UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: March 31, 2004 Commission File Number 0-32353
-------------- -------
EASYWEB, INC.
-------------
(Exact name of registrant as specified in its charter)
COLORADO 84-1475642
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6025 South Quebec Street, Suite 135, Englewood, Colorado 80111
-------------------------------------------------------- -----
(Address of principal executive offices)
(Zip code)
(720) 493-0303
--------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock, no par value 4,946,200
Class Number of shares outstanding at May 3, 2004
--------------------------------------------------------------------------------
This document is comprised of 11 pages.
FORM 10-QSB
1ST QUARTER
INDEX
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed balance sheet, March 31, 2004 (unaudited)................... 3
Condensed statements of operations, three months ended
March 31, 2004 (unaudited) and 2003 (unaudited).................... 4
Condensed statements of cash flows, three months ended
March 31, 2004 (unaudited) and 2003 (unaudited).................... 5
Notes to unaudited condensed financial statements..................... 6
Item 2. Plan of Operation............................................ 8
Item 3. Controls and Procedures...................................... 9
PART II - OTHER INFORMATION
Item 1. Legal Information............................................ 9
Item 2. Changes in Securities........................................ 9
Item 3. Defaults Upon Senior Securities.............................. 9
Item 4. Submission of Matters to a Vote of Security Holders.......... 9
Item 5. Other Information............................................ 9
Item 6. Exhibits and Reports on Form 8-K............................. 9
Signatures............................................................ 11
2
EASYWEB, INC.
CONDENSED BALANCE SHEET
(UNAUDITED)
MARCH 31, 2004
ASSETS
Current Assets:
Cash.......................................................... $ 4,625
==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued liabilities...................... $ 7,625
Due to affiliate (Note 2)..................................... 18,827
----------
Total current liabilities....................... 26,452
----------
Shareholders' deficit (Note 4):
Common stock.................................................. 136,050
Stock options outstanding - 100,000........................... 20,600
Additional paid-in capital.................................... 74,481
Retained deficit.............................................. (252,958)
----------
Total shareholders' deficit..................... (21,827)
----------
$ 4,625
==========
See accompanying notes to condensed financial statements
3
EASYWEB, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31,
------------------------
2004 2003
---------- ----------
Operating expenses:
Contributed rent (Note 2)........................ $ 1,500 $ 1,500
Contributed administrative
support (Note 2).............................. 3,000 3,000
Professional fees................................ 1,828 1,765
Web site consulting and maintenance.............. 60 60
Dues and subscriptions........................... -- 2,975
Depreciation and amortization.................... -- 214
Other............................................ 253 404
---------- ----------
Total operating expenses......... 6,641 9,918
---------- ----------
Loss before income taxes......... (6,641) (9,918)
Income tax provision (Note 3)................... -- --
---------- ----------
Net loss......................... $ (6,641) $ (9,918)
========== ==========
Basic and diluted loss per share..................... $ (0.00) $ (0.00)
========== ==========
Basic and diluted weighted average
common shares outstanding........................ 4,786,200 4,539,533
========== ==========
See accompanying notes to condensed financial statements
4
EASYWEB, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31,
------------------------
2004 2003
---------- ----------
Net cash used in
operating activities........ $ (1,408) $ (82)
---------- ----------
Cash flows from financing activities:
Proceeds from the sale of common stock........... 6,000 10,000
---------- ----------
Net cash provided by
financing activities........ 6,000 10,000
---------- ----------
Net change in cash.......... 4,592 9,918
Cash, beginning of period............................ 33 15
---------- ----------
Cash, end of period.................................. $ 4,625 $ 9,933
========== ==========
Supplemental disclosure of cash flow information:
Income taxes..................................... $ -- $ --
========== ==========
Interest......................................... $ -- $ --
========== ==========
See accompanying notes to condensed financial statements
5
EASYWEB, INC.
Notes to Unaudited Condensed Financial Statements
NOTE 1: BASIS OF PRESENTATION
The financial statements presented herein have been prepared by the Company in
accordance with the accounting policies in its Form 10-KSB dated December 31,
2003, and should be read in conjunction with the notes thereto.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments) which are necessary to provide a fair presentation of
operating results for the interim period presented have been made. The results
of operations for the periods presented are not necessarily indicative of the
results to be expected for the year.
Financial data presented herein are unaudited.
NOTE 2: RELATED PARTY TRANSACTIONS
RENT
An affiliate contributed office space to the Company during the three months
ended March 31, 2004. The Company's management has estimated the fair market
value of the office space at $500 per month, which is included in the
accompanying condensed financial statements as Contributed Rent with an
offsetting credit to Additional Paid-in Capital.
ADMINISTRATIVE SUPPORT
An affiliate contributed administrative services to the Company during the three
months ended March 31, 2004. The Company's management has estimated the fair
market value of the services at $1,000 per month, which is included in the
accompanying condensed financial statements as Contributed Administrative
Support with an offsetting credit to Additional Paid-in Capital.
INDEBTEDNESS TO RELATED PARTIES
At December 31, 2003, the Company owed an affiliate $18,111 for professional
fees and other administrative expenses paid on behalf of the Company. During the
three months ended March 31, 2004, the affiliate paid expenses totaling $716 on
behalf of the Company. As of March 31, 2004, the Company owed the affiliate
$18,827, which is included in the accompanying condensed financial statements as
Due to Affiliate.
NOTE 3: INCOME TAXES
The Company records its income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". The Company incurred net operating losses during
all periods presented resulting in a deferred tax asset, which was fully allowed
for; therefore, the net benefit and expense resulted in $-0- income taxes.
NOTE 4: SHAREHOLDER'S DEFICIT
During March 2004, the Company sold 240,000 shares of its common stock for
$6,000, or $.025 per share.
Following is a schedule of changes in shareholders' deficit for the three months
ended March 31, 2004:
6
EASYWEB, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Deficit
Accumulated
Outstanding Additional During
Common stock Stock Paid-In Development
Shares Amount Options Capital Stage Total
--------- --------- --------- --------- --------- ---------
Balance, January 1, 2004 ........ 4,706,200 $ 130,050 $ 20,600 $ 69,981 $(246,317) $ (25,686)
March 2004, sale of common
stock at $.025 per share .... 240,000 6,000 -- -- -- 6,000
Office space and administrative
support contributed by an
affiliate ................... -- -- -- 4,500 -- 4,500
Net loss for the three months
ended March 31, 2004 ........ -- -- -- -- (6,641) (6,641)
--------- --------- --------- --------- --------- ---------
Balance, March 31, 2004 4,946,200 $ 136,050 $ 20,600 $ 74,481 $(252,958) $ (21,827)
========= ========= ========= ========= ========= =========
7
EASYWEB, INC.
PART I. ITEM 2. PLAN OF OPERATION
------- -----------------
PLAN OF OPERATION
EasyWeb's business plan is to design, market, sell and maintain customized and
template, turnkey sites on the Internet, hosted by third parties. Our business
plan is prepared based upon the popularity of the Internet and the growing
number of businesses interested in advertising and marketing online. We have
generated only $9,547 in revenue and have a retained deficit of $252,958 through
March 31, 2004. We have not performed any services or earned any revenue during
2004 or 2003.
Our future success will be dependent upon our ability to (1) locate and
consummate a merger or acquisition with an operating company, (2) finance
Internet opportunities if we are allowed to trade publicly and raise capital
and, ultimately, (3) attain profitability. There is no assurance that we will be
successful in consummating a merger or acquisition with an operating company,
financing Internet investments, or attaining profitability. As of the date of
this filing, we have had no discussions and no agreements have been reached with
any third parties regarding such a business combination.
We are experiencing capital shortages and are currently dependent upon an
affiliate, Summit Financial Relations, Inc. ("Summit"), which has paid expenses
on our behalf, in order to maintain our limited operations. There is no
assurance that Summit will continue to pay our expenses in the future. As of
March 31, 2004, we owed Summit $18,827 for expenses paid on our behalf.
As a result of our inability to generate significant revenue, together with
sizeable continuing operating expenses, access to capital may be unavailable in
the future except from affiliated persons. If we are able to obtain access to
outside capital in the future, it is expected to be necessarily costly because
of high rates of interest and fees. Through March 31, 2004, in addition to the
expenses paid by Summit, we have been funded through the sale of our common
stock for gross proceeds in the amount of $136,050 including proceeds of $6,000
through the sale of 240,000 shares of our common stock ($.025 per share) during
March 2004.
While our independent auditor has presented our financial statements on the
basis that we are a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business over a
reasonable length of time, they have noted that our significant operating losses
and net capital deficit raise a substantial doubt about our ability to continue
as a going concern.
We do not intend to hire any additional employees in the foreseeable future. We
do not intend to make significant equipment purchases or conduct any research
and development within the next twelve months unless we become a market trading
entity. The Board may then make decisions as to the future of our business and
our assets.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements within the meaning of federal
securities laws. These statements plan for or anticipate the future.
Forward-looking statements include statements about our future business plans
and strategies, statements about our need for working capital, future revenues,
results of operations and most other statements that are not historical in
nature. In this Report, forward-looking statements are generally identified by
the words "intend", "plan", "believe", "expect", "estimate", and the like.
Investors are cautioned not to put undue reliance on forward-looking statements.
Except as otherwise required by applicable securities statues or regulations,
8
the Company disclaims any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise. Because forward-looking statements involve future risks and
uncertainties, these are factors that could cause actual results to differ
materially from those expressed or implied.
PART I. ITEM 3. CONTROLS AND PROCEDURES
------- -----------------------
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
Our Chief Executive Officer and Principal Accounting Officer has
evaluated the effectiveness of our disclosure controls and procedures
(as such term is defined in Rules 13a-15 and 15d-15 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of
the end of the period covered by this quarterly report (the "Evaluation
Date"). Based upon such evaluation, the officer has concluded that, as
of the Evaluation Date, our disclosure controls and procedures are
effective in alerting him on a timely basis to material information
relating to our Company (including our consolidated subsidiary)
required to be included in our reports filed or submitted under the
Exchange Act.
(B) CHANGES IN INTERNAL CONTROLS
During the most recent fiscal quarter, there have not been any
significant changes in our internal controls over financial reporting
or in other factors that could have materially affected, or are
reasonably likely to materially affect, our internal controls over
financial reporting.
PART II. OTHER INFORMATION
-------- -----------------
Item 1 - Legal Information.
No response required.
Item 2 - Changes in Securities.
During March 2004, we sold 240,000 shares of our common stock for
$6,000, or $.025 per share. The shares were sold to an individual
pursuant to the exemption from the registration requirements of the
Securities Exchange Act of 1933 (the "Act"), as amended, provided by
Section 4(2) of the Act for transactions by an issuer not involving
any public offering.
Item 3 - Defaults Upon Senior Securities.
No response required.
Item 4 - Submission of Matters to a Vote of Security Holders.
No response required.
Item 5 - Other Information.
No response required.
9
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits:
31. Certification of Chief Executive Officer and
Principal Accounting Officer pursuant to Rule
13a-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32. Certification of Chief Executive Officer and
Principal Accounting Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K:
None.
10
SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the three months ended March 31, 2004 have been
included.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EASYWEB, INC.
(Registrant)
DATE: May 3, 2004 BY: /S/ DAVID C. OLSON
----------- ----------------------------------
David C. Olson
President and CEO
11