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, 2003 Commission File Number 0-32353
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EASYWEB, INC.
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(Exact name of registrant as specified in its charter)
COLORADO 84-1475642
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
6025 South Quebec Street, Suite 150, Englewood, Colorado 80111
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(Address of principal executive offices) (Zip code)
(720) 489-8873
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(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 4,706,200
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Class Number of shares outstanding at May 2, 2003
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This document is comprised of 10 pages.
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1
FORM 10-QSB
1ST QUARTER
INDEX
Page
----
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed balance sheet, March 31, 2003 (unaudited) ................... 3
Condensed statements of operations, three months ended March 31,
2003 (unaudited) and 2002 (unaudited), and September 24,
1998 (inception) through March 31, 2003 (unaudited) ................ 4
Condensed statements of cash flows, three months ended March 31,
2003 (unaudited) and 2002 (unaudited), and September 24, 1998
(inception) through March 31, 2003 (unaudited) ..................... 5
Notes to unaudited condensed financial statements ..................... 6
Item 2. Plan of Operation ............................................. 8
PART 2 - 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 ....................................................... 10
2
EASYWEB, INC.
(A Development Stage Company)
Condensed Balance Sheet
(Unaudited)
March 31, 2003
Assets
Current Assets:
Cash .................................................. $ 9,933
---------
Total current assets .................... 9,933
Intangible assets, net .................................... 272
---------
$ 10,205
=========
Liabilities and Shareholders' Deficit
Current Liabilities:
Accounts payable and accrued liabilities .............. $ 12,939
Due to affiliate (Note B) ............................. 9,368
Due to officer (Note B) ............................... 650
---------
Total current liabilities ............... 22,957
---------
Shareholders' deficit (Note D):
Common stock .......................................... 130,050
Stock options outstanding - 100,000 ................... 20,600
Additional paid-in capital ............................ 56,991
Deficit accumulated during development stage .......... (220,393)
---------
Total shareholders' deficit ............. (12,752)
---------
$ 10,205
=========
See accompanying notes to condensed financial statements
3
EASYWEB, INC.
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
September 24,
1998
For the Three Months Ended (Inception)
March 31, Through
-------------------------- March 31,
2003 2002 2003
----------- ----------- -----------
Revenue:
Commissions, related party ................ $ -- $ -- $ 4,000
Commissions, other ........................ -- 1,610 5,547
----------- ----------- -----------
Total revenue .............. -- 1,610 9,547
----------- ----------- -----------
Operating expenses:
Stock-based compensation:
Consulting services .................... -- -- 20,600
Director services ...................... -- -- 6,000
Rent ...................................... -- 1,000 6,333
Contributed rent (Note B) ................. 1,500 500 17,167
Administrative support .................... -- 285 7,176
Contributed administrative support (Note B) 3,000 2,715 39,824
Salaries and payroll taxes ................ -- -- 20,729
Professional fees ......................... 1,765 5,197 58,264
Web site consulting and maintenance ....... 60 250 13,479
Information technology agreement .......... -- -- 8,269
Advertising ............................... -- -- 12,034
Dues and subscriptions .................... 2,975 -- 7,950
Depreciation and amortization ............. 214 188 2,452
Other ..................................... 404 696 9,663
----------- ----------- -----------
Total operating expenses ... 9,918 10,831 229,940
----------- ----------- -----------
Loss before income taxes ... (9,918) (9,221) (220,393)
Income tax provision (Note C) ................. -- -- --
----------- ----------- -----------
Net loss ................... $ (9,918) $ (9,221) $ (220,393)
=========== =========== ===========
Basic and diluted loss per share .............. $ (0.00) $ (0.00)
=========== ===========
Basic and diluted weighted average
common shares outstanding ................. 4,539,533 4,429,095
=========== ===========
See accompanying notes to condensed financial statements
4
EASYWEB, INC.
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
September 24,
1998
For the Three Months Ended (Inception)
March 31, Through
--------------------- March 31,
2003 2002 2003
------- -------- ---------
Net cash used in
operating activities (82) (6,135) (110,093)
------- -------- ---------
Cash flows from investing activities:
Purchases of equipment -- -- (400)
Payments for intangible assets -- -- (2,774)
------- -------- ---------
Net cash used in
investing activities .... $ -- $ -- $ (3,174)
------- -------- ---------
Cash flows from financing activities:
Proceeds on loans from related parties ....... -- -- 10,650
Repayment of related party loans ............. -- (5,500) (5,500)
Proceeds from the sale of common stock ....... 10,000 16,500 128,050
Proceeds from the sale of common stock subject
to rescission ............................. -- -- 4,000
Payments for offering costs .................. -- -- (14,000)
------- -------- ---------
Net cash provided by
financing activities .... 10,000 11,000 123,200
------- -------- ---------
Net change in cash ...... 9,918 4,865 9,933
Cash, beginning of period ........................ 15 451 --
------- -------- ---------
Cash, end of period .............................. $ 9,933 $ 5,316 $ 9,933
======= ======== =========
Supplemental disclosure of cash flow information:
Income taxes ................................. $ -- $ -- $ --
======= ======== =========
Interest ..................................... $ -- $ -- $ --
======= ======== =========
Non-cash financing activities:
Common stock issued in exchange for debt ..... $ -- $ -- $ 6,000
======= ======== =========
See accompanying notes to condensed financial statements
5
EASYWEB, INC.
(A Development Stage Company)
Notes to Unaudited Condensed Financial Statements
Note A: 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,
2002, 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.
The Company is in the development stage in accordance with Statements of
Financial Accounting Standards (SFAS) No. 7 "Accounting and Reporting by
Development Stage Enterprises". As of March 31, 2003, the Company has devoted
substantially all of its efforts to financial planning, raising capital and
developing markets.
Financial data presented herein are unaudited.
Note B: Related party transactions
Rent
An affiliate contributed office space to the Company during the three months
ended March 31, 2003. 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, 2003. 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, 2002, the Company owed an affiliate $8,294 for professional fees
and other administrative expenses paid on behalf of the Company. During the
three months ended March 31, 2003, the affiliate paid expenses totaling $1,074
on behalf of the Company. As of March 31, 2003, the Company owed the affiliate
$9,368, which is included in the accompanying condensed financial statements as
Due to Affiliate.
In April 2002, the officer loaned the Company $650 for working capital. The loan
carries no interest rate and is due on demand. The $650 is included in the
accompanying condensed financial statements as Due to Officer.
6
EASYWEB, INC.
(A Development Stage Company)
Notes to Unaudited Condensed Financial Statements
Note C: 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 D: Shareholder's deficit
During March 2003, the Company sold 200,000 shares of its common stock for
$10,000, or $.05 per share.
Following is a schedule of changes in shareholders' deficit for the three months
ended March 31, 2003:
Deficit
Outstanding Accumulated
Common stock Stock Additional During
-------------------- Paid-In Development
Shares Amount Options Capital Stage Total
--------- -------- ------- ------- --------- --------
Balance, January 1, 2003 .............. 4,506,200 $120,050 $20,600 $52,491 $(210,475) $(17,334)
March 2003, sale of common
stock at $.05 per share ........ 200,000 10,000 -- -- -- 10,000
Office space and administrative
support contributed by an
affiliate ...................... -- -- -- 4,500 -- 4,500
Net loss for the three months
ended March 31, 2003 ........... -- -- -- -- (9,918) (9,918)
--------- -------- ------- ------- --------- --------
Balance, March 31, 2003 4,706,200 $130,050 $20,600 $56,991 $(220,393) $(12,752)
========= ======== ======= ======= ========= ========
7
Part I. Item 2. Plan of operation
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EASYWEB, INC.
(A Development Stage Company)
PLAN OF OPERATION
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The Company plans to continue to design, market, sell and maintain customized
and turnkey web sites on the Internet that are hosted by third parties. To date,
revenues from these services have been minimal. The Company intends to generate
increased revenue through the expenditure of additional funds for marketing,
advertising and promotion. The Company believes that the revenue generated from
operations may not be sufficient to finance future activities and that it may be
necessary to raise additional funds through equity and/or debt financing in the
next twelve months. There is no assurance that the Company will be able to
generate additional capital for marketing, advertising and promotion and/or
other purposes. In the event that only limited additional financing is received,
the Company expects its opportunities in the design, marketing, and sale of
Internet web sites to be limited.
Furthermore, if we are unable to raise additional capital to support our future
operations, we may begin exploring business opportunities for possible
investments and/or business combinations with companies that may be outside of
our original business plan. As of the date of this filing, we have had no
discussions and no agreements have been reached with any third parties regarding
such an investment or business combination.
The Company does not intend to hire any additional employees in the foreseeable
future. The Company does not intend to make significant equipment purchases or
conduct any research and development within the next twelve months.
Special note regarding forward-looking statements
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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,
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.
8
Part 2. Other Information
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EASYWEB, INC.
(A Development Stage Company)
Item 1 - Legal Information.
No response required.
Item 2 - Changes in Securities.
During March 2003, the Company sold 200,000 shares of its common stock
for $10,000, or $.05 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.
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits:
1. 99.1: Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 - CEO
2. 99.2: Certification Pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 - CFO
(b) Reports on Form 8-K:
None.
9
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, 2003 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 2, 2003 BY: /s/ David C. Olson
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David C. Olson
President
10
Exhibit 99.1
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 EasyWeb, Inc. (the "Company") on Form
10-QSB for the period ending March 31, 2003, as filed with the Securities and
Exchange Commission on the date hereof (the "Report'), I, David C. Olson, Chief
Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 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 result of operations of the
Company.
/s/ David C. Olson
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David C. Olson
Chief Executive Officer
May 2, 2003
Exhibit 99.2
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 EasyWeb, Inc. (the "Company") on Form
10-QSB for the period ending March 31, 2003, as filed with the Securities and
Exchange Commission on the date hereof (the "Report'), I, David C. Olson, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 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 result of operations of the
Company.
/s/ David C. Olson
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David C. Olson
Chief Financial Officer
May 2, 2003