UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the quarterly period ended March 31, 2003.
[ ] Transition report under Section 13 or 15(d) of the Exchange Act for the
transition period from ___________ to ________________.
Commission File Number: 0-49763
-------
eXmailit.com
------------
(Exact name of registrant as specified in its charter)
Nevada 88-0469593
------ ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
530-999 West Hastings
Vancouver, B.C., Canada V6C 2W2
-------------------------------
(Address of principal executive offices) (Zip Code)
(604) 688-4060
--------------
Registrant's telephone number, including area code
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 [ ]
The number of shares outstanding of Registrant's common stock as of
October 10, 2003 was 4,000,000.
Transitional Small Business Disclosure Format (check one):
Yes [ ] No [X]
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
As used herein, the term "Company" refers to eXmailit.com, a Nevada
corporation, and its subsidiaries and predecessors, unless otherwise indicated.
Consolidated, unedited, condensed interim financial statements including a
balance sheet for the Company as of the quarter ended March 31, 2003, statement
of operations, statement of shareholders equity and statement of cash flows for
the interim period up to the date of such balance sheet and the comparable
periods of the preceding year are attached hereto beginning on Page F-1 and are
incorporated herein by this reference.
The consolidated financial statements for the Company included herein are
unaudited but reflect, in management's opinion, all adjustments, consisting only
of normal recurring adjustments, that are necessary for a fair presentation of
the Company's financial position and the results of its operations for the
interim periods presented. Because of the nature of the Company's business, the
results of operations for the three months ended March 31, 2003 are not
necessarily indicative of the results that may be expected for the full fiscal
year. The financial statements included herein should be read in conjunction
with the financial statements and notes thereto included in the Form 10-KSB for
the year ended December 31, 2002.
2
eXmailit.com
A DEVELOPMENT STAGE COMPANY
I N T E R I M F I N A N C I A L S T A T E M E N T S
FOR THE THREE MONTHS ENDED 31 MARCH 2003 AND FROM INCEPTION,
6 APRIL 2000 TO 31 MARCH 2003 Unaudited - see the Review Engagement Report
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Parker & Co., Chartered Accountants
F-1
eXmailit.com
A DEVELOPMENT STAGE COMPANY
I N T E R I M F I N A N C I A L S T A T E M E N T S FOR THE THREE MONTHS ENDED
31 MARCH 2003 AND FROM INCEPTION, 6 APRIL 2000 TO 31 MARCH 2003 Unaudited - see
the Review Engagement Report
C O N T E N T S Page
--------
INDEPENDENT REVIEW ENGAGEMENT REPORT 1
INTERIM STATEMENT OF FINANCIAL POSITION 2
INTERIM STATEMENT OF RESULTS OF OPERATION 3
INTERIM STATMENT OF CASH FLOWS 4
INTERIM STATEMENT OF STOCKHOLDER'S EQUITY 5
NOTES TO THE INTERIM FINANCIAL STATEMENTS 6-9
- --------------------------------------------------------------------------------
Parker & Co., Chartered Accountants
F-2
P A R K E R & C O. Page 1 of 9
CHARTERED ACCOUNTANTS
- --------------------------------------------------------------------------------
200 - 2560 Simpson Road, Richmond BC V6X 2P9
Tel: (604) 276-9920 Fax: (604) 276-4577
- --------------------------------------------------------------------------------
INDEPENDENT REVIEW ENGAGEMENT REPORT
To the Board of Directors
eXmailit.com
We have reviewed the interim statement of financial position of eXmailit.com, a
development stage company, as at 31 March 2003 and as at 31 December 2002 and
the interim statements of results of operations and cash flows for the three
months and nine months ended 31 March 2003 and 2002 and the interim statement of
changes in stockholders' equity from inception, 6 April 2000, to 31 March 2003,
in accordance with the standards established by the American Institute of
Certified Public Accountants. These interim financial statements are the
responsibility of the company's management.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and making
inquiries of persons responsible for financial and accounting matters. A review
is substantially less in scope than an audit in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statement taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the interim financial statements referred to above for them to be in
conformity with generally accepted accounting principles in the United States of
America.
We have previously audited, in accordance with generally accepted auditing
standards in the United States, the statements of financial position as at 31
December 2002, and the statements of results of operation and cash flow for the
year then ended and the statement of changes in shareholders' equity from
inception, 6 April 2000, to 31 December 2002; and in our report dated 21 March
2003, we expressed an unqualified opinion on those financial statements. In our
opinion, the information set forth in the accompanying interim statement of
financial position as of 31 March 2003, is fairly stated in all material
respects in relation to the statement of financial position from which it has
been derived.
These interim financial statements have been prepared assuming the company will
continue as a going concern. As stated in Note 2 to the interim financial
statements, the company will require an infusion of capital to sustain itself.
This requirement for additional capital raises substantial doubt about the
company's ability to continue as a going concern. The interim financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Richmond, British Columbia, Canada
2 May 2003
/s/ PARKER & CO., CHARTERED ACCOUNTANTS
- ------------------------------------------------------------------------
Parker & Co., Chartered Accountants
F-3
eXmailit.com
A DEVELOPMENT STAGE COMPANY
INTERIM STATEMENT OF FINANCIAL POSITION
Unaudited - see the Review Engagement Report Page 2 of 9
- --------------------------------------------------------------------------------
AS AT AS AT
31 MARCH 31 DECEMBER
2003 2002
--------------- ---------------
CURRENT ASSETS
Cash $ 16,547 $ 19,295
--------------- ---------------
Total current assets 16,547 19,295
--------------- ---------------
EQUIPMENT AND SOFTWARE, NOTE 3
Office and computer equipment
and software, at cost 14,560 14,560
Accumulated amortization 6,832 6,557
--------------- ---------------
Unamortized cost 7,728 8,003
--------------- ---------------
TOTAL ASSETS $ 24,275 $ 27,298
=============== ===============
CURRENT LIABILITIES
Accounts payable $ 2,318 $ 2,250
Loans payable, Note 4 75,000 75,000
--------------- ---------------
Total current liabilities 77,318 77,250
--------------- ---------------
STOCKHOLDERS' EQUITY (DEFICIENCY IN ASSETS)
Share capital, Note 5 4,000 4,000
Additional paid in capital 49,000 49,000
Currency translation adjustment 2,549 1,691
Deficit accumulated during the
development stage (108,592) (104,643)
--------------- ---------------
Total stockholders'equity
(deficiency in assets) (53,043) (49,952)
--------------- ---------------
TOTAL LIABILITIES AND DEFICIENCY IN ASSETS $ 24,275 $ 27,298
=============== ===============
- --------------------------------------------------------------------------------
Parker & Co., Chartered Accountants
F-4
eXmailit.com
A DEVELOPMENT STAGE COMPANY
INTERIM STATEMENT OF RESULTS OF OPERATIONS
Unaudited - see the Review Engagement Report Page 3 of 9
- --------------------------------------------------------------------------------
FROM
INCEPTION,
FOR THE THREE 6 APRIL
MONTHS ENDED 2000 TO
31 MARCH 31 MARCH 31 MARCH
2003 2002 2003
------------ ----------- ------------
EXPENSES
Accounting $ 212 $ 0 $ 4,793
Legal and professional fees - 3,336 58,261
Advertising - - 647
Transfer Agent Fees 140 - 140
Programming 3,049 - 3,049
Bank charges 44 30 848
Dues and subscriptions - 75 1,816
Telephone 140 365 4,550
Utilities - - 153
Rent - - 7,445
Postage and courier 99 53 557
Office supplies - 90 3,397
Travel and entertainment - - 7,621
Amortization 275 740 11,544
Exchange losses - 973 4,335
----------- ---------- ------------
Total expenses 3,959 5,662 109,156
----------- ---------- ------------
OTHER INCOME
Exchange gain 10 - 10
Interest earned - - 554
----------- ---------- ------------
Total Other Income 10 - 564
----------- ---------- ------------
LOSS BEFORE INCOME TAXES (3,949) (5,662) (108,592)
INCOME TAXES, NOTE 7 - - -
----------- ---------- ------------
LOSS $ (3,949) $ (5,662) $ (108,592)
=========== =========== ============
LOSS PER SHARE, NOTE 8 ($0.00) ($0.00) ($0.03)
=========== =========== ============
WEIGHTED AVERAGE
NUMBER OF SHARES 4,000,000 4,000,000 3,523,048
=========== =========== ============
- --------------------------------------------------------------------------------
Parker & Co., Chartered Accountants
F-5
eXmailit.com
A DEVELOPMENT STAGE COMPANY
INTERIM STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FROM INCEPTION, 6 APRIL 2000, TO 31 MARCH 2003
Unaudited - See the Review Engagement Report 5 of 9
- --------------------------------------------------------------------------------------------------------------------------------
COMMON COMMON ADDITIONAL CURRENCY
STOCK STOCK PAID IN TRANSLATION
CONSIDERATION ISSUED AMOUNT CAPITAL DEFICIT ADJUSTMENT TOTAL
- --------------------------------------------------------------------------------------------------------------------------------
Private placement
for cash on 10 April 2000 3,000,000 $3,000 $ 0 $ 0 $3,000
Net loss from inception, 6 April
2000 to 31 December 2000 ($28,224) (28,224)
--------- --------- --------- --------- --------- ----------
Balance as at 31 December 3,000,000 $ 3,000 - ($28,224) - (25,224)
2000
Private placement
for cash on 20 September 1,000,000 1,000 49,000 50,000
2001
Net loss for the
year ended 31 December 2001 (46,241) (46,241)
Balance as at 4,000,000 4,000 49,000 (74,465) - (21,465)
31 December 2001 ----------- ---------- ---------- --------- ---------- -----------
Net loss for the
year ended 31 December 2002 (30,178) (30,178)
--------- -----------
Currency translation
adjustment as at 31 December 2002 1,691 1,691
----------- ---------- ---------- ----------- ---------- -----------
Balance as at 31 4,000,000 4,000 $49,000 ($104,643) $1,691 ($49,952)
December 2002
Net loss for the
three months ended 31 March (3,949) (3,949)
Currency translation
adjustment as at 31 March 2003 858 858
----------- ---------- ---------- ----------- ---------- -----------
Balance as at 31
March 2003 4,000,000 $4,000 $49,000 ($108,592) $2,549 ($53,043)
=========== ========== ========== ============ ========== ===========
- ----------------------------------------------------------------------------------------------------------------------------
Parker & Co., Chartered Accountants
F-6
eXmailit.com
A DEVELOPMENT STAGE COMPANY
I N T E R I M S T A T E M E N T O F C A S H F L O W S
Unaudited - see the Review Engagement Report Page 4 of 9
- --------------------------------------------------------------------------------
FROM
INCEPTION,
FOR THE THREE 6 APRIL
MONTHS ENDED 2000 TO
31 MARCH 31 MARCH 31 MARCH
2003 2002 2003
-------------- ------------ -------------
CASH PROVIDED (USED)
FROM OPERATIONS
Net loss ($ 3,949) ($ 5,662) ($ 108,592)
Items not involving cash
Amortization of equipment
and software cost 275 740 11,544
equipment exchanged
for consulting services - - 15,354
------------- ------------ ------------
Total cash used for the loss (3,674) (4,922) (81,694)
------------- ------------ ------------
Changes in working capital other than cash
Accounts payable 68 (25) 2,318
Loan payable - - 75,000
-------------- ------------ ------------
Total changes in working capital 68 (25) 77,318
-------------- ------------ ------------
Total cash provided (used) in operation (3,606) (4,947) (4,376)
-------------- ------------ ------------
CASH PROVIDED (USED) BY
INVESTMENT ACTIVITY
Acquisition of equipment and software - - (34,626)
-------------- ------------ ------------
Total cash provided
(used by investment activity - - (34,626)
-------------- ------------ ------------
CASH PROVIDED (USED) BY
FINANCING ACTIVITY
Issue of common stock - - 53,000
Currency translation adjustment 858 - 2,549
-------------- ------------ ------------
Total cash provided by financin 858 - 55,549
-------------- ------------ ------------
CASH CHANGE (2,748) (4,947) 16,547
CASH BEGINNING 19,295 46,613 -
-------------- ------------ ------------
CASH ENDING $ 16,547 $ 41,666 $ 16,547
============== ============ ============
COMPRISED OF:
Cash $ 16,547 $ 41,666 $ 16,547
============== ============ ============
- --------------------------------------------------------------------------------
Parker & Co., Chartered Accountants
F-7
eXmailit.com
A DEVELOPMENT STAGE COMPANY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS MONTHS ENDED 31 MARCH 2003 AND FROM
INCEPTION, 6 APRIL 2000 TO 31 MARCH 2003
Unaudited - see the Review Engagement Report Page 6 of 9
- --------------------------------------------------------------------------------
Note 1 THE CORPORATION AND ITS BUSINESS
eXmailit.com was incorporated in the State of Nevada, United States on 6 April
2000. The company as total of 100,000,000 authorized shares with a par value of
$0.001 per share with 4,000,000 shares issued and outstanding as at 31 March
2003.
The company has offices in Vancouver, British Columbia, Canada. The company has
been organized to operate an online email to mail service network on the
internet. The company is a development stage company which has not derived any
revenue from its operations. The fiscal year end of the company is 31 December.
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
These financial statements have been prepared using United States Generally
Accepted Accounting Principles as established by the American Institute of
Certified Public Accountants and have been stated in United States dollars
rounded to the nearest whole dollar except for the loss per share which has been
rounded to the nearest cent. These accounting principles are applicable to a
going concern, which contemplates the realization and liquidation of liabilities
in the normal course of business. Current business activities have just begun
and insufficient revenue has been generated to sustain the company as a going
concern without the infusion of additional capital.
Assets and liabilities of operations in foreign countries are translated into
United States dollars using the exchange rate at the statement of financial
position date for monetory assets and liabilities or the historical exchange
rates for the nonmonetory assets. Accordingly, the company's primary functional
currency is the Canadian dollar and as a result the company operates a Canadian
dollar bank account which was translated into United States of America dollars
at the exchange rate at the statement of financial position date. Transactions
made in Canadian dollars or other foreign currencies were translated at the
average exchange rates prevailing throughout the year. The effects of exchange
rate fluctuations on translating foreign currency assets and liabilities into
United States dollars are included in stockholders' equity, while gains and
losses resulting from foreign currency transactions are included in operations.
Revenue is recorded as a sale at the time the services contracted for have been
completed. Costs are recorded at the time an obligation to pay occurs and are
expensed at the time the benefit to the company is matched to revenue or, if
there is no matching revenue, to the period in which the benefit is realized.
F-8
eXmailit.com
A DEVELOPMENT STAGE COMPANY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS MONTHS ENDED 31 MARCH 2003 AND FROM
INCEPTION, 6 APRIL 2000 TO 31 MARCH 2003
Unaudited - see the Review Engagement Report Page 7 of 9
- --------------------------------------------------------------------------------
Equipment and software are all amortized at 20% on the declining balance.
Note 3 EQUIPMENT AND COMPUTER SOFTWARE
ACCUMULATED UNAMORTIZED UNAMORTIZED
AT COST AMORTIZATION COST COST
31 MARCH 31 MARCH 31 MARCH 31 DECEMBER
COMPRISED OF: 2003 2003 2003 2002
-------------------------------------------------------
Office furniture $1,982 $ 855 $ 1,127 $ 1,174
Computer equipment 2,828 2,033 795 783
Computer software 5,616 2,227 3,389 3,528
Leasehold improvements 4,134 1,717 2,417 2,518
------ ------ ------ -------
$14,560 $6,832 $ 7,728 $ 8,003
======= ====== ======= ========
Note 4 LOANS PAYABLE
The loans payable were repayable on August 12, 2001. Interest at the rate of 15%
per annum may be charged after the loans maturity at the option of the holder.
If payment is not paid within 30 days of the due date, then liquidation damages
equal to 5% of the overdue amount will be added to the balance owing. The
interest for 2002 and the liquidation damages have been waived and the loans
repayment terms have been extended indefinitely, with a provision that the notes
cannot be demanded. The loans payable have been classified as current
liabilities because it is management's intention to repay them within one year.
F-9
eXmailit.com
A DEVELOPMENT STAGE COMPANY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS MONTHS ENDED 31 MARCH 2003 AND FROM
INCEPTION, 6 APRIL 2000 TO 31 MARCH 2003
Unaudited - see the Review Engagement Report Page 8 of 9
- --------------------------------------------------------------------------------
NOTE 5 SHARE CAPITAL
The authorized share capital is 100,000,000 shares with a par value of $0.001.
4,000,000 common share have been issued as follows:
ADDITIONAL
SHARE PAID IN
CONSIDERATION DATE ISSUED CAPITAL CAPITAL TOTAL
- --------------------------------------------------------------------------------
Private placement
for cash 10 April 2000 3,000,000 $3,000 $ 0 $ 3,000
Private placement
for cash 20 September 2001 1,000,000 1,000 49,000 50,000
---------------------------------------------------------
Balance as at 31 March 2003 4,000,000 $4,000 $49,000 $53,000
=========================================================
Note 6 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On 12 August 2000, Robert Gardner, an officer and director, loaned the company
$75,000, repayable on 12 August 2001 at an interest rate of 15% per annum, at
the option of the holder. The terms of the loan payable provide that if payment
is not made within 30 days of the due date, then liquidation damages equal to 5%
of the overdue amount will be added to the balance owing.
The interest to and including 30 September 2002 and the liquidation damages have
been waived by Mr. Gardner and the loan repayment has been extended
indefinitely, with a provision that the note cannot be demanded.
The company is currently using the business offices of Robert Gardner, an
officer and director, at 999 West Hastings Street, Suite 530, Vancouver, B.C.
Canada, on a rent-free basis. There is no written lease agreement or other
material terms or arrangements relating to the company's agreement with Mr.
Gardner to use his office space. The premises consist of approximately 1000
square feet, including office space, reception area and meeting facilities.
F-10
eXmailit.com
A DEVELOPMENT STAGE COMPANY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS MONTHS ENDED 31 MARCH 2003 AND FROM
INCEPTION, 6 APRIL 2000 TO 31 MARCH 2003
Unaudited - see the Review Engagement Report Page 9 of 9
- --------------------------------------------------------------------------------
The officers and directors of the company are involved in other business
activities, and may, in the future become active in additional other business
activities. If a specific business opportunity becomes available, such persons
may face a conflict in selecting between the company and their own business
interests. The company has not formulated a policy for the resolution of such a
conflict.
Note 7 INCOME TAXES
Income taxes on the loss has not been reflected in these financial statements as
it is not virtually certain that this loss will be recovered before the expiry
period of the loss carry forwards. The losses to be carried forward are as
follows:
YEAR EXPIRY
INCURRED LOSS YEAR
------------------------------------------------
2000 $ 28,224 2007
2001 43,308 2008
2002 27,393 2009
2003 2,674 2010
---------
$ 101,599
=========
Note 8 LOSS PER SHARE
Basic loss per share is computed by dividing losses available to common
stockholders by the weighted average number of common shares during the period.
Diluted loss per share is calculated on the weighted average number of common
shares that would have resulted if dilutive common stock equivalents had been
converted to common stock. No stock options or similar rights were available or
granted during the period presented. Accordingly, basic and diluted loss per
share are the same.
F-11
ITEM 2. MANAGEMENT'S PLAN OF OPERATION.
Forward-looking Information
This quarterly report contains forward-looking statements. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. These statements relate to
future events or to our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may," "should,"
"expects," "plans," "anticipates," "believes," "estimates," "predicts,"
"potential," or "continue" or the negative of such terms or other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. There are a number of factors that could cause our actual
results to differ materially from those indicated by such forward-looking
statements.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Although all such forward-looking
statements are accurate and complete as of this filing, we cannot predict
whether the statements will ultimately be accurate and consequently do not
assume responsibility for the ultimate accuracy and completeness of such
forward-looking statements. We are under no duty to update any of the
forward-looking statements after the date of this report to conform such
statements to actual results.
Overview
We were incorporated to engage in the business of providing
Internet-based email-to-mail printing and delivery services. The Company
established the eXmailit.com website which has not yet commenced providing an
Internet-based email-to-mail service. The network, which is still under
construction, was intended to consist of a consumer-based, software product that
would have a number of strategically located international distribution centers
enabling users to send email as standard mail.
As a result of our lack of profitability and the Company's receipt of
numerous inquires from entities seeking to merge with us, we decided to change
our operational focus in August, 2003 by executing a Stock Exchange Agreement
("Agreement") with Cirond Technologies Inc., a Colorado corporation ("Cirond").
The Agreement is expected to close on or about October 7, 2003 ("Closing").
Pursuant to the Agreement, the Company agreed to acquire all of the issued and
outstanding capital stock of Cirond's wholly owned subsidiary, Cirond Networks
Inc., a Nevada corporation ("CNI"), in exchange for Four Million (4,000,000)
post-Forward Split shares ("Shares") of the Company's common stock, par value
$0.001 ("Common Stock"). The Company's Forward Split is discussed more fully
below.
As a result of the Agreement, in the event it closes, CNI will become a
wholly-owned subsidiary of the Company, and Cirond will become the owner of
approximately 20% of the Company. CNI is a developer of technologies designed to
enhance the performance and security of wireless networking technologies, with
an initial specific focus on 802.11b Wireless Local Area Network ("WLAN")
technology. WLAN is one in which a mobile user can connect to a local area
network (LAN) through a wireless (radio) connection. The 802.11b standard for
WLANs - often called Wi-Fi - is part of the 802.11 series of WLAN standards from
the Institute of Electrical and Electronics Engineers (IEEE).
3
CNI manufactures products incorporating its proprietary technology that
are applicable to all segments of the WLAN marketplace. Cirond's products are
principally focused on WiFi network management and implementation, and enable
WiFi networks to be installed easily, operated optimally, and managed more
effectively and also offer improvements to network security by offering a robust
security system suitable for most typical business environments. Cirond's
approach to WiFi security is to provide technologies that improve the overall
security and implementation of the WEP security scheme, while buttressing it
with a variety of propriety intrusion detection and location-enabled security
and access technologies. CNI conducts its research and development activities
through its subsidiary, Cirond Networks (Canada) Inc., a British Columbia
corporation.
In connection with the Agreement, the Company agreed to use its best
efforts, prior to Closing, to cancel 2,990,000 shares of Common Stock held by
its founders (the "Share Cancellation"), and to effect a 16-for-1 forward stock
split ("Forward Split") of the 1,010,000 shares of Common Stock which would be
outstanding after the Share Cancellation. In the event the Forward Stock Split
is not effected prior to Closing, the Company will issue to Cirond at Closing
Two Hundred Fifty Thousand (250,000) pre-Forward Split shares of Common Stock
(which would represent approximately 20% of the Company's then issued and
outstanding shares of Common Stock without giving effect to the Private
Placement), the equivalent to the Four Million (4,000,000) post-Forward Split
shares.
Closing of the Agreement is subject to the Company and Cirond conducting
additional due diligence and the Company raising at least $300,000 pursuant to a
private placement offering ("Private Placement") of not more than 2,000,000
shares of post-Forward Split Common Stock, at a price of $0.50 per share. Any
monies raised will be held in escrow until Closing. If the Closing occurs, the
monies will be used to fund CNI's operations. If the Closing does not occur, the
money will be returned to the subscribers. The Agreement may be terminated by
either party if the Closing does not occur on or prior to October 15, 2003.
Plan of Operation
As there were no revenues for the fiscal year ended December 31, 2002 or
the quarter ended June 30, 2003, we anticipate that, in the event we acquire
CNI, the commencement of business operations in the area of wireless networking
technologies will drastically increase expenses and if such operations are
successful, revenues.
It is anticipated that, in the event we acquire CNI, the pursuit of our
new operations will require additional, and possibly substantial, capital
expenditures. We believe we have sufficient cash to satisfy our operating
requirements for in excess of six (6) months, if the Agreement to acquire CNI
closes or not. If the cash is not enough to satisfy our operating needs and we
are unable to generate revenues and/or obtain bank loans on favorable terms
and/or sell additional shares of our equity securities to secure the cash
required to conduct our business operations for the next twelve (12) months, we
could fail.
In the event we acquire CNI, we will be conducting ongoing research and
development to refine and improve our existing product line and to develop new
products. During the next twelve months, provided we acquire CNI, we plan to
hire a Chief Executive Officer, sales and marketing personnel, and product
support staff.
4
Critical Accounting Policies
The accompanying interim financial statements of eXmailit.com (the
"Company") are unaudited. In the opinion of management, the interim data
includes all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the results for the interim period.
The financial statements included herein have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosure normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. Management believes
the disclosures made are adequate to make the information not misleading and
recommends that these condensed financial statements be read in conjunction with
the financial statements and notes included in the Company's Form 10-KSB as of
December 31, 2002. Operating results for the three months ended March 31, 2003
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2003. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 2002.
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 for each reporting
period. These estimates and assumptions are affected by management's application
of accounting policies. Actual results could differ from those estimates.
Our critical accounting policies include the full cost method of
accounting for oil and gas operations, unit-of-production method for the
depletion of exploration and development costs and depreciation of production
equipment, the full cost method, revenue recognition, accounting for the
impairment or disposal of long-lived assets, and accounting for stock based
compensation.
We have adopted SFAS No. 144 "Accounting for the Impairment or Disposal of
Long- Lived Assets" which requires that long-lived assets to be held and used be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Oil and gas
properties accounted for using the full cost method of accounting, a method
utilized by us, are excluded from this requirement, but will continue to be
subject to the ceiling test limitations.
We have also adopted SFAS No. 123 "Accounting for Stock Based
Compensation" which defines a fair value based method of accounting for employee
stock options or similar equity instruments. This statement gives entities a
choice of recognizing related compensation expense to employees by adopting the
fair value method or continuing to measure compensation using the intrinsic
value approach under Accounting Principles Board ("APB") Opinion No. 25. We have
elected to utilize APB No. 25 for measurement, and will, pursuant to SFAS No.
123, disclose on a supplemental basis the pro forma effects on net income and
earnings per share of using the fair value measurement criteria.
5
ITEM 3. CONTROLS AND PROCEDURES.
Within the 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Exchange Act Rule 13a-14. Based upon the evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls are effective in timely alerting them to material
information relating to us, required to be included in our periodic SEC filings.
There have been no significant changes in our internal controls or in other
factors which could significantly affect internal controls subsequent to the
date we conducted our evaluation.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits required to be attached by Item 601 of Regulation S-B are
listed in the Index to Exhibits found after the signature page of this Form
10-QSB.
(b) There were no reports filed on Form 8-K during the quarter ended March
31, 2003.
SIGNATURES
In accordance with the requirements of Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
eXmailit.com
/s/ M. Kevin Ryan
Date: October 10, 2003 By:_________________________________
M. Kevin Ryan, Chief Executive Officer
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INDEX TO EXHIBITS
EXHIBIT PAGE
NO. NO. DESCRIPTION
- ------- ---- -----------
3(i) * Articles of Incorporation of the Company
3(ii) * Bylaws of the Company
31(i) 8 302 Certification of Chief Executive Officer
31(ii) 9 302 Certification of Chief Financial Officer
32(i) 10 906 Certification of Chief Executive Officer
32(ii) 11 906 Certification of Chief Financial Officer
* Previously filed as indicated and incorporated herein by reference from the
referenced filings previously made by the Company.
7
EXHIBIT 31(i)
I, M. Kevin Ryan, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of eXmailit.com;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of eXmailit.com as of, and for, the periods presented in this
quarterly report;
4. eXmailit.com's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for eXmailit.com and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The other certifying officers and I have disclosed, based on our most recent
evaluation, to our auditors and the audit committee of our board of
directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The other certifying officers and I have indicated in this quarterly report
whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: October 10, 2003 /s/ M. Kevin Ryan
------------------------------------------
By: M. Kevin Ryan, Chief Executive Officer
and Chairman of the Board of Directors
8
EXHIBIT 31(ii)
I, Robert Gardner, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of eXmailit.com;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of eXmailit.com as of, and for, the periods presented in this
quarterly report;
4. eXmailit.com's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for eXmailit.com and we have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The other certifying officers and I have disclosed, based on our most recent
evaluation, to our auditors and the audit committee of our board of
directors (or persons performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in internal
controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The other certifying officers and I have indicated in this quarterly report
whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.
Date: October 10, 2003 /s/ Robert Gardner
-------------------------------------------
By: Robert Gardner, Chief Financial Officer
and Director
9
EXHIBIT 32(i)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of eXmailit.com (Registrant) on
Form 10-QSB for the quarter ended March 31, 2003 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, M. Kevin Ryan, the
Chief Executive Officer of Registrant, hereby certify, pursuant to 18 U.S.C.
section 1350, that:
(1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
Dated: October 10, 2003
/s/ M. Kevin Ryan
- ---------------------------
Chief Executive Officer of
eXmailit.com, Registrant
10
EXHIBIT 32(ii)
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly of eXmailit.com (Registrant) on Form
10-QSB for the quarter ended March 31, 2003 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Robert Gardner, Chief
Financial Officer of Registrant, hereby certify, pursuant to 18 U.S.C. section
1350, that:
(1) the Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations of the
Company.
Dated: October 10, 2003
/s/ Robert Gardner
- --------------------------
Chief Financial Officer of
eXmailit.com, Registrant
11