UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2002
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________________ to ____________________
Commission file number 000-28547
800America.com, Inc.
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(Exact name of small business issuer as specified in its charter)
Nevada 87-0567884
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(State or other jurisdiction of (IRS Employer
incorporation or jurisdiction) Identification No.)
420 Lexington Avenue
New York, New York 10170
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(Address of principal executive offices)
(800) 999-5048
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(Issuers telephone number)
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 ____
There were 19,981,320 shares of common stock $0.001 par value per share, issued
and outstanding as of March 31, 2002.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I -- FINANCIAL INFORMATION
Item 1.
Jack F. Burke, Jr.
Certified Public Accountant
P. O. Box 15728
Hattiesburg, Mississippi 39402
Independent Accountant's Review Report
I have reviewed the accompanying balance sheets of 800America.com Inc.,
as of March 31, 2002 and December 31, 2001 and the related statements of income,
retained earnings, and cash flows for the three months ended March 31, 2002 and
March 31, 2001 in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants. All information included in these financial statements is the
representation of the management of 800America.com Inc.
A review consists principally of inquiries of company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with auditing standards generally accepted in
the U.S., the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, I do not express such an
opinion.
Based on my review, I am not aware of any material modifications that
should be made to the accompanying financial statements in order for them to be
in conformity with generally accepted accounting principles.
Sincerely,
/s/ Jack F. Burke, Jr.
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Jack F. Burke, Jr.
May 16, 2002
800America.com Inc.
Balance Sheet
March 31, 2002 and December 31, 2001
March 31, December 31,
2002 2001
Assets
Current Assets
Cash $13,809,345 $13,201,125
Accounts Receivable 0 53,752
Interest Receivable 17,305 17,151
Notes Receivable 301,570 301,570
Investment Short Term 3,100,000 0
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Total Current Assets 17,228,220 13,573,598
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Property and Equipment
Equipment 1,087,201 1,087,201
Software 3,895,650 3,695,650
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4,982,851 4,782,851
Accumulated Depreciation (1,942,411) (1,607,545)
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Total Property and Equipment 3,040,440 3,175,306
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Other Assets
Stock Escrow 173,445 115,015
Other Intangible Assets (Net) 4,133,493 2,633,493
Goodwill (Net) 3,417,358 2,774,266
Bond Deposit 0 500,000
Other Assets 219,633 199,917
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Total Other Assets 7,943,929 6,222,691
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Total Assets 28,212,597 22,971,595
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Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable 239,494 229,906
Membership Dues Payable 770,892 770,892
Deferred Income Tax 232,262 0
Taxes Payable - Income Tax 1,214,528 1,027,518
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Total Current Liabilities 2,457,176 2,028,316
Long Term Liabilities
Deferred Income Tax 696,788 0
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Total Liabilities 3,153,964 0
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Stockholders' Equity
Preferred Stock $0.001 Par Value, 5,000,000
Shares Authorized 0 Shares Issued
Common Stock $0.001 Par Value, 50,000,000
Authorized, 19,981,320 Shares Issued and
Outstanding 19,981 18,725
Additional Paid in Capital 12,648,115 10,605,671
Less Treasury Stock Purchased (50,000) (50,000)
Retained Earnings 12,440,537 10,368,883
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Total Stockholders' Equity 25,058,633 20,943,279
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Total Liabilities and Stockholders' Equity $28,212,597 $22,971,595
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See Accompanying Notes to Financial Statements
800America.com Inc.
Income Statement
Three Months and March 31, 2002 and 2001
Three Months Three Months
Ended Ended
March 31, 2002 March 31, 2001
Revenues $7,768,164 $4,300,777
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Cost and Expense
Advertising 2,300,000 427,360
Bad Debt 53,752 0
Depreciation and Amortization 620,824 136,955
Payroll 581,385 186,914
General and Administration 1,007,646 682,862
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Total Cost and Expense 4,563,607 1,434,091
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Net Operating Income 3,204,557 2,866,686
Other Income
Interest Income 81,625 18,808
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Net Income Before Income Tax 3,286,182 2,885,494
Income Tax Expense 1,214,578 1,030,094
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Net Income 2,071,604 1,855,400
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Basic Earnings Per Share Common Stock $0.10 $0.12
19,981,320 Weighted Shares 2002
15,429,943 Weighted Shares 2001
Diluted Earnings Per Share $0.09 $0.11
22,981,320 Shares 2002
18,429,943 Shares 2001
See Accompanying Notes to Financial Statements
800America.com Inc.
Statement of Cash Flows
Three Months Ended March 31, 2002 and 2001
2002 2001
Cash Flows From Operating Activities
Net Income $2,071,654 $1,855,400
Adjustments to Reconcile Net Income
to Cash Provided in Operations
Depreciation and Amortization 620,824 136,955
Consulting Fees Paid in Common Stock 218,400 0
Accounts Receivable 53,752 (1,135,460)
Notes Receivable (154) 0
Investment - Short Term (3,100,000) 0
Bond - China Received 500,000 0
Other Assets - Increase (78,146) 75,000
Accounts Payable - Increase 9,880 157,991
Taxes Payable Income - Increase 187,010 594,196
Other Current Liabilities - Increase 0 15,942
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Total Cash Flows From Operating Activities 483,220 1,700,024
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Cash Flows From Investing Activities
Purchase of Equipment 0 (98,626)
Advances to Operating Activities 0 (490,009)
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Cash (Used) in Investing 0 (588,635)
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Cash Flows From Financing Activities
Additional Paid in Capital 124,875 0
Sale of Common Stock 125 0
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Cash Flows Provided From Financing Activities 125,000 0
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Net Increase in Cash 608,220 1,111,389
Beginning Cash Balance 13,201,125 2,117,746
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Ending Cash Balance $13,809,345 $3,229,135
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See Accompanying Notes to Financial Statements
800America.com Inc.
Selected Notes to Reviewed Financial Statements
March 31, 2002
Note 1 - Financial Statement Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the U.S.
for interim financial information. In the opinion of management, all
adjustments, which are necessary for a fair presentation, have been included.
The results for interim periods are not necessarily indicative of results which
may be expected for any other interim period or for the fully year. For further
information, refer to the December 31, 2001 consolidated financial statements
and notes thereto include in 800Americ.com, Inc. 10KSB.
Note 2 - Business Combinations
The Company purchased the assets of Youtopia.com in exchange for six
hundred eighty thousand shares of its previously unissued common stock. Valued
at $2.50 per share. The cost price of 1,700,00 dollars was allocated as follows:
Software $ 200,000
Subscriber List 1,500,000
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Total $1,700,000
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Note 3 - Deferred Income Tax
Deferred income tax has been established represented future income tax
expense on the difference between the tax basis and allocated cost of certain
assets obtained in business combinations.
Note 4 - Related Party Transactions
Compensation paid the Chief Executive Officer for the three months
ended March 31, 2001 was $60,000 and for the three months ended March 31, 2000
the amount was $30,000.
Note 5 - Supplemental Cash Flow Information
Three Months Ended 03/31/02 03/31/01
Interest Paid 0 0
Income Tax Paid $1,224,000 $435,898
Note 6 - Non Cash Transaction
680,000 shares common stock for Youtopia.com 1,700,000
158,334 shares common stock issued for consulting services 218,400
Note 7 - Short Term Investments
The company entered into a joint venture in South America for direct
sale of certain closeout items. The Company invested four million dollars
($4,000,000) on February 12, 2002. On March 28 the Company received its first
pay back of nine hundred thousand dollars ($900,000) leaving a remaining
investment of three million one hundred thousand dollars ($3,100,000).
During the quarter the Company also received a return of its five
hundred thousand dollars ($500,000) deposit from a bank in the Peoples Republic
of China.
Item 2. Management's Discussion and Results or Plan of Operation.
General
We operate various Internet web sites in three areas: Business to Business;
Business to Consumers and Technology. Our goal is to bring buyers and sellers
together in an efficient and easy format and generate income based on the
transactions. Our technologies coupled with our customer approach continue to
strengthen relationships with our customers. These technologies are providing
the foundation need to scale and grow the e-commerce businesses profitably
across geographic regions and multiple product lines.
Sites operated under the 800America Network are OneTwoClick.com,
RothmanCloseouts.com, InternetWEbGuide.com, FileShooter.com, InShop.com,
eBiz4biz.com, cs-live.com, iGain.com, IPS payment.com, WizardWorld.com and
Youtopia.com.
Results of Operations
Quarter Ended March 31, 2002 Compared to Quarter Ended March 31, 2001.
We had revenues of $7,768,164 for the quarter ended March 31, 2002 compared to
revenues of $4,300,777 for the quarter ended March 31, 2001. Approximately,
$504,000 of our revenues were derived from an off-line venture whereby we
partnered with another company to sell closeout merchandise into the South
American market. Our total investment was approximately $4,000,000. To date we
have received $900,000 of our investment back and the remaining investment of
$3,100,000, which has been used to purchase close out merchandise, should be
received during the second quarter along with additional revenue. We do not
regularly engage in these types of ventures but, as the opportunity arises we
may engage in them in the future. Approximately 21% of our total revenues were
derived from foreign sources. Approximately 65% of the foreign revenue came from
South America and the balance from the Far East and Europe. Net income for the
quarter ended March 31, 2002 was $2,071,604 compared to net income of $1,855,400
for the quarter ended March 31, 2001 . Total operating expenses for the quarter
ended March 31, 2002 were $4,563,607 resulting in net operating income for the
quarter of $3,204,557. This compares to total operating expenses of $1,434,091
for the quarter ended March 31, 2001, resulting in net operating income of
$2,866,686. This increase in operating expenses is a result of our continuing to
grow our business in order to increase revenues. Because of our limited
operating history with our various web sites, management cannot predict, based
upon past performance, whether the above listed cost and expense categories are
relatively stable or subject to a substantial degree of volatility. Management
continues to expect that advertising costs will be a significant part of its
operating structure. Management expects that all divisions will have increased
revenues and profits in the Second Quarter.
Liquidity And Capital Resources
Cash and cash equivalents as of March 31, 2002 were $13,809,345. At March 31,
2002, we had current assets of $17,228,220 and current liabilities of $2,457,176
resulting in working capital at March 31, 2002 (current assets less current
liabilities) of $14,771,044.
In January 2002, we acquired substantially all of the assets, including the
name, of Yutopia.com. and assumed certain operating leases. The purchase price
was 680,000 shares of common stock.
We believe that our current capital resources and liquidity are adequate for at
least the next twelve months. Other than costs in connection with the further
development of its web sites, we do not have any plans for significant capital
or operating expenditures above our current level unless we determines to
develop additional web sites that could result in additional development costs.
We may also make additional acquisitions which might be financed at least in
part with our own funds.
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Forward Looking Statements
This report on Form 10-QSB contains certain forward-looking statements that are
based on what we believe are reasonable beliefs and assumptions of management.
Often, these statements can be recognized because of the use of words such as
believe, anticipate, intend, estimate and expect in the statements. Such
forward-looking statements obviously involve known and unknown risks,
uncertainties, and other factors that may cause the actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements.
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PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
We are a party to litigation incurred in connection with the ordinary operation
of our business. The Company does not believe that any adverse result in the
various litigation matters would have a material effect on our operations or
financial condition.
Item 2. Changes in Securities and Use of Proceeds
On January 11, 2002, the registrant issued a total of 680,000 shares of its
Common Stock in connection with the purchase of assets from Youtopia.com. The
transaction was exempt from the registration requirement by virtue of Rule 506
of Regulation D of the Securities Act of 1933, as amended.
In February and March of 2002, the registrant issued a total of 75,000 shares of
its Common Stock for financial consulting services. The shares were issued to an
"accredited investor" as that term is used in Rule 506 of Regulation D of the
Securities Act of 1933, as amended.
Also, in February 2002, the registrant issued 50,000 shares of its Common Stock
for consulting services to an "accredited investor" as that term is used in Rule
506 of Regulation D of the Securities Act, as amended.
In January and February of 2002, the registrant issued a total of 13,334 shares
of its Common Stock to a consultant who is an "accredited investor" as that term
is used in Rule 506 of Regulation D of the Securities Act of 1933, as amended.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
800America.com, Inc.
Date: May 20, 2002 By: /s/ David E. Rabi
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David E. Rabi
Chief Executive Officer (Principal
Executive Officer,
Chief Financial Officer and Chief
Accounting Officer)