UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSBFORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: September 30, 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 135, Englewood, Colorado 80111
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(Address of principal executive offices) (Zip code)
(720) 493-0303
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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
Class Number of shares outstanding at October 28, 2003
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This document is comprised of 10 pages.
FORM 10-QSB
3RD QUARTER
INDEX
Page
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PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed balance sheet, September 30, 2003 (unaudited)....................3
Condensed statements of operations, three and nine months ended
September 30, 2003 (unaudited) and 2002 (unaudited),
and September 24, 1998 (inception)
through September 30, 2003 (unaudited)..................................4
Condensed statements of cash flows, nine months ended September 30,
2003 (unaudited) and 2002 (unaudited), and September 24, 1998
(inception) through September 30, 2003 (unaudited)......................5
Notes to unaudited condensed financial statements..........................6
Item 2. Plan of Operation.................................................8
Item 3. Controls and Procedures...........................................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
Certifications............................................................11
2
EASYWEB, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 2003
ASSETS
Current Assets:
Cash ................................................ $ 38
=========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued liabilities ............ $ 3,265
Due to affiliate (Note B) ........................... 16,122
---------
Total current liabilities ............. 19,387
---------
Shareholders' deficit (Note D):
Common stock ........................................ 130,050
Stock options outstanding - 100,000 ................. 20,600
Additional paid-in capital .......................... 65,556
Deficit accumulated during development stage ........ (235,555)
---------
Total shareholders' deficit ........... (19,349)
---------
$ 38
=========
See accompanying notes to condensed financial statements
3
EASYWEB, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
SEPTEMBER 24,
1998
THREE MONTHS ENDED NINE MONTHS ENDED (INCEPTION)
SEPTEMBER 30, SEPTEMBER 30, THROUGH
--------------------------- -------------------------- SEPTEMBER 30,
2003 2002 2003 2002 2003
---------- ----------- ---------- ----------- -------------
Revenue:
Commissions, related party ........ $ -- $ -- $ -- $ -- $ 4,000
Commissions, other ................ -- -- -- 2,570 5,547
---------- ---------- ---------- ----------- -----------
Total revenue ........ -- -- -- 2,570 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 1,500 4,500 3,500 20,167
Administrative support ............ 180 375 435 885 7,611
Contributed administrative
support (Note B) ................ 2,820 2,625 8,565 8,115 45,389
Salaries and payroll taxes ........ -- -- -- -- 20,729
Professional fees ................. 3,770 689 7,240 14,742 63,739
Web site consulting and maintenance -- 320 60 570 13,479
Information technology agreement .. -- -- -- -- 8,269
Advertising ....................... -- -- -- -- 12,034
Dues and subscriptions ............ -- -- 2,975 -- 7,950
Depreciation and amortization ..... 59 210 486 585 2,724
Other ............................. 215 832 819 2,345 10,078
---------- ---------- ---------- ----------- -----------
Total operating expenses 8,544 6,551 25,080 31,742 245,102
---------- ---------- ---------- ----------- -----------
Loss before income taxes (8,544) (6,551) (25,080) (29,172) (235,555)
Income tax provision (Note (C) ........ -- -- -- -- --
---------- ---------- ---------- ----------- -----------
Net loss ............. $ (8,544) $ (6,551) $ (25,080) $ (29,172) (235,555)
========== ========== ========== =========== ========
Basic and diluted loss per share ...... $ (0.00) $ (0.00) $ (0.01) $ (0.01)
========== ========== ========== ===========
Basic and diluted weighted average
common shares outstanding ......... 4,706,200 4,605,200 4,630,644 4,497,667
========== ========== ========== ===========
See accompanying notes to condensed financial statements
4
EASYWEB, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SEPTEMBER 24,
1998
NINE MONTHS ENDED (INCEPTION)
SEPTEMBER 30, THROUGH
------------------------- SEPTEMBER 30,
2003 2002 2003
---------- ---------- -------------
Net cash used in
operating activities .... $ (9,327) $ (13,655) $ (119,338)
--------- --------- ----------
Cash flows from investing activities:
Purchases of equipment ....................... -- (316) (400)
Payments for intangible assets ............... -- -- (2,774)
--------- --------- ----------
Net cash used in
investing activities .... -- (316) (3,174)
--------- --------- ----------
Cash flows from financing activities:
Proceeds on loans from related parties ....... -- 2,553 10,650
Repayment of related party loans ............. (650) (5,500) (6,150)
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 .... 9,350 13,553 122,550
--------- --------- ----------
Net change in cash ...... 23 (418) 38
Cash, beginning of period ........................ 15 451 --
--------- --------- ----------
Cash, end of period .............................. $ 38 $ 33 $ 38
========= ========= =========
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 September 30, 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 nine months
ended September 30, 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 nine
months ended September 30, 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. The Company
paid $435 for services during the nine months ended September 30, 2003,
therefore, Contributed Administrative Support for the period totaled $8,565.
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 nine
months ended September 30, 2003, the affiliate paid expenses totaling $7,828 on
behalf of the Company. As of September 30, 2003, the Company owed the affiliate
$16,122, 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 Company repaid the loan
during the quarter ended June 30, 2003.
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 nine months
ended September 30, 2003:
Deficit
Accumulated
Common stock Outstanding Additional During
----------------------- Stock 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 -- -- -- 13,065 -- 13,065
Net loss for the nine months
ended September 30, 2003 -- -- -- -- (25,080) (25,080)
Balance, September 30, 2003 4,706,200 $ 130,050 $ 20,600 $ 65,556 $ (235,555) $ (19,349)
========= ========== =========== ============ =========== ===========
7
PART I. ITEM 2. PLAN OF OPERATION
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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 hopes to generate
increased revenue through the expenditure of additional funds for marketing,
advertising and promotion, assuming public liquidity allows. 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. The Company would also consider the sale of its technology.
If the Company is 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 is currently maintaining operations through working capital advances
provided by an affiliate company owned 100 percent by David Olson, the Company's
president. There is no assurance that the affiliate will continue to provide
working capital advances for any period of time.
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.
PART I. ITEM 3. CONTROLS AND PROCEDURES
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(a) Evaluation of disclosure controls and procedures
------------------------------------------------
We maintain controls and procedures designed to ensure that information
required to be disclosed in the reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of this
report, our chief executive officer and the principal financial officer
concluded that our disclosure controls and procedures were adequate.
8
(b) Changes in internal controls
----------------------------
There were no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the
date of the evaluation of those controls by the chief executive officer and
principal financial officer.
PART 2. OTHER INFORMATION
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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. 31: Certification
2. 32: Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 - CEO
and 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 and nine months ended September 30,
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: October 28, 2003 BY: /s/ David C. Olson
---------------- -------------------------
David C. Olson
President
10
Exhibit 31
CERTIFICATION
I, David C. Olson, certify that:
1. I have reviewed this quarterly report on Form 10-QSB of EasyWeb, Inc.
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 the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant'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 the registrant and 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 registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's 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 registrant's other certifying officers and I have indicated in this
quarterly report whether or not 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 28, 2003
/s/ David C. Olson
- ---------------------------------------------------
David C. Olson
Chief Executive Officer and Chief Financial Officer
Exhibit 32
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 September 30, 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
- ---------------------------------------------------
David C. Olson
Chief Executive Officer and Chief Financial Officer
October 28, 2003