UNITED STATES
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 June 30, 2002
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
Commission file number: 333-95549
HeavenExpress.com, Inc.
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(Exact name of small business issuer as specified in its charter)
Florida 65-0974212
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State or other jurisdiction of I.R.S. Employer
incorporation or organization Identification No.
2531 S.E. 14th Street, Pompano Beach, Florida 33062
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(Address of principal executive office)
(954) 782-4547
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(Issuer's telephone number including area code)
(All communications to)
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Brenda Lee Hamilton, Esquire
Hamilton, Lehrer & Dargan, P.A.
2 East Camino Real, Suite 202
Boca Raton, Florida 33432
(561) 416-8956
As of October 11, 2002, we had 8,116,000 shares of our common stock issued and
outstanding.
HeavenExpress.com, Inc.
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
C O N T E N T S
Balance Sheet
Statements of Loss and Accumulated Deficit During the Development Stage
Statements of Cash Flows
Notes to Financial Statements
HEAVENEXPRESS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AT JUNE 30, 2002
ASSETS
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CURRENT ASSETS
- ------------------------------------------------------------------
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 78
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TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $ 78
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LIABILITIES AND DEFICIENCY IN ASSETS
- ------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . $ 230
Note payble - officer. . . . . . . . . . . . . . . . . . . . . . 34,484
Accrued expenses and other liabilities . . . . . . . . . . . . . 3,300
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TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . 38,014
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DEFICIENCY IN ASSETS
- ------------------------------------------------------------------
Preferred stock ($.001 par value, 10,000,000 shares authorized:
none issued and outstanding)
Common stock ($.001 par value, 200,000,000 shares authorized:. . -
8,116,000 issued and outstanding). . . . . . . . . . . . . . . . 8,116
Additional paid-in-capital . . . . . . . . . . . . . . . . . . . 46,834
Deficit accumulated during development stage . . . . . . . . . . (92,886)
TOTAL DEFICIENCY IN ASSETS . . . . . . . . . . . . . . . . . . (37,936)
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TOTAL LIABILITIES AND DEFICIENCY IN ASSETS . . . . . . . . . . $ 78
=========
HEAVENEXPRESS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001
Cumulative-to
Three months ended June 30, Six months ended June 30, date since
2002 2001 2002 2001 inception
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OPERATING EXPENSES:
- -----------------------------------
Professional and consulting fees. $ 3,522 $ 7,414 $ 7,019 $ 9,851 $ 87,698
Interest expense. . . . . . . . . 750 438 1,502 875 4,272
General and administrative. . . . 195 960 240 1,919 916
----------- ----------- ----------- ----------- -----------
TOTAL EXPENSES. . . . . . . . . . 4,467 8,812 8,761 12,645 92,886
LOSS BEFORE TAXES . . . . . . . . (4,467) (8,812) (8,761) (12,645) (92,886)
----------- ----------- ----------- ----------- -----------
INCOME TAX (PROVISION) BENEFIT. . -0- -0- -0- -0- -0-
NET INCOME (LOSS) . . . . . . . . $ (4,467) $ (8,812) $ (8,761) $ (12,645) $ (92,886)
----------- ----------- ----------- ----------- -----------
Net loss per common share
Basic & fully diluted . . . . . . $ ** $ ** $ ** $ ** $ (0.01)
=========== ========== ========== ========== ===========
Weighted average common
shares outstanding. . . . . . . . 8,116,000 8,116,000 8,116,000 8,116,000 8,058,000
=========== ========== ========== ========== ===========
** Less than $.01
HEAVENEXPRESS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
Cumulative to
date since
2002 2001 inception
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CASH FLOWS FROM OPERATING ACTIVITIES:
- ----------------------------------------------------
Net income (loss). . . . . . . . . . . . . . . . . $(8,761) $(12,645) $ (92,886)
Adjustments to reconcile net income (loss) to net
cash provided by (used in)
operating activities:
Common stock issued for services . . . . . . . . -0- -0- 53,600
Increase (decrease) in operating liabilities:
Accounts payable . . . . . . . . . . . . . . . (1,167) 5,024 230
Accrued expenses . . . . . . . . . . . . . . . 2,552 125 6,822
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NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES . . . . . . . . . . . . . (7,376) (7,496) (32,234)
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Proceeds from sales of common stock. . . . . . . . -0- -0- 1,350
Contributed capital. . . . . . . . . . . . . . . . -0- 8,756 2,776
Proceeds from note payable to officer. . . . . . . 7,380 -0- 28,186
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NET CASH PROVIDED BY
FINANCING ACTIVITIES . . . . . . . . . . . . . 7,380 8,756 32,312
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NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS. . . . . . . . . . . . . . . . . . 4 1,260 78
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CASH AND CASH EQUIVALENTS:
- ----------------------------------------------------
Beginning of period. . . . . . . . . . . . . . 74 40 -0-
End of period. . . . . . . . . . . . . . . . . $ 78 $ 1,300 $ 78
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NON-CASH FINANCING ACTIVITIES:
- ----------------------------------------------------
Common stock issued for services . . . . . . . . . $ -0- $ -0- $ 53,600
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NOTE 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - HeavenExpress.Com, Inc. (A Development Stage Company) (the
Company) is a Florida corporation formed in December 1999, primarily to provide
memorial products and services through the Internet.
Unaudited Financial Statements - The unaudited financial statements as of and
for the three and six months ended June 30, 2002 and 2001, have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six months ended June 30,
2002 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2002.
Use of 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
disclosures of contingent assets and liabilities at the date of the dated
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.
Income Taxes - The Company follows Statement of Financial Accounting Standards
No. 109 (FAS 109), "Accounting for Income Taxes". FAS 109 is an asset and
liability approach that requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of the difference in events
that have been recognized in the Company's financial statements compared to the
tax returns.
Advertising - Advertising costs will be expensed as incurred.
Basic Net Loss Per Common Share - The Company follows the provisions of FASB
Statement No. 128 (SFAS No. 128), "Earnings Per Share". SFAS No. 128 requires
companies to present basic earnings per share (EPS) and diluted EPS, instead of
primary and fully diluted EPS presentations that were formerly required by
Accounting Principles Board Opinion No. 15, "Earnings Per Share". Basic EPS is
computed by dividing net income or loss by the weighted average number of common
shares outstanding during each year.
Cash and Cash Equivalents - The Company considers all highly liquid investments
with original maturities of three months or less to be cash equivalents.
Development Stage Company - The Company has been devoting its efforts to
activities such as raising capital, establishing sources of information, and
developing markets for its planned operations. The Company has not yet generated
any revenues and, as such, it is considered a development stage company.
NOTE 2. RELATED PARTY TRANSACTIONS
The note payable to officer at June 30, 2002, was $33,734 which includes accrued
interest of $4,272. This note is unsecured, due on demand, and provides for
annual interest at 12%.
NOTE 3. INCOME TAXES
At June 30, 2002, the Company had a net operating loss carryforward of
approximately $92,886. This loss may be carried forward to offset federal income
taxes in future years through the year 2021. However, if subsequently there are
ownership changes in the Company, as defined in Section 382 of the Internal
Revenue Code, the Company's ability to utilize net operating losses available
before the ownership change may be restricted to a percentage of the market
value of the Company at the time of the ownership change. Therefore, substantial
net operating loss carryforwards could, in all likelihood, be limited or
eliminated in future years due to a change in ownership as defined in the Code.
The utilization of the remaining carryforwards is dependent on the Company's
ability to generate sufficient taxable income during the carryforward periods
and no further significant changes in ownership.
SFAS No. 109 provides for the recognition and measurement of deferred income tax
benefits based on the likelihood of their realization in future years. A
valuation allowance must be established to reduce deferred income tax benefits
if it is more likely than not that, a portion of the deferred income tax
benefits will not be realized. It is Management's opinion that the entire
deferred tax benefit of $15,000 resulting from the net operating loss
carryforward may not be recognized in future years. Therefore, a valuation
allowance equal to the deferred tax benefit of $15,000 has been established,
resulting in no deferred tax benefits as of the balance sheet date.
NOTE 4. GOING CONCERN AND MANAGEMENT'S PLANS
As shown in the accompanying financial statements, the Company incurred net
losses of $4,467 for the three months ended June 30, 2002, and has an
accumulated deficit of $92,886. As a result, the Company has a negative working
capital and a deficiency in assets. The ability of the Company to continue as a
going concern is dependent upon its ability to obtain financing and achieve
profitable operations. The Company anticipates meeting its cash requirements
through the financial support of its management until such time as it begins
operations. The financial statements do not include any adjustments that might
be necessary should the Company be unable to continue as a going concern.
NOTE 5. COMMITMENTS AND CONTINGENCIES
The Company has its executive offices in the residence of its Vice-President.
The Company occupies approximately 150 square feet, free of charge.
NOTE 6. DEFICIENCY IN ASSETS
Preferred Stock - The Board of Directors is authorized to establish the rights
and preferences of preferred stock. To date, the Board of Directors has not
established those rights and preferences.
Common Stock - In February 2002, the Board of Directors approved a four (4) for
one (1) stock split. In connection with this stock split the Board of Directors
amended the Articles of Incorporation and the Company is now authorized to issue
200 million shares of common stock. Retroactive effect has been given to the
stock split in these financial statements.
HeavenExpress.com, Inc.
(A Development Stage Company)
ITEM 2. Plan Of Operation
Forward-Looking Statements
This report on Form 10-QSB contains forward looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The words or phrases "would be," "will allow,"
"intends to," "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "project," or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Actual results could differ materially
from those projected in the forward looking statements as a result of a number
of risks and uncertainties, including: (a) lack of demand for our products and
services being purchased via the Internet; (b) competitive products and pricing;
(c) limited amount of resources devoted to advertising; and (d) those risks
factors contained in our Form SB-2 registration statements. Statements made
herein are as of the date of the filing of this Form 10-QSB with the Securities
and Exchange Commission and should not be relied upon as of any subsequent date.
Unless otherwise required by applicable law, we do not undertake, and we
specifically disclaim any obligation, to update any forward-looking statements
to reflect occurrences, developments, unanticipated events or circumstances
after the date of such statement.
Our Operations from Our Inception to June 30, 2002
We were incorporated on December 9, 1999. Since our inception through June 30,
2002, we have no revenues and we have an accumulated deficit of $92,886.
Since our inception to June 30, 2002, we have accomplished the following:
Developed our business plan
Raised Capital - We raised $1,350.00 for our operations through the sale of
private placement securities;
Appointment of Board Members - We appointed Charles Scheuerman as a second
member of our Board of Directors;
Obtained our website address - We obtained the address of www.heavenepxress.com
Development of a website - We developed our website content;
Graphics - We designed the graphics for our website;
Website Designers - We hired Sensory Design Group, Inc. who created our website;
Our website became operational on May 21, 2000.
Our Future Plan of Operations
Our plan of operations over the next twelve months will consist of the
following:
A. Our management plans to redesign and reformat our website to accomplish the
following goals:
o Create a user-friendly environment;
o Create an aesthetically pleasing website; and
o Create an organizational format to the website as reflected in B below that
offers users a more organized product and service description.
To accomplish the above goals, management plans to locate computer consultants
to design and upgrade our website. We have not yet located consultants to
perform these services. Until we locate and retain such consultants, we will
continue to conduct our operations with our originally formatted website. The
components of our future website are described below under "Our Future Plan of
Operations". We expect that our new website will be operational by February 28,
2003.
B. New Website. Our website will contain an entirely new organizational format,
as follows:
(General Category): Retail products with the following sub-categories:
o Burial vaults;
o Garments;
o Caskets;
o Monuments;
o Urns;
o Flowers;
o Sympathy gifts;
o Cards;
o Stone and bronze memorials; and
o Books.
(General Category): Funeral Services with the following sub-categories:
o Traditional funeral arrangements;
o Theme funeral arrangements (such as parades); and
o Denominational funeral arrangements
Within each sub-category above, the user will be able to link to various sites
that retail that type merchandise or describe the particular type of information
within each sub-category. For instance, if users wish to click on "caskets"
under the general category, "Retail Products", they will then view a page that
contains a listing of all caskets which we offer through various casket
manufacturers retailers.
Our new website will also contain a "print function" that will print substantive
information from linked retailer websites while omitting images and pictures and
an e-mail function enabling users to automatically E-mail linked retailer
websites to other E-mail addresses. We will also add an "advertiser" management
system to simplify the addition, removal, and use of links from different
sources. We will also create a new professional logo, color scheme, and
navigation layout to the website to improve our awareness of our website
We expect that all of the above described aspects of our new website will be
operational by February 28, 2002.
C. New Content. Between now and February 28, 2003 we expect to add content on
our website that will demonstrate the price advantage of ordering online
memorial products via our website compared to prices offered at retail
establishments, such as physically situated funeral homes. In addition, to
attract additional visitors to our website, we plan to eventually provide
educational and informative content, as follows:
o Quality of various memorial and funeral products and services, such as the
different types of wood, metal, bronze and copper caskets;
o Laws and consumer rights pertaining to the funeral and memorial industry;
o Customs and etiquette regarding funeral attendance and appropriate charitable
contributions in memory of the deceased, sympathy card content, expressing
personal thoughts, and considerations pertaining to various religions; and
o Legal ramifications and advantages and disadvantages of pre-paid funeral
arrangements.
We originally planned to have this additional content available on our website
approximately nine months after we established our new website; however, our
time estimate for completion of our new content is now February 28, 2003. We
expect a cost of $1,500 pertaining to establishing this additional content.
D. Additional Sources of Revenue. Our President plans to actively seek potential
sources of revenues from various establishments. She plans to contact funeral
homes and online obituaries to establish relationships that will generate
potential sources of revenue, as follows:
o Referral fees by referring business to these entities from business leads
obtained from contact with our website;
o Advertising fees from advertising these establishments on our website;
o Establishing relationships with vendors of memorial products that will sell
their products through our website;
o Developing an apparatus by which we will receive transaction fees from
e-commerce applications;
o Developing a plan to obtain advertising of other memorial based businesses on
our website that will generate advertising fees;
o Establishing links with other third party vendors of memorial based products,
wherein the third party vendors will provide us with a commission from third
party e-commerce transactions; and
o Including testimonials from our customers on our website to demonstrate the
quality of our service.
We expect that we will accomplish these goals by February 28, 2003. We expect
costs of $2,500 pertaining to the establishment of these revenue sources.
E. Advertising. We plan to obtain small advertisements in trade magazines. We
estimate that these advertisements will cost between $75.00 and $500.00
depending upon the publication, number of advertisements and length of
advertisements. We expect to advertise in local written publications in South
Florida and large cities. These advertisements will cost between $150.00 and
$1,500.00 per advertisement. We expect to spend approximately $10,000 for these
type advertisements. We will place these advertisements only if we have
sufficient revenues or financing from other sources.
Liquidity and Capital Resources. As of June 30, 2002, we had limited cash
capital resources of only $78. Our business plan includes the following
estimated capital expenditures of $32,000 over the next twelve months: $10,000
for advertising; $2,500 to establish new sources of revenue; $1,500 to improve
the content of our website; $600 for paying our server over the next twelve
months; $5,000 to upgrade our website and $12,000 for working capital.
Our existing cash is insufficient to fund our operations. Moreover, we have
incurred accumulated net losses of $92,886 since our inception to June 30, 2002.
As a result, we have a negative working capital and a deficiency in assets. Our
ability to continue as a going concern is dependent upon our ability to obtain
financing and achieve profitable operations. If our revenues are insufficient
to meet our needs, our President/director or director plans to loan us funds to
conduct our operations; however, we have no agreement with our
president/director or director to do so and they are under no obligation to loan
us funds. Moreover, there are no assurances that our president/director or
director will have sufficient funds to make these loans. Accordingly, there are
no assurances that we will receive loans from our president/director or
director. We have no compensation agreements to our president/director or
director in connection with any loans that either may provide to us. If our
president/director or director is unable or unwilling to make loans to us
necessary to implement our continuing plan of operations, we will need
additional financing through traditional bank financing or a debt or equity
offering; however, because we are a development stage company with little
operating history and a poor financial condition, we may be unsuccessful in
obtaining such financing or the amount of the financing may be minimal and
therefore inadequate to implement our continuing plan of operations.
Accordingly, there can be no assurance that we will be able to obtain financing
on satisfactory terms or at all, or raise funds through a debt or equity
offering. In addition, if we only have nominal funds by which to conduct our
operations, we may have to curtail advertising or be unable to conduct any
advertising, both of which will negatively impact development of the
HeavenExpress.com name and reputation.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER EVENTS
Subsequent Events.
Our Board of Directors unanimously approved a forward stock split of our common
stock at a ratio of four (4) shares for every one (1) share held. The forward
split became effective on February 22, 2002. As a result of the split, we have
8,116,000 shares of common stock issued and outstanding. Prior to the split, we
had 2,029,000 shares of Common Stock outstanding.
We increased our authorized capital shares in proportion to the forward
stock split. Our authorized capital stock consists of 200,000,000 shares of
common stock. Prior to the split, we were authorized to issue 50,000,000 shares
of common stock. In connection, with the forward split, we amended our articles
of incorporation.
In May 2002, our President was diagnosed with an illness that resulted in a
surgical operation on the brain which was operated on in September. She is
expected to make full recovery over the next few months. However, this caused a
delay in executing the next step of our business plan until approximately
February 28, 2003. Charles Scheuerman is currently the officer in charge and has
authority to complete all corporate transactions.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBITS
3.1 Articles of Incorporation*
3.2 Amendment to Articles of Incorporation**
3.2 Bylaws*
4.0 Share Certificate*
*Filed by the Company as exhibits to its Registration Statement on Form SB-2
filed with the Commission on January 27, 2000.
**Filed by the Company as exhibits to its Report on 8-K filed on February 22,
2002.
Reports on Form 8-K.
We hereby incorporate the following documents by reference in this Registration
Statement:
a) Our Form SB-2 Registration Statement filed on May 3, 2001.
b) Our Report on Form 8-K filed with the Commission on February 22, 2002
reporting a forward stock split of our common stock at a ratio of four (4)
shares for every one (1) share held. The forward split became effective on
February 22, 2002.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
HeavenExpress.com, Inc.
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(Registrant)
Date: October 11, 2002
By: /s/ Charles Scheuerman
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Charles Scheuerman, President