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 30, 2001
[ ] 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.
---------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
Nevada 87-0567884
------------------------------ -----------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1929 S. 21st Avenue
Nashville, TN 37212
--------------------------------------
(Address of principal executive offices)
(800) 999-5048
-------------------------
(Issuer's telephone number)
Not Applicable
-------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
There were 15,429,943 shares of common stock $0.001 par value outstanding as of
May 11, 2001.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
Jack F. Burke, Jr.
Certified Public Accountant
P. O. Box 15728
Hattiesburg, Mississippi 39404
Independent Accountant's Review Report
I have reviewed the accompanying balance sheets of 800America .com, Inc., as of
March 31, 2001 and December 31, 2000 and the related statements of income,
retained earnings, and cash flows for the three months ended March 31, 2001 and
March 31, 2000, in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public Accountant.
All information included in these financial statements is the representation of
the management of 800America . com, Inc.
A review consist 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 generally accepted auditing standards, 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.
-----------------------
Jack F. Burke, Jr.
May 11, 2001
800America. com, Inc.
Balance Sheet
March 31, December 31,
Assets 2001 2000
----------- -----------
Current Assets
Cash $ 3,229,135 $ 2,117,746
Accounts Receivable 2,131,094 995,634
Allowance for Doubtful Account (139,000) (139,000)
Prepaid Advertising 75,000
Deferred Tax Asset 47,260 47,260
=========== ===========
Total Current Assets 5,268,489 3,096,640
=========== ===========
Property and Equipment
Equipment 842,457 743,831
Software 887,150 887,150
Auto 20,738 20,738
=========== ===========
1,750,345 1,651,719
Accumulated Depreciation (701,454) (567,832)
=========== ===========
Total Property and Equipment 1,048,891 1,083,887
=========== ===========
Other Assets
Intangible Assets(Net) 190,000 193,333
Advances 537,758 47,749
Investment Inshop 2,018
=========== ===========
Total Other Assets 729,776 241,082
=========== ===========
Total Assets 7,047,156 4,421,609
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable - Trade 182,937 24,946
Accrued Expenses 15,942
Income Tax Payable 981,068 386,872
=========== ===========
Total Current Liabilities 1,179,947 411,818
=========== ===========
Stockholders' Equity
Preferred Stock 0.001 Par Value
5,000,000 Shares Authorized 0 Issued
Common Stock 0.001 Par Value
50,000,000 Shares Authorized
13,412,000 Shares Outstanding
December 31, 2000 15,429,943 Shares
Outstanding March 31, 2001 15,430 13,412
Additional Paid in Capital 1,943,134 1,943,134
Retained Earnings 3,908,645 2,053,245
=========== ===========
Total Stockholders' Equity 5,867,209 4,009,791
=========== ===========
Total Liabilities and Stockholders'
Equity (Deficit) $ 7,047,156 $ 4,421,609
=========== ===========
The Accompanying "Notes to Financial Statements"
Are An Integral Part of These Financial Statements
See Accountants Review Report
800America. com, Inc.
Income statement
For the Three Months
Ended March 31
--------------------------
2001 2000
Revenues $4,300,777 $2,390,824
========== ==========
Cost and Expenses
Advertising 427,360 335,688
Depreciation & Amortization 136,955 53,109
Rebate 1,303,969
Payroll 186,914 124,142
Software Maintenance 91,750
Professional 119,300 18,363
Bad Debts 73,000
Other Operating Expense 471,812 17,526
========== ==========
Total Operating Expense 1,434,091 1,925,797
========== ==========
Operating Income 2,866,686 465,027
Other Income (Expenses)
Interest Income 18,808 2,155
========== ==========
Net Income Before Income Taxes 2,885,494 467,182
Income Tax 1,030,094 188,000
========== ==========
Net Income $1,855,400 $ 279,182
========== ==========
Basic Earnings Per Share Common Stock $ 0.12 $ 0.02
Diluted Earnings Per Share Common Stock 0.11 0.02
The Accompanying "Notes to Financial Statements"
Are An Integral Part of These Financial Statements
See Accountants Review Report
800America . com Inc.
Analysis of Stockholders Equity
Three Months Ended March 31, 2001
Common Common Additional Total
Stock Stock Paid In Retained Stockholders
Shares Amount Capital Earning Equity
===============================================================================
Balance December 31, 2000 13,412,000 $13,412 $1,943,134 $2,053,245 $4,009,791
Common Stock Issued to
Acquire Operating Activity
Net Income 2,017,943 2,018 2,018
1,855,400 1,855,400
===============================================================================
Balance March 31, 2001 15,429,943 $15,430 $1,943,134 $3,908,645 $5,867,209
===============================================================================
Three Months Ended March 31, 2000
Balance December 31, 1999 12,250,000 $12,250 $952,312 $(37,716) $926,846
Additional Paid in Capital
January 14, 2000 250,000 250,000
Net Income 279,182 279,182
===============================================================================
Balance March 31, 2000 12,250,000 $12,250 $1,202,312 $241,466 $1,456,028
===============================================================================
The Accompanying "Notes to Financial Statements"
Are An Integral Part of These Financial Statements
See Accountants Review Report
800America. com, Inc.
Statement of Cash Flows
Three Months Ended March 31
2001 2000
----------- -----------
Cash Flows From Operating Activities
Net Income $ 1,855,400 $ 279,182
Adjustments to Reconcile Net Income
To Cash Provided in Operating Activities
Deprecation and Amortization 136,955 53,109
Bad Debts 73,000 --
Accounts Receivable Increase (1,135,460) (577,568)
Prepaid Advertising 75,000 121,600
Deposit on Equipment -- 94,000
Accounts Payable 157,991 30,053
Rebates Payable -- 101,220
Income Tax Payable 594,196 188,000
Other Current Liabilities 15,942 --
=========== ===========
Cash Provided by Operations 1,700,024 362,596
=========== ===========
Cash Flows From Investing Activities
Purchase of Equipment (98,626) (297,557)
Purchase of Software -- (245,850)
Advances to Operating Activities (490,009) --
=========== ===========
Cash Flows (Used) in Investing Activity (588,635) (543,407)
=========== ===========
Cash Flows From Financing Activities
Additional Paid In Capital -- 250,000
=========== ===========
Cash Flows Provided byFinancing Activities -- 250,000
=========== ===========
Net Increase in Cash 1,111,389 69,189
Beginning Cash Balance 2,117,746 392,564
=========== ===========
Ending Cash Balance $ 3,229,135 $ 461,753
=========== ===========
The Accompanying "Notes to Financial Statements"
Are An Integral Part of These Financial Statements
See Accountants Review Report
800America . com, Inc.
Selected notes to Reviewed Financial Statements
Note 1 - Related Party Transactions
Compensation paid Chief Executive Officer $60,000 for three months ended
March 31, 2001 and 30,000 for the three months ended March 31, 2000.
Note 2 - Supplemental Cash Flow Information
Three months ended 3/31/01 3/31/00
Interest Paid 0 0
Income Tax paid $435,898 0
Note 3 - Non Cash Transactions
2,017,943 Shares Common Stock
for operating activity Inshop. $ 2,018
Item 2. Management's Discussion and Analysis or Plan of Operation.
General
The Company owns and operates international e-commerce and technology
businesses. The Company's primary business is to bring buyers and sellers
together in an efficient and easy format and generate fees based on
transactions. 800America's unique approach to customer acquisition and retention
has provided it a strong following of loyal Internet users. The Company is an
innovator in developing proprietary technologies needed for easy navigation and
convenience for business-to-business-and business-to-consumer environments. The
Company's technologies coupled with its unique customer approach continue to
strengthen relationships with its customers. These technologies are providing
the foundation needed to scale and grow the e-commerce businesses profitably
across geographic regions and multiple product lines.
800America has three primary operating units. The 800America Network, Rothman
Closeouts, and Fileshooter.
800Amerca is the home of many Internet shoppers. 800America offers shoppers a
convenient way to navigate easily among hundreds of stores. The portal offers
incentives to visit continuously the site through promotions and giveaways. The
Company funds TV advertising in over 50 cities around the world.
Rothman Closeouts is believed by the Company to be the largest
business-to-business marketplace for branded surplus merchandise and the leading
site for manufacturers, wholesalers and retailers to sell or buy surplus
inventories around the world. The Company believes that Rothman Closeouts has
become the number one closeout web site on the fifteen major search engines
around the world.
The Company acquired 51% of the software company Fileshooter, Inc., which owns
the software called File Shooter. File Shooter is one of the world's best
messaging transmission programs. It also can transmit files of any size, with
private and secure chat rooms all in one. The technology is unique in that the
sender will send a message, file, picture, graphic and music to the recipient by
bypassing the intervention of a service provider. File Shooter is a TRUE
PEER-to-PEER communication tool. The Company intends to market the product
worldwide starting in the latter part of the second quarter.
Recent Developments
In February 2001, the Company acquired Ebiz4biz.com. Ebiz4biz.com offers a
proprietary technology in Chinese and English that automates the consumer buying
process. The technology provides the 800America.com's customers the ability to
gather information. Ebiz4biz.com has offices in Ottawa(Canada) and
Beijing(China) and is the infrastructure for international operations for
Rothmancloseouts.com as well as other products and services of the Company.
During the quarter the Company also sold the following web sites:
21stAvenueProductions.com, Inde4u.com and Steeplehouse.com.
Results of Operations
Quarter Ended March 31, 2001 Compared to Quarter Ended March 31, 2000.
The Company had revenues of $4,300,777 for the quarter ended March 31, 2001
compared to revenues of $2,390,824 for the quarter ended March 31, 2000. Net
income for the quarter ended March 31, 2001 was $1,855,400 compared to net
income of $279,182 for the quarter ended March 31, 2000. Total operating
expenses for the quarter ended March 31, 2001 were $1,434,091 resulting in
operating income for the quarter of $2,866,686. This compares to total operating
expenses of $1,925,797 for the quarter ended March 31, 2000, resulting in
operating income of $465,027. The Company has instituted a policy of not paying
rebates as of January 1, 2001 and hence represented none of the total operating
expenses. This compared to customer rebates of $1,303,969 for the quarter ended
March 31, 2000 that represented approximately 68% of total operating expenses.
Management expects that general and administrative expenses will increase with
the hiring of additional personnel and the further development of the Company's
web sites. Because of the Company's limited operating history with its 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.
Liquidity And Capital Resources
Net cash provided by operating activities was $1,700,024 for the quarter ended
March 31, 2001 compared to net cash provided by operating activities of $362,596
for the quarter ended March 31, 2000. Net cash used in investing activities was
$588,635 for the quarter ended March 31, 2001 compared to $543,407 for the
quarter ended March 31, 2000. There was no cash provided by financing activity
for the quarter ended March 31, 2001 compared to net cash provided by financing
activities of $250,000 for the quarter ended March 31, 2000.
The Company's cash and cash equivalents as of March 31, 2001 were $3,229,135. At
March 31, 2001, the Company had current assets of $5,268,489 and current
liabilities of $1,179,947, resulting in working capital at March 31, 2001
(current assets less current liabilities) of $4,088,542.
The Company believes that its 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, the Company does not have any
plans for significant capital or operating expenditures above its current level
unless it determines to develop additional web sites that could result in
additional development costs.
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 our
management. Often, you can recognize these statements because we use 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 of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
A summons and complaint in an action titled MICHELE J. GALAGHER against
INSHOP.COM, INC. has been served on registrant's majority-owned subsidiary
inShop.com, Inc. The action is pending in the Supreme Court of the State of New
York, County of New York. The complaint seeks approximately $45,000 for wages
and expenses. InShop.com, Inc. intends vigorously to defend this litigation.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K
On May 3, 2001, registrant reported, on Form 8-K, the results for the fiscal
quarter ended March 31, 2001.
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.
(Registrant)
Date May 15, 2001 By: /s/ Elie Rabi
-------------------------------
Elie Rabi, President