-----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, EDfNy39vRQV5lkC19je/RfKerCGo7sGYHZmg38uXYzTtB6STsF+1/Sqajgijzg7Y UbU5AwiuIE189oOhflHubw== 0001103023-01-000006.txt : 20010424 0001103023-01-000006.hdr.sgml : 20010424 ACCESSION NUMBER: 0001103023-01-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010228 FILED AS OF DATE: 20010420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OMNINET MEDIA COM INC CENTRAL INDEX KEY: 0001103023 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 352089880 STATE OF INCORPORATION: IN FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28935 FILM NUMBER: 1607414 BUSINESS ADDRESS: STREET 1: 5580 LA JOLLA BLVD STREET 2: #071 CITY: LA JOLLA STATE: CA ZIP: 92037 BUSINESS PHONE: 8588561392 MAIL ADDRESS: STREET 1: 5580 LA JOLLA BLVD STREET 2: #071 CITY: LA JOLLA STATE: CA ZIP: 92037 FORMER COMPANY: FORMER CONFORMED NAME: OMNINET MEDIACOM INC DATE OF NAME CHANGE: 20000828 FORMER COMPANY: FORMER CONFORMED NAME: MAS ACQUISITION XXV CORP DATE OF NAME CHANGE: 20000111 10QSB 1 0001.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-QSB {x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the Quarter Ended February 28, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934 For the transition period from ______________ to _________________ Commission file number 000-28935 OMNINET MEDIA.COM, INC. (Name of Small Business Issuer) Nevada 880398783 (State or Other (I.R.S. Employer Jurisdiction of Identification Incorporation or Number) Organization) 3140 Venture Blvd. 89101 Las Vegas, NV (Zip Code) Registrant's telephone number including area code: (702) 641-5030 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. OMNINET MEDIA.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED February, 28 2001 1 TABLE OF CONTENTS Page Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations 2 Condensed Consolidated Statements of cash Flows 3 Notes to Condensed Consolidated Financial Statements 4 - 6 2 OMNINET MEDIA.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS February 28 August 30, 2001 2000 Current Assets Cash $ - $ 1,420 Prepaid expenses - 6,779 Total Current Assets - 8,199 Property and Equipment, net 142,223 158,507 Other Assets License agreement, net - 703,916 Other assets 6 2,796 Total Assets $142,229 $873,418 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued expenses $413,815 $400,920 Current portion of note payable 19,000 642,000 Notes payable to related parties 627,046 623,956 Total Current Liabilities 1,059,861 1,666,876 Noncontrolling interest ( 304,148) ( 277,405) Stockholders' Deficit Preferred stock, $0.0001 par value; 10,000,000 shares authorized, no shares issued and outstanding - - Common stock, $0.0001 par value; 690,000,000 shares authorized; 42,278,173 shares issued and outstanding 4,228 4,228 Additional paid in capital 1,759,262 1,759,262 Accumulated deficit (2,376,974) (2,279,543) Total Stockholders' Deficit ( 613,484) ( 516,053) Total Liabilities and Stockholders' Deficit $ 142,229 $ 873,418 See accompanying summary of notes to unaudited condensed consolidated financial statements. -1- OMNINET MEDIA.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended, Six Months Ended February 28 February 28 2001 2000 2001 2000 Revenues, net $ - $ 823,124 $ - $1,128,628 Cost of products sold - ( 80,302) - (243,371) Gross Profit - 742,822 - 885,257 Expenses General and administrative 8,142 963,392 62,258 1,274,371 Impaired loss on license Agreements - - 61,916 - Operating Loss (8,142) (220,570) (124,174) ( 389,114) Non-controlling interest 1,977 53,544 26,743 93,995 Net Loss $ (6,165) $ (167,026) ( 97,431) ( 295,119) Net Loss Per Common Share $( 0.000) $( 0.015) $( 0.002) $( 0.026) Weighted Average Number Of Common Shares Outstanding 42,278,173 11,260,748 42,278,173 11,260,748 See accompanying summary of notes to unaudited condensed consolidated financial statements. -2- OMNINET MEDIA.COM, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Six Months Ended February 28, 2001 2000 Cash Flows From Operating Activities Net loss $ (97,431) $ (295,119) Adjustment to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 16,284 123,240 Minority interest in net loss of consolidated subsidiaries (26,743) (93,995) Impairment loss on license agreements 61,916 - Decrease in accounts receivable - (3,271) Increase in inventory - (162,498) Decrease in prepaid expenses 6,779 (4,639) Decrease in security deposit 2,790 (2,790) Increase in accounts payable and accrued expenses 12,895 35,100 Net Cash Provided by (Used In) Operating Activities (23,510) (403,972) Cash Flows From Investing Activities Disposal of property and equipment - 2,622 Net Cash Provided by Investing Activities - 2,622 Cash Flows From Financing Activities Proceeds from notes payable 22,090 311,632 Payments on notes payable - (30,464) Capital contributed by shareholder - 37,560 Net Cash Provided by (Used In) Financing Activities 22,090 318,728 Net Decrease in Cash (1,420) (82,622) Cash at beginning of period 1,420 99,770 Cash at end of period $ - $ 17,148 See accompanying summary of notes to unaudited condensed consolidated financial statements. -3- OMNINET MEDIA.COM, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Presentation of Interim Information In the opinion of the management of OmniNet Media.Com, Inc. and Subsidiaries, Inc. (the Company), the accompanying unaudited condensed consolidated financial statements include all normal adjustments considered necessary to present fairly the financial position as of February 28, 2001, and the results of its operations and cash flows for the three months ended February 28, 2001 and 2000. Interim results are not necessarily indicative of results for a full year. The condensed consolidated financial statements and notes are presented as permitted by Form 10-Q, and do not contain certain information included in the Company's audited consolidated financial statements and notes for the year ended August 31, 2000. 2. Financial Statements The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated. 3. Supplemental Disclosures of Cash Flow Information Three months ended February 28, 2001 2000 Operating Activities: Interest paid $ - $ - ==== ==== 4. Going Concern As shown in the accompanying financial statements, the Company incurred net losses of $6,165 and $97,431 for the three months and the six months ended February 28, 2001. The Company's current liabilities exceeded its current assets by $1,059,861 and $1,508,369 at February 28, 2001 and August 31, 2000, respectively. In addition, a subsidiary of the Company is involved in litigation, the outcome which is unknown at this time and has defaulted on the license agreements. The ability of the Company to continue as a going concern is contingent upon its ability to secure additional equity financing. The Company will offer additional shares of its common stock to raise capital and obtain financing on an as needed basis. -4- OMNINET MEDIA.COM, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5. Stock Options On August 31, 2000, the Company issued options to purchase an aggregate of 250,000 shares of its common stock as $4.00 per share to a vendor of advertising services. These options were fully vested as of the date of their issuance with an exercise period of three years. Activity related to the Company's stock options during the three months and six months ended February 28, 2001, was as follows: Outstanding Options Weighted Number Average Of Exercise Shares Price September 1, 2000 22,000 $ 4.00 Grants - - Exercises - - Cancellations - - ________ Options exercisable at: February 28, 2001 22,000 $ 4.00 ======= SFAS No. 123, "Accounting for Stock-Based Compensation" (SFAS 123) was issued during 1995 and is effective for fiscal years ending after December 15, 1996. This pronouncement established financial accounting and reporting standards for stock-based employee compensation plans. It encourages, but does not require, companies to recognize compensation expense for grants of stock, stock options and other equity instruments to employees based on new fair value accounting rules. Companies that choose not to adopt the new fair value accounting rules are required to disclose net income and earnings per share under the new method on a pro forma basis. The Company accounts for its options and warrants according to APB No. 25 and follows the disclosure provisions of SFAS 123. Accordingly, if options or warrants are granted to employees or others for services and other consideration with an exercise price below fair market value on the date of the grant, the difference between the exercise price and the fair market value is charges to operations. The fair value of the options granted during the eight months ended August 31, 2000 reported below, has been estimated at the dates of grant using the Black-Schole option pricing model with the following assumptions: Expected life (in years) 2 Risk-free interest rate 6.0% Volatility 11.0% Dividend yield 0.0% - -5- OMNINET MEDIA.COM, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5. Stock Options, (Continued) The Black-Scholes option valuation method was developed for use in estimating the fair value traded options that have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because the Company's options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in the opinion of management, the existing models do not materially affect the fair value estimate, in the opinion of management, the existing models do not necessarily provide a reliable single measure of the fair value of its options. For the purpose of pro form disclosures, the estimated fair values of the options amortized to expense over the options vesting period. The Company's pro forma for the three months ended February 28, 2001, is as follows: Pro forma net loss $( 0) Pro forma loss per share $( .000) The effects on pro forma disclosures of applying SFAS 123 are not necessary indicative of the effects on pro forma disclosures of future years. 6. Impairment Loss In September 2000, the issuer of the license agreements to the Company cancelled the agreements for non-payment of license fees. An impairment loss in the amount of $61,916 was recognized. 7. Subsequent Event On March 3, 2001, the Company received $40,000.00 in exchange for One Hundred and Eight Thousand One Hundred and Eight shares (108,108) of the Common Stock, $0.0001 par value ("Common Stock") of OmniNet Media.com, Inc., (ONMC) at a Twenty Percent (20%) discount from the 3-month weighted average price during the time period from December 5th, 2000 to March 5th, 2001. - -6- ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION OmniNet Media.Com, Inc. commenced active operations in January of 2000 which have continued to the date of this report. In note 1 to its financial statements as of August 31, 2000 its auditors stated that the financial statements were presented on a going concern basis which contemplated the realization of assets and satisfaction of liabilities in the normal course of business. However, as noted there, the Company has sustained recurring losses since inception and had negative working capital for the eight months ended August 31, 2000 and the years ended December 31, 1999 and 1998. The Company experienced operating losses of $1,560,604, $41,971 and $14,350, respectively, during those periods. Its ability to continue as a going concern is contingent upon its ability to secure additional equity financing, initiate sales of its products and thereby attain profitable operations. The Company is continuing to pursue financing by the issuance of common stock shares. Although the Company plans to pursue additional financing on terms beneficial to the Company and its stockholders. Without such funds the Company will be unable to comply with its payment obligations to vendors. The Company anticipates that it will require $5,000,000 in additional debt or equity financing in order to continue as a going concern during the next twelve months of operation. The Company plans to attempt to enter into arrangements to raise these funds through the private or public sale of common shares, and by initiating profitable operations. No assurance can be given that either of these plans will be realized and thus, no assurance can be given that the Company will be able to continue as a going concern in the foreseeable future. The company's plan of operation will target the $15,000,000,000 promotional market, and the $12,000,000,000 television advertising market by providing both the retailer and National advertiser with a wireless, digital video, Internet-enabled networked plasma displays for the purpose of disseminating timely multi-media in-store advertising messages directly into the retail environment to influence the shopper at the moment of decision. The Plasma system consists of a large thin (up to 60 inch) display screen, a server, a management workstation, display controller packaged in a low profile complete stand alone wall or ceiling mounted systems. The company's proprietary system, referred to as WIPD (Wireless Internet Plasma Displays) ties the complete system together and can be configured in a number of different ways depending upon the specific requirements of the retailer. Upon completion of months of diligent market research, the company has concluded that its business model will focus on marketing its unique advertising platform and promotional vehicle to both the National advertiser and retailer. The company will market and supply a network of large plasma display panels to the retailer for promotional and advertising messages. The company will market this network of wireless plasma display panels, as opposed to a large and complicated interactive kiosk unit, which requires physical maintenance, individual configurations, servicing, and attention. The plasma display screen advertising loops will be updated remotely via the Internet, according to the National advertisers specifications, but will remain non-interactive to the viewing public. During March 2001, the company executed leases for its new Corporate Office at 3140 Venture Blvd, Las Vegas, Nevada and for its Executive and Marketing Offices at One World Trade Center 8th Floor, Long Beach, California. Global Glass Guard Inc., (3Gtm) a Nevada Corporation and wholly owned subsidiary of OmniNet Media.Com, Inc., is in the final stages of completing its unique proprietary adhesive process of the company's polyester-based laminate film product line. The company intends to become a dominant provider of safety and security laminate for glass protection. The Company has suspended all active business operations in its subsidiary U.S./Ace Security Laminates and does not expect to resume active operation of this business in the foreseeable future. PART II ITEM 1. Legal Proceedings. On March 3, 2001 the company received a complaint filed in San Diego, California Superior Court, by J. Thomas Markham, a Media Communication firm. The complaint alleges that OmniNet Media.com, Inc., should pay J. Thomas Markham 4.5 Million for advertising literature and other expenses. The company believes the suit is without merit and is vigorously defending its position. U.S./Ace Security Laminates Inc., a subsidiary of OmniNet Media.com, Inc., is involved in litigation. U.S./Ace, including certain employees, officers, and directors,is a defendant in a lawsuit filed by the original licensor (in Hull, Quebec,Canada) of certain territories which U.S./Ace entered into contracts for dealership and distribution. The claim is for outstanding license fees allegedly owing pursuant to contracts dated February 9, 1998 and July 7, 1998. The suit asks for damages totaling approximately $9.3 million (Canadian) plus legal costs. Outside counsel for U.S./ACE has advised that, at this stage in the proceeding, the counsel cannot offer an opinion as to the probable outcome. U.S./Ace believes the suit is without merit and is vigorously defending its position. The plaintiffs attorney has been sanctioned by the Court for no appearance at court hearings. ITEM 2. Changes in Securities. There have been no changes in the Company's securities. ITEM 3. Defaults Upon Senior Securities. There have been no defaults upon senior securities. ITEM 4. Submission Of Matters To A Vote Of Security Holders. There have been no Submission of matters to a vote of security holders. ITEM 5. Other Information. The Board of Directors plan to take all necessary action to implement the following: Change the name of the company from OmniNet Media.com, Inc. to OmniNet Media Corporation. Change the capitalization from Six Hundred and Ninety Million (690,000,000) shares of $0.0001 par value to One Hundred Million (100,000,000) common $0.0001 par value. Rescind the June 5th, 2000 Business Combination Agreement by and between U.S./ACE Security Laminates, Inc., a Delaware Corporation and Ace Security Laminates International, Inc. and OmniNet Media.Com. ITEM 6. Exhibits And Reports On Form 8-K. The registrant has filed two Current Reports on Form 8-K, to wit: 1. Form 8-K filed September 27, 2000 which reported the change of the registrant's fiscal year to August 31. 2. Form 8-K/A filed January 19, 2001 which reports (1) a change in control of the registrant resulting from the election of Don Steffens as President to replace Michael Knox, who resigned; (2) the resignation of Michael Knox as a director of the registrant and the appointment of Don Steffens to fill his unexpired term; and (3) a change of address of the registrant. All of these reports are incorporated herein by reference. SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: April 20, 2001 By:/s/ Don A. Steffens, President -----END PRIVACY-ENHANCED MESSAGE-----