0.00) ($0.01) ($0.03)
========= ======== ======== ========= ========
WEIGHTED AVERAGE
NUMBER OF SHARES 4,000,000 3,000,000 4,000,000 3,000,000 3,347,666
========= ======== ======== ========= ========
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Parker & Co., Chartered Accountants
7
eXmailit.com
A DEVELOPMENT STAGE COMPANY
I N T E R I M S T A T E M E N T O F C A S H F L O W S
Unaudited - see the Review Engagement Report Page 4 of 8
- --------------------------------------------------------------------------------
FROM
INCEPTION,
6 APRIL
FOR THE THREE FOR THE SIX 2000
MONTHS ENDED MONTHS ENDED TO
30 JUNE 30 JUNE 30 JUNE 30 JUNE 30 JUNE
2002 2001 2002 2001 2002
--------- -------- -------- --------- --------
CASH PROVIDED (USED)
FROM OPERATIONS
Net loss ($10,316)($11,698) ($15,978)($24,282) ($90,443)
Items not involving cash
Amortization of equipment
and software cost 2,047 1,680 2,787 2,829 11,271
Office equipment exchanged
for consulting services - - - - 15,354
--------- -------- -------- --------- --------
Total cash used for the loss (8,269) (10,018) (13,191) (21,453) (63,818)
--------- -------- -------- --------- --------
Changes in working capital
other than cash
Due from a shareholder - - - 3,632 -
Deposit - - - 131 -
Accounts payable (523) 656 (548) (2) 490
Loan payable - - - - 75,000
--------- -------- -------- --------- --------
Total changes in working capital (523) 656 (548) 3,761 75,490
--------- -------- -------- --------- --------
Total cash used in operations (8,792) (9,362) (13,739) (17,692) 11,672
--------- -------- -------- --------- --------
CASH PROVIDED (USED) BY
INVESTMENT ACTIVITY
Acquisition of equipment
and software (2,830) (2,587) (2,830) (4,986) (34,628)
--------- -------- -------- --------- --------
CASH PROVIDED (USED) BY
FINANCING ACTIVITY
Issue of common stock - - - - 53,000
Currency translation adjustment 2,448 (313) 2,448 (313) 2,448
--------- -------- -------- --------- --------
Total cash provided by financing 2,448 (313) 2,448 (313) 55,448
--------- -------- -------- --------- --------
CASH CHANGE (9,174) (12,262) (14,121) (22,991) 32,492
CASH BEGINNING 41,666 12,704 46,613 23,433 -
--------- -------- -------- --------- --------
CASH ENDING $ 32,492 $ 442 $ 32,492 $ 442 $ 32,492
========= ======== ======== ========= ========
COMPRISED OF:
Cash $ 32,492 $ 442 $ 32,492 $ 442 $ 32,492
========= ======== ======== ========= ========
- --------------------------------------------------------------------------------
Parker & Co., Chartered Accountants
8
eXmailit.com
A DEVELOPMENT STAGE COMPANY
INTERIM STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
From inception, 6 April 2000 to 30 June 2002 and fro the Three Months and
Six Months Ended 20 June 2002 and 2001
Unaudited - See the Review Engagement Report
- -------------------------------------------------------------------------------
COMMON COMMON ADDITIONAL CURRENCY
STOCK STOCK PAID IN TRANSLATION
CONSIDERATION ISSUED AMOUNT CAPITAL DEFICIT ADJUSTMENT TOTAL
- ------------------ -------- -------- --------- --------- ----------- ---------
<s> <c> <c> <c> <c> <c> <c>
Private placement
for cash on
10 April 2000 3,000,000 $ 3,000 $ 0 $ 0 $ 3,000
Net loss from
inception, 6 April
2000 to 31 December
2000 ($28,224) (28,224)
-------- -------- --------- --------- ----------- ---------
Balance as at
31 December 2000 3,000,000 $ 3,000 - ($28,224) - (25,224)
Net loss for the
three months ended
31 March 2001 (12,584) (12,584)
-------- -------- --------- --------- ----------- ---------
Balance as at
31 March 2001 3,000,000 3,000 - (40,808) - (37,808)
Net loss for the
three months ended
30 June 2001 (11,698) (11,698)
---------- -------- --------- ---------- ---------- --------
Balance as at
30 June 2001 3,000,000 3,000 - (52,506) - (49,506)
Private placement
for cash on
20 September 2001 1,000,000 1,000 49,000 50,000
Net loss for the
six months ended
31 December 2001 (21,959) (21,959)
--------- --------- -------- --------- ---------- --------
Balance as at 31
December 2001 4,000,000 4,000 49,000 (74,465) - (21,465)
Net loss for the
three months ended
31 March 2002 (5,662) (5,662)
--------- --------- -------- --------- ---------- --------
Balance as at
31 March 2002 4,000,000 4,000 49,000 (80,127) - (27,127)
Net loss for the
three months ended
30 June 2002 (10,316) (10,316)
Currency translation
adjustment as at
30 June 2002 2,448 2,448
--------- --------- -------- --------- ---------- --------
Balance as at
30 June 2002 4,000,000 $4,000 $49,000 ($90,443) $2,448 ($34,995)
========= ========= ======== ========= ========== ========
Parker & Co., Chartered Accountants
9
eXmailit.com
A DEVELOPMENT STAGE COMPANY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FROM INCEPTION, 6 APRIL 2000 TO 30 JUNE 2002 AND FOR THE THREE MONTHS
AND SIX MONTHS ENDED 30 JUNE 2002 AND 2001
Unaudited - see the Review Engagement Report Page 6 of 8
- ---------------------------------------------------------------------
Note 1 THE CORPORATION AND ITS BUSINESS
eXmailit.com was incorporated in the State of Nevada, United States
on 6 April 2000. The company has a total of 100,000,000 authorized
shares with a par value of $0.001 per share with 4,000,000 shares
issued and outstanding as at 30 June 2002.
The company has offices in Vancouver, British Columbia, Canada.
The company has been organized to operate an online email to mail
service network on the internet. The company is a development stage
company which has not derived any revenue from its operations.
The fiscal year end of the company is 31 December.
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
These financial statements have been prepared using United States
Generally Accepted Accounting Principles as established by the
American Institute of Certified Public Accountants and have been
stated in United States dollars rounded to the nearest whole dollar
except for the loss per share which has been rounded to the nearest
cent. These accounting principles are applicable to a going concern,
which contemplates the realization and liquidation of liabilities in
the normal course of business. Current business activities have just
begun and insufficient revenue has been generated to sustain the
company as a going concern without the infusion of additional capital.
Assets and liabilities of operations in foreign countries are
translated into United States dollars using the exchange rate at the
statement of financial position date for monetory assets and
liabilities or the historical exchange rates for the nonmonetory
assets. Accordingly, the company's primary functional currency is the
Canadian dollar and as a result the company operates a Canadian dollar
bank account which was translated into United States of America dollars
at the exchange rate at the statement of financial position date.
Transactions made in Canadian dollars or other foreign currencies were
translated at the average exchange rates prevailing throughout the year.
The effects of exchange rate fluctuations on translating foreign currency
assets and liabilities into United States dollars are included in
stockholders' equity, while gains and losses resulting from foreign
currency transactions are included in operations.
Revenue is recorded as a sale at the time the services contracted for
have been completed. Costs are recorded at the time an obligation to pay
occurs and are expensed at the time the benefit to the company is matched
to revenue or, if there is no matching revenue, to the period in which
the benefit is realized.
Equipment and software are all amortized at 20% on the declining balance.
Note 3 EQUIPMENT AND COMPUTER SOFTWARE
ACCUMULATED UNAMORTIZED UNAMORTIZED
AT COST AMORTIZATION COST COST
30 JUNE 30 JUNE 30 JUNE 31 DECEMBER
COMPRISED OF: 2002 2002 2002 2001
---------------------------------------------------
Office furniture $1,982 $ 808 $ 1,174 $ 1,309
Computer equipment 2,828 2,045 783 -
Computer software 5,616 2,088 3,528 3,865
Leasehold improvements 4,134 1,616 2,518 2,786
------ ------ ---------- -----------
$14,560 $6,557 $ 8,003 $ 7,960
======= ====== ========== ==========
10
eXmailit.com
A DEVELOPMENT STAGE COMPANY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FROM INCEPTION, 6 APRIL 2000 TO 30 JUNE 2002 AND FOR THE THREE
MONTHS AND SIX MONTHS ENDED 30 JUNE 2002 AND 2001
Unaudited - see the Review Engagement Report Page 7 of 8
- ---------------------------------------------------------------------
Note 4 LOANS PAYABLE
The loans payable were repayable on August 12, 2001. Interest at the
rate of 15% per annum may be charged after the loans maturity at the
option of the holder. If payment is not paid within 30 days of the
due date, then liquidation damages equal to 5% of the overdue amount
will be added to the balance owing. The interest to 30 June 2002 and
the liquidation damages have been waived and the loans repayment
terms have been extended indefinitely, with a provision that the
notes cannot be demanded.
NOTE 5 SHARE CAPITAL
The authorized share capital is 100,000,000 shares with a par value
of $0.001.
4,000,000 common share have been issued as follows:
<CAPTION
ADDITIONAL
SHARE PAID IN
CONSIDERATION DATE ISSUED CAPITAL CAPITAL TOTAL
- --------------------------------------------------------------------------
<s>
Private placement
for cash 10 April 2000 3,000,000 $3,000 $ 0 $ 3,000
Private placement
for cash 20 September 2001 1,000,000 1,000 49,000 50,000
--------- ------ ------ -------
Balance as at 30 June 2002 4,000,000 $4,000 $49,000 $53,000
========= ====== ======= =======
Note 6 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On 12 August 2000, Robert Gardner, an officer and director, loaned the
company $75,000, repayable on 12 August 2001 at an interest rate of
15% per annum, at the option of the holder. The terms of the loan
payable provide that if payment is not made within 30 days of the due
date, then liquidation damages equal to 5% of the overdue amount will
be added to the balance owing. The interest to and including 30 June
2002 and the liquidation damages have been waived by Mr. Gardner and
the loan repayment has been extended indefinitely, with a provision
that the note cannot be demanded.
The company is currently using the business offices of Robert Gardner,
an officer and director, at 999 West Hastings Street, Suite 530,
Vancouver, B.C. Canada, on a rent-free basis. There is no written
lease agreement or other material terms or arrangements relating to
the company's agreement with Mr. Gardner to use his office space.
The premises consist of approximately 1000 square feet, including
office space, reception area and meeting facilities.
11
eXmailit.com
A DEVELOPMENT STAGE COMPANY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FROM INCEPTION, 6 APRIL 2000 TO 30 JUNE 2002
AND FOR THE THREE MONTHS AND SIX MONTHS ENDED 30 JUNE 2002 AND 2001
Unaudited - see the Review Engagement Report Page 8 of 8
- ---------------------------------------------------------------------
Note 6 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS (CONTINUED)
The officers and directors of the company are involved in other
business activities, and may, in the future become active in
additional other business activities. If a specific business
opportunity becomes available, such persons may face a conflict
in selecting between the company and their own business interests.
The company has not formulated a policy for the resolution of
such a conflict.
Note 7 INCOME TAXES
Income taxes on the loss has not been reflected in these financial
statements as it is not virtually certain that this loss will be
recovered before the expiry period of the loss carry forwards.
Note 8 LOSS PER SHARE
Basic loss per share is computed by dividing losses available to
common stockholders by the weighted average number of common shares
during the period. Diluted loss per share is calculated on the
weighted average number of common shares that would have resulted
if dilutive common stock equivalents had been converted to common
stock. No stock options or similar rights were available or granted
during the period presented. Accordingly, basic and diluted loss
per share are the same.
12
Item 2. Management's Discussion and Analysis or Plan of Operation.
Plan of Operation
- -----------------
Registrant expects its current cash in the bank to satisfy its cash
requirements for business operations for at least the next 12 months
without having to raise additional funds or seek bank loans.
For the period from inception to the six months ended June 30, 2000,
Registrant had not yet generated any revenues or expended any
significant amount of money for research and development. During the
next 12 months, Registrant does not intend to purchase any
significant property or equipment. Registrant is still in the
development stage and is continuing development of its eXmailit
software.
Results of Operations
- ---------------------
For the three and six months ended June 30, 2002, Registrant had no
revenues and incurred net operating losses of $10,316 and $11,698,
respectively, all of which comprised general and administrative
expenses.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A) The following exhibits required to be filed herein are
incorporated by reference to Registrant's Form 10SB/A, intially
filed with the Commission on April 26, 2002:
Exhibit No. Description
- ----------- -----------
3(i) Articles of Incorporation
3(ii) Bylaws
B) There were no reports on Form 8-K filed during the quarter.
13
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.
eXmailit.com
------------------------
Dated: August 10, 2002 By:/s/ M. Kevin Ryan,
President, Secretary and Director
Dated: August 10, 2002 By:/s/ Robert Gardner, Treasurer
and Director
14