UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-Q SB/A
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter report ended March 31, 2001
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to ___________
Commission File number 000-28047
VOIP TELECOM, INC.
(Exact name of small business issuer as registrant as specified in charter)
Nevada 86-0880742
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16935 West Bernardo Drive, Suite 212, San Diego, CA 92127
(Address of principal executive office)
Registrants telephone no., including area code (858) 618-1710
N/A
(Former name, changed since last report)
Check whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), Yes [X] No [ ] and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the last practicable date.
Class Outstanding as of March 31, 2001
Common Stock, $0.0001 32,472,972
TABLE OF CONTENTS
PART 1. FINANCIAL INFORMATION
Heading Page
Item 1. Consolidated Financial Statements 3
Consolidated Balance Sheets December 31, 2000
And March 31, 2001 5-6
Consolidated Statements of Operations for the months
Ended March 31, 2001 and March 31, 2000 7
Consolidated Statement of Stockholders Equity 8-10
Consolidated Statements of Cash Flows three months
Ended March 31, 2000 and 2001 11
Notes to Consolidated Financial Statements 12-19
Item 2. Managements Discussion and Analysis and
Result of Operations 20-21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 21
Item 2. Changes in Security 21
Item 3. Defaults Upon Senior Securities 21
Item 4. Submission of Matter to a Vote of 22
Securities Holders
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
Signatures S-1
ii
PART 1 FINANCIAL INFORMATION
Item 1. Financial Statement
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
the financial position, results of operations, cash flows, and stockholders
equity in conformity with generally accepted accounting principles. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been
included and all such adjustments are of a normal recurring nature.
The unaudited balance sheet of the Company as of March 31, 2001, and the
balance sheet derived from the Companys audited financial statement as of
December 31, 2000, the unaudited statement of operations and cash flows for the
three months ended March 31, 2001 and 2000 the statements of stockholders equity
for the period from May 4, 1987 through March 31, 2001 are attached hereto and
incorporated herein by this reference.
Operating results for the quarters ended March 31, 2001 are not necessarily
indicative of the results that can be expected for the year ending December 31,
2001.
3
ARMANDO C. IBARRA
CERTIFIED PUBLIC ACCOUNTANTS
( A Professional Corporation)
Armando C. Ibarra, C.P.A.
Members of the California Society of
Armando Ibarra, Jr.,
C.P.A.
Certified Public Accountants
To the Board of Directors
VoIP Telecom, Inc.
(Formerly Presidents Telecom, Inc.)
We have reviewed the accompanying consolidated balance sheets of VoIP
Telecom, Inc. (Formerly Presidents Telecom, Inc.) as of March 31, 2001 and the
related statements of operations, changes in stockholders equity, and cash
flows for the three months then ended, in accordance with Statements on
Standards for Accounting Review Services issued by the American Institute of
Certified Public Accountants. All information included in these financial
statements is the representation of the management of VoIP Telecom, Inc.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It 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
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any modifications that should be
made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
Our review was made for the purpose of expressing limited assurance that
there are no material modifications that should be made to the financial
statements in order for them to be in conformity with generally accepted
accounting principles.
______ ___________________________
ARMANDO C. IBARRA, CPA - APC
June 25, 2001
VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Consolidated Balance Sheets
ASSETS
Three Months
Ended Year Ended
March 31, December 31,
2001 2000
------------------------------------
CURRENT ASSETS
Cash $ 40,358 $ 50,392
Accounts receivable 179,134 145,852
Receivable - related party 1,450 1,450
Loan receivable 153,622 153,622
Prepaid expenses 2,906 2,906
---------------------------------------
Total Current Assets 377,470 354,222
NET PROPERTY & EQUIPMENT 432,372 1,506,720
------------------------------------
TOTAL ASSETS 809,842 $1,860,942
=======================================
VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
Three Months
Ended Year Ended
March 31, December 31,
2001 2000
--------------------- --------------------
CURRENT LIABILITIES
Accounts payable $ 693,012 $ 1,236,659
Accrued expenses 40,026
Loans payable 272,044 233,266
------------------------------------
Total Current Liabilities 1,005,082 1,469,925
LONG TERM LIABILITIES
Loan payable - related party 0 122,785
------------------------------------
Total Long Term Liabilities 0 122,785
------------------------------------
TOTAL LIABILITIES 1,005,082 1,592,710
STOCKHOLDERS' EQUITY
Common stock ($0.0001 par value
, 100,000,000 shares
authorized; 32,472,972
and 32,674,192 shares issued
and outstanding as of
March 31, 2001 and December 31,
2000 respectively.) 3,248 3,268
Additional paid-in capital 11,622,392 11,642,494
Deficit accumulated
during development stage (95,911) (95,911)
Retained Earning / (deficit) (11,724,969) (11,281,619)
------------------------------------
Total Stockholders' Equity (195,240) 268,232
------------------------------------
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY $ 809,842 $ 1,860,942
VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Consolidated Statements of Operations
Three Months Three Months
Ended Ended
March 31, March 31,
2001 2000
---------------------- --------------------------
REVENUES
Sales $ 184,629 $ 0
Costs of revenues 0 0
----------------------------------------------------
Total Net Revenues 184,629 0
OPERATING COSTS
Depreciation 26,753 0
Bank charges 690 0
Bad debt expense 0 1,004,210
Administrative expenses 400,315 2,082,582
-----------------------------------------------------
Total Operating Costs 427,758 3,086,792
OTHER INCOME & (EXPENSES)
Interest income 7 0
(Loss) on investment (137,393) (15,000)
Exchange gain or loss 15 0
Interest expense (62,850) 0
----------------------------------------------------
Total Other Income & (Expenses) (200,221) (15,000)
-----------------------------------------------------
NET (LOSS) $ (443,350) $ (3,101,792)
-----------------------------------------------------
=====================================================
BASIC (LOSS) PER SHARE $ (0.01) $ (0.07)
=====================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 31,362,558 44,311,314
=====================================================
VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Consolidated Statement of Changes in Stockholders' Equity
From May 4, 1987(Inception) through March 31, 2001
Common Additional
Common Stock Paid in
shares amount Capital
Inception, May 4, 1987 - $ - $ -
Common stock issued for cash 12,000,000 1,200 (200)
Net loss from inception on May 4,
1997 through December 31, 1997 - - -
Balance, December 31, 1997 000,000 1,200 (200)
Net loss for the year ended December
31, 1998 - - -
Balance, December 31, 1998 12,000,000 1,200 (200)
Common stock issued December 31, 1998
for cash at $ 0.15 per share 1,200,000 120 149,880
Contributed capital - - 67
Common stock issued June 17, 1998
for cash at $ 0.84 per share 108,002 11 89,989
Stock issued for services at $ 1.00
for services valued at $ 0.84 per share 6,000 1 4,999
Net loss for the year ended
December 31, 1999 - - -
Balance, December 31, 1999 13,314,002 1,332 244,735
Common stock issued on March 31, 2000
for cash at $ 0.54 per share 2,752,276 275 2,752,001
Common stock issued on March 31, 2000
for cash at $ 0.20 per share 3,810,000 381 761,619
Stock offering costs - - (607,928)
Common stock issued on April 20, 2000
for services valued
at $ 3.00 per share 60,000 6 179,994
Common stock issued on April 28, 2000
for services valued
at $ 1.00 per share 1,080,600 108 1,080,492
Common stock issued
on May 17, 2000
for services valued at
$ 0.50 per share 25,000 3 12,497
Stock
Subscription Retained
receivable Earnigns Total
Inception, May 4, 1987 $ - $ - $ -
Common stock issued for cash - - 1,000
Net loss from inception on May 4,
1997 through December 31, 1997 - (1,000) (1,000)
- --------------------------------------------------------------------------------
Balance, December 31, 1997 0 (1,000) 0
================================================================================
Net loss for the year
ended December
31, 1998 - (1,450) (1,450)
- -------------------------------------------------------------------------------
Balance, December 31, 1998 - (2,450) (1,450)
================================================================================
Common stock issued December 31, 1998
for cash at $ 0.15 per share (150,000) - -
Contributed capital - - 67
Common stock issued June 17, 1998
for cash at $ 0.84 per share - - 90,000
Stock issued for services at $ 1.00
for services valued at $ 0.84 per share - - 5,000
Net loss for the year ended
December 31, 1999 - (93,461) (93,461)
- -------------------------------------------------------------------------------
Balance, December 31, 1999 (150,000) (95,911) 156
===============================================================================
Common stock issued on March 31, 2000
for cash at $ 0.54 per share - - 2,752,276
Common stock issued on March 31, 2000
for cash at $ 0.20 per share - - 762,000
Stock offering costs - - (607,928)
Common stock issued on April 20, 2000
for services valued
at $ 3.00 per share - - 180,000
Common stock issued on April 28, 2000
for services valued
at $ 1.00 per share - - 1,080,600
Common stock issued on May 17, 2000
for services valued
at $ 0.50 per share - - 12,500
VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Consolidated Statement of Changes in Stockholders' Equity
From May 4, 1987(Inception) through March 31, 2001
Common Additional
Common Stock Paid in
Sahres Amount Capital
continued
Common stock issued
on May 19, 2000
for services valued at
$ 0.17 per share 172,834 17 28,788
Common stock issued to acquire 100%
of Central America Fuel Technologies,
Inc. on March 15, 2000 6,000 1 14,999
Options exercised
at $ 0.42 per share 75,000 7 31,243
Options exercised
at $ 0.21 per share 60,000 6 12,494
Options exercised
at $ 0.21 per share 60,000 6 12,494
Common stock issued
on June 30, 2000
for acquisition of ICE
at $ 0.83 per share 3,000,000 300 2,499,700
Common stock issued on
June 30, 2000 for
Access Network Limited
at $ 0.83 per share 4,800,000 480 3,999,520
Common stock issued
on August 30, 2000
for debt settlement
at $ 0.20 per share 2,152,140 215 358,475
Common stock issued on
August 30, 2000
for debt settlement
at $ 0.83 per share 109,340 11 90,741
Receipt of subscription receivable - - -
Options exercised
at $ 0.2084 12,000 1 2,499
Options exercised
at $ 0.4167 42,600 4 17,746
Options exercised
at $ 0.4167 2,400 1 999
Common stock
issued on December 27, 2000
for cash at $ 0.10 per share 120,000 12 11,988
Common stock issued
December 27, 2000
for cash at $ 0.10
per share 500,000 50 49,950
Common stock issued on
December 31, 2000
for services valued
at $ 0.17 per share 520,000 52 87,448
Net loss for the year ended
December 31, 2000 - - -
- -------------------------------------------------------------------------------
Balance, December 31, 2000 32,674m192 $ 3,268 $11,642,494
===============================================================================
Stock
Subscription Retained
Receivable Earnings Total
continued
Common stock issued
on May 19, 2000
for services valued
at $ 0.17 per share - - 28,805
Common stock issued to acquire 100%
of Central America Fuel Technologies,
Inc. on March 15, 2000 - - 15,000
Options exercised at
$ 0.42 per share - - 31,250
Options exercised at
$ 0.21 per share - - 12,500
Options exercised at
$ 0.21 per share - - 12,500
Common stock issued on June 30, 2000
for acquisition of
ICE at $ 0.83 per share - - 2,500,000
Common stock issued on June 30, 2000 for
Access Network Limited
at $ 0.83 per share - - 4,000,000
Common stock issued on August 30, 2000
for debt settlement
at $ 0.20 per share - - 358,690
Common stock issued on August 30, 2000
for debt settlement
at $ 0.83 per share - - 90,752
Receipt of
subscription receivable 150,000 - 150,000
Options exercised
at $ 0.2084 - - 2,500
Options exercised
at $ 0.4167 - - 17,750
Options exercised at $ 0.4167 - - 1,000
Common stock issued on December 27, 2000
for cash at
$ 0.10 per share - - 12,000
Common stock issued December 27, 2000
for cash at
$ 0.10 per share - - 50,000
Common stock issued on December 31, 2000
for services valued
at $ 0.17 per share - - 87,500
Net loss for the year ended
December 31, 2000 - (11,281,61) (11,281,619)
- --------------------------------------------------------------------------------
Balance, December 31, 2000 - (11,377,530) 268,232
================================================================================
VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Consolidated Statement of Changes in Stockholders' Equity
From May 4, 1987(Inception) through March 31, 2001
Common Additional
Common Stock Paid in
Shares Amount Capital
continued
Recission of ICE
at $ 0.10 per share (3,000,000) (300) (299,700)
Common stock issued on January 25, 2001
for services
at $ 0.10 per share 1,800,000 180 179,820
Common stock issued
on February 9, 2001
for debt service
at $ 0.10 per share 628,500 63 62,787
Common stock issued
on February 20, 2001
for services at
$ 0.10 per share 20,280 2 2,026
Common stock issued
on March 9, 2001
for services valued
at $ 0.10 per share 250,000 25 24,975
Common stock issued
March 10, 2001
for services valued
at $ 0.10 per share 100,000 10 9,990
Net loss for the period ended
March 31, 2001 - - -
- --------------------------------------------------------------------------------
Balance, March 31, 2001 32,472,972 $ 3,248 $ 11,622,392
===============================================================================
Stock
Subscription Retained
Receivable Earnings Total
continued
Recission of ICE
at $ 0.10 per share - - (300,000)
Common stock issued on January 25, 2001
for services
at $ 0.10 per share - - 180,000
Common stock issued
on February 9, 2001
for debt service
at $ 0.10 per share - - 62,850
Common stock issued
on February 20, 2001
for services
at $ 0.10 per share - - 2,028
Common stock issued
on March 9, 2001
for services valued
at $ 0.10 per share - - 25,000
Common stock issued
March 10, 2001
for services valued
at $ 0.10 per share - - 10,000
Net loss for the period ended
March 31, 2001 - (443,350) (443,350)
Balance, March 31, 2001 - $(11,820,880) $ (195,240)
VoIP TELECOM, INC.
(Formerly Presidents Telecom, Inc.)
Consolidated Statements of Cash Flows
Three Months Three Months
Ended Ended
March 31, March 31,
2001 2000
----------------------- --------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) from operations $ (443,350) $ (3,101,792)
Depreciation expense 26,753 0
(Increase) in accounts
receivable (33,282) 0
Increase (decrease)
in accounts payable (543,647) 0
(Increase) in loans receivable 0 (1,004,210)
Bad debt 0 1,004,211
Common stock issued for services 279,878 2,320,635
--------------------------------------------
Net Cash (Used) by
Operating Activities (713,649) (781,156)
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of fixed assets (6,000) (400,000)
Common stock retired
in ICE recission (300,000) 0
Disposal of equipment 1,053,596 0
--------------------------------------------
Net Cash Provided / (Used) by
Investing Activities 747,596 (400,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease)
in loans payable (43,981) 127,930
Common stock issued for cash 0 1,106,806
--------------------------------------------
Net Cash Provided / (Used)
by Financing Activities (43,981) 1,234,736
Net (Decrease) / Increase in Cash (10,034) 53,580
Cash at Beginning of Period 50,392 156
--------------------------------------------
Cash at End of Period $ 40,358 $ 53,736
============================================
Schedule of Non-Cash Activities
Common stock issued
for services $ 279,878 $ 0
Common stock issued
for acquisition of subsidiaries $ 0 $ 15,000
Common stock retired
in ICE recission $ (300,000) $ 0
NOTE 1. ORGANIZATION AND DESCRIPTION OF BUSINESS
VoIP Telecom, Inc. (the Company) was incorporated, May 4, 1987, under the
laws of the state of Nevada, as Energy Realty Corporation. On July 31, 1993 the
Companys name changed to Balcor International and on December 18, 1998 the name
was again changed to Dimension House, Inc. As of December 31, 1998 the Company
had no operations and in accordance with SFAS # 17 was considered a development
stage company. As of December 31, 1998 the Company was authorized to issue
100,000,000 shares of $0.0001 par value of which 10,000,000 shares were
outstanding. On October 28, 1999 the Company changed its name to Presidents
Telecom, Inc.
Pursuant to an acquisition agreement and plan of merger dated as of March
15, 2000 between the Company then known as Presidents Telecom, Inc. and Central
America Fuel Technology, Inc. (CAFT), a Nevada corporation, all the outstanding
common shares of CAFT were exchanged for 5,000 restricted common shares of VoIP.
On April 1, 2000, the Company acquired 100% of the issued and outstanding
shares of Access Network Limited in exchange for 4,800,000 shares of the
Companys common stock. The Company provides long distance voice communication
services.
On April 17, 2000, the Company changed its name to VoIP Telecom, Inc.
Through subsidiaries, the Company delivers international long distance
services via flexible, server-based networks consisting of re-sale arrangements
with other long distance providers, various foreign termination relationships,
VoIps own international servers and leased/owned transmission facilities.
Employing digital switching and transmission technologies supported by
comprehensive monitoring and technical support personnel, the Company provides
services in foreign countries.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Accounting Method
The Companys financial statements are prepared using the accrual method of
accounting. The company has elected a December 31, year end.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b. Basic Loss per Share
In February 1997, the FASB issued SFAS No. 128, Earnings Per Share, which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities with publicly held common stock. SFAS No. 128
supersedes the provisions of APB No. 15, and requires the presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective December 6, 1993 (inception).
Basic net loss per share excludes dilution and is computed by dividing net
loss by the weighted average number of common shares outstanding during the
reported periods. Diluted net loss per share reflects the potential dilution
that could occur if a stock option and other commitments to issue common stock
were exercised.
c. Basis of Consolidation
The consolidated financial statements of VoIP Telecom, Inc. include those
accounts of VoIP Telecom, Inc., and Access Network Limited. All significant
intercompany transactions have been eliminated.
d. Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
e. Estimates and Adjustments
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
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.
f. Basis of Presentation and Considerations Related to Continued Existence
(going concern)
The Companys financial statements have been presented on the basis that it
is a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The Companys
management intends to raise additional operating funds through operations and/or
debt offerings.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g. Income Taxes
The Company accounts for income taxes using the asset and liability method.
Under the asset and liability method, deferred income taxes are recognized for
the tax consequences of temporary differences by applying enacted statutory
tax rates applicable to future years to differences between the financial
statement carrying amounts and the tax bases of existing assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. See note 3 regarding income tax benefit.
h. Property & Equipment
Property and equipment are recorded at cost. Minor additions renewals are
expensed in the year incurred. Major additions and renewals are capitalized and
depreciated over their estimated useful lives. Depreciation and amortization is
calculated using straight-line and accelerated methods for income tax purposes
(five years for vehicles and equipment, and seven years for office furniture).
Total depreciation for the three months ended 2001 is $ 26,753.
NOTE 3 - INCOME TAXES
March 31 , December 31,_
2001 2000
Deferred tax assets:
Net operating loss carryforwards $ 443,350 $ 11,377,530
Other -0- -0-
Valuation allowance (443,350) (11,377,530)
Deferred tax assets $ -0- $ -0-
Realization of deferred tax assets is dependent upon sufficient future
taxable income during the period that deductible temporary differences and
carryforwards are expected to be available to reduce taxable income. As the
achievement of required future taxable income is uncertain, the Company recorded
a valuation allowance.
NOTE 4 - NOTES PAYABLE
Notes payable as of March 31, 2001, consist of the following:
Unsecured promissory note of $165,000 dated November 2, 2000 with an
interest rate at the annual floating rate of US Prime+ 4%. The maturity date is
November 2, 2001.
Unsecured promissory note of $15,000 dated November 13, 2000 with an
interest rate at 10%. The maturity date is November 2, 2001.
Unsecured promissory note of $50,000 dated November 22, 2000 with an
interest rate at 10% per annum. The maturity date is November 22, 2001, or under
the terms of a funding commitment to fund up to $4,000,000 by way of a
convertible debenture. Conversion can be exercised at a price of $0.25 per
share.
NOTE 5 - GOING CONCERN
As shown in the accompanying financial statements the Company has incurred
a deficit of $11,820,880 since its inception in 1987. The ability of the Company
to continue, as a going concern is dependent on the significant generation of
revenue from the Companys international long distance services. The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.
NOTE 6 - PROPERTY & EQUIPMENT
Property is stated at cost. Additions, renovations, and improvements are
capitalized. Maintenance and repairs, which do not extend asset lives, are
expensed as incurred. Depreciation is provided on a straight-line basis over the
estimated useful lives ranging from 27.5 years for commercial rental properties,
5 years for tenant improvements, and 5 - 7 years on furniture and equipment.
March 31, 2001
--------------------------------
--------------------------------
Equipment $ 535,053
Office furniture 40,428
--------------------------------
$ 575,481
Less Accumulated Depreciation (143,109)
--------------------------------
--------------------------------
Net Property and Equipment $ 432,372
================================
NOTE 7 - RELATED PARTY TRANSACTIONS
a. On September 1, 2000 the Company entered into a twelve month consulting
agreement. Alexander Anderson will serve the Company in the capacity of
consultant in consideration of which the Company will pay to the consultant the
sum of $10,000 monthly or such greater sum as may be approved by the Board of
Directors of the Company.
b. The Company has received advances of $ 184,785 from a stockholder as of
March 31, 2001. As of March 31, 2001 the Company has not established specific
repayment terms.
NOTE 8 - STOCK TRANSACTIONS
As of December 31, 1998 the Company had 12,000,000 shares outstanding. On
June 17, 1998, the Company issued 1,200,000 shares of common stock valued at
$0.15 per share for cash.
On June 17, 1998 the Company issued 108,002 shares of common stock for cash
valued at $1.00 per share.
On June 17, 1998. The Company issued 6,000 shares of common stock for
services valued at $1.00 per share.
As of December 31, 1999 the Company had 13,314,002 shares of common stock
outstanding.
On March 31, 2000, the Company issued 2,752,276 shares of common stock for
cash valued at $0.54 per share.
On March 31, 2000, the Company issued 3,810,000 shares of common stock for
cash valued at $0.20 per share.
On April 20, 2000 the Company issued 60,000 shares of common stock for
services valued at $3.00 per share.
On April 28, 2000, the Company issued 1,080,600 shares of common stock for
services valued at $1.00 per share.
On May 17, 2000, the Company issued 25,000 shares of common stock for
services valued at $0.50 per share.
On May 19, 2000, the Company issued 172,834 shares of common stock for
services valued at $0.17 per share.
NOTE 8 - STOCK TRANSACTIONS (CONTINUTED)
On June 2, 2000 the Company issued 6,000 shares of common stock to acquire
100% of Central America Fuel Technologies, Inc. valued at $2.50 per share.
On June 30, 2000 the Company had 75,000 shares of common stock exercised
valued at $0.42 per share.
On June 30, 2000 the Company had 60,000 shares of common stock exercised
valued at $0.21 per share.
On June 30, 2000 the Company had 60,000 shares of common stock exercised
valued at $0.21 per share.
On June 30, 2000 the Company issued 3,000,000 shares of common stock to
acquire ICE valued at $ 0.83 per share.
On June 30, 2000 the Company issued 4,800,000 shares of common stock to
acquire Access Network Limited valued at $0.83 per share.
On August 30, 2000 the Company issued 2,152,140 shares of common stock for
debt settlement valued at $0.20 per share.
On August 30, 2000 the Company issued 109,340 shares of common stock for
debt settlement valued at $0.83 per share.
On October 1, 2000 the Company had 12,000 shares of common stock exercised
valued at $0.2084 per share.
On October 4, 2000 the Company had 42,600 shares of common stock exercised
at $0.4167 per share.
On October 12, 2000 the Company had 2,400 shares of common stock exercised
valued at $0.4167 per share.
On December 27, 2000 the Company issued 120,000 shares of common stock for
cash valued at $0.10 per share.
On December 27, 2000 the Company issued 500,000 shares of common stock for
cash valued at $0.10 per share.
NOTE 8 - STOCK TRANSACTIONS (CONTINUTED)
On December 31, 2000 the Company issued 520,000 shares of common stock for
cash valued at $0.16827 per share.
On January 1, 2001 the Company recinded the issuance of 3,000,000 shares
for the acquisition of ICE at a value of $ 0.10.
On January 25, 2001 the Company issued 1,800,000 shares of common stock for
services valued at $0.10 per share.
On February 9, 2001 the Company issued 628,500 shares of common stock for
debt settlement valued at $0.10 per share.
On February 20, 2001 the Company issued 20,280 shares of common stock for
services valued at $0.10 per share.
On March 9, 2001 the Company issued 100,000 shares of common stock for
services valued at $0.10 per share.
On March 10, 2001 the Company issued 250,000 shares of common stock for
services valued at $0.10 per share. As of March 31, 2001 there were 32,472,972
shares of common stock outstanding.
NOTE 9 - ISSUANCE OF SHARES FOR SERVICES STOCK OPTIONS
The company has a nonqualified stock option plan, which provides for the
granting of options to key employees, consultants, and nonemployees directors of
the Company. The valuations of shares for services are based on the fair market
value of services. The Company has elected to account for the stock option plan
in accordance with paragraph 30 of SFAS 123 were the compensation to employees
should be recognized over the period(s) in which the related employee services
are rendered. In accordance with paragraph 19 of SFAS 123 the fair value of a
stock option granted is estimated using an option-pricing model. A total of
2,170,280 shares were issued for services to management and key employees for
the three months ended March 31, 2001.
ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Going Concern and Ability of the Company to Continue
The Company has a net operating loss carry forward of $11,724,969 since
inception through March 31, 2001.
The Companys consolidated financial statements are prepared using
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. The Company has not established revenues sufficient
to cover its operating costs and allow it to continue as a going concern.
Management believes that the Company will soon be able to generate revenues
sufficient to cover its operating costs. In the interim, the Company intends to
raise additional capital through private placements of its common stock.
Liquidity and Capital Resources
As of March 31, 2001 the Company has $377,470 in current assets compared to
current liabilities of $1,005,082. Management recognizes there is a severe
impairment to the Companys financial statement. The Company has a 1:2:7 current
ratio. The current assets are comprised of $40,358 in cash, $334,206 in
loans/accounts payable and $2,906 in prepaid expenses. This compares to $693,012
in accounts payable, $40,026 in accrued expenses and $272,044 in loans payable.
Results of Operations
For the first quarter ended March 31, 2001 the Company had revenues of
$184,629 and expenses of $1,734,756 compared to revenues of $0 and expenses of
$3,086,792 as of March 31, 2000. The Company has a loss on investment of
$(137,393) due to rescinding the ICE acquisition. The acquisition was rescinded
on January 1, 2001 whereby the Company returned all assets and liabilities of
ICE in exchange for the 3,000,000 shares of common stock the Company paid for
ICE. The 3,000,000 shares were subsequently retired. For the three months ended
March 31, 2001 the Company has a net loss of $(443,350) compared to a net loss
of $(3,101,792) for the same period the year before. The reason for the
$2,658,442 decrease in net loss can be attributed to the fact that that Company
was not acquiring companies as it had been during the period of 2000. The
Company also had $26,753 in depreciation compared to $0 for the same period the
prior year.
Net Operating Loss
The Company has accumulated approximately $11,724,969 of net operating
losses caryforwards as of March 31, 2001, which maybe offset against taxable
income and income taxes in future years. The use of these to losses to reduce
future income taxes will depend on the generation of sufficient taxable income
prior to the expiration of the net loss carryforwards. The carryforwards expire
in the year 2021. In the event of certain changes in control of the Company,
there will be an annual limitation on the amount of carryforwards, which can be
used.
Sale of Common Capital Stock
On January 25, 2001 the Company issued 1,800,000 shares of common stock at
$.10 per share to RB Capital and Equities in trust for the settlement of debt to
a Investor Relations firm.
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On March 10, 2001 the Company issued 100,000 shares to RST Investment,
Ltd., at $.10 per share as a consulting fee and on February 20, 2001 the Company
issued 20,280 shares at $.10 per share to Brent Purin for a finders fee. Also,
the Company issued 628,500 shares to 36 investors on February 9, 2001 at $.10
per share in a Private Placement in March of 2000 as penalty shares.
On March 9, 2001 the Company issued 250,000 shares to Alexander Anderson,
an officer and director, in consideration of a cancellation of a management
contract at $.10 per share for consideration of $25,000.
As of March 31, 2001 there were 32,472,972 shares of common stock
outstanding.
Risk Factors and Cautionary Statements
Forwardlooking statements in this report are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. The
Company wished to advise readers that actual results may differ substantially
from such forward-looking statements. Forward-looking statements involve risks
and uncertainties that could cause actual results to differ materially from
those expressed on or implied by the statements, including, but not limited to,
the following: the ability of the Company to successfully meet its cash and
working capital needs, the ability of the Company to successfully market its
product, and other risks detailed in the Companys periodic report filings with
the Securities and Exchange Commission.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are presently no pending legal proceedings to which the Company or
any of its subsidiaries are a party, to the best of knowledge of the Company. No
actions against the Company are contemplated or threatened.
ITEM 2. CHANGES IN SECURITIES
On January 1, 2001 the Company rescinded their ICE acquisition. The Company
retired the 3,000,000 shares of common stock that were issued for the ICE
acquisition.
On January 25, 2001 the Company issued 1,800,000 shares of common stock at
$.10 per share to RB Capital and Equities in trust for the settlement of debt to
a Investor Relations firm.
On March 10, 2001 the Company issued 100,000 shares to RST Investment,
Ltd., at $.10 per share as a consulting fee and on February 20, 2001 the Company
issued 20,280 shares at $.10 per share to Brent Purin for a finders fee. Also,
the Company issued 628,500 shares to 36 investors on February 9, 2001 at $.10
per share in a Private Placement in March of 2000 as penalty shares.
On March 9, 2001 the Company issued 250,000 shares to Alexander Anderson,
an officer and director, in consideration of a cancellation of a management
contract at $.10 per share for consideration of $25,000.
As of March 31, 2001 there were 32,472,972 shares of common stock
outstanding.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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ITEM 4. SUBMISSION OF MATTERS TO BE A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON 8-K
a. Form 10K SB filed by reference on April 18, 2001.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Report to be signed in its behalf by the
undersigned hereto duly authorized.
VOIP TELECOM, INC.
Dated: March 20, 2002
By:_/S/ Ron Lowe
Ron Lowe
President
S-1
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