UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 5(d) OF THE SECURITIES ACT OF 1934:
For the Quarterly Period ended September 30, 2000
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT
For the transition period from __________________ to __________________
Commission File number 1-28733
youticket.com inc.
(Exact Name of registrant as specified in its charter)
Nevada 88-0430607
- ---------------------------------------- --------------------
(State or other jurisdiction of I.R.S. Employer ID No.
incorporation or organization)
4420 S. Arville, Suites 13 & 14
Las Vegas, Nevada 89103
----------------------------------------
(Address of principal executive offices)
(702) 876-8200
(Issuer's telephone number)
Indicate by check mark whether the registrant (1) has filed has filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the preceding 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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES ____ NO. ____
APPLICABLE ONLY TO CORPORATE ISSUERS
As of September 30, 2000, 17,246,000 shares of the Issuer's Common Stock were
outstanding.
YOUTICKET.COM, INC.
PART I. FINANCIAL INFORMATION Page No.
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets (Unaudited) as of
September 30, 2000 and December 31, 1999 3
Consolidated Statements of Operations (Unaudited)
for the Three Months Ended September 30, 2000
and 1999 and for the Nine Months Ended
September 30, 2000 and 1999 4
Consolidated Statements of Cash Flows(Unaudited)
for Nine Months Ended September 30, 2000 and 1999 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation 8
PART II. OTHER - INFORMATION 11
Item 5 - Other Information 12
Item 6 - Exhibits and Reports on Form 8-K 14
2
YouTicket.Com, Inc.
Consolidated Balance Sheet
September 30, 2000
(Unaudited)
September 30 December 31,
2000 1999
----------- -----------
Assets
Current Assets
Cash $ 1,221 $ 18,360
Accounts Receivable 1,947 35,457
Other Current Assets 14,624 17,722
----------- -----------
Total Current Assets 17,792 71,539
----------- -----------
Property and Equipment 49,356 12,472
Goodwill, net of amortization of $172,449 - 1,118,578
Total Assets $ 67,148 $ 1,202,589
=========== ===========
Liabilities and Shareholder's Deficit
Current Liabilities
Accounts Payable 246,161 338,603
Accrued Expenses 141,680 13,494
Notes Payable - -
Accrued Compensation 66,860 62,052
----------- -----------
Total Current Liabilities 454,701 414,149
----------- -----------
Long Term Liabilities
Convertible Notes Payable 169,630 -
----------- -----------
Total Liabilities 624,331 414,149
----------- -----------
Shareholder's Equity
Common Stock, .0001 par Value,
100,000,000 shares authorized,
28,573,140 shares issued and
17,246,000 shares outstanding 1,725 1,495
Additional Paid in Capital 2,263,099 1,719,074
Deferred Compensation (59,219) (116,367)
Treasury Stock (11,327,140 at cost) (193,750) (193,750)
Accumulated Deficit (2,569,038) (622,012)
Total Shareholder's Equity (557,183) 788,440
----------- -----------
Total Liabilities and Shareholder's Equity $ 67,148 $ 1,202,589
=========== ===========
See accompanying notes to Consolidated Financial Statements
3
YouTicket.Com, Inc.
Cnsolidated Statements of Operations
For the three months ended September 30, 2000 and 1999
(Unaudited)
------------------------------------------------------------------
Three Months Ended Nine Months Ended
------------------------------------------------------------------
September 30 September 30 September 30 September 30
2000 1999 2000 1999
---------- ---------- ------------ ------------
Revenue $ 28,615 $ 24,049 $ 200,114 $ 72,148
Cost of Revenue 16,959 17,165 156,799 51,494
---------- ---------- ------------ ------------
Gross Profit 11,656 6,885 43,314 20,654
---------- ---------- ------------ ------------
Selling, General and Administrative Expenses 66,232 136,130 871,762 408,391
Amortization of Goodwill 1,032,173 43,023 1,118,578 43,022
---------- ---------- ------------ ------------
Net Loss $(1,086,749) $ (129,246) $ (1,947,026) $ (430,759)
========== ========== =========== ==========
Net Loss per common share (0.06) (.009) (0.12) (0.04)
=================================================================
Weighted average number of common shares
outstanding (basic and diluted) 16,777,557 13,673,739 16,024,948 11,088,049
=================================================================
See accompanying notes to Consolidated Financial Statements
4
YouTicket.Com, Inc.
Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
September 30, September 30,
2000 1999
------------- ------------
Cash flows form operating activities
Net Loss $(1,947,026) $ (430,759)
Adjustments to reconcile net loss to
net cash used in operating activities:
Stock Issued for Services 544,255 -
Depreciation and amortization 1,125,774 44,906.00
Non-cash charges related to equity
issuances 151,376.00
Deferred Compensation 57,148 -
Changes in operating assets and liabilities
Accounts Receivable 33,510 (3,473)
Other Assets 3,098 (16,918)
Accounts Payable (92,446) 31,113
Accrued Expenses 128,186 83,624
Notes Payable (80,366) -
Accrued Compensation 4,808 66,860
----------- -----------
Net cash used in operating activites (223,059) (73,271)
------------ -----------
Cash flow from investing activities
Purchase of property and equipment (44,080) 0
------------ -----------
Cash flows from financing activities
Bank Overdraft - 0
Capital Contribution - 16,822
Proceeds from Notes Payable 250,000 293,750
Purchase of treasury stock - (193,750)
Net cash provided by financing
activities 250,000 116,822
------------ -----------
Increase/(Decrease in Cash) (17,139) 43,551
Cash, beginning of period 18,360 -
Cash, end of period $ 1,221 $ 43,551
============ ===========
See accompanying notes to Consolidated Financial Statements
5
YOUTICKET.COM, INC.
FORM 10-QSB
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
SEPTEMBER 30, 2000
1. BASIS OF PRESENTATION:
The Unaudited Consolidated Financial Statements included herein have been
prepared by Registrant and include all normal and recurring adjustments
which are, in the opinion of Management, necessary for a fair presentation,
of the financial position at September 30, 2000 and December 31, 1999.The
results of operations are for the three and nine months ended September 30,
2000 and 1999. The statement of cash flows are for the nine months ended
September 30, 2000 and September 30, 1999 pursuant to the rules and
regulations of the Securities and Exchange Commission. The consolidated
financial statements include the accounts of Youticket.com any wholly-owned
subsidiary. All material intercompany accounts and transactions have been
eliminated. Certain information and footnote disclosures normally included
in consolidated financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to
such rules and regulations. The Company believes that the disclosures made
in these financial statements are adequate to make the information
presented not misleading when read in conjunction with the financial
statements and notes thereto included in the Company's latest audited
financial statements which were included in the Form 10-SB filed with the
SEC. Certain reclassifications of prior year amounts have been made to
conform to current year presentations. The results of operations for the
subject periods are not necessarily indicative of the results for the
entire year.
2. COMPANY
The Company was organized May 9, 1996, under the laws of the State of
Nevada, as BNE Associates, Inc. On June 30, 1999, the Company acquired
Visitcom, Inc. ("Visitcom") and the Company changed its name to
Youticket.com, Inc., (the "Company").
The Company operates an Internet show and tour ticketing website,
www.youticket.com, for the Las Vegas market. On May 20, 2000, Youticket.com
terminated their contract with Venetian Hotel and Ticketmaster and
established their own internal ticketing system. On June 1, 2000, in
conjunction with Goalnet Inc. of Japan, Youticket.com launched a Japanese
website, www.youticketjapan.com. In addition to selling tickets through its
website and ticket outlets, Youticket.com also enables customers to
purchase its products via its toll-free telephone numbers.
3. LOSS PER SHARE
Basic earnings per share are calculated by dividing net income (loss) by
the weighted average number of common shares outstanding during the period.
Diluted earnings per share is calculated by dividing net income by the
basic shares outstanding and all dilutive securities, including stock
options, but does not include the impact of potential common shares which
would be antidilutive. These dilutive securities were anti-dilutive in 1999
and as of September 30, 2000.
6
Three Months Ended Nine Months Ended
- -------------------------------------------------------------------------------
Sept 30, Sept 30, Sept 30, Sept 30,
2000 1999 2000 1999
- -------------------------------------------------------------------------------
Loss (1,086,749) (129,246) (1,947,026) (430,759)
Weighted number of
common Shares
outstanding 16,777,557 13,673,739 16,024,948 11,088,049
Effect of diluted
securities -- --
Basic and diluted
loss per share (.06) (.009) (.12) (.04)
For the three and nine months ended September 30, 2000 , potential dilutive
securities representing 2,005,000 outstanding stock options and warrants
are not included in the earnings per share calculation since their effect
would be antidilutive.
4. STOCK ISSUANCE
On January 24, 2000 we issued 500,000 shares of common stock to Stockbroker
Relations of Colorado, Inc. in payment of services through that date. On
February 7, 2000, we issued an additional 100,000 shares of common stock to
Stockbroker Relations of Co., Inc in payment of services through that date.
The aggregate value of the services, based on the stock price on the dates
of issuance, was $ 256,250.
On April 11, 2000 we issued 500,000 shares of common stock to Stockbroker
Relations of Colorado, Inc, in payment of services through that date. The
aggregate value of the services, based on the stock price on the date of
issuance was $ 171,900.
On April 18, 2000 we issued 100,000 shares of common stock to Easy Computer
Systems in exchange for an internal computerized ticketing system. The
aggregate value was $30,000 based on a offering price of $.30 per share.
On August 2, 2000 we issued 53,333 shares to Chris Grobl in payment for
legal services for 1999. The aggregate value of the services was $ 10,000
based on an offering price of $.1875.
On August 2, 2000 we issued 42,667 shares to David Hope in payment for
consulting services for 1999. The aggregate value of the services was $
8,000 bases on an offering price of $.1875.
On August 21, 2000 we converted a note for $ 25,000 and a note for $ 75,000
due to Roy Meadows into 1,000,000 shares of common stock . The aggregate
value was $100,000 based on an offering price of .10.
5. CONTINGENCIES
The Company is party to legal claims arising in the normal course of
business. In the opinion of management, resolution of such matters will not
have a material adverse effect on the Company's financial position, results
of operations or cash flows.
7
6. CURRENT LIABILITIES
Current liabilities decreased in the third quarter of 2000, upon the
company converting a $75,000 note into 750,000 shares of common stock at an
offering price of .10 to a stockholder of the Company. Also the company
wrote off $40,000 in erroneous accounts payable of Visitcom, Inc. from
prior year.
7. LONG-TERM LIABILITIES
In the first quarter of 2000 the Company issued a $ 125,000 convertible
note in January 2000, payable to a company controlled by a stockholder of
the Company. This note bears interest rate of 10%, is due in December 2001
and is convertible into shares of the Company's common stock at the rate of
60% of the price of a share of common stock on the date of conversion.
Long term liabilities increased in the third quarter of 2000, upon the
company issuing two convertible notes totaling $ 25,000 to stockholders of
the company. These notes bears interest rate of 8%, are due in May 2002.
The company also issued a $ 19,630 promissory note to a former officer of
the company for reimbursable expenses incurred while in office.
8. STOCK OPTIONS
During the nine months ended September 30, 2000, the Company granted
150,000 stock options to a Board member and 300,000 to a former employee.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION.
Overview
Because we continue to develop our website products and services, we are
still in the earlier stages of operations. Therefore, selected financial
data would not be meaningful. Reference is made to the financial statements
elsewhere in the document. Included in the document are the unaudited
financial statements for the three and nine months ended September 30, 2000
and 1999.
Results of Operations
Revenues increased by $ 4,566 up 18% (from $ 24,049 to $ 28,615) during the
three-month period ended September 30, 2000, compared to the same period in
1999. The revenues for the nine months ended September 30, 2000 increased
by $ 127,966 up 177% ($ 72,148 to $ 200,114) as compared to the same period
in 1999. The increase in revenue is attributable to higher ticket sales and
the reorganization of the company.
The cost of revenue decreased by $ 206.00 down .01% (from $ 17,165 to $
16,959) during the three-month period ended September 30, 2000, compared to
the same period in 1999. The cost of revenue for the nine months ended
September 30, 2000 increased by $ 105,305 up 200% (from $ 51,494 to
$156,799) as compared to the same period in 1999. The increase in the cost
of revenue was attributable to higher revenue volume.
Gross profit increased by $ 4,771 up 69% (from $ 6,885 to $ 11,656 ) during
the three-month period ending September 30, 2000, compared to the same
period in 1999. The gross profit for the nine months ended September 30,
2000 increased by $ 22,660 up by 109% (from $ 20,654 to $ 43,314), as
compared to the same period in 1999. The increase in margins was
attributable to higher revenue volume.
Selling, General and Administrative expenses decreased by $ 66,232 during
the three-month period ended September 30, 2000, as compared to the same
period in 1999. For the nine months ended September 30, 2000, these
8
expenses increased by $ 463,371 as compared to the same period in 1999. The
cash expenses during the 2000 period were principally the costs associated
with developing the website, salaries, rent, professional fees, limited
selling and marketing costs and general overhead. The non-cash expenses
during the period of 2000 were for issuance of shares of common stock to
compensate a financial public relations firm, which the company engaged.
The services of this firm for the first quarter and second quarter was $
256,250 and $ 171,900. There will be additional expenses if we continue
with this firm, which will be recorded in future periods to reflect
issuance of stock.
Amortization of Goodwill was $ 1,032,173 for the three-month ended
September 30, 2000 and $ 1,118,578 for the nine months ended September 30,
2000. Since it had been a year since acquisition of Visitcom and we have
had continued losses, we have written off Goodwill. Net purchase price of
Visitcom was $ 750,000. The cost in excess of the fair market value of the
net assets acquired was $ 1,204,623.
Net Losses for the third quarter of 2000 were $ 1,086,749 as compared to $
129,246 in the same period for 1999. For the nine months ended September
30, 2000, the net loss was $ 1,947,026 as compared to $ 430,759 for the
same period in 1999. The increase in net loss was attributable to the costs
of operations and cost of revenues exceeding revenues. Operational expenses
will continue to exceed revenues in the future. In an effort to improve its
financial position, the company has made several cutbacks in costs. These
include but are not limited to, reduction in outside providers, personnel
and professional fees. Despite savings in these areas, expenses will
continue to exceed revenues as we expand our business. Moreover, in the
future, when it has additional capital, it should anticipate that in
addition to ordinary expenses associated with the growth of the business,
it will have significant additional marketing and advertising expenses.
Overall, the company expects that it will continue to experience net losses
well into the future.
Liquidity and Capital Requirements.
The working capital of YouTicket.com at September 30, 2000 was a deficit of
$ 436,909. We will require additional capital financing to continue to
operate our business and implement our plans for expansion. Capital funds
are required for operating losses and to further our website development,
marketing, and strategic alliances and acquisitions. We have determined
that the funds needed for full implementation of our current business plan
will be substantial. If we are unable to raise capital or increase our
revenues, we will have to curtail aspects of our business plan and
operations or cease our operations altogether. We are reviewing our
immediate capital requirements and consulting with investment banking
professionals with a view towards raising additional equity capital. We
have no specific plans or agreements for raising capital at this time.
The company received capital proceeds of $250,000 during the nine months
ended September 30, 2000 from the issuance of five convertible notes. On
October 30, 2000 the company entered into a commitment to borrow $ 125,000
from a private lender. The company borrowed $ 25,000 on November 14,2000
and may borrow $10,000 per month thereafter. See Section - Other
Information.
The company received a going concern opinion on its financial statements
for the year ended December 31, 1999 expressing substantial doubt about the
company's ability to continue as a going concern. The company's financial
condition will require consideration of this opinion in each quarter and
yearly fiscal period. In the short term, the company will not be able to
cover expenses from its operating revenues and expenses will continue to
grow slightly faster than revenues. The company has reduced certain cash
expenses and will continue to seek other reductions of its cash expenses,
but it does not believe that its cash receipts will exceed its expenses in
the near term. The company will need capital to continue its operations and
to fund any growth it undertakes. To the extent it is able, the company
will cover its working capital needs from the sale of securities and
borrowings. There can be no assurance that the company will raise any
capital. The company will continue to monitor its capital requirements and
its ability to raise capital. There is no assurance that the company will
be able to continue in business.
9
Forward-Looking Statements
When used in this Form 10-QSB and in future filings by Youticket.com with
the Securities and Exchange Commission, words or phrases "will likely
result", "management expects", "will continue", "is anticipated", "plans",
"believes", "estimates", "seeks", variation of such words and similar
expressions are intended to identify such forward-looking statements within
the Private Securities Litigation Reform Act of 1995. Readers are cautioned
not to place undue reliance on any such forward-looking statements, each of
which speak only as of the date described below. Actual results may differ
materially from historical earnings and those presently anticipated or
projected. Youticket.com has no obligation to publicly release the result
of any revisions, which may be made to any forward-looking statements to
reflect anticipated events or circumstances occurring after the date of
such statements.
10
PART II - OTHER INFORMATION
Item 5. Other Information
On October 30, 2000, by action of the board of directors, the number of
persons comprising the board was increased from three persons to five persons.
As a result of this action and a previous resignation, there were then three
vacancies on the board of directors. The three positions were filed by the two
remaining directors as provided in the by-laws and Nevada corporate law by the
appointment of Messrs. Donald A. Mitchell, Jeffrey M. Harvey and Byron Rambo.
On October 30, 2000, the company obtained a commitment from Mr. Roy
Meadows to borrow $125,000 which is evidenced by a convertible negotiable
promissory note executed by the company. The loans are scheduled to be made over
time, the first loan to be in the amount of $25,000 upon the signing of the note
and then $10,000 on the first day of each month commencing November 1, 2000 for
the next ten months, ending on August 1, 2001 The note is payable on December
16, 2001 for the full amount of the commitment and bears interest at the rate of
10% per annum. The note is prepayable with a ten percent premium. The
outstanding amounts due on the note are convertible at the option of the holder
into shares of common stock at any time and from time to time by dividing the
dollar amount by the greater of (i) 80% of the average closing bid price of the
common stock for the five consecutive trading days ending two days prior to the
date of conversion or (ii) $.005. If the full amount of the commitment is
borrowed under the note and the common stock is not trading, the company could
be asked by the holder to convert the note into in excess of 25,000,000 shares
of common stock. The company is obligated to reserve sufficient shares for the
possible conversion of the note which may prevent the company from obtaining
financing by the sale of common stock or securities convertible into common
stock from any other sources.
On October 30, 2000, the company entered into an investment banking
agreement with International Investment Banking, Inc. Under the agreement, IIB
will provide investment banking and financial services to the company. The
agreement is for a period of two years, renewable for successive one year terms
unless terminated. Pursuant to the agreement, Mr. Donald A. Mitchell, a director
of the company, is appointed by IIB as a consultant to oversee and to execute
the terms and conditions of the agreement on its behalf. As part compensation
for the services under the IIB investment banking agreement, the company is
obligated at the signing of the agreement to issue to IIB 4,000,000 shares of
common stock to IIB and to Mr. Mitchell 2,000,000 shares of common stock. In
addition the company is obligated to pay to IIB $10,000 per month throughout the
term of the agreement. The first three payments are to be paid in cash on the
sixtieth day after signing the agreement. The agreement also calls for the
escrow of additional shares of common stock which may be used to pay the monthly
fee.
11
Under the Investment Banking Agreement, IIB is to produce a business
plan and pay IIB $10,000, of which $5,000 is due on the signing of the
agreement. In consideration of IIB participating in and managing merger and
acquisition transactions for the company, the company will pay to IIB a success
fee in the amount of either (i) five percent of the gross value of any merger or
acquisition consummated with a target that was identified or introduced to the
company by IIB or (ii) two and one-half percent of the gross value of any merger
or acquisition consummated with any target not identified or introduced by IIB.
All fees, and reasonable out of pocket expenses shall be paid to IIB at the
closing in like consideration.
In connection with any raise of capital by the company using a private
placement memorandum prepared with the help of IIB for a fee of $25,000 and
reimbursement of expenses, the company will pay IIB a success fee in the form of
free trading shares of common stock in four equal payments over the expected
time period to complete the offering as set forth below:
Estimated Opening Each Additional
Estimated Opening First $1,000,000 or
Offer Price of $1,000,000 Fraction
Each Share Raised Thereof Raised
---------------------- --------------- ----------------
Less then $1.00 200,000 shares 150,000 shares
Between $1.01 and $5.00 125,000 shares 95,000 shares
Greater than $5.00 30,000 shares 20,000 shares
On October 30, 2000, the company entered into a consulting agreement
with Stockbroker Presentations, Inc. SPI will provide services related to
advising the company with respect to market maker and broker relations and
information services. The term of the agreement is 12 months, commencing on the
payment of the fees specified in the agreement. The agreement calls for the
issuance of 500,000 shares at the signing of the contract and 200,000 shares of
common stock to be issued monthly for the first six months of the term of the
agreement. In addition, the company is obligated to issue an option to purchase
4,000,000 shares of common stock to SPI, exercisable at $.05 for an unspecified
term. The company has given SPI piggyback registration rights for all the shares
issued as compensation under the agreement. The company has further agreed that
it will not reorganize, transfer assets, consolidate, merge, dissolve, issue or
sell securities or take any other act that dilutes the securities issued to SPI.
Moreover, for a period of six months, the company will not enter into any
transaction including reorganize, transfer assets, consolidate, merge, dissolve,
issue or sell securities including additional shares or other voluntary action
with the exception to the terms and conditions of the contract between the
company and IIB. Unless the company obtains a waiver of this restriction, it
will not be able to sell additional securities for any reason
Because of the aforementioned issuances of common stock and the
commitments to issue common stock, the company may not have sufficient shares of
common stock available to meet its obligations or be able to issue common stock
or securities convertible into common stock to raise capital to fund its
operations. The securities described above also may impair the company's ability
to raise capital from lending and equity sources and may adversely affect the
trading market for the common stock of the company.
The above transactions may be considered a change of control of the
company.
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Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K: None
Exhibit No. Exhibit
(27.1) Financial Data Schedule
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.
YOUTICKET.COM, INC,
/s/ Maria Burkholder
Date: November 20, 2000 By:____________________________
Maria Burkholder
Principal Accounting Officer
/s/ Virginia Thompson
Date: November 20, 2000 By:____________________________
Virginia Thompson
Director
14