U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM
Commission file number: 000-28935
OMNINET MEDIA CORPORATION
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(Exact name of small business issuer as specified in its charter)
Nevada 88-0492265
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(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1355 E. Balboa Blvd., Suite A, Newport Beach, CA 92661
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(Address of principal executive offices)
949-701-0979
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Issuer's telephone number
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock $.0001
par value
Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. [ ]
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 [ ] No [X]
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date. As of April 30, 2006, there were
98,554,712 common shares outstanding.
Transitional Small Business Disclosure Format (check one): Yes [ ] No [X]
OMNINET MEDIA CORPORATION
Quarterly Report on Form 10-QSB
Table of Contents
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited) 3
Condensed Consolidated Balance Sheet:
November 30, 2001 (unaudited) 4
Condensed Consolidated Statements of Income (unaudited):
Three Months Ended November 30, 2000 and 2001 5
Condensed Consolidated Statements of Cash Flows (unaudited):
Three Months November 30, 2000 and 2001 6
Notes to Condensed Consolidated Financial Statements (unaudited): 7
Item 2. Management Discussion and Analysis 10
Item 3. Controls and Procedures 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits 11
Signatures 11
2
ITEM 1. FINANCIAL STATEMENTS (Unaudited)
3
OMNINET MEDIA CORPORATION
(Formerly OmniNet Media.Com, Inc.)
BALANCE SHEET
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ASSETS
November 30,
2001
------------
Current assets:
Cash $ --
------------
Total current assets --
------------
Total assets $ --
============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Accounts payable $ 772,105
Notes payable, related party (Note 4) 22,090
------------
Total liabilities 794,195
Contingency (Note 5) --
Shareholders' equity: (Note 6)
Preferred stock par value $0.0001, 10,000,000 shares
Authorized, none issued and outstanding at November 30, 2001
Common stock par value $0.0001 100,000,000 shares
authorized; 48,554,712 issued and outstanding at
November 30, 2001 4,552
Additional paid in capital 3,483,107
Accumulated deficit (4,176,089)
------------
(693,430)
Less: Subscription receivable (100,765)
------------
Total shareholders' equity (deficit) (794,195)
------------
Total liabilities and shareholders' equity (deficit) $ --
============
4
OMNINET MEDIA CORPORATION
(Formerly OmniNet Media.Com, Inc.)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDING NOVEMBER 30, 2000 AND NOVEMBER 30, 2001
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Three Months Three Months
Ending Ending
November 30, November 30,
2000 2001
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Revenues $ -- $ --
------------ ------------
Total revenues -- --
------------ ------------
Operating expenses:
General and administrative 54,116 --
Impaired loss on license agreements 61,916 --
------------ ------------
Total operating expenses (116,032) --
------------ ------------
Other income (expense): Non-controlling interest 24,766
Interest expense -- --
Forgiveness of debt -- --
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Net income (loss) before income taxes (91,266) --
Provision for income taxes -- --
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Net income (loss) $ (91,266) $ --
============ ============
Net income (loss) per share - basic $ (0.002) $ --
============ ============
Net income (loss) per share - diluted $ -- $ --
============ ============
Weighted average number of shares outstanding - basic 42,278,173 48,554,712
============ ============
Weighted average number of shares outstanding - diluted 42,278,173 48,554,712
============ ============
5
OMNINET MEDIA CORPORATION
(Formerly OmniNet Media.Com, Inc.)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDING NOVEMBER 30, 2000 AND NOVEMBER 30, 2001
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Three Months Three Months
Ended Ended
November 30, November 30,
2000 2001
------------ ------------
Cash flows from operating activities:
Net income (loss) $ (91,266) $ --
Adjustments to reconcile net (loss) to net cash:
Gain from forgiveness of debt -- --
Stock compensation for services -- --
Decrease in accounts payable -- --
Depreciation and amortization 8,142 --
Minority interest in net loss of consolidated subsidiary (24,766) --
Impairment loss on license agreements 61,916 --
Decrease in prepaid expenses 6,779 --
Decrease in security deposit 2,790 --
Increase in accounts payable and accrued expenses 12,895 --
------------ ------------
Net cash provided by ( used in) operating activities (23,510) --
Cash flows from financing activities:
Proceeds from issuance of common stock -- --
Borrowings from related parties -- --
Proceeds from notes payable 22,090 --
Payments on notes payable -- --
------------ ------------
Net cash provided by (used in) financing activities 22,090 --
------------ ------------
Net change in cash (1,420) --
Cash, beginning of year 1,420 --
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Cash, end of year $ -- $ --
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Schedule of Non Cash Investing and Financing --
Activities: (delete since all zero)
Issuance of common stock in exchange for services $ -- $ --
============ ============
Issuance of common stock for subscriptions
receivable $ -- $ --
============ ============
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1. HISTORY AND ORGANIZATION OF THE COMPANY
---------------------------------------
OmniNet Media Corporation (formerly OmniNet Media.Com, Inc.) (the
Company) was incorporated on March 12, 1997 as Clinical Aesthetics
Centre, Inc. (Clinical) under the laws of the State of Nevada. Clinical
conducted no active business operations from inception through July
1998. On July 27, 1998 Clinical entered into a business reorganization
in which it issued 5,250,000 of its common shares in exchange for all
the issued and outstanding shares of TriCom Technology Group, Inc.
(TriCom), a Nevada corporation formed on July 14, 1998. TriCom
continued to operate under its own name, but failed in its attempt to
operate as an advertising and communications company. It became
inactive, and remained inactive until February 2000.
On February 18, 2000 the Board of Directors of TriCom approved the
issuance of 5,000,000 of its common shares in exchange for 100% of the
issued and outstanding stock of OmniNet Media.Com, Inc. which had been
formed as a Nevada business corporation on January 7, 2000 under the
name of Kioskcoupon.Com, Inc.(Kioskcoupon) Its business purpose was to
provide communications services. Kioskcoupon had changed its name to
OmniNet Media.Com, Inc. by amendment to its articles of incorporation
on January 20, 2000. TriCom subsequently adopted the name of its
subsidiary by amending its articles of incorporation to change its name
to OmniNet Media.Com, Inc. and then to OmniNet Media Corp.
OmniNet Media Corporation's main business activity targeted the
television and promotional advertising market by offering both grocery
retailer and national food advertiser with a new and efficient in-store
advertising medium consisting of internet-enabled networked
large-screen video displays, for the purpose of disseminating timely,
centralized multi-media advertising messages directly into the retailer
environment to influence the buyer at the moment of decision. The
Company was unable to fund operations as an advertising and
communications company and became inactive in late 2001, and remains
inactive and for all intents and purposes exists as a development stage
company.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
INTERIM FINANCIAL INFORMATION
-----------------------------
The financial statements of the Company as of November 30, 2001 and for
the three months ended November 30, 2001, and footnote information are
unaudited. All adjustments (consisting only of normal recurring
adjustments) have been made which, in the opinion of management, are
necessary for a fair presentation. Results of operations for the three
months ended November 30, 2001 are not necessarily indicative of the
results that may be expected for any future period. Certain information
and footnote disclosures, normally included in financial statements
prepared in accordance with accounting principles generally accepted in
the United States of America, have been omitted. These financial
statements should be read in conjunction with the Company's Annual
Report on form 10-KSB for the year ended August 31, 2001.
Use of Estimates
----------------
The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
7
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
------------------------------------------
Earnings Per Share
------------------
In February 1997, the Financial Accounting Standards Board (FASB)
issued SFAS No. 128 "Earnings Per Share" which requires the Company to
present basic and diluted earnings per share, for all periods
presented. The computation of loss per common share (basic and diluted)
is based on the weighted average number of shares actually outstanding
during the period.
Income Taxes
------------
Deferred income taxes are reported using the liability method. Deferred
tax assets are recognized for deductible temporary differences and
deferred tax liabilities are recognized for taxable temporary
differences. Temporary differences are the differences between the
reported amounts of assets and liabilities and their tax bases.
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. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax
laws and rates on the date of enactment.
3. GOING CONCERN
-------------
The accompanying financial statements have been prepared in a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company has incurred cumulative net losses of approximately $4,176,000
since its inception and will require additional capital for is
operational activities. The Company plans to complete a plan to merge
with an operating company over the next twelve months. If it is unable
to merge with an operating company, the business plan will be
significantly delayed. The Company does not have any formal commitments
or arrangements for the completion of a merger with an operating
company . The Company's ability to raise additional capital through the
future issuance of the common stock is unknown.
The obtainment of additional financing and its transition, ultimately,
to the attainment of profitable operations are necessary for the
Company to continue operations. These factors, among others, raise
substantial doubt about the Company's ability to continue as a going
concern. The financial statements of the Company do not include any
adjustments that may result from the outcome of these aforementioned
uncertainties.
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4. NOTE PAYABLE - RELATED PARTY
----------------------------
The Company owed $22,090 on a note payable to a related party. The note
payable is non-interest bearing and is due on demand.
5. CONTINGENCY
-----------
As of the year ended August 31, 2001, the Company owed approximately
$772,000 to various vendors. The current management believes that the
statute of limitations related to these liabilities has run out as of
August 31, 2005 and therefore can defeat any legal action to collect
Reported Liabilities based upon the affirmative defense that the
creditor's claim are barred for the four year limitation period set
forth in Section 337 of the California Code of Civil Procedure. The
Company has credited approximately $772,000 to forgiveness of debt for
the year ended August 31, 2005.
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ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
OmniNet Media Corporation ("OmniNet" or the "Company") has reorganized itself
and ceased all business operations other than to locate and negotiate with a
business entity for the combination of that target company with OmniNet. A
combination will normally take the form of a merger, stock-for-stock exchange or
stock-for-assets exchange (the "business combination"). In most instances, the
target company will wish to structure the business combination to be within the
definition of a tax-free reorganization under Section 351 or Section 368 of the
Internal Revenue Code of 1986, as amended. No assurances can be given that
OmniNet will be successful in locating or negotiating with any target business.
OmniNet has not restricted its search for any specific kind of businesses, and
it may acquire a business which is in its preliminary or development stage,
which is already in operation, or in essentially any stage of its business life.
It is impossible to predict the status of any business in which OmniNet may
become engaged, in that such business may need to seek additional capital, may
desire to have its shares publicly traded, or may seek other perceived
advantages which OmniNet may offer.
In implementing a structure for a particular business acquisition, OmniNet may
become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity.
It is anticipated that any securities issued in any such business combination
would be issued in reliance upon exemption from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of its transaction, OmniNet may agree to register all or a
part of such securities as part of the business combination or at specified
times thereafter.
Negotiations with a target company will likely focus on the percentage of
OmniNet which the target company shareholders would acquire in exchange for
their shareholdings. Although the terms of such agreements cannot be predicted,
generally such agreements will require certain representations and warranties of
the parties thereto, will specify certain events of default, will detail the
terms of closing and the conditions which must be satisfied by the parties prior
to and after such closing and will include miscellaneous other terms. Any merger
or acquisition effected by OmniNet can be expected to have a significant
dilutive effect on the percentage of shares held by the OmniNet's shareholders
at that time.
THERE CAN BE NO ASSURANCES GIVEN THAT OMNINET WILL BE ABLE TO SUCCESSFULLY
LOCATE A MERGER TARGET OR CONSUMMATE A MERGER. STATUTES, REGULATIONS, RULES AND
THE POSITIONS OF REGULATORY AUTHORITIES HAVE BEEN BECOMING MORE ADVERSE AND
RESTRICTIVE TOWARD SUCH MERGERS AND TOWARD ENTITIES SUCH AS OMNINET.
ITEM 3. CONTROLS AND PROCEDURES
a) Evaluation of Disclosure Controls and Procedures. As of the last day of the
period covered by this report, the Company's management carried out an
evaluation, under the supervision of the Company's Chief Executive Officer and
the Chief Financial Officer of the effectiveness of the design and operation of
the Company's system of disclosure controls and procedures pursuant to the
Securities and Exchange Act, Rule 13a-15(e) and 15d-15(e) under the Exchange
Act). Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures were effective, as of the date of their evaluation, for the purposes
of recording, processing, summarizing and timely reporting material information
required to be disclosed in reports filed by the Company under the Securities
Exchange Act of 1934.
b) Changes in internal controls. There were no changes in internal controls over
financial reporting, known to the Chief Executive Officer or Chief Financial
Officer that occurred during the period covered by this report that has
materially affected, or is likely to materially effect, the Company's internal
control over financial reporting.
10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There are no current legal proceedings.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of the security holders during the
quarter.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
(a) EXHIBIT(S) DESCRIPTION
Exhibit No. Description Page No.
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31.1 CEO Certifications Under Section 302 12
31.2 CFO Certifications Under Section 302 13
32.1 CEO Certifications Under Section 906 14
32.2 CFO Certifications Under Section 906 15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
July 5, 2006
OmniNet Media Corporation
By: /s/ Mitchell Stough
-------------------
Name: Mitchell Stough
Title: Chief Executive Officer and
Chief Financial Officer
11