-----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, CTbWwEFETSblGUnQoxyNSLveTmgz9xVRo06Tt0qiyiFU+u/BH+hOzDlXnTtO+1cv CjQx8SGSw0J/gdpkmujz+A== 0001094891-00-000364.txt : 20000523 0001094891-00-000364.hdr.sgml : 20000523 ACCESSION NUMBER: 0001094891-00-000364 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000522 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CYBERMARK INTERNATIONAL CORP CENTRAL INDEX KEY: 0001092299 STANDARD INDUSTRIAL CLASSIFICATION: GAMES, TOYS & CHILDREN'S VEHICLES (NO DOLLS & BICYCLES) [3944] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-26919 FILM NUMBER: 640904 BUSINESS ADDRESS: STREET 1: 95 WEST BEAVER CREAK STREET 2: RICHMOND HILL CITY: ONTARIO CANADA STATE: A6 MAIL ADDRESS: STREET 1: 95 WEST BEAVER CREAK STREET 2: RICHMOND HILL CITY: ONTARIO CANADA STATE: A6 10QSB 1 QUARTERLY REPORT ON FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (X) QUARTERLY REPORT UNDER SECTION 13 OR 5(d) OF THE SECURITIES ACT OF 1934: For the Quarterly Period ended March 31, 2000 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT For the transition period from __________________ to __________________ Commission file number 0-26919 CYBER MARK INTERNATIONAL CORP. ----------------------------------- (Name of Small Business Issuer in Its Charter) Delaware N/A - ------------------------------- ----------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Identification No.) Incorporation or Organization) 359 Enford Road, Unit 1 Richmond Hill, Ontario, Canada L4C 3G2 - --------------------------------------- --------------------- (Address of Principal Executive Offices) (Zip Code) Issuer's telephone number: (905) 770-4602 --------------- Indicate by check mark whether the registrant (1) has filed has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ___ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES ____ NO. ____ APPLICABLE ONLY TO CORPORATE ISSUERS As of May 11, 2000, 6,104,300 shares of the Issuer's Common Stock were outstanding. CYBER MARK INTERNATIONAL CORP. PART I. FINANCIAL INFORMATION Page No. Item 1. Consolidated Financial Statements: Consolidated Balance Sheets (Unaudited) as of March 31, 2000 and December 31, 1999 3 Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2000 and 1999 4 Consolidated Statements of Cash Flows (Unaudited) for Three Months Ended March 31, 2000 and 1999 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation PART II. OTHER - INFORMATION Item 6 - Exhibits and Reports on Form 8-K 2 Cyber Mark International Corp. Consolidated Balance Sheets As at March 31, 2000 and December 31, 1999 - -------------------------------------------------------------------------------- March 31, December 31, 2000 1999 ASSETS (Unaudited) Current Cash and cash equivalents $ - $ 1,521 Investment tax credits receivable 162,524 163,208 Accounts receivable 16,500 9,281 Inventory 24,376 24,479 Prepaid expenses 4,983 5,004 ------------ ------------- Total current assets 208,383 203,493 Property and equipment - net 132,334 142,334 ------------ ------------- Total assets $ 340,717 $ 345,827 ============ ============= LIABILITIES AND STOCKHOLDERS" EQUITY (DEFICIT) Current Bank indebtedness $ 98,348 $ 48,503 Accounts payable and accrued liabilities 107,527 126,619 Long-term debt - current portion 150,465 151,098 Advances from shareholder 130,985 77,641 ------------ ------------- Total liabilities 487,325 403,861 ------------ ------------- STOCKHOLDERS' EQUITY (DEFICIT) Capital stock 610 610 Additional paid in capital 740,367 740,367 Cumulative translation adjustment (23,073) (41,217) Deficit (864,512) (757,794) ------------ ------------- Total stockholders" equity (deficit) (146,608) (58,034) ------------ ------------- Total liabilities and stockholders" equity $ 340,717 $ 345,827 ============ ============= The accompanying notes are an integral part of these consolidated financial statements 3 Cyber Mark International Corp. Consolidated Statements of Operations and Deficit For the Three Months Ended March 31, 2000 and 1999 (Unaudited) - ------------------------------------------------------------------------------- 2000 1999 Revenue Sales $ - $ 38,972 Other 1,302 22,900 -------------- -------------- 1,302 61,872 Cost of sales - 26,789 -------------- -------------- Gross profit 1,302 35,083 -------------- -------------- Expenses Marketing 30,260 31,756 Research and development 19,047 12,670 Wages and benefits 16,070 30,122 Rent and occupancy 9,180 16,400 Professional fees 8,574 18,974 Interest 6,568 8,210 Office and general 3,589 25,130 Telephone 2,732 2,790 Insurance 2,000 3,300 Depreciation and amortization 10,000 10,590 -------------- -------------- 108,020 159,942 -------------- -------------- Net loss $ (106,718) $ (124,859) ============== ============== Loss per share $ (0.02) $ (0.02) ============== ============== The accompanying notes are an integral part of these consolidated financial statements 4 Cyber Mark International Corp. Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2000 and 1999 (Unaudited) - ------------------------------------------------------------------------------- 2000 1999 Cash flows from operating activities Net loss $ (106,718) $ (124,859) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization 10,000 10,590 Changes in assets and liabilities Investment tax credits receivable 684 (24,696) Accounts receivable (7,219) 527 Inventory 103 (2,427) Prepaid expenses 21 (14,121) Accounts payable and accrued liabilities (19,092) 53,350 ------------ ------------ Net cash used by operating activities (122,221) (101,636) ------------ ------------ Cash flows from financing activities Bank indebtedness 49,845 18,972 Long-term debt (633) (9,383) Advances from shareholder 53,344 (5,252) ----------- ------------ Net cash provided by financing activities 102,556 4,337 ----------- ------------ Effect of exchange rate changes on cash 18,144 (9,566) ----------- ------------ Increase (decrease) in cash and cash equivalents (1,521) (106,865) Cash and cash equivalents, beginning of period 1,521 106,865 ------------ ------------ Cash and cash equivalents, end of period $ - $ - ============ ============= Supplementary information: Interest paid $ 6,568 $ 8,210 ============ ============= The accompanying notes are an integral part of these consolidated financial statements 5 Cyber Mark International Corp. Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2000 and 1999 (Unaudited) - ------------------------------------------------------------------------------- 1. The financial information included herein is unaudited; however, such information reflects all adjustments, consisting solely of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the periods indicated. Certain information and footnote disclosures normally included in financial statements prepared in conformity with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These condensed financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company's Annual Report for the twelve months ended December 31, 1999. The following is a summary of the significant accounting policies followed by the Company: Basis of Presentation The accompanying consolidated financial statements include the accounts of the company and its wholly-owned subsidiary. All significant intercompany transactions and balances have been eliminated in consolidation. Cash and cash equivalents The company considers all highly liquid investments with a maturity of three months or less from time of purchase to be cash equivalents. Inventory Inventory is valued at lower of cost or market. Cost is determined on the first-in-first-out basis. Property and equipment Property and equipment are stated at cost. Depreciation is provided on a straight-line basis over the estimated useful life of the assets, usually five years. For leasehold improvements, depreciation is provided on straight-line basis over five years. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates and assumptions. 6 Cyber Mark International Corp. Notes to Consolidated Financial Statements For the Three Months Ended March 31, 2000 and 1999 (Unaudited) Financial instruments The company considers the fair value of all financial instruments to be not materially different from their carrying value at year end. Translation of foreign currencies The company uses the local currency as the functional currency and translates all assets and liabilities at year-end exchange rates, all income and expense accounts at average rates and records adjustments resulting from the translation in a separate component of common shareholders' equity. Loss per common share Loss per common share is based on the weighted average number of common shares (2000 - 6,104,300, 1999 - 6,064,300) outstanding during each period. Loss per common share is the same for both basic and dilutive since stock options would be antidilutive and therefore not included in the calculation. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION. Overview Because we continue to develop our products and services, we are still in the earlier stages of development. Therefore, selected financial data would not be meaningful. Reference is made to the financial statements elsewhere in the document. Included in this document are the unaudited financial statements for the three months ended March 31, 2000 and 1999. Results of Operations There were no sales for the three months ended March 31, 2000 compared to $38,972 for the comparable 1999 period. The company's sales declined from those in 1999 because it was concentrating on developing new Windows based software for its games and operational programs. In addition, the marketing orientation of the company is shifting from sales to revenue sharing arrangements which has adversely impacted sales and overall revenues. Because of the lack of sales and shifting marketing focus, cost of sales and gross profit declined accordingly. Expenses for the three months ended March 31, 2000 were $108,000, a decline of $51,942 from $159,942 for the comparable 1999 period. The reduction was achieved by eliminating staff and reducing overhead by moving to smaller, less expensive premises. Also, in 1999 there was a one-time professional fee. The reduction of expenses was also a response to the absence of revenue during the period due to its redesign of the products and change in marketing. The net loss for the period ended March 31, 2000 was $106,718, compared to $124,859 for the same period in 1999. The reduction was due to reduced expenses. The net loss per share remained constant. Liquidity and Capital Requirements. The working capital deficiency of CyberMark at March 31, 2000 was $278,942, compared to a working capital deficiency of $200,368 at December 31, 1999. The company is in default of certain covenants given to its lenders. The company has not received any notice of default. Because of the default status, however, all debt is classified as current. The company's bank debt was $356,340 at March 31, 2000. The company's use of cash for operations was partly funded by an infusion of cash by the sole director of the company. There can be no assurance that this source of funds will be available in future periods. The company has $162,524 worth of Canadian government Investment Tax Credits which have been approved, and the company anticipates collecting this amount in the near term. We will require additional capital financing to continue to develop our business and fund sales or revenue sharing arrangements. We will also need capital to fund operational expenses as well as research and development and capital expenses. We have determined that the funds needed for full implementation of our current business plan will be substantial. If we are unable to raise capital or increase our revenues, we will have to curtail aspects of our business plan and operations or cease our operations altogether. We are reviewing our immediate capital requirements and consulting with investment banking professionals with a view towards raising additional equity capital. No assurance can be given that the company will be able to sell its securities or sell them on acceptable terms. 8 Forward-Looking Statements When used in this Form 10-QSB and in future filings by CyberMark with the Securities and Exchange Commission, words or phrases "will likely result", "management expects", "will continue", "is anticipated", "plans", "believes", "estimates", "seeks", variation of such words and similar expressions are intended to identify such forward-looking statements within the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on any such forward-looking statements, each of which speak only as of the date described below. Actual results may differ materially from historical earnings and those presently anticipated of projected. CyberMark has no obligation to publicly release the result of any revisions, which may be made to any forward-looking statements to reflect anticipated events or circumstances occurring after the date of such statements. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K Reports on Form 8-K: None Exhibit No. Exhibit - ----------- -------- (27.1) Financial Data Schedule 8 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. CYBER MARK INTERNATIONAL CORP. Dated: May 22, 2000 /s/ Samuel Singal By: ____________________________________ Name: Samuel Singal Title: President and Chief Operating Officer EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-2000 JAN-1-2000 MAR-31-2000 0 0 16,500 0 24,376 208,383 266,913 134,579 340,717 487,325 0 610 0 0 147,218 340,717 0 1,302 0 0 0 0 6,568 (106,718) 0 0 0 0 0 (106,718) (.02) (.02)
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