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 September 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.
incorporation or organization Employer 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)
Brenda Lee Hamilton, Esquire
Hamilton, Lehrer & Dargan, P.A.
2 East Camino Real, Suite 202
Boca Raton, Florida 33432
(561) 416-8956
As of November 12, 2002, we had 8,116,000 shares of our common stock issued and
outstanding.
HeavenExpress.com, Inc.
(A Development Stage Company)
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
C O N T E N T S
Balance Sheet F-1
Statements of Loss and Accumulated Deficit
During the Development Stage F-2
Statements of Cash Flows F-3
Notes to Financial Statements F-4 - F-6
HEAVENEXPRESS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
AT SEPTEMBER 30, 2002
ASSETS
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CURRENT ASSETS
- ------------------------------------------------------------------
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18
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TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $ 18
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LIABILITIES AND DEFICIENCY IN ASSETS
- ------------------------------------------------------------------
LIABILITIES
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Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . $ 230
Note payable - officer . . . . . . . . . . . . . . . . . . . . . 34,628
Accrued expenses and other liabilities . . . . . . . . . . . . . 3,300
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TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . . . . 38,158
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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 . . . . . . . . . . (93,090)
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TOTAL DEFICIENCY IN ASSETS . . . . . . . . . . . . . . . . . . (38,140)
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TOTAL LIABILITIES AND DEFICIENCY IN ASSETS . . . . . . . . . . $ 18
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The accompanying notes are an integral part of the financial statements.
F-1
HEAVENEXPRESS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
Cumulative-to
Three months ended Sept. 30, Nine months ended Sept. 30, date since
2002 2001 2002 2001 inception
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OPERATING EXPENSES:
- -----------------------------------
Professional and consulting fees. $ 544 $ - $ 7,563 $ 9,558 $ 88,242
Interest expense. . . . . . . . . 350 - 1,102 1,145 3,872
General and administrative. . . . 61 45 301 285 976
----------- ----------- ----------- ----------- -----------
TOTAL EXPENSES. . . . . . . . . . 955 45 8,966 10,988 93,090
----------- ----------- ----------- ----------- -----------
LOSS BEFORE TAXES . . . . . . . . (955) (45) (8,966) (10,988) (93,090)
INCOME TAX
(PROVISION) BENEFIT . . . . . . . -0- -0- -0- -0- -0-
----------- ----------- ----------- ----------- -----------
NET INCOME (LOSS) . . . . . . . . $ (955) $ (45) $ (8,966) $ (10,988) $ (93,090)
=========== =========== =========== =========== ===========
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 8,074,000
=========== =========== =========== =========== ===========
** Less than $.01
The accompanying notes are an integral part of the financial statements.
F-2
HEAVENEXPRESS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
Cumulative to
date since
2002 2001 inception
CASH FLOWS FROM OPERATING ACTIVITIES:
- ----------------------------------------------------
Net income (loss). . . . . . . . . . . . . . . . . $(8,966) $(10,988) $ (93,090)
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) 685 230
Accrued expenses . . . . . . . . . . . . . . . 2,552 1,596 6,822
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NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES . . . . . . . . . . . . . (7,581) (8,707) (32,438)
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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. . . . . . . 7,525 -0- 28,330
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NET CASH PROVIDED BY
FINANCING ACTIVITIES . . . . . . . . . . . . . 7,525 8,756 32,456
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NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS. . . . . . . . . . . (56) 49 18
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CASH AND CASH EQUIVALENTS:
- ----------------------------------------------------
Beginning of period. . . . . . . . . . . . . . 74 40 -0-
End of period. . . . . . . . . . . . . . . . . $ 18 $ 89 $ 18
======== ========= ===========
NON-CASH FINANCING ACTIVITIES:
- ----------------------------------------------------
Common stock issued for services . . . . . . . . . $ -0- $ -0- $ 53,600
======== ========= ===========
The accompanying notes are an integral part of the financial statements.
F-3
HEAVENEXPRESS.COM, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Business Activity - HeavenExpress.Com, Inc. ("the Company"), a development stage
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 nine months ended September 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 nine months ended September
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 September 30, 2002, was $34,628 which includes
accrued interest of approximately $4,900. This note is unsecured, due on demand,
and provides for annual interest at 12%.
NOTE 3. INCOME TAXES
At September 30, 2002, the Company had a net operating loss carryforward of
approximately $93,090. This loss may be carried forward to offset federal income
taxes in various future years through year 2022. 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 $8,966 for the nine months ended September 30, 2002, and has an
accumulated deficit of $93,090. 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.
F-5
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. 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."
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 or no amount of
resources devoted to advertising; (d) limited amount of time our management
devotes to our business; (e) the absence of management experience in the
memorial business or in Internet marketing; (f) if we fail to obtain financing
to conduct our plan of operations, we may be unable to continue in business; (g)
because our President is recovering from a brain related operation, our Plan of
Operations has experienced delays; and (h) absence of any contracts or
arrangements with third party supplies or manufacturers. 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 September 30, 2002
We were incorporated on December 9, 1999. Since our inception through September
30, 2002, we have no revenues and we have an accumulated deficit of $93,090.
Since our inception to September 30, 2002, we have accomplished the following:
- - Developed our business plan;
- - Raised Capital - We raised $1,350 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; and
- - 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:
- - Create a user-friendly environment;
- - Create an aesthetically pleasing website; and
- - 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:
- - Burial vaults;
- - Garments;
- - Caskets;
- - Monuments;
- - Urns;
- - Flowers;
- - Sympathy gifts;
- - Cards;
- - Stone and bronze memorials; and
- - Books.
(General Category): Funeral Services with the following sub-categories:
- - Traditional funeral arrangements;
- - Theme funeral arrangements (such as parades); and
- - 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, 2003.
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:
- - Quality of various memorial and funeral products and services, such as the
different types of wood, metal, bronze and copper caskets;
- - Laws and consumer rights pertaining to the funeral and memorial industry;
- - 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
- - 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. During the entire course of our Plan of
Operations, 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:
- - Referral fees by referring business to these entities from business leads
obtained from contact with our website;
- - Advertising fees from advertising these establishments on our website;
- - Establishing relationships with vendors of memorial products that will sell
their products through our website;
- - Developing an apparatus by which we will receive transaction fees from
e-commerce applications;
- - Developing a plan to obtain advertising of other memorial based businesses on
our website that will generate advertising fees;
- - 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
- - Including testimonials from our customers on our website to demonstrate the
quality of our service.
We originally expected that we would accomplish these goals by February 28,
2003; however, our President has been unsuccessful thus far in accomplishing any
of the above-stated goals and because our President has been ill and is
recovering from surgery, our Plan of Operations has been delayed. Accordingly,
our President will continue these efforts throughout our next twelve months of
operations. 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. At present, we do not have sufficient cash or financing
resources to accomplish this goal; accordingly, we will place these
advertisements only if we have sufficient revenues or financing from other
sources. Even if we do develop sufficient financial resources to conduct our
advertising campaign, we do not expect to begin our advertising until our new
website and website content is completed in February 2003. We will continually
monitor the relative success or failure of these advertisements to determine
whether our advertising campaign requires content adjustment or publication
selection.
Liquidity and Capital Resources. As of September 30, 2002, we had limited cash
capital resources of only $18. 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 $93,090 since our inception to September 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 our company
name and reputation.
ITEM 3. Controls and Procedures
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(a) On September 30, 2002, we made an evaluation of our disclosure controls and
procedures. In our opinion, the disclosure controls and procedures are adequate
because the systems of controls and procedures are designed to assure, among
other items, that 1) recorded transactions are valid; 2) valid transactions are
recorded; and 3) transactions are recorded in the proper period in a timely
manner to produce financial statements which present fairly the financial
condition, results of operations and cash flows for the respective periods being
presented. Moreover, the evaluation did not reveal any significant deficiencies
or material weaknesses in our disclosure controls and procedures.
(b) There have been no significant changes in our internal controls or in other
factors that could significantly affect these controls since the last
evaluation.
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
None
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: November 12, 2002
By: /s/ Saundra Sharpe
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Saundra Sharpe, President, Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer