-----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, TJQemxmjSUvXN/7a781q21JYTa+cFBwLReZS+wEwhntiP0ZZ+NcguS2tM9FtnrqD +CR+M0xb/a5bDiK8tNwGbw== /in/edgar/work/0001094891-00-000618/0001094891-00-000618.txt : 20001109 0001094891-00-000618.hdr.sgml : 20001109 ACCESSION NUMBER: 0001094891-00-000618 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CYBERMARK INTERNATIONAL CORP CENTRAL INDEX KEY: 0001092299 STANDARD INDUSTRIAL CLASSIFICATION: [3944 ] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-26919 FILM NUMBER: 755220 BUSINESS ADDRESS: STREET 1: 359 ENFORD ROAD UNIT 1 STREET 2: RICHMOND HILL CITY: ONTARIO CANADA STATE: A6 ZIP: 00000 MAIL ADDRESS: STREET 1: 95 WEST BEAVER CREAK STREET 2: RICHMOND HILL CITY: ONTARIO CANADA STATE: A6 10QSB 1 0001.txt 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 15(d) OF THE SECURITIES ACT OF 1934: For the Quarterly Period ended September 30, 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 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 September 30, 2000, 13,008,600 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 as of September 30, 2000 (Unaudited) and December 31, 1999 3 Consolidated Statements of Operations and Deficit (Unaudited)for the Three and Nine Months Ended September, 2000 and 1999 4 Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2000 and 1999 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation 8 PART II. OTHER - INFORMATION Item 3 - Default on Senior Indebtedness 10 Item 4 - Submission of Matters to a Vote of Security Holders 10 Item 6 - Exhibits and Reports on Form 8-K 10 2 Cyber Mark International Corp. Consolidated Balance Sheets As at September 30, 2000 (Unaudited) and December 31, 1999 - -------------------------------------------------------------------------------- ASSETS September 30, December 31, 2000 1999 (Unaudited) Current Cash and cash equivalents $ - $ 1,521 Investment tax credits receivable 45,050 163,208 Accounts receivable - 9,281 Inventory 24,479 24,479 Prepaid expenses 9,930 5,004 ----------- ----------- Total current assets 79,459 203,493 Property and equipment - net 112,334 142,334 ----------- ----------- Total assets $ 191,793 $ 345,827 =========== =========== LIABILITIES AND STOCKHOLDERS' DEFICIT Current Bank indebtedness $ 32,404 $ 48,503 Accounts payable and accrued liabilities 86,753 126,619 Long-term debt - current portion 148,188 151,098 Advances from shareholder 70,125 77,641 ----------- ----------- Total current liabilities 337,470 403,861 Long-term debt 200,000 - ----------- ----------- Total liabilities 537,470 403,861 ----------- ----------- STOCKHOLDERS' DEFICIT Capital stock 1,300 610 Additional paid in capital 760,367 740,367 Cumulative translation adjustment 82,731 (41,217) Deficit (1,190,075) (757,794) ----------- ----------- Total stockholders' deficit ( 345,677) (58,034) ----------- ----------- Total liabilities and stockholders' deficit $ 191,793 $ 345,827 =========== =========== The accompanying notes are an integral part of these consolidated financial statements Page 3 Cyber Mark International Corp. Consolidated Statements of Operations and Deficit (Unaudited) Three months ended Nine months ended September 30 September 30 2000 1999 2000 1999 Revenue Sales $ - $ 175,657 $ - $ 214,629 Other 1,401 131,678 3,676 154,578 --------- --------- --------- --------- 1,401 307,335 3,676 369,207 Cost of sales - 111,008 - 137,797 --------- --------- --------- --------- Gross profit 1,401 196,327 3,676 231,410 --------- --------- --------- --------- Expenses Marketing 5,731 36,026 50,629 67,782 Research and development 21,396 15,189 88,281 27,859 Wages and benefits 39,306 78,294 110,050 108,416 Rent and occupancy 4,911 27,249 18,333 43,649 Professional fees 36,650 16,583 76,030 35,557 Interest 10,787 12,224 28,517 20,434 Office and general 7,326 20,864 18,345 45,994 Telephone 1,960 4,518 9,097 7,308 Insurance 2,025 9,999 6,025 13,299 Depreciation and amortization 10,000 17,383 30,000 27,973 --------- --------- --------- --------- 140,092 238,329 435,307 398,271 --------- --------- --------- --------- Net loss $(138,691) $ (42,002) $(431,631) $(166,861) --------- --------- --------- --------- Deficit, beginning of period (1,050,734) (511,311) (757,794) (386,452) Less: dividends (650) - (650) - --------- --------- --------- --------- Deficit, end of period $(1,190,075) $ (553,313)$(1,190,075) $(553,313) ========= ========= ========= ========= Loss per share $ (0.04) $ (0.02) $ (0.14) $ (0.06) ========= ========= ========= ========= The accompanying notes are an integral part of these consolidated financial statements Page 4 Cyber Mark International Corp. Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2000 and 1999 (Unaudited) 2000 1999 Cash flows from operating activities Net loss $(431,631) $(166,861) Adjustments to reconcile net loss to net cash used by operating activities Depreciation and amortization 30,000 27,973 Changes in assets and liabilities Investment tax credits receivable 118,158 17,964 Accounts receivable 9,281 6,654 Inventory - (5,616) Prepaid expenses (4,926) (16,352) Accounts payable and accrued liabilities (39,866) 66,729 --------- --------- Net cash used by operating activities (318,984) (69,509) --------- --------- Cash flows from financing activities Bank indebtedness (16,099) 8,057 Long-term debt 197,090 (25,083) Advances from shareholder (7,516) (4,839) Issuance of capital stock 20,040 - --------- --------- Net cash provided by financing activities 193,515 (21,865) --------- --------- Cash flows from investing activities Purchase of property and equipment - (8,246) --------- --------- Effect of exchange rate changes on cash 123,948 (7,245) --------- --------- 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 $ 28,517 $ 20,434 ========= ========= Income taxes paid $ - $ - ========= ========= The accompanying notes are an integral part of these consolidated financial statements Page 5 Cyber Mark International Corp. Notes to Consolidated Financial Statements For the Nine Months Ended September 30, 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. Page 6 Cyber Mark International Corp. Notes to Consolidated Financial Statements For the Nine Months Ended September 30, 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 - 12,594,000, 1999 - 12,128,600) 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. During the 3 month period ended September 30, 2000 the company issued 100,000 additional common shares as a fee for the arrangement of the convertible debenture, further described in Item 2. On July 14, 2000 the company declared a stock dividend of one share of Common Stock at $.0001 par value for every one share of Common Stock of the company outstanding, payable on August 7, 2000 to holders of record of the Common Stock of the company at the close of business on July 21, 2000. Page 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 this document. Included in this document are the unaudited financial statements for the nine months ended September 30, 2000 and 1999. Results of Operations There were no sales for the nine months ended September 30, 2000 compared to $214,629 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 nine months ended September 30, 2000 were $435,307, an increase of $37,036 from $398,271 for the comparable 1999 period. The increase was due to an increase in marketing efforts to secure revenue sharing business and an increase in Research and Development. The net loss for the period ended September 30, 2000 was $431,631, compared to $166,861 for the same period in 1999. The net loss per share increased as a result of lack of sales revenues. Liquidity and Capital Requirements. The working capital deficiency of Cyber Mark at September 30, 2000 was $258,011, compared to a working capital deficiency of $200,368 at December 31, 1999. The company is in default of certain covenants given to The Business Development Bank of Canada. The company has not received any notice of default. Because of the default status, however, this debt is classified as current. The company's bank debt was $180,592 at September 30, 2000. The company has borrowed $200,000 by way of a convertible debenture. The holder of the note has the right at any time to convert any or all of the debt into fully paid non-assessable common shares of the company at a conversion rate equal to one common share for every $.50 of debt. These funds were received during April to September 2000. The company has $45,050 worth of Canadian government Investment Tax Credits, 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. Page 8 Forward-Looking Statements When used in this Form 10-QSB and in future filings by Cyber Mark 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. Cyber Mark 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. Page 9 PART II - OTHER INFORMATION ITEM 3. DEFAULT ON SENIOR INDEBTEDNESS The company is in default of its loan from The Business Development Bank of Canada. The loan amount due is $148,188, interest due is $28,828 and arrearages are $39,396. The total amount of $148,188 is carried as long-term debt in current liabilities. The company is in violation of the payment covenants. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On July 14, 2000, the company held the annual meeting of stockholders. At the meeting, one director, Samuel Singal, was elected and the certificate of amendment was amended to increase the number of authorized shares of common stock. The results are as follows; For Against Abstain --------- ------- ------- Election of Director 4,604,600 - - Amendment to Certificate of Incorporation 4,604,600 - 168,000 Item 6. Exhibits and Reports on Form 8-K Reports on Form 8-K: None Exhibit No. Exhibit - ----------- -------- (27.1) Financial Data Schedule Page 10 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: October 25, 2000 /s/ Samuel Singal By: ____________________________________ Name: Samuel Singal Title: President and Chief Operating Officer EX-27 2 0002.txt FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-2000 JAN-1-2000 SEP-30-2000 0 0 0 0 24,479 79,459 266,913 154,579 191,793 337,470 200,000 650 0 0 (346,327) 191,793 0 3,676 0 0 0 0 28,517 (431,631) 0 0 0 0 0 (431,631) (.14) (.14)
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