United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter ended September 30, 2001
Commission File Number: 000-26249
SNOHOMISH EQUITY CORPORATION
Nevada 33-0507843
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
219 Broadway, Suite 261, Laguna Beach CA 92651
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 248-1765
Shares Registered Section 12(g): Common Stock
As of September 30, 2001: 125,001 shares of Common Stock were issued and
outstanding.
Transitional Small Business Disclosure Format (check one): yes [ ] no [X]
PART I: FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial statements, for the three months and nine months ended
September 30, 2001, included have been prepared by the Company, without audit
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnotes disclosure normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
not misleading.
The Remainder of this Page is Intentionally left Blank
1
SNOHOMISH EQUITY CORPORATION
(a Development Stage Company)
BALANCE SHEETS (UNAUDITED)
for the fiscal year ended December 31, 2000
and for the period ended September 30, 2001
September 30, December 31,
2001 2000
- -----------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Total Current Assets. . . . . . . . . . . . . . . . . -0- -0-
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . . -0- -0-
-------- --------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . -0- -0-
======== ========
LIABILITIES & STOCKHOLDERS' EQUITY
LIABILITIES
Account payable . . . . . . . . . . . . . . . . . . . 29,073 10,657
-------- --------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . 29,073 10,657
STOCKHOLDERS' EQUITY
Common Stock, $.001 par value; authorized 50,000,000
shares; issued and outstanding, 125,001 shares
and 118,683 shares . . . . . . . . . . . . . . . . 125 119
Additional Paid In Capital. . . . . . . . . . . . . . 24,380 24,386
Accumulated Surplus (Deficit) . . . . . . . . . . . . (53,578) (35,162)
-------- --------
Total Stockholders' Equity. . . . . . . . . . . . . . (29,073) (10,657)
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY. . . . . . -0- -0-
======== ========
The accompanying notes are an integral part
of these financial statements.
2
SNOHOMISH EQUITY CORPORATION
(a Development Stage Company)
STATEMENTS OF OPERATIONS
for the periods ended September 30, 2000 and 2001
(Unaudited)
From
From July From January Inception
1, 2000 and 2001 1, 2000 and 2001 April
through through 8, 1992) to
September 30, September 30, September 30,
2001 2000 2001 2000 2,001
-------- -------- --------- -------- ---------
Revenues. . . . . . . . . . . . . . -0- -0- -0- -0- -0-
-------- -------- --------- -------- ---------
Expenses; General & Administrative. 8,047 2,822 18,416 7,167 53,578
-------- -------- --------- -------- ---------
Net Loss from Operations. . . . . . (8,047) (2,822) (18,416) (7,167) (53,578)
Net Income (Loss) . . . . . . . . . ($8,047) ($2,822) ($18,416) ($7,167) ($53,578)
======== ======== ========= ======== =========
Gain (Loss) per Share . . . . . . . ($0.07) ($0.02) ($0.15) ($0.08) ($0.74)
======== ======== ========= ======== =========
Weighted Average
Shares Outstanding. . . . . . . 119,385 118,683 118,917 92,842 72,440
======== ======== ========= ======== =========
The accompanying notes are an integral part
of these financial statements.
3
SNOHOMISH EQUITY CORPORATION
(a Development Stage Company)
STATEMENTS OF CASH FLOWS
for the periods ended September 30, 2000 and 2001
(Unaudited)
From
From January Inception
1, 2001 April
Through 8, 1992) to
September 30, September 30,
2001 2000 2001
---------- --------- ----------
Operating Activities
Net Income (Loss). . . . . . . . . . . . ($18,416) ($7,167) ($53,578)
Increase in accounts payable . . . . . . 18,416 7,167 29,073
Shares issued for services and payables 0 16,505
--------- ----------
Net Cash from Operations . . . . . . . . 0 0 (8,000)
Financing activities:
Stock issued for cash. . . . . . . . . . 0 0 8,000
Cash at beginning of Period. . . . . . . 0 0 0
Increase (Decrease) in Cash. . . . . . . 0 0 0
Cash at End of Period. . . . . . . . . . $ 0 $ 0 $ 0
========== ========= ==========
The accompanying notes are an integral part
of these financial statements.
4
SNOHOMISH EQUITY CORPORATION
NOTES TO FINANCIAL STATEMENTS
for the fiscal year ended December 31 2000
and the period ended September 30, 2001
NOTES TO FINANCIAL STATEMENTS
Snohomish Equity Group, Inc. ("the Company") has elected to omit substantially
all footnotes to the financial statements for the period ended September 30,
2001, since there have been no material changes (other than indicated in other
footnotes) to the information previously reported by the Company in their Annual
Report filed on Form 10-KSB for the Fiscal year ended December 31, 2000.
COMMON STOCK REVERSE SPLIT
On September 19, 2001, the Board of Directors and Shareholders of the Company
approved a one for thirty (1:30) reverse split of its common stock. All
presentations of shareholders' equity are presented as if the reverse split had
been effect since inception.
UNAUDITED INFORMATION
The information furnished herein was taken from the books and records of the
Company without audit. However, such information reflects all adjustments which
are, in the opinion of management, necessary to properly reflect the results of
the period presented. The information presented is not necessarily indicative
of the results from operations expected for the full fiscal year.
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ITEM 2. DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
(A) PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. We have adopted a business
plan to become a full-service web communication group specializing in the
production of all types of corporate presentation media including web-based
multi-media presentations, streaming video production, CD Rom authoring,
corporate Powerpoint presentations and slide production, as well as complete
on-line corporate meeting production and broadcasting of corporate events. We
will also provide services for corporate event production such as annual
shareholders meetings. We will work with each client to serve their
communication needs.
We intend to change our Corporate Name to Webservice Innovations, Ltd., or
a similar name. We will design a customized corporate identity in all the
products we offer, whether in a simple website Powerpoint presentation to
complete digital video production and streaming video. Our products will consist
of a range of multi-media outlets. We will also use other mediums for our
products such as CD roms, DVDs, e-mail, and video conferencing. For client's
video projects we will write, shoot, edit, add narration, music, special motion
graphics and visual effects and deliver beautiful finished video productions
tailored specifically to each client's needs. For powerpoint presentations we
will offer an extremely experienced team of multimedia designers skilled in the
production of Powerpoint presentations. We will produce these presentations
using existing client data and/or producing original artwork, animations,
transitions and backgrounds.
Our services will include the following:
Computer Graphics - Adobe based software, PC & MAC computer systems, high
resolution color
slides, CD Roms and website design.
Video Production - Scripts, Location and studio shooting, off and on-line
editing.
Photography - Product and model photography, location photography, 35 mm
and digital.
Sound Services - narration and casting, editing, music library, soundtrack
production, mixing, mastering, duplication.
Art and Graphics - Design consultation, art direction, signs, website
enhancement, original artwork and company identity.
Creative services - Concepts, outlines, storyboards, scripts.
Production Coordination - Quality and traffic control, on-site coordination
of location shooting, talent, permits, scheduling.
Multi-media presentations - Original show designed and created for website
and/or CD Rom, updates on web presentations, e-mail condensed versions.
Corporate Event Staging - on-site set up, stage management, event design
and coordination, multi-media slide programming.
Our target market will consist of public corporations with approximately
100 to 1000 shareholders. The average client will be a fairly young company or
newly trading companies. Average clients will have 25 or more employees and an
annual revenue of over $25 million.
We will obtain clients by contacting recent trading companies on various
exchanges. We will promote our business through personal selling. Potential
clients will receive a multi-media presentation via e-mail or CD rom which will
display our companies services and direct them to our website for more
information. This advertising method is the most beneficial by enabling us to
actually demonstrate our products and services. Another avenue of promotion will
be through strategic alliances with public accountants specializing in public
companies and Securities attorneys. The alliances will be based on receiving
word of mouth referrals from accountants and attorneys in exchange for
complimentary products for their firms. The degree of complimentary products and
services will vary upon the number of clients obtained through their referrals.
(1) COMPETITIVE BUSINESS CONDITIONS AND THE SMALL BUSINESS ISSUER'S
COMPETITIVE POSITION IN THE INDUSTRY. The multi-media industry is one of the
most evolving industries in the world making it difficult to keep up with the
changes. Many well-established companies and many new ventures are in or
entering this dynamic field. There can be no assurance that we can compete
effectively, or that other technologies or approaches will not arise that
obviate our concept.
(2) ESTIMATE OF AMOUNT SPENT ON RESEARCH AND DEVELOPMENT IN EACH OF LAST
TWO YEARS. None.
(3) COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS. Not
Applicable
(4) NUMBER OF TOTAL EMPLOYEES AND FULL-TIME EMPLOYEES. We have two
Officers that devote their time to the development of the company. Jeffrey A.
Harry and Jena M. Harry are now our officers and directors, as of September 17,
2001. Please see Part II of this Report for more information.
(5) EXPECTED SIGNIFICANT CHANGE IN THE NUMBER OF EMPLOYEES. None at this
time. Current conditions being as they are, we would not expect to add
additional employees before the second quarter of 2002.
(6) SUMMARY OF PRODUCT RESEARCH AND DEVELOPMENT. None.
(7) EXPECTED PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT. None at
this time. Current conditions being as they are, we would not expect to acquire
significant equipment before the second quarter of 2002.
(B) CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS, TWELVE MONTHS. We have
an immediate and forseeable need for additional funding, during the next twelve
months; however, as a practical matter we cannot begin to formulate the capital
requirements, before we achieve quote-ability on the OTCBB (Over-The-Counter
Bulletin Board). Management estimates that we need $500,000 to launch and
another $500,000 to continue operations for the next twelve months. We expect to
raise our capital privately, from knowledgeable investors. It is less clear
when we will succeed in raising such capital, in the current less than liquid
market; unless our launch and early revenue generation appear attractive. There
can be no guaranty of that.
Accordingly, two cautionary considerations are material:
First, that we may not be able to achieve required funding and may not be
able to proceed at our desired pace of development, or, in the worst case, at
all.
Second, even if we are successful in raising capital through the sources
specified, there can be no assurances that any such financing would be available
in a timely manner or on terms acceptable to us and our current shareholders.
Additional equity financing could be dilutive to our then existing shareholders,
and any debt financing could involve restrictive covenants with respect to
future capital raising activities and other financial and operational matters.
In this connection, is necessary to understand the importance of our
achieving quoteablity of our common stock. Investors considering a start up
venture are less likely to favor an issuer whose shares are not tradeable, than
one whose shares are quoted, at some bid and ask, on the OTCBB (Over-The-Counter
Bulletin Board) or an exchange. We do not anticipate any contingency upon which
we would voluntarily cease filing reports with the SEC, even though we may cease
to be required to do so. We would continue to file voluntarily in our own best
interests in order to remain quoted on OTCBB, if and when we reach that stage.
It is in our compelling interest to report our affairs quarterly, annually and
currently, as the case may be, generally to provide accessible public
information to interested parties, and also specifically to maintain its
qualification for the OTCBB, if and when the Issuer's intended application for
submission be effective.
To launch properly, we should have secured facilities, engaged an initial
staff, and conducted our first run of advertising. The geographic area of our
initial advertising would be limited and depend on the extent of our funding. We
assume that by the sixth month of operation, successful or not, additional
capital would be required to assure our ability to remain in operation and
handle increasing interest in our services. It may be possible for us to begin
minimal operation with some debt financing at commercially reasonable results. A
minimal start would involve only our immediately local area, and only local and
targeted advertising. It would not involve a sales force or more than one or two
additional employees. We do not have sufficient borrowing power or available
security interests to offer. We do not place reliance on our ability to borrow
much, if at all. At the present time, in view of current conditions, a
small-start, an abbreviated launch is under way.
There can be no assurance that we will be successful in raising capital
through private placements or otherwise. Even if we are successful in raising
capital through the sources specified, there can be no assurances that any such
financing would be available in a timely manner or on terms acceptable to us and
our current shareholders, Additional equity financing could be dilutive to our
then existing shareholders, and any debt financing could involve restrictive
covenants with respect to future capital raising activities and other financial
and operational matters.
(C) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
We (SNOHO) have had no revenues or activity since our inception, except for our
Registration of our common stock, pursuant to section 12(g) of the Securities
Exchange Act of 1934, and our intended combination with WEB, which included the
preparation of our filing on Form 14C, pursuant to Section 14(c) of the
Securities Exchange Act of 1934.
(D) REVERSE ACQUISITION CANDIDATE. We are not a candidate for any reverse or
direct acquisition transactions, or other business combinations. Our intention
is to develop and realize our business plan. Our present combination is not a
take-over, direct or reverse, and involves not change of control.
PART II: OTHER INFORMATION
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ITEM 1. LEGAL PROCEEDINGS. None
ITEM 2. CHANGES IN SECURITIES. We effected a one for thirty (1:30) reverse split
of the 3,560,500 shares of common stock; provided that no shareholder be
reversed below 100 shares; with the indicated result that 125,001 shares
(subject to possible minor adjustment for fractional shares) are issued and
outstanding. The Effective Date of the forward split was September 28, 2001 to
shareholders of record as of September 27, 2001 ("Record Date").
ITEM 3. DEFAULTS ON SENIOR SECURITIES. None
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS. On September 30,
2001, the following Majority Shareholder Action was taken pursuant to the Nevada
Corporate Law, to approve the following proposals:
PROPOSAL 1: To acquire all of the issued and outstanding shares or stock of
WebService Innovations, Inc. (WEB), as a wholly owned subsidiary in exchange for
the issuance of 6,931,120 new investment shares of our common stock, subject to
satisfaction of the terms and conditions set forth in the attached Plan of
Reorganization and Acquisition (see Attachement A herto).
PROPOSAL 2: To change our corporate name to Webservice Innovations, Ltd., or a
substantially similar name
PROPOSAL 3: Increase the authorized capital, to 100,000,000 (one hundred
million) shares of common stock.
PROPOSAL 4: To ratify the appointment and continuation of Chisholm & Associates
as our auditors
Holders of approximately 80% of our common stock have executed a written
consent in favor of the proposals described herein. However, under federal law
these proposals were not finally and definitively effected until at least 20
days after the filing and mailing of the Information Statement pursuant to
Section 14(c) of the Securities Exchange Act of 1934 (or about November 5,
2001).
ITEM 5. OTHER INFORMATION. WebService Innovations, Inc. ("WEB") is a private
Nevada corporation duly organized, validly existing, and in good standing under
the laws of the State of Nevada. WEB was incorporated in the state of Nevada on
May 19, 1999 as Webmaster.com, Inc. Upon discovery of a corporate name conflict
WEB's name changed to its present name. There will be no change of control of
either corporation, or of the business of either corporation, or of the officers
or directors of either corporation. Both corporations are 80% controlled by
Jeffrey A. Harry and Jena Minnick Harry, husband and wife, immediately before
and after the acquisition.
(A) MANAGEMENT. The following persons are the Officers/Directors of both SNOHO
and WEB, immediately before and after the transaction.
Jeffrey A. Harry (age 29) is a Microsoft Certified Systems Engineer (MCSE),
with highly specialized training in windows based networks. His education also
includes training in Novell and MS-Dos software as well as hardware components
and computer network assembly. His training also includes extensive knowledge of
software such as Windows NT, Windows 3.x, Windows 95, MS-Office,
WordPerfect/Corel, Anti-Virus, Netware, Internet, and MS-Mail. Mr. Harry
continues his knowledge of technology changes in hardware and software to remain
competitive in the industry. His background experience consists of over 6 years
of computer hardware and software management. From 1995 to June of 1997 he was
the Manager of Information Systems for a leading New England engineering firm,
Environmental Science Services. From June 1997 to February 1998 he continued to
provide consulting services on a free-lance basis while obtaining his MSCE
certification. Mr. Harry served as an officer and director of Knowledge
Networks, Inc. (an operating public company in the business of Microsoft
Consulting and Training, as well as Telecommunications Consulting and
Outsourcing) from its inception December 23, 1998, until March of 2001.
Jena Minnick-Harry (age 26) is our Secretary/Treasurer and second Director.
She has been working in the administrative and operations division of motion
picture production and theatrical production for the last four years. From 1997
to April 2001, she has been the Production Manager and Accountant for an
independent film company (Oasis Entertainment Corporation). From 1998 to 2001
she served as Secretary and Director of EditWorks, Ltd., an on-line editing
company. Her previous business experience includes Sales and Marketing for a
Medical Equipment Manufacturer, Catering Company, and Wyndham Hotels. Ms. Harry
has a Bachelors Degree in Marketing and a minor in Psychology from Johnson &
Wales University. She also has specialized training in graphic design and
multi-media production. As Secretary/Treasurer of the Company, Ms. Harry will
manage all production, supervise marketing activities, and oversee graphic
design services.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. We have filed no reports on Form 8-K
during the period of this Report. We filed Definitive Form 14c in October 2001.
The following documents may be found as Exhibits/Attachments to that 14c filing,
and are incorporated herein by this reference.
- --------------------------------------------------------------------------------
Exhibit Number Attachment:
This Report Item/Document Form 14c
- --------------------------------------------------------------------------------
Exhibit 2.1 Plan of Reorganization and Acquisition: September 30, 2001. A
- --------------------------------------------------------------------------------
FA-01-WEB Audited Financial Statements: WEB 3/31/01 F
- --------------------------------------------------------------------------------
FQ-2-WEB Un-Audited Financial Statements: WEB 9/30/01 G
- --------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Form 10-Q Report for the Quarter ended September 30, 2001, has been signed below
by the following person on behalf of the Registrant and in the capacity and on
the date indicated.
Dated: November 8, 2001
SNOHOMISH EQUITY CORPORATION
by
/s/Jeffrey A. Harry /s/Jena M. Harry
Jeffrey A. Harry Jena M. Harry
president/director secretary/treasurer/director
7