-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FFoX6wPU4yvr82Ciex7o8b3F/abCbeKHpEHYbp1IPvHxKf/ptRXFBT6eUY/+dj69 IIQ6uKh08e4QsevNMfKvUw== 0000950134-99-009171.txt : 19991027 0000950134-99-009171.hdr.sgml : 19991027 ACCESSION NUMBER: 0000950134-99-009171 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990831 FILED AS OF DATE: 19991026 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PALWEB CORP CENTRAL INDEX KEY: 0001088413 STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-26331 FILM NUMBER: 99733793 BUSINESS ADDRESS: STREET 1: 1607 W. COMMERCE ST CITY: DALLAS STATE: TX ZIP: 75208 BUSINESS PHONE: 2146988330 MAIL ADDRESS: STREET 1: 1607 W. COMMERCE ST CITY: DALLAS STATE: TX ZIP: 75208 10-Q 1 FORM 10-Q FOR THE QUARTER ENDED AUGUST 31, 1999 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ________ TO ________ PALWEB CORPORATION (Name of registrant as specified in its charter) Delaware 000-26331 75-1984048 ---------------------------------- ------------------ ------------------------------------ (State or other jurisdiction of Commission File (I.R.S. Employer Identification incorporation or organization) Number No.)
1607 WEST COMMERCE STREET DALLAS, TEXAS 75208 ---------------------------------------------- ------------------------------- (Address of principal executive offices) (City, State, and Zip Code)
(214) 698-8330 ------------------------------- (Issuer's telephone number) Indicate by check mark 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 requirements for the past 90 days. Yes X . No . ------- -------- The number of shares of common stock, $0.10 par value, outstanding at August 31, 1999 was 217,981,046. -1- 2 INDEX
Page No. -------- PART I. Financial Information: Item 1. Financial Statements Consolidated Balance Sheet -- August 31, 1999 and 1998 ................................... 3 Consolidated Statement of Operations -- Three Months Ended August 31, 1999 and 1998 ................................................... 4 Consolidated Statement of Cash Flows -- Three Months Ended August 31, 1999 and 1998 ................................................... 5 Notes to Consolidated Financial Statements ................. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ................................................. 7 PART II. Other Information: Item 6. Exhibit 27-Financial Data Schedule ......................... 9
-2- 3 PalWeb Corporation (a development stage company) Consolidated Balance Sheets (Unaudited)
August 31, ------------------------------ ASSETS 1999 1998 ------------ ------------ Current Assets: Cash $ 1,064 $ -- Inventory 9,938 28,346 ------------ ------------ Total current assets 11,002 28,346 Property, Plant and Equipment, at cost 2,189,965 2,659,958 Accumulated depreciation (375,101) (257,885) ------------ ------------ Total Property, Plant and Equipment 1,814,864 2,402,073 Other Assets: Intangible assets 67,964 60,058 Accumulated Amortization (7,215) (4,737) Other 30,173 29,353 ------------ ------------ Total other assets 90,922 84,674 ------------ ------------ Total Assets $ 1,916,788 $ 2,515,093 ============ ============ LIABILITIES AND STOCKHOLDERS' DEFICIENCY Current Liabilities: Notes and mortgages payable $ 50,000 $ 2,313,807 Accounts payable and accrued expenses 547,374 816,359 Payable to related parties 2,413,992 1,758,918 Customer deposits 300,000 -- ------------ ------------ Total current liabilities 3,311,366 4,889,084 Lease Finance Obligation 1,766,958 -- Stockholders' Deficiency: Preferred stock, $.0001 par, 20,000,000 20,000,000 shares authorized - outstanding 4,968,890 and 880,000, respectively 497 38 Common stock, $.10 par value, 250,000,000 authorized, outstanding - 217,981,046, and 168,981,046, respectively 9,206,888 4,066,938 Additional paid-in capital 612,925 -- Deficit accumulated during development stage (12,981,846) (6,440,967) ------------ ------------ Total stockholders' deficiency (3,161,536) (2,373,991) ------------ ------------ Total Liabilities and Stockholders Deficiency $ 1,916,788 $ 2,515,093 ============ ============
See notes to consolidated financial statements. -3- 4 PalWeb Corporation (a development stage company) Consolidated Statements of Operations (Unaudited)
From Inception (November 20, 1995) Quarter Ended August 31, To August 31, ------------------------------ ------------------- 1999 1998 1999 ------------ ------------ ------------------- Sales $ -- $ 11,585 $ 92,694 Other income (loss) (6,337) 27,400 270,848 ------------ ------------ ------------ (6,337) 38,985 363,542 ------------ ------------ ------------ Expenses: Research and development -- -- 406,943 General and administrative expenses 838,315 295,105 9,049,256 Impairment -- -- 3,456,231 Interest expense 38,383 48,145 501,574 ------------ ------------ ------------ Total expenses 876,698 343,250 13,414,004 ------------ ------------ ------------ Loss before extraordinary items (883,035) (304,265) (13,050,462) Extraordinary gain -- -- 68,616 ------------ ------------ ------------ Net Loss $ (883,035) $ (304,265) $(12,981,846) ============ ============ ============ Loss per common share $ (0.004) $ (0.002) ============ ============
See notes to consolidated financial statements. -4- 5 PalWeb Corporation (a development stage company) Consolidated Statements of Cash Flows (Unaudited)
From Inception (November 20, 1995) Quarter Ended August 31, To August 31, ---------------------------- ------------------- 1999 1998 1999 ----------- ----------- ------------------- Net cash provided from Operating activities $ 40,181 $ -- $ 415,919 Cash Flows from Investing Activities: Purchase of property and equipment (57,827) -- (3,303,400) Proceeds from sale of equipment 18,000 -- 92,995 Proceeds from lease finance obligation -- -- 149,517 ----------- ----------- ----------- Net cash used by investing activities (39,827) -- (3,030,888) Cash Flows from Financing Activities: Increase in notes and mortgage payable -- -- 2,124,057 Proceeds from issuance of common stock -- -- 491,976 ----------- ----------- ----------- Net cash provided by financing activities -- -- 2,616,033 ----------- ----------- ----------- Net Increase (Decrease) in Cash 354 -- 1,064 Cash, beginning of period 710 -- -- ----------- ----------- ----------- Cash, end of period $ 1,064 $ -- $ 1,064 =========== =========== ===========
See notes to consolidated financial statements. -5- 6 PALWEB CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments and reclassifications, which are of a normal recurring nature, necessary to present fairly its financial position as of August 31, 1999 and 1998, and the results of its operations and its cash flows for the three month periods then ended. These consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the years ended May 31, 1999 and 1998 and the notes thereto included in the Company's Form 10. 2. The results of operations for the three month period ended August 31, 1999 is not necessarily indicative of the results to be expected for the full year. 3. During the three month period ended May 31, 1999, the Company issued 4,088,890 shares of preferred stock for services. The preferred stock is convertible into common stock on a one to one basis. The valuation of the services totalling $613,334 is based on the market value of the underlying common stock as of the effective date. During the three month period ended May 31, 1998, the Company issued 2,125,000 shares of common stock for services. The valuation of the services totalling $203,000 is based on the market value of the common stock as of the effective date. 4. The computation of earnings per share is based on the weighted average shares outstanding for the quarters ended August 31, 1999 and 1998 in the amounts of 217,981,046 and 168,284,046, respectively. Convertible preferred stock is not considered as their effect is antidilutive. -6- 7 Management Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The Company incurred a net loss of $883,035 and $304,265 in the three month periods ended August 31, 1999 and 1998. The Company continues in its capacity as a development stage company to develop its products. The Company is developing two primary products - (1) a marketable plastic pallet to compete with standard wood pallets and (2) an injection molding machine which will compete both on the acquisition cost and operating efficiency. The primary reason for the increase in net loss in the three month period ended August 31, 1999 over 1998 is the value of preferred stock issued in 1999 for services. Changes in Financial Position During the three month periods ended August 31, 1999 and 1998, the Company continues to rely on related parties to provide funding. Management is in the process of completing a financing arrangement with a bank for a $400,000 credit line. The Company has a commitment letter from the bank and is formalizing collateralization provided by a related party. -7- 8 SIGNATURE Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized. PALWEB CORPORATION By: /s/ RONALD G. HALE --------------------------------------- Ronald G. Hale, President Dated: October 22, 1999 ------------------------------------ 9 EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 27 Financial Data Schedule
EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS MAY-31-2000 AUG-31-1999 1,064 0 0 0 9,938 11,002 2,189,965 375,101 1,916,788 3,311,366 1,766,958 0 497 9,206,888 (12,368,921) 1,916,788 0 (6,337) 0 0 838,315 0 38,383 (883,035) 0 (883,035) 0 0 0 (883,035) (0.004) (0.004)
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