SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 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 000-29701
SYNDICATIONNET.COM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 57-2218873
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
The Hartke Building
7637 Leesburg Pike
Falls Church, Virginia 22043
(Address of principal executive offices (zip code))
703/ 748-3480
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the last 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
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
Class Outstanding at June 30, 2001
Common Stock, par value $0.0001 10,781,750
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SYNDICATION NET.COM, INC.
AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2001 AND DECEMBER 31, 2000
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Consolidated Balance Sheets
ASSETS
------
June 30, December 31,
2001 2000
---- ----
(Unaudited)
CURRENT ASSETS
Cash $ 47,244 $ 45
Accounts receivable (Note 1) 872,369 571,716
------------ ------------
Total Current Assets 919,613 571,761
------------ ------------
PROPERTY AND EQUIPMENT - NET (Note 2) 1,364 1,820
------------ ------------
TOTAL ASSETS $ 920,977 $ 573,581
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 1,130,755 $ 870,644
Notes payable - related party (Note 6) 105,000 105,000
Accrued expenses (Note 3) 28,613 22,613
------------ ------------
Total Current Liabilities 1,264,368 998,257
------------ ------------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 20,000,000 shares authorized of
$0.0001 par value, no shares issued or outstanding. - -
Common stock: 100,000,000 shares authorized of
$0.0001 par value, 10,781,750 shares issued and
outstanding 1,078 1,078
Additional paid-in capital 791,749 791,749
Accumulated deficit (1,136,218) (1,217,503)
------------ ------------
Total Stockholders' Equity (Deficit) (343,391) (424,676)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 920,977 $ 573,581
============ ============
The accompanying notes are an integral part of these consolidated financial statements.
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
NET SALES $ 2,198,581 $ 1,742,043 $ 4,467,577 $ 3,380,538
COST OF SALES 2,184,910 1,730,793 4,439,708 3,357,920
------------ ------------ ------------ ------------
GROSS MARGIN 13,671 11,250 27,869 22,618
------------ ------------ ------------ ------------
OPERATING EXPENSES
Depreciation 228 227 456 455
General and administrative. 7,297 197,675 72,613 272,148
------------ ------------ ------------ ------------
Total Operating
Expenses 7,525 197,902 73,069 272,603
------------ ------------ ------------ ------------
INCOME (LOSS) FROM
OPERATIONS 6,146 (186,652) (45,200) (249,985)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSE)
Other income 47,000 - 132,485 -
Interest expense (3,000) (4,471) (6,000) (6,671)
------------ ------------ ------------ ------------
Total Other Income
(Expense) 44,000 (4,471) 126,485 (6,671)
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 50,146 $ (191,123) $ 81,285 $ (256,656)
============ ============ ============ ============
BASIC INCOME (LOSS)
PER SHARE $ 0.00 $ (0.01) $ 0.01 $ (0.01)
============ ============ ============ ============
WEIGHTED AVERAGE
NUMBER OF SHARES 10,781,750 17,180,975 10,781,750 17,180,975
============ ============ ============ ============
The accompanying notes are an integral part of these consolidated financial statements.
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficit)
Preferred Stock Common Stock Additional
------------------- ------------------- Paid-In Accumulated
Shares Amount Shares Amount Capital Deficit
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 1998 - $ - 9,813,916 $ 981 $192,209 $ (519,844)
Recapitalization 60,000 6 189,312 19 (25) -
Common stock issued for cash at
$1.65 per share - - 7,572 1 12,499 -
Capital contributions, 1999 - - - - 60,000 -
Net loss for the year ended
December 31, 1999 - - - - - (212,220)
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 1999 60,000 6 10,010,800 1,001 264,683 (732,064)
Conversion of preferred shares
to common stock (60,000) (6) 36,000 4 2 -
Common stock issued for cash at
prices ranging from $0.83 to $2.50
per share - - 193,500 19 227,482 -
Common stock issued for cash and
services at $1.67 per share - - 50,400 5 83,995 -
Common stock issued for services
at $1.67 per share - - 78,000 8 129,992 -
Common stock issued for conversion
of debt at $1.64 per share - - 19,050 2 31,248 -
Recapitalization - - 250,000 25 (25) -
Common stock issued for cash at
$0.047 per share - - 94,000 9 4,377 -
Common stock issued for services
at $1.00 per share - - 50,000 5 49,995 -
Net loss for the year ended
December 31, 2000 - - - - - (485,439)
-------- -------- ---------- ------- --------- ------------
Balance, December 31, 2000 - - 10,781,750 1,078 791,749 (1,217,503)
Net income for the six months ended
June 30, 2001 (unaudited) - - - - - 81,285
-------- -------- ---------- ------- --------- ------------
Balance, June 30, 2001 (unaudited) - $ - 10,781,750 $ 1,078 $791,749 $(1,136,218)
======== ======== ========== ======= ========= ============
The accompanying notes are an integral part of these consolidated financial statements.
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months Ended
June 30,
----------------------------
2001 2000
------------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 81,285 $(256,656)
Adjustments to reconcile net income (loss) to
net cash provided (used) by operating activities:
Depreciation 456 455
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (300,653) (110,988)
Increase (decrease) in accrued expenses 6,000 (5,829)
Increase (decrease) in accounts payable 260,111 33,508
------------ -----------
Net Cash Provided (Used) by Operating Activities 47,199 (339,510)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES - -
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment on notes payable - related party - (50,000)
Proceeds from issuance of common stock - 393,251
----------- ------------
Net Cash Provided by Financing Activities - 343,251
----------- ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 47,199 3,741
CASH AT BEGINNING OF PERIOD 45 5,580
----------- -----------
CASH AT END OF PERIOD $ 47,244 $ 9,321
============ ===========
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash Paid For:
Interest $ - $ -
Income taxes $ - $ -
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 1 ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
The consolidated financial statements presented are those
of Syndication Net.com, Inc. (formerly Life2K.com, Inc.) (Syndication)
and its wholly-owned subsidiary, Kemper Pressure Treated Forest
Products, Inc. (Kemper). Collectively, they are referred to herein as
the "Company". Syndication was incorporated under the name of
Generation Acquisition Corporation (Generation) on March 25, 1999
under the laws of the State of Delaware to engage in any lawful act or
activity. Effective August 16, 1999, Life2K.com, Inc. (Life2K) issued
16,200,000 shares of its common stock and 60,000 shares of its
preferred stock in exchange for the issued and outstanding stock of
Kemper. Effective October 13, 2000, pursuant to an Agreement and Plan
of Organization between Generation Acquisition Corporation and Life2K,
Generation Acquisition Corporation issued 10,387,750 shares of its
outstanding common stock for 100% of the outstanding shares of Life2K.
As part of the transaction, Life2K was merged with and into Generation
Acquisition Corporation, Life2K was dissolved and Generation
Acquisition Corporation changed its name to Syndication Net.com, Inc.
Kemper was incorporated on December 28, 1987 under the State laws of
Mississippi. Kemper was organized to procure, buy, sell and harvest
forest products for treating poles, conventional lumber and wood
products, as well as preserve and treat wood and forest products for
sale in wholesale and retail markets.
On October 9, 1997, Kemper entered into an asset purchase
agreement and lease assignment under which it conditionally sold
all of its assets as well as reassigned its lease related to
its manufacturing enterprise. From that time, Kemper has acted as
a retail broker, having eliminated virtually all of its
manufacturing capacity.
At the time of the acquisition of Kemper, Life2K was essentially
inactive, with no operations and minimal assets. Additionally,
the exchange of Life2K's common stock for the common stock of Kemper
resulted in the former stockholders of Kemper obtaining control of
Life2K. Accordingly, Kemper became the continuing entity for
accounting purposes, and the transaction was accounted for as a
recapitalization of Kemper with no adjustment to the basis of
Kemper's assets acquired or liabilities assumed. For legal
purposes, Life2K was the surviving entity.
At the time of the acquisition of Life2K, Syndication was
essentially inactive, with no operations and minimal assets.
Additionally, the exchange of Syndication's common stock for
the common stock of Life2K resulted in the former stockholders
of Life2K obtaining control of Syndication. Accordingly, Life2K
became the continuing entity for accounting purposes, and the
transaction was accounted for as a recapitalization of Life2K
with no adjustment to the basis of Life2K's assets acquired
or liabilities assumed. For legal purposes, Syndication was
the surviving entity.
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial statements
June 30, 2001 and December 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
b. Accounting Method
The Company's consolidated financial statements are prepared using
the accrual method of accounting. The Company has elected a
December 31 year end.
c. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity
of three months or less when purchased to be cash equivalents.
d. Accounts Receivable
Accounts receivable consist entirely of an amount due from one
customer. As management of the Company believes the amount to be
fully collectible, no allowance for doubtful accounts has been recorded
at June 30, 2001 and December 31, 2000.
e. Basic Loss Per Share
The computations of basic loss per share of common stock are based
on the weighted average number of common shares outstanding during the
period of the consolidated financial statements as follows:
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- --------------------------
2001 2000 2001 2000
------------ ------------ ------------ ------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Income (loss) (numerator) . $ 50,146 $ (191,123) $ 81,285 $ (256,656)
Weighted average shares
outstanding (denominator) 10,781,750 17,180,975 10,781,750 17,180,975
------------ ------------ ------------ ------------
Basic income (loss) per
share. . . . . . . . . . . $ 0.00 $ (0.01) $ 0.01 $ (0.01)
============ ============ ============ ============
f. Change in Accounting Principle
The Company has adopted the provisions of FASB Statement No. 138 "Accounting for
Certain Derivative Instruments and Hedging Activities, (an amendment of FASB
Statement No. 133.)" Because the Company had adopted the provisions of FASB
Statement No. 133, prior to June 15, 2000, this statement is effective for all
fiscal quarters beginning after June 15, 2000. The adoption of this principle
had no material effect on the Company's consolidated financial statements.
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial statements
June 30, 2001 and December 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
f. Change in Accounting Principle (Continued)
The Company has adopted the provisions of FASB Statement No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities
(a replacement of FASB Statement No. 125.)" This statement provides accounting
and reporting standard for transfers and servicing of financial assets and
extinguishments of liabilities. Those standards are based on consistent
application of a financial-components approach that focuses on control. Under
that approach, the transfer of financial assets, the Company recognized the
financial and servicing assets it controls and the liabilities it has incurred,
derecognizes financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. This statement provides consistent
standards for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. This statement is effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after March 31, 2001. This statement is effective for recognition and
reclassification of collateral and for disclosures relating to securitization
transactions and collateral for fiscal years ending after December 15, 2000.
The adoption of this principle had no material effect on the Company's
consolidated financial statements.
The Company has adopted the provisions of FIN 44 "Accounting for Certain
Transactions Involving Stock Compensation (an interpretation of APB Opinion No.
25.)". This interpretation is effective July 1, 2000. FIN 44 clarifies the
application of Opinion No. 25 for only certain issues. It does not address any
issues related to the application of the fair value method in Statement No. 123.
Among other issues, FIN 44 clarifies the definition of employee for purposes of
applying Opinion 25, the criteria for determining whether a plan qualifies as a
noncompensatory plan, the accounting consequence of various modifications to the
terms of a previously fixed stock option or award, and accounting for an
exchange of stock compensation awards in a business combination. The adoption
of this principle had no material effect on the Company's consolidated financial
statements.
g. Property and Equipment
Property and equipment is recorded at cost. Major additions and improvements
are capitalized. The cost and related accumulated depreciation of equipment
retired or sold are removed from the accounts and any differences between the
undepreciated amount and the proceeds from the sale are recorded as gain or loss
on sale of equipment. Depreciation is computed using the straight-line method
over a period of five years.
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
h. Provision for Taxes
At December 31, 2000, the Company had net operating loss carryforwards of
approximately $1,217,000 that may be offset against future taxable income
through 2020. No tax benefit has been reported in the consolidated financial
statements because the potential tax benefits of the net operating loss
carryforwards are offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net
operating loss carryforwards for Federal income tax reporting purposes are
subject to annual limitations. Should a change in ownership occur, net
operating loss carryforwards may be limited as to use in future years.
i. Principles of Consolidation
The consolidated financial statements include those of Syndication and its
wholly-owned subsidiary, Kemper.
Any material intercompany accounts and transactions have been eliminated.
j. Estimates
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.
k. Advertising
The Company follows the policy of charging the costs of advertising to expense
as incurred.
l. Revenue Recognition Policy
Revenue is recognized upon shipment of goods to the customer.
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
m. Concentrations of Risk
Concentration in the Volume of Business Transacted with a Particular
- ---------------------------------------------------------------------------
Supplier
- --------
The Company currently engages the services of only one supplier, which provides
100% of its wood treating and procurement services. Although there are a
limited number of manufacturers which provide wood treating and procurement
services, management believes that other suppliers could provide these services
on comparable terms. A change in suppliers, however, could cause a delay in
manufacturing and a possible loss of sales, which would affect operating results
adversely.
Concentration in the Volume of Business Transacted with a Particular
- ---------------------------------------------------------------------------
Customer
- ---------
The Company currently has one major customer which accounts for 100% of its
revenues. Although the Company is continually negotiating contracts with
potential customers, a loss of this customer could greatly affect the operating
results of the Company.
n. Unaudited Consolidated Financial Statements
The accompanying unaudited consolidated financial statements include all of the
adjustments which, in the opinion of management, are necessary for a fair
presentation. Such adjustments are of a normal recurring nature.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
June 30, December 31,
2001 2000
---------- -------------
(Unaudited)
Office equipment $ 4,550 $ 4,550
Accumulated depreciation (3,186) (2,730)
----------- ------------
Net property and equipment $ 1,364 $ 1,820
============ ============
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 3 - ACCRUED EXPENSES
At June 30, 2001 and December 31, 2000, accrued expenses consist of $28,613 and
$22,613, respectively, of interest payable associated with the related party -
notes payable (Note 6).
NOTE 4 - COMMITMENTS AND CONTINGENCIES
On May 18, 1999, the Company entered into an agreement to acquire a reporting
United States corporation with audited financial statements showing no material
assets or liabilities. The Company agreed to pay $100,000 for its services in
regard to the transaction. Payment of this amount is to be made as follows:
$10,000 on execution of the agreement, $30,000 on delivery of offering materials
under rules 504 and/or 506, $35,000 on the business combination and $25,000 on
the filing of a Form 8-K with the Securities and Exchange Commission. If the
Company does not elect to make any offerings under rules 504 or 506, then the
payment due on the business combination will be $60,000.
On April 7, 1999, the Company ratified its corporate service consulting
agreement with Source Management Services, Inc. (Source), a related company
owned by a significant shareholder. Source is to oversee the general activities
of the Company on a day-to-day basis, develop and execute a business plan, and
assist in other ongoing administrative issues. For the year ended December 31,
2000, the Company agreed to pay Source the greater of $150 per hour or $17,500
per month. The Company has also agreed to award Source a bonus of 5% of the
outstanding shares of stock when the Company's securities are traded on any
United States stock exchange.
On September 19, 2000, the Company entered into a Services and Consulting
Agreement with Tri-State Metro Territories, Inc. (Tri-State), a business that
sells franchised hair coloring salon units under the copyright name of
"haircolorxpress." The Company was retained as Tri-State's consultant to assist
in the development of management, sales and marketing of "haircolorxpress"
franchised hair coloring salon units. The Company received a total of $51,300
during 2000 as a result of the consulting agreement with Tri-State. The Company
received an additional $132,485 during the six months ended June 30, 2001 under
the consulting agreement. The agreement is for a term of twenty years with up
to four, five-year extensions. The Company is currently in negotiations with a
number of companies that are interested in entering into similar consulting
agreements.
NOTE 5 - PREFERRED STOCK
The shareholders of the Company have authorized 20,000,000 shares of preferred
stock with a par value of $0.0001. The terms of the preferred stock are to be
determined when issued by the board of directors of the Company.
On January 1, 2000, the remaining 60,000 Series A preferred shares were
converted into common shares, thus, at December 31, 2000, no preferred shares
were outstanding.
SYNDICATION NET.COM, INC. AND SUBSIDIARY
Notes to the Consolidated Financial Statements
June 30, 2001 and December 31, 2000
NOTE 6 - NOTES PAYABLE - RELATED PARTY
Notes payable to related parties consisted of the following:
June 30, December 31,
<BTB> 2001 2000
--------- -------------
(Unaudited)
Note payable to a related party, due on demand,
plus interest at 12% per annum, unsecured. $ 105,000 $ 105,000
Less: Current Portion (105,000) (105,000)
------------ -------------
Long-Term Notes Payable to Related Parties $ - $ -
============ =============
NOTE 7 - GOING CONCERN
The Company's 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 historically incurred significant losses which have
resulted in an accumulated deficit of $1,217,503 at December 31, 2000 which
raises substantial doubt about the Company's ability to continue as a going
concern. The accompanying consolidated financial statements do not include any
adjustments relating to the recoverability and classification of liabilities
that might result from the outcome of this uncertainty.
It is management's intent to acquire Internet and E-commerce companies as well
as develop a software for online bidding services. Management believes this
bidding service process will allow the Company to bid and package contracts
online for the treatment, sale and shipment of processed wood. In addition,
management believes that being a publicly traded company will enhance their
negotiating leverage as well as provide a source of additional funding if
needed.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion is intended to provide an analysis of
SyndicationNet's financial condition and plan of operation and should be read in
conjunction with SyndicationNet's financial statements and its related notes.
The matters discussed in this section that are not historical or current facts
deal with potential future circumstances and developments. Such forward-looking
statements include, but are not limited to, the development plans for the growth
of SyndicationNet, trends in the results of SyndicationNet's development,
anticipated development plans, operating expenses and SyndicationNet's
anticipated capital requirements and capital resources. SyndicationNet's actual
results could differ materially from the results discussed in the
forward-looking statements.
Although SyndicationNet believes that the expectations reflected in the
forward-looking statements and the assumptions upon which the forward-looking
statements are based are reasonable, these expectations and assumptions may not
prove to be correct.
General
SyndicationNet.com, Inc., a Delaware corporation (the "Company"), is a
start-up holding company which was formed to acquire controlling interests in or
to participate in the creation of, and to provide financial, management and
technical support to, development stage businesses. SyndicationNet's strategy is
to integrate affiliated companies into a network and to actively develop the
business strategies, operations and management teams of the affiliated entities.
SyndicationNet currently has one wholly owned subsidiary, Kemper Pressure
Treated Forest Products, Inc. Kemper is engaged in the retail brokerage
business of preservative treated lumber such as utility poles, bridge pilings,
timber and guardrail posts. Kemper is also developing computer software
applications that will enable Kemper to manage on-line bidding for the
treatment, sale and shipment of processed wood.
SyndicationNet was originally incorporated in Delaware on March 25, 1999
under the name Algonquin Acquisition Corporation. In August 1999, Algonquin
changed its name to Life2K.com, Inc. On August 16, 1999, Life2K.com, Inc.
acquired all the outstanding shares of Kemper Pressure Treated Forest Products,
Inc., an operating Mississippi company. On October 13, 2000, Life2K.com, Inc.
was acquired by Generation Acquisition Corporation, a public reporting company,
as a wholly owned subsidiary. Subsequently, Life2K.com, Inc. was merged with
and into Generation Acquisition Corporation, which simultaneously changed its
name to SyndicationNet.com, Inc.
Plan of Operation
(i) The Company believes that it currently has enough cash on hand to
enable it to operate for the next twelve months. The Company's revenues and
profits, if any, will depend upon various factors, including whether the Company
will be able to effectively evaluate the overall quality and industry expertise
of potential acquisition candidates, whether the Company will have the funds to
provide seed capital and mezzanine financing to e-commerce and Internet-related
companies and whether the Company can develop and implement business models
that capitalize on the Internet's ability to provide solutions to traditional
companies. The Company may be materially adversely affected if it is unable to
secure sufficient funds to finance its proposed acquisitions and operating
costs.
The Company, primarily through the marketing efforts of its executive
officers, directors and consultants, intends to locate B2B Internet-related
companies and/or traditional brick and mortar businesses for which the Company
will act as a general corporate consultant and intends to locate development
stage companies as acquisition candidates. Over the next twelve months, the
Company's management team, led by retired United States Senator Vance Hartke,
hopes to take advantage of the resources of its directors, specifically in the
areas of accounting, e-commerce, finance and politics, to enable the Company to
consult with, acquire and integrate B2B e-commerce companies and/or traditional
brick and mortar businesses and to leverage the Company's collective management
resources and experiences. The Company intends to actively explore synergistic
opportunities such as cross marketing efforts within the network of companies it
will consult with or acquire.
The Company intends for its management team to identify companies that are
positioned to succeed and to assist those companies with financial, managerial
and technical support. Over the next 12 months the Company intends to increase
revenue and gross profit margin by focusing and expanding its consulting
services. It is management's belief that potential acquisition targets can be
better identified and assessed for risk if the Company becomes involved with
various companies on a consulting capacity. The Company's strategy is to
integrate affiliated companies into a network and to actively develop the
business strategies, operations and management teams of the affiliated entities.
PERIOD ENDED JUNE 30, 2001 COMPARED TO JUNE 30, 2000 FOR SYNDICATIONNET TOGETHER
WITH ITS WHOLLY OWNED SUBSIDIARY, KEMPER PRESSURE TREATED FOREST PRODUCTS, INC.
For the period ended June 30, 2001, the Company's revenues increased to
$4,467,577 from $3,380,538 for the period ended June 30, 2000. The
increase is primarily attributed to the growth of the Company's wholly
owned subsidiary, Kemper Pressure Treated Forest Products, Inc.
Cost of sales were $4,439,708 for the period ended June 30, 2001,
compared to $3,357,920 for the period ended June 30, 2000. This increase in
cost of sales was primarily attributable to an increase in the
Company's revenue.
The net income for the period ended June 30, 2001 was $81,285 compared
to net losses of $256,656 for the period ended June 30, 2000.
Total current assets increased to $920,977 at June 30, 2001 from
$573,581 at December 31, 2000, due primarily to the increase of the
Company's accounts receivable. Total current liabilities increased from
$998,257 at December 31, 2000 to $1,264,368 at June 30, 2001.
The Company has not paid dividends on its common stock, and intends to
reinvest its earnings to support its working capital and expansion requirements.
The Company intends to continue to utilize its earnings in the development and
expansion of the business and does not expect to pay cash dividends in the
foreseeable future. It is the belief of management that as the Company moves
toward an active trading status the ability to raise capital by stock issuance
to effect its business plan is enhanced.
(ii) The Company does not expect to purchase or sell any manufacturing
facilities or significant equipment over the next twelve months.
(iii) The Company does not foresee any significant changes in the number
of its employees over the next twelve months.
PART 2 - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
SyndicationNet is not a party to any current litigation.
ITEM 2. CHANGES IN SECURITIES
Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
On May 31, 2001 the Company filed an amended registration statement
on Form SB-2/A with the Securities and Exchange Commission to register
561,500 shares of its common stock held by thirty-five of its
securityholders.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K
(a) Exhibits
3.1* Certificate of Incorporation, filed with the registration statement of
Generation Acquisition Corporation on Form 10-SB (file No. 000-29701 filed
with the Commission and incorporated herein by reference
3.2* By-Laws of the Company, filed with the registration statement of Generation
Acquisition Corporation on Form 10-SB (file No. 000-29701) filed with the
Commission and incorporated herein by reference
4.1* Agreement and Plan of Reorganization among Generation Acquisition
Corporation, Life2K, Inc., and the shareholders of Life2K, Inc. filed on
Form 8-K with the Commission on November 6, 2000 and incorporated herein by
reference
4.2* Agreement and Plan of Merger between Generation Acquisition Corporation and
Life2K Acquisition Corporation filed on Form 8-K with the Commission on
November 6, 2000 and incorporated herein by reference
4.3* Consulting agreement between SyndicationNet.com, Inc. and Tri-State Metro
Territories, Inc. dated September 19, 2000, filed with the Commission as
Exhibit 4.3 in a registration statement on Form SB2 filed on February 13,
2001
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* Previously filed
(b) Reports on Form 8-K
On July 5, 2001 SynidcationNet filed a Form 8-KA which contained the
financial statements for its fiscal year ended December 31, 1998 and 1999
audited by the independent public accounting firm of Jones, Jensen & Company LLC
together with the unaudited financial statements for the period ending September
30, 2000.
SIGNATURES
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.
SYNDICATIONNET.COM, INC.
By: /s/ Cynthia White
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Chief Financial Officer and
Principal Accounting Officer
Dated: August 6, 2001