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 September 30, 2001
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number: 333-95549
HeavenExpress.com, Inc.
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(Exact name of small business issuer as specified in its charter)
Florida 65-0974212
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State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
5741 NE 18th Avenue, #1, Fort Lauderdale, Florida 33334
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(Address of principal executive office)
(954) 971-0179
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(Issuer's telephone number including area code)
As of September 30, 2001, we had 2,029,000 shares of our common stock issued and
outstanding.
HeavenExpress.com, Inc.
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
C O N T E N T S
Balance Sheet
Statements of Loss and Accumulated Deficit During the Development Stage
Statements of Cash Flows
Notes to Financial Statements
HeavenExpress.com, Inc.
(A Development Stage Company)
BALANCE SHEET
September 30, 2001
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ASSETS
Cash and cash equivalents $ 89
Deferred tax asset less valuation allowance
of $12,619 and $11,015 -
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TOTAL ASSETS $ 89
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LIABILITIES AND DEFICIENCY IN ASSETS
LIABILITIES
Accounts payable $ 1,160
Note payable - officer 23,338
Accrued expenses and other liabilities 4,721
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TOTAL LIABILITIES 29,219
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COMMITMENTS AND CONTINGENCIES (NOTE 4)
DEFICIENCY IN ASSETS
Preferred stock, $.001 par value, 10,000,000 shares authorized;
none issued -
Common stock, $.001 par value, 200,000,000 shares authorized,
8,116,000 and 8,116,000 shares issued and outstanding 8,116
Additional paid-in capital 46,834
Deficit accumulated during the development stage (84,080)
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TOTAL DEFICIENCY IN ASSETS (29,130)
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TOTAL LIABILITIES AND DEFICIENCY IN ASSETS $ 89
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See accompanying notes.
HeavenExpress.com, Inc.
(A Development Stage Company)
STATEMENTS OF LOSS AND ACCUMULATED DEFICIT DURING THE DEVELOPMENT STAGE
For the For the For the For the
nine nine three three
months months months months
ended ended ended ended Cumulative
September September September September since
30, 2001 30, 2000 30, 2001 30, 2000 inception
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EXPENSES
Professional fees $ 9,558 $51,868 $ - $ 1,089 $ 80,701
Interest expense 1,145 - - - 2,770
General and administrative
expenses 285 324 45 - 609
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NET LOSS BEFORE INCOME TAXES (10,988) (52,192) (45) (1,089) (84,080)
INCOME TAXES - - - - -
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NET LOSS AND ACCUMULATED
DEFICIT DURING THE
DEVELOPMENT STAGE ($ 10,988)($ 52,192) ($ 45) ($ 1,089)($ 84,080)
================================================================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING(BASIC AND DILUTED)8,116,000 6,116,000 8,116,000 8,116,000 7,410,675
================================================================================
NET LOSS PER SHARE (BASIC AND
DILUTED) ($0.001) ($0.009) ($0.000) ($0.000) ($0.011)
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See accompanying notes.
HeavenExpress.com, Inc.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the For the
nine nine
months months
ended ended Cumulative
September September since
30, 2001 30, 2000 inception
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CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($ 10,988) ($ 52,192) ($84,080)
Adjustments to reconcile net loss to net
cash used by operating activities:
Common stock exchanged for service - 50,000 53,600
Increase in accounts payable 685 - 1,160
Increase in accrued liabilities 1,596 (1,200) 4,721
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NET CASH USED BY DEVELOPMENT STAGE
OPERATING ACTIVITIES ( 8,707) ( 3,392) ( 24,599)
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CASH FLOWS FROM FINANCING ACTIVITIES
Sale of common stock - - 1,350
Proceeds from note payable to officer 8,756 2,082 23,338
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NET CASH PROVIDED BY FINANCING
ACTIVITIES 8,756 2,082 24,688
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NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS
FOR THE YEAR AND CUMULATIVE DURING THE
DEVELOPMENT STAGE 49 (1,310) 89
CASH AND EQUIVALENTS - BEGINNING OF YEAR 40 1,350 -
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CASH AND EQUIVALENTS - END OF YEAR $ 89 $ 40 $ 89
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SUPPLEMENTAL DISCLOSURES
Interest paid $ - $ - $ -
Income taxes paid $ - $ - $ -
NON-CASH FINANCING ACTIVITIES
Common stock issued for services $ - $ - $53,600
================================================================================
See accompanying notes.
NOTE 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - HeavenExpress.Com, Inc. (A Development Stage Company) (the
Company) is a Florida corporation formed in December 1999, primarily to provide
memorial products and services through the Internet.
Unaudited Financial Statements - The unaudited financial statements as of and
for the nine months ended September 30, 2001 and 2000, have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the 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 three and nine months ended September
30, 2001 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2001.
Use of 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
disclosures of contingent assets and liabilities at the date of the dated
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.
Income Taxes - The Company follows Statement of Financial Accounting Standards
No. 109 (FAS 109), "Accounting for Income Taxes". FAS 109 is an asset and
liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of the difference in events
that have been recognized in the Company's financial statements compared to the
tax returns.
Advertising - Advertising costs will be expensed as incurred.
Basic Net Loss Per Common Share - The Company follows the provisions of FASB
Statement No. 128 (SFAS No. 128), "Earnings Per Share". SFAS No. 128 requires
companies to present basic earnings per share (EPS) and diluted EPS, instead of
primary and fully diluted EPS presentations that were formerly required by
Accounting Principles Board Opinion No. 15, "Earnings Per Share". Basic EPS is
computed by dividing net income or loss by the weighted average number of common
shares outstanding during each year.
Cash and Cash Equivalents - The Company considers all highly liquid investments
with original maturities of three months or less to be cash equivalents.
Development Stage Company - The Company has been devoting its efforts to
activities such as raising capital, establishing sources of information, and
developing markets for its planned operations. The Company has not yet generated
any revenues and, as such, it is considered a development stage company.
NOTE 2. RELATED PARTY TRANSACTIONS
The note payable to officer at September 30, 2001 was $23,338. This note is
unsecured, due on demand, and provides for annual interest at 12%.
NOTE 3. INCOME TAXES
At September 30, 2001, Company had a net operating loss carryforward of
approximately $84,110. This loss may be carried forward to offset federal income
taxes in future years through the year 2021. However, if subsequently there are
ownership changes in the Company, as defined in Section 382 of the Internal
Revenue Code, the Company's ability to utilize net operating losses available
before the ownership change may be restricted to a percentage of the market
value of the Company at the time of the ownership change. Therefore, substantial
net operating loss carryforwards could, in all likelihood, be limited or
eliminated in future years due to a change in ownership as defined in the Code.
The utilization of the remaining carryforwards is dependent on the Company's
ability to generate sufficient taxable income during the carryforward periods
and no further significant changes in ownership.
The Company computes deferred income taxes under the provisions of FASB
Statement No. 109 (SFAS 109), which requires the use of an asset and liability
method of accounting for income taxes. SFAS No. 109 provides for the recognition
and measurement of deferred income tax benefits based on the likelihood of their
realization in future years. A valuation allowance must be established to reduce
deferred income tax benefits if it is more likely than not that, a portion of
the deferred income tax benefits will not be realized. It is Management's
opinion that the entire deferred tax benefit of $12,612 resulting from the net
operating loss carryforward may not be recognized in future years. Therefore, a
valuation allowance equal to the deferred tax benefit of $12,612 has been
established, resulting in no deferred tax benefits as of the balance sheet date.
NOTE 4. GOING CONCERN AND MANAGEMENT'S PLANS
As shown in the accompanying financial statements, the Company incurred net
losses of $10,898 for the nine months ended September 30, 2001 and has an
accumulated deficit of $84,080. As a result, the Company has a negative working
capital and a deficiency in assets. The ability of the Company to continue as a
going concern is dependent upon its ability to obtain financing and achieve
profitable operations. The Company anticipates meeting its cash requirements
through the financial support of its management until such time as it begins
operations. The financial statements do not include any adjustments that might
be necessary should the Company be unable to continue as a going concern.
NOTE 5. COMMITMENTS AND CONTINGENCIES
The Company shares its executive offices with another company. The Company
occupies a small portion of the total space of 560 square feet, free of charge.
NOTE 6. DEFICIENCY IN ASSETS
Preferred Stock - The Board of Directors is authorized to establish the rights
and preferences of preferred stock. To date, the Board of Directors has not
established those rights and preferences.
NOTE 7. SUBSEQUENT EVENT
Common Stock - In February 2002, the Board of Directors approved a four (4) for
one (1) forward stock split. In connection with forward stock split the Board of
Directors amended the Articles of Incorporation and the Company is now
authorized to issue 200,000,000 million shares of common stock. Retroactive
effect has been given to the financial statements.
ITEM 2. Plan Of Operation
Forward-Looking Statements
This report on Form 10-Q contains forward looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The words or phrases "would be," "will allow," "intends
to," "will likely result," "are expected to," "will continue," "is anticipated,"
"estimate," "project," or similar expressions are intended to identify
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Actual results could differ materially from those
projected in the forward looking statements as a result of a number of risks and
uncertainties, including: (a) lack of demand for our products; (b) competitive
products and pricing; (c) limited amount of resources devoted to advertising;
(d) lack of demand for our products and services being purchased via the
Internet and (e) those risks factors contained in our Form SB-2 registration
statements. Statements made herein are as of the date of the filing of this Form
10-Q with the Securities and Exchange Commission and should not be relied upon
as of any subsequent date. Unless otherwise required by applicable law, the
Company does not undertake, and specifically disclaims any obligation, to update
any forward-looking statements to reflect occurrences, developments,
unanticipated events or circumstances after the date of such statement.
Our Operations from Our Inception to September 30, 2001
We were incorporated on December 9, 1999. Since our inception through September
30, 2001, we have no revenues and we have an accumulated deficit of $84,080.
Since our inception to September 30, 2001, we have accomplished the following:
Developed our business plan
Raised Capital - We raised $1,350.00 for our operations through the sale of
private placement securities; Appointment of Board Members -We appointed Charles
Scheurerman as a second member of our Board of Directors; Obtained our website
address- We obtained the address of www.heavenepxress.com Development of a
website. We developed our website content; Graphics. We designed the graphics
for our website; Website Designers, We hired Sensory Design Group, Inc. who
created our website; Our website became operational on May 21, 2000.
In September 2001, our management decided that our website should be redesigned
and reformatted to accomplish the following goals:
oCreate a user-friendly environment;
oCreate an aesthetically pleasing website; and
oCreate an organizational format to the website that offers users a more
organized product and service description.
To accomplish the above goals, management plans to locate computer consultants
to design and upgrade our website. We have not yet located consultants to
perform these services. Until we locate and retain such consultants, we will
continue to conduct our operations with our originally formatted website. The
components of our future website are described below under "Our Future Plan of
Operations". We expect that our new website will be operational by September,
2002.
Our Future Plan of Operations
Our plan of operations over the next twelve months will consist of the
following:
A. New Website. Our website will contain an entirely new
organizational format, as follows:
(General Category): Retail products with the following sub-categories:
o Burial vaults;
o Garments;
o Caskets;
o Monuments;
o Urns;
o Flowers;
o Sympathy gifts;
o Cards;
o Stone and bronze memorials; and
o Books.
(General Category): Funeral Services with the following sub-categories:
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o Traditional funeral arrangements;
o Theme funeral arrangements (such as parades); and
o Denominational funeral arrangements
Within each sub-category above, the user will be able to link to various sites
that retail that type merchandise or describe the particular type of information
within each sub-category. For instance, if a user wishes to click on "caskets"
under the general category, "Retail Products", they will then view a page that
contains a listing of all caskets which we offer through various casket
manufacturers retailers.
Our new website will also contain a "print function" that will print substantive
information from linked retailer websites while omitting images and pictures and
an E-mail function enabling users to automatically E-mail linked retailer
websites to other E-mail addresses. We will also add an "advertiser" management
system to simplify the addition, removal, and use of links from different
sources. We will also create a new professional logo, color scheme, and
navigation layout to the website to improve our awareness of our website
We expect that all of the above described aspects of our new website will be
operational by September 30, 2002.
B. New Content. During the remainder of 2002 we expect to add content on our
website that will demonstrate the price advantage of ordering online memorial
products via our website compared to prices offered at retail establishments,
such as physically situated funeral homes. In addition, to attract additional
visitors to our website, we plan to eventually provide educational and
informative content as follows:
o Quality of various memorial and funeral products and services, such as the
different types of wood, metal, bronze and copper caskets;
o Laws and consumer rights pertaining to the funeral and memorial industry;
o Customs and etiquette regarding funeral attendance and appropriate
charitable contributions in memory of the deceased, sympathy card content,
expressing personal thoughts, and considerations pertaining to various
religions; and o Legal ramifications and advantages and disadvantages of
pre-paid funeral arrangements.
We plan to have this additional content available on our website approximately
nine months after we establish our new website. We expect a cost of $1,500
pertaining to establishing this additional content.
C. Additional Sources of Revenue. Our President plans to actively seek potential
sources of revenues from various establishments after our website is
established. She plans to contact funeral homes and online obituaries to
establish relationships that will generate potential sources of revenue, as
follows:
o Referral fees by referring business to these entities from business leads
obtained from contact with our website; o Advertising fees from advertising
these establishments on our website; o Establishing relationships with vendors
of memorial products that will sell their products through our website;
o Developing an apparatus by which we will receive transaction fees from
e-commerce applications; o Developing a plan to obtain advertising of other
memorial based businesses on our website that will generate advertising fees;
o Establishing links with other third party vendors of memorial based products,
wherein the third party vendors will provide us with a commission from third
party e-commerce transactions; and o Including testimonials from our customers
on our website to demonstrate the quality of our service.
We expect that we will accomplish these goals before September 2002. We expect
costs of $2,500 pertaining to the establishment of these revenue sources.
D. Advertising. We plan to obtain small advertisements in trade magazines. We
estimate that these advertisements will cost between $75.00 and $500.00
depending upon the publication, number of advertisements and length of
advertisements. We expect to advertise in local written publications in South
Florida and other large cities. These advertisements will cost between $150.00
and $1,500.00 per ad. We expect to spend approximately $10,000 for these type
advertisements. We will place these advertisements only if we have sufficient
revenues or financing from other sources,
Liquidity and Capital Resources. As of September 30, 2001, we had limited cash
capital resources of only $89. Our business plan includes the following
estimated capital expenditures of $32,000 over the next twelve months: $10,000
for advertising; $2,500 to establish new sources of revenue; $1,500 to improve
the content of our website; $600 for paying our server over the next twelve
months; $5,000 to upgrade our website and $12,000 for working capital.
Our existing cash and future commission based revenues may be insufficient to
fund our operations. Accordingly, if our revenues are insufficient to meet our
needs, our president/director or director plans to loan us funds to conduct our
operations; however, we have no agreement with our president/director or
director to do so and they are under no obligation to loan us funds. Moreover,
there are no assurances that our president/director or director will have
sufficient funds to make these loans. Accordingly, there are no assurances that
we will receive loans from our president/director or director. We have no
compensation agreements to our president/director or director in connection with
any loans that either may provide to us. If our president/director or director
is unable or unwilling to make loans to us necessary to implement our continuing
plan of operations, we will need additional financing through traditional bank
financing or a debt or equity offering; however, because we are a development
stage company with little operating history and a poor financial condition, we
may be unsuccessful in obtaining such financing or the amount of the financing
may be minimal and therefore inadequate to implement our continuing plan of
operations. Accordingly, there can be no assurance that we will be able to
obtain financing on satisfactory terms or at all, or raise funds through a debt
or equity offering. In addition, if we only have nominal funds by which to
conduct our operations, we may have to curtail advertising or be unable to
conduct any advertising, both of which will negatively impact development of the
HeavenExpress name and reputation.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER EVENTS
Subsequent Events.
The Company's Board of Directors unanimously approved a forward stock split of
the Company's common stock at a ratio of four (4) shares for every one (1) share
held. The forward split became effective on February 22, 2002. As a result of
the split, the Company has 8,116,000 shares of common stock issued and
outstanding. Prior to the split, the Company had 2,029,000 shares of Common
Stock outstanding.
The Company increased its authorized capital shares in proportion to the forward
stock split. The authorized capital stock of the Company consists of 200,000,000
shares of common stock. Prior to the split, the Company was authorized to issue
50,000,000 shares of common stock. In connection, with the forward split, the
Company amended its articles of incorporation.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS
3.1 Articles of Incorporation*
3.2 Amendment to Articles of Incorporation**
3.2 Bylaws*
4. Share Certificate*
*filed by the Company as exhibits to its Registration Statement on Form SB-2
filed with the Commission on January 27, 2000
**filed by the Company as exhibits to its Report on 8K filed on February 22,
2002.
Reports on Form 8K.
We hereby incorporate the following documents by reference in this Registration
Statement:
a) Our Report on Form 8k filed with the commission on February 22, 2002 a
forward stock split of our common stock at a ratio of four (4) shares for every
one (1) share held. The forward split became effective on February 22, 2002.
After the split, the Company had 8,116,000 shares of common stock issued and
outstanding.
The Company increased its authorized capital shares in proportion to the forward
stock split. The authorized capital stock of the Company after the split
consists of 200,000,000 shares of common stock. Prior to the split, the Company
was authorized to issue 50,000,000 shares of common stock. In connection, with
the forward split, the Company amended it's articles of incorporation.
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.
HeavenExpress.com, Inc.
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(Registrant)
Date: March 26, 2002
By: /s/ Saundra Sharpe
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Saundra Sharpe, President