SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1943
For the transition period from ______________to____________________
Commission File number: 0-31493
AXIS.COM, INC.
(Name of small business issuer in its charter)
Nevada 88-0469539
(State of organization) (I.R.S. Employer Identification No.)
2980 S. Rainbow Blvd., Suite 210C, Las Vegas NV 89146
(Address of Principal executive offices)
Issuers telephone number: (702) 212-4588
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____x____ No __________.
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the last practicable date: 3,000,000
Part I.
Item 1. Financial Statements.
AXIS.COM, INC.
(A Development Stage Company)
BALANCE SHEET
January1,2000 MARCH 31, 2001
ASSETS $________- $_________-
LIABILITIES AND STOCKHOLDERS EQUITY
Liabilities $________- $_________-
STOCKHOLDERSS EQUITY
Common Stock, $0.001 par value;
25,000,000 shares authorized,
3,000,000 shares issued and
outstanding 3,000 3,000
Additional paid-in capital 500 500
Deficit accumulated during
the development stage (3,500) (3,500)
Total stockholders equity ______- ______-
Total liabilities and
stockholders equity $______- $______-
AXIS.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
August 4,2000 (inception)- January 1,2000 -
January 1, 2000 March 31, 2001
Revenue $ - $ -
General and administrative
expenses 3,500 3,500
Loss from operations before
provision for income
taxes (3,500) (3,500)
Provision for income taxes - -
Net Loss $ (3,500) $ (3,500)
Net Loss per share - basic
and diluted $________- $________-
Weighted average number of
Common shares
Outstanding 3,000,000 3,000,000
--------- ---------
AXIS.COM, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDER EQUITY
AUGUST 4, 2000 (INCEPTION) TO JANUARY 1, 2000
JANUARY 1, 2000 TO MARCH 31, 2001
Deficit
Accumulated
Additional During the
Common Stock Paid-in Development
Shares Amount Capital Stage Total
------- -------- -------- --------- ------
Balance, August 4, 2000 - $ - $ - $ - $ -
Issuance of shares for
Services - August 4,2000 3,000,000 3,000 - - 3,000
Expenses paid by
shareholder - - 500 - 500
Net Loss - - - (3,500)(3,500)
--------- ------- -------- --------- -------
Balance,
JANUARY 1, 2000 3,000,000 $ 3,000 $ 500 $ (3,500)$ -
--------- ------- -------- --------- -------
Balance,
March 31, 2001 3,000,000 $ 3,000 $ 500 $ (3,500) $ -
--------- ------- -------- --------- -------
AXIS.COM, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
AUGUST 4, 2000 (INCEPTION) TO JANUARY 1, 2000
JANUARY 1, 2000 TO MARCH 31, 2001
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(3,500)
Stock issued for services 3,000
Expenses paid by shareholder 500
-------
NET CASH USED IN OPERATING ACTIVITES -
CASH AND CASH EQUIVALENTS - August 4, 2000 -
-------
CASH AND CASH EQUIVALENTS - JANUARY 1, 2000 $ -
-------
CASH AND CASH EQUIVALENTS - MARCH 31, 2001 $ -
-------
The accompanying notes are an integral part of these financial
statements.
AXIS.COM, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2001
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES
Nature of Operations
Axis.com, Inc. (the "Company") is currently a development-stage
company under the provisions of the Financial Accounting Standards
Board ("FASB") Statement of Financial Accounting Standards ("SFAS")
NO. 7. The Company was incorporated under the laws of the state of
Nevada on August 4, 2000.
Interim Financial Information
The accompanying unaudited interim financial statements have been
prepared by the Company, in accordance with generally accepted
accounting principles pursuant to Regulation S-B of the Securities
and Exchanges Commission. Certain information and footnote disclosured
normally included in audited financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted. Accordingly, these interim financial statements
should be read in conjunction with the Company's financial
statements and related notes as contained in Form 10-KSB for the year
ended December 31, 2000. In the opinion of management, the interim
financial statements reflect all adjustments, including normal
recurring adjustments, necessary for fair presentation of the interim
periods presented. The results of operations for the three months
ended March 31, 2001 are not necessarily indicative of results of
operations to be expected for the full year.
SUPPLEMENTAL INFORMATION:
During the period from January 1, 2000 to March 31, 2001, the
Company paid no cash for interest or income taxes.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Although Management believes that the expectations reflected in these
forward-looking statements are reasonable,it can give no assurance that
such expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the
expectations are disclosed in this Statement, including, without
limitation, in conjunction with those forward-looking statements
contained in this Statement.
Plan of operation - general
Axis plans to seek, investigate, and if such investigation warrants,
acquire an interest in one or more business opportunities presented to
it by persons or firms desiring the perceived advantages of a publicly
held corporation. At this time, Axis has no plan, proposal, agreement,
understanding, or arrangement to acquire or merge with any specific
business or company and Axis has not identified any specific business
or a company for investigation and evaluation. No member of Management
or any promoter of Axis, or an affiliate of either, has had any
material discussions with any other company with respect to any
acquisition of Axis.
Axis will not restrict its search to any specific business, industry,
or geographical location, and may participate in business ventures of
virtually any kind or nature.
Discussion of the proposed business under this caption and throughout
this Registration Statement is purposefully general and is not meant to
restrict Axis' virtually unlimited discretion to search for and enter
into a business combination. Axis may seek a combination with a firm
which only recently commenced operations, or a developing company in
need of additional funds to expand into new products or markets or
seeking to develop a new product or service, or an established business
which may be experiencing financial or operating difficulties and needs
additional capital which is perceived to be easier to raise by a public
company.
In some instances, a business opportunity may involve acquiring or
merging with a corporation which does not need substantial additional
cash but which desires to establish a public trading market for its
common stock. Axis may purchase assets and establish wholly owned
subsidiaries in various businesses or purchase existing businesses as
subsidiaries. Selecting a business opportunity will be complex and
extremely risky. Because of general economic conditions, rapid
technological advances being made in some industries, and shortages of
available capital, management believes that there are numerous firms
seeking the benefits of a publicly- traded corporation. Such perceived
benefits of a publicly traded corporation may include facilitating or
improving the terms on which additional equity financing may be sought,
providing liquidity for the principals of a business, creating a means
for providing incentive stock options or similar benefits to key
employees, providing liquidity (subject to restrictions of applicable
statues) for all shareholders, and other items.
Potentially available business opportunities may occur in many
different industries and at various stages of development, all of which
will make the task of comparative investigation and analysis of such
business opportunities extremely difficult and complex. Management
believes that Axis may be able to benefit from the use of "leverage" to
acquire a target company. Leveraging a transaction involves acquiring
a business while incurring significant indebtedness for a large
percentage of the purchase price of that business. Through
leveraged transactions, Axis would be required to use less of its
available funds to acquire a target company and, therefore, could
commit those funds to the operations of the business, to combinations
with other target companies, or to other activities.
The assets of the acquired business will ordinarily secure the
borrowing involved in a leveraged transaction. If that business were
not able to generate sufficient revenues to make payments on the debt
incurred by Axis to acquire that business, the lender would be able to
exercise the remedies provided by law or by contract. These leveraging
techniques, while reducing the amount of funds that Axis must commit
to acquire a business, may correspondingly increase the risk of loss to
Axis.
Axis can give no assurance as to the terms or availability of
financing for any acquisition. During periods when interest rates are
relatively high, the benefits of leveraging are not as great as during
periods of lower interest rates, because the investment in the business
held on a leveraged basis will only be profitable if it generates
sufficient revenues to cover the related debt and other costs of the
financing. Lenders from which Axis may obtain funds for purposes of a
leveraged buy-out may impose restrictions on the future borrowing,
distribution, and operating policies of Axis. It is not possible at
this time to predict the restrictions, if any, which lenders may
impose, or the impact thereof on Axis.
Axis has insufficient capital with which to provide the owners of
businesses significant cash or other assets. Management believes Axis
will offer owners of businesses the opportunity to acquire a
controlling ownership interest in a public company at substantially
less cost than is required to conduct an initial public offering.
However, a business that conducts a public will raise capital, but will
not raise capital as a result of merging with Axis. The owners of the
businesses will, however, incur significant post-merger or acquisition
registration costs in the event they wish to register a portion of
their shares for subsequent sale. Axis will also incur significant
legal and accounting costs in connection with the acquisition of a
business opportunity, including the costs of preparing Forms 8-K,
agreements, and related reports and documents. At a minimum, It will be
necessary to file a Form 8K. Additionally, 10Qs and 10Ks will need to
be filed as necessary.
Nevertheless, the officers and directors of Axis have not conducted
market research and are not aware of statistical data that would
support the perceived benefits of a merger or acquisition transaction
for the owners of a business.
Axis does not intend to make any loans to any prospective merger or
acquisition candidates or to unaffiliated third parties. Axis will
not restrict its search for any specific kind of firms, but may acquire
a venture, which is in its preliminary or development stage, which is
already in operation, or in essentially any stage of its corporate
life. It is impossible to predict at this time the status of any
business in which Axis 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 Axis may offer.
However, Axis does not intend to obtain funds in one or more private
placements to finance the operation of any acquired business
opportunity until such time as Axis has successfully consummated such
a merger or acquisition. Axis also has no plans to conduct any
offerings under Regulation S.
Currently, Axis has minimal cash. Additional funds will have to be
raised via securities issues or will need to be borrowed from
management in order to properly pursue its business plan. Should Axis
be unable to raise the necessary funds in the next 12 months, Axis
would be unable to fully implement its business plan and may be unable
to implement its business plan at all. In such an event, all active
operations of Axis would cease.
Sources of opportunities
Axis will seek a potential business opportunity from all known
sources, but will rely principally on personal contacts of its officer
and director as well as indirect associations between them and other
business and professional people. It is not presently anticipated that
Axis will engage professional firms specializing in business
acquisitions or reorganizations. Management, while not especially
experienced in matters relating to the new business of Axis, will rely
upon their own efforts and, to a much lesser extent, the efforts of
Axis' shareholders, in accomplishing the business purposes of Axis It
is not anticipated that any outside consultants or advisors, other
than Axis' legal counsel and accountants, will be utilized by Axis to
effectuate its business purposes described herein. However, if Axis
does retain such an outside consultant or advisor, any cash fee earned
by such party will need to be paid by the prospective
merger/acquisition candidate, as Axis has no cash assets with which to
pay such obligation. There have been no discussions, understandings,
contracts or agreements with any outside consultants and none are
anticipated in the future.
In the past, Axis' management has never used outside consultants or
advisors in connection with a merger or acquisition. As is customary
in the industry, a finder's fee for locating an acquisition prospect
may be necessary. If any such fee is paid, it will have to be approved
and paid for by the target candidate because Axis has no cash. Any
such payment would be done in accordance with industry standards.
Such fees are customarily between 1% and 5% of the size of the
transaction, based upon a sliding scale of the amount involved. Such
fees are typically in the range of 5% on a $1,000,000 transaction
ratably down to 1% in a $4,000,000 transaction. Management has adopted
a policy that such a finder's fee or real estate brokerage fee could,
in certain circumstances, be paid to any employee, officer, director or
5% shareholder of Axis, if such person plays a material role in
bringing a transaction to Axis.
Mr. Lovell, Mr. Shaikh, and Mr. Thomas do have general business
experience as disclosed in the resume.
Evaluation of opportunities
The analysis of new business opportunities will be undertaken by or
under the supervision of the officer and director of Axis (see
"Management"). Management intends to concentrate on identifying
prospective business opportunities, which may be brought to its
attention through present associations with management. In analyzing
prospective business opportunities, management will consider, among
other factors, such matters as;
1. The available technical, financial and managerial resources
2. Working capital and other financial requirements
3. History of operation, if any
4. Prospects for the future
5. Present and expected competition
6. The quality and experience of management services which may be
available and the depth of that management
7. The potential for further research, development or exploration
8. Specific risk factors not now foreseeable but which then may be
anticipated to impact the proposed activities of Axis
9. The potential for growth or expansion
10.The potential for profit
11.The perceived public recognition or acceptance of products, services
or trades
12.Name identification
Management will meet personally with management and key personnel of
the firm sponsoring the business opportunity as part of their
investigation. To the extent possible, Axis intends to utilize written
reports and personal investigation to evaluate the above factors. Axis
will not acquire or merge with any company for which audited financial
statements cannot be obtained. Opportunities in which Axis
participates will present certain risks, many of which cannot be
identified adequately prior to selecting a specific opportunity.
Axis' shareholders must, therefore, depend on Management to identify
and evaluate such risks. Promoters of some opportunities may have been
unable to develop a going concern or may present a business in its
development stage (in that it has not generated significant revenues
from its principal business activities prior to Axis' participation.)
Even after Axis' participation, there is a risk that the combined
enterprise may not become a going concern or advance beyond the
development stage. Other opportunities may involve new and untested
products, processes, or market strategies, which may not succeed. Axis
and, therefore, its shareholders will assume such risks.
The investigation of specific business opportunities and the
negotiation, drafting, and execution of relevant agreements, disclosure
documents, and other instruments will require substantial management
time and attention as well as substantial costs for accountants,
attorneys, and others. If a decision were made not to participate in a
specific business opportunity the costs incurred in the related
investigation would not be recoverable. Furthermore, even if an
agreement is reached for the participation in a specific business
opportunity, the failure to consummate that transaction may result in
the loss by Axis of the related costs incurred. There is the
additional risk that Axis will not find a suitable target. Management
does not believe Axis will generate revenue without finding and
completing a transaction with a suitable target company. If no such
target is found, therefore, no return on an investment in Axis will be
realized, and there will not, most likely, be a market for Axis' stock.
Acquisition of opportunities
In implementing a structure for a particular business acquisition,
Axis may become a party to a merger, consolidation, reorganization,
joint venture, franchise, or licensing agreement with another
corporation or entity. It may also purchase stock or assets of an
existing business. Once a transaction is complete, it is possible that
the present management and shareholders of Axis will not be in control
of Axis. In addition, a majority or all of Axis' officer and
director may, as part of the terms of the transaction, resign and be
replaced by new officer and director without a vote of Axis'
shareholders.
It is anticipated that securities issued in any such reorganization
would be issued in reliance on exemptions from registration under
applicable Federal and state securities laws. In some circumstances,
however, as a negotiated element of this transaction, Axis may agree
to register such securities either at the time the transaction is
consummated, under certain conditions, or at specified time thereafter.
The issuance of substantial additional securities and their potential
sale into any trading market, which may develop in Axis' Common
Stock, may have a depressive effect on such market. While the actual
terms of a transaction to which Axis may be a party cannot be
predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable
event and thereby structure the acquisition in a so called "tax free"
reorganization under Sections 368(a)(1) or 351 of the Internal Revenue
Code of 1986, as amended (the "Code").
In order to obtain tax-free treatment under the Code, it may be
necessary for the owners of the acquired business to own 80% or more of
the voting stock of the surviving entity. In such event, the
shareholders of Axis, including investors in this offering, would
retain less than 20% of the issued and outstanding shares of the
surviving entity, which could result in significant dilution in the
equity of such shareholders.
As part of Axis' investigation, officers and directors of Axis will
meet personally with management and key personnel, may visit and
inspect material facilities, obtain independent analysis or
verification of certain information provided, check references of
management and key personnel, and take other reasonable investigative
measures, to the extent of Axis' limited financial resources and
management expertise. The manner in which Axis participates in an
opportunity with a target company will depend on the nature of the
opportunity, the respective needs and desires of Axis and other
parties, the management of the opportunity, and the relative
negotiating strength of Axis and such other management. With respect
to any mergers or acquisitions, negotiations with Target Company,
management will be expected to focus on the percentage of Axis, which
the target company's shareholders would acquire in exchange for their
shareholdings in the target company. Depending upon, among other
things, the target company's assets and liabilities, Axis'
shareholders will, in all likelihood, hold a lesser percentage
ownership interest in Axis following any merger or acquisition. The
percentage ownership may be subject to significant reduction in the
event Axis acquires a target company with substantial assets. Any
merger or acquisition effected by Axis can be expected to have a
significant dilutive effect on the percentage of shares held by Axis
then shareholders, including purchasers in this offering. Management
has advanced, and will continue to advance, funds, which shall be used
by Axis in identifying and pursuing agreements with target companies.
Management anticipates that these funds will be repaid from the
proceeds of any agreement with the target company, and that any such
agreement may, in fact, be contingent upon the repayment of
those funds.
It is expected that amounts to conduct investigations will be less than
$10,000 and that such amount will come from Mr. Lovell, Mr. Shaikh, and
Mr. Thomas. Additional funds may need to be raised if the amount
exceeds this or Mr. Lovell, Mr. Shaikh, and Mr. Thomas are short on
funds.
Mr. Lovell, Mr. Shaikh, and Mr. Thomas may contribute up to $10,000 for
acquisition investigations. However, Mr. Lovell, Mr. Shaikh, and Mr.
Thomas are not obligated to advance any additional amount to Axis.
Axis may be required to issue stock to raise additional funds if Mr.
Lovell, Mr. Shaikh, and Mr. Thomas cannot provide said funds.
Competition
Axis is an insignificant participant among firms, which engage in
business combinations with, or financing of, development-stage
enterprises. There are many established management and financial
consulting companies and venture capital firms, which have
significantly greater financial and personal resources, technical
expertise and experience than Axis. In view of Axis' limited
financial resources and management availability, Axis will continue to
be at significant competitive disadvantage vis-a-vis the Axis
competitors. Axis will be at a disadvantage with other companies
having larger technical staffs, established market shares and greater
financial backing.
Regulation and taxation
The Investment Company Act of 1940 defines an "investment company." as
an issuer, which is or holds it out as being engaged primarily in the
business of investing, reinvesting or trading securities. While Axis
does not intend to engage in such activities, Axis may obtain and hold a
minority interest in a number of development stage enterprises. Axis
could be expected to incur significant registration and compliance
costs if required to register under the Investment Company Act of 1940.
Accordingly, management will continue to review Axis' activities from
time to time with a view toward reducing the likelihood Axis could be
classified as an "investment company." Axis intends to structure a
merger or acquisition in such manner as to minimize Federal and state
tax consequences to Axis, and to any target company.
Employees
Axis' only employees at the present time are its officer and
director, who will devote, as much time as the Board of Director
determine is necessary to carry out the affairs of Axis. (See
"Management").
Mr. Lovell, Mr. Shaikh, and Mr. Thomas's time devotion to Axis would
be estimated at 10 hours a month until further fundraising or a
merger/acquisition.
PART II
Item 1. Legal Proceedings.
N/A
Item 2. Changes in Securities and Use of Proceeds.
N/A
Item 3. Defaults Upon Senior Securities.
N/A
Item 4. Submission of Matters to a Vote of Security Holders.
N/A
Item 5. Other Information.
N/A
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.1 Articles of Incorporation (incorporated by reference in
Company's Form 10SB12G filed on 9/8/2000.
3.2 By-Laws (incorporated by reference in Company's Form
10SB12G filed on 9/8/2000.
SIGNATURES
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the
capacities and on the dates indicated:
Axis.com, Inc.
By:/S/__________________
Danny Lovell
President.
By:/S/__________________
Eliot Thomas
Treasurer.
By:/S/__________________
Adam Shaikh
Secretary.