-----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, TFfus1o2kM9sbmcnFhFvaQKzBJ+P+XysT7BCMDfvGNlF5GVrAJLChONui2j6YKZT Vq28QGwTcXmz5Ou8y6tYrQ== 0001103023-01-500008.txt : 20010724 0001103023-01-500008.hdr.sgml : 20010724 ACCESSION NUMBER: 0001103023-01-500008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010531 FILED AS OF DATE: 20010723 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OMNINET MEDIA CORP CENTRAL INDEX KEY: 0001103023 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 880398783 STATE OF INCORPORATION: NV FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28935 FILM NUMBER: 1685971 BUSINESS ADDRESS: STREET 1: 3140 VENTURE DRIVE STREET 2: # CITY: LAS VEGAS STATE: NV ZIP: 89101 BUSINESS PHONE: 702-641-5030 MAIL ADDRESS: STREET 1: 3140 VENTURE DRIVE STREET 2: X CITY: LAS VEGAS STATE: NV ZIP: 89101 FORMER COMPANY: FORMER CONFORMED NAME: OMNINET MEDIA COM INC DATE OF NAME CHANGE: 20001005 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 omni.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 May 31, 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 CORPORATION (Name of Small Business Issuer) Nevada 880398783 (State or Other (I.R.S. Employer Jurisdiction of Identification Incorporation or Number) Organization) One World Trade Center 8th floor 90831 Long Beach, CA (Zip Code) Registrant's telephone number including area code: (866) 983-8177 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. OMNINET MEDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED May 31, 2001 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 OMNINET MEDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS May 31 August 30, 2001 2000 Current Assets Cash $ 6 $ 1,420 Prepaid expenses - 6,779 Total Current Assets - 8,199 Property and Equipment, net - 158,507 Other Assets License agreement, net - 703,916 Other assets 6 2,796 Total Assets $ 12 $873,418 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued expenses $772,105 $400,920 Current portion of note payable 19,000 642,000 Notes payable to related parties 3,090 623,956 Total Current Liabilities 794,195 1,666,876 Noncontrolling interest - ( 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; 100,000,000 shares authorized; 44,857,299 and 45,317,679 shares issued and outstanding, respectively 4,143 4,228 Additional paid in capital 1,799,251 1,759,262 Accumulated deficit (2,597,577) (2,279,543) Total Stockholders' Deficit ( 794,183) ( 516,053) Total Liabilities and Stockholders' Deficit $ 12 $ 873,418 See accompanying summary of notes to unaudited condensed consolidated financial statements. OMNINET MEDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended May 31, Nine Months Ended May 31, 2001 2000 2001 2000 Expenses Consulting 712,124 $ - $ 712,124 $ 6,000 General and Administrative 15,650 - 15,650 43,428 Loss from Continuing Operations ( 727,774) - ( 727,774) ( 49,428) Discontinued Operations 507,171 ( 315,703) 409,740 ( 561,394) Net Loss $( 220,603) $ ( 315,703) ( 318,034) ( 610,822) Net Loss Per Common Share Continuing operations $( .016) $ - $( .016) $( .004) Discontinued operations .011 ( .028) .009 ( .050) Net Loss $( .005) $ ( .028) $( .007) $( .054) Weighted Average Number Of Common Shares Outstanding 45,285,489 11,260,748 45,428,248 11,260,748 See accompanying summary of notes to unaudited condensed consolidated financial statements. OMNINET MEDIA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Nine Months Ended May 31, 2001 2000 Cash Flows From Operating Activities Net loss $ (318,034) $ (610,822) Adjustment to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 24,423 406,195 Minority interest in net loss of consolidated subsidiaries 304,140 ( 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 395,759 50,700 Net Cash Provided by (Used In) Operating Activities 477,773 (421,120) Cash Flows From Investing Activities Disposal of property and equipment - 2,622 Disposal of business segement 82,679 - Net Cash Provided by Investing Activities 82,679 2,622 Cash Flows From Financing Activities Proceeds from sale of common stock 40,000 - Proceeds from notes payable 22,090 311,632 Reductions and reclassification on notes payable (623,956) (30,464) Capital contributed by shareholder - 37,560 Net Cash Provided by (Used In) Financing Activities (561,866) 318,728 Net Decrease in Cash ( 1,414) (99,770) Cash at beginning of period 1,420 99,770 Cash at end of period $ 6 $ - See accompanying summary of notes to unaudited condensed consolidated financial statements. OMNINET MEDIA CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Presentation of Interim Information In the opinion of the management of OMNINET MEDIA CORPORATION 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 May 31,2001, and the results of its operations and cash flows for the nine months ended May 31, 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 Nine months ended May 31, 2001 2000 Operating Activities: Interest paid $ 110 $ - ==== ==== 4. Going Concern As shown in the accompanying financial statements, the Company incurred net losses of $220,603 and $318,034 for the three months and the nine months ended May 31, 2001. The Company's current liabilities exceeded its current assets by $794,189 and $1,658,677 at May 31, 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. OMNINET MEDIA CORPORATION 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 nine months ended May 31, 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: May 31, 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% OMNINET MEDIA CORPORATION 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 nine months ended May 31, 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. Disposal of Business Segement On May 25, 2001, the Company rescinded the acquisition agreement with US/Ace Security Laminate, Inc. a subsidiary, in which the Company maintained a 75.7% ownership interest. The agreement provided for the return of 964,489 shares of the Company's stock isued on October 10, 2000 with restrictions. In addition, the Company will be responsible for the subsidiaries legal fees pertaining to the transaction. 8. Subsequent Events On June 1, 2001, the authorized common stock of the corporation changed to One Hundred Million (100,000,000) shares par value $.0001, from Six Hundred and Ninety Million (690,000,000) shares par value $.0001. The number of authorized preferred shares remains at Ten Million (10,000,000) shares par value $.0001. On June 1, 2001, Meadpoint Investments entered into a Agreement to acquire capital stock of the Corporation in a transaction not involving a public offering as that term is used in Section 4(2) of the Securities Act of 1933, as amended. The company issued Five Hundred and Thirty Five Thousand Four Hundred and Seventy Nine (535,479) shares of restricted Common Stock to Meadpoint Investments, $0.0001 par value ("Common Stock") of OmniNet Media Corporation, in exchange for One Hundred and Twenty Thousand Seven Hundred and Sixty Four Dollars and Fifty Nine Cents ($120,764.59). On June 13, 2001 OmniNet Media Corporation and Lemura Pty Ltd. entered into an Agreement pertaining to the sale of 100% of the company's wholly owned subsidiary, Global Glass Guard. The Agreement calls for a 30-day due diligence period secured with a $50,000 nonrefundable deposit paid to the company from Lemura Pty Ltd. At the conclusion on the 30-day due diligence period, the remainder of the $750,000 purchase price shall be paid. Lemura Pty Ltd. will also issue the company 45,000,000 shares of Lemura Pty Ltd. On July 13, 2001, the company granted Lemura a 30-day extension to complete its due diligence. On June 26th the company entered into a Stock Purchase Agreement with Greystone Venture Partners LP. Greystone Venture Partners LP agrees to tender up to Five Million USD ($5,000,000) to purchase free trading and unencumbered common stock issued by the company pursuant to a private placement memorandum, promulgated under the Securities Act of 1933 during a period not to exceed 36 months proceeding effective registration of the shares. Greystone Venture Partners LP agrees to purchase the shares in traunche amounts equal to One Hundred and Fifty Percent of the 40-day average daily trading volume, multiplied by the purchase price equal to Ninety percent of the lowest bid price during an agreed upon 10-day trading period. On July 10, 2001 OOS Holdings, Inc. agreed to acquire capital stock of the Corporation in a transaction not involving a public offering as that term is used in Section 4(2) of the Securities Act of 1933, as amended. The company issued Nine Hundred Seventy Nine Thousand Forty Seven shares (979,047) of the Common Stock, $0.0001 par value ("Common Stock") of OmniNet Media Corporation, (ONMC) a Nevada corporation (the "Corporation".) in exchange for Ninety Six Thousand Six Hundred and Twelve Dollars and Thirty Six Cents ($96,612.36). On March 15, 2001, the company entered into Consulting Agreements with its President/CEO, Don A. Steffens, and its Secretary, James A. Graves. On June 26, 2001 One Million Six Hundred Thousand shares (1,600,000) of the Common Stock, $0.0001 par value of OmniNet Media Corporation., (ONMC) was issued to Don A. Steffens as compensation for services rendered, and Nine Hundred Thousand shares (900,000) of the Common Stock, $0.0001 par value of OmniNet Media Corporation, (ONMC) was issued to James A. Graves as compensation for services rendered, pursuant to the March 15, 2001 Consulting Agreements. ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION OMNINET MEDIA CORPORATION 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 has received an equity line of credit to draw down up to $5,000,000 Dollars over a 36 month period to use at the company's discretion. The Company will continue to attempt to enter into arrangements to raise additional funding 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 ADHERE system is a wireless point-of-purchase wide area network management system capable of interacting with and influencing consumers at their moment of purchase by marketing pertinent information and product incentives via plasma display panels 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 the Offices 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 CORPORATION, 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 CORPORATION, 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. ITEM 2. Changes in Securities. The authorized common stock of the corporation has been changed to One Hundred Million (100,000,000) shares par value $.0001, from Six Hundred and Ninety Million (690,000,000) shares par value $.0001. The number of authorized preferred shares remains at Ten Million (10,000,000) shares par value $.0001. 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. The shareholders approve the action that the Board of Directors rescind the Business Combination Agreement, dated June 5, 2000, by and between U.S./ACE Security Laminates, Inc., a Delaware Corporation and Ace Security Laminates International, Inc. and OmniNet Media.Com, a Nevada Corporation, by March 31, 2001. The shareholders approve the action that the Board of Directors change the company's name to OmniNet Media Corporation from OmniNet Media.com, Inc. The shareholders approve the action that the Board of Directors hereby elect Steven Miotti as Director. ITEM 5. Other Information. ITEM 6. Exhibits And Reports On Form 8-K. The registrant has filed four 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. 3. Form 8-K filed On May 25, 2001 an agreement was entered into by and between OmniNet Media.com, Inc. and the prior majority shareholders of U.S./Ace Security Laminates, Inc., a Delaware corporation, and Ace Security Laminates International, Inc. by which a Business Combination Agreement dated June 5, 2000 and all other agreements between the parties thereto were rescinded in their entirety. 4. Form 8-K/A filed on May 15th, 2001 OmniNet Media Corporation and International Business Corporation (IBM), through its division IBM Global Services signed a Letter of Intent and agreed to engage in detailed discussions concerning Web and e-business Hosting Development and Operational Management, Business Process Design and Development, Information Technology Management, and Strategic Outsourcing services that IBM may provide to OmniNet Media Corporation. On June 1, 2001, the Board of Directors approved the change of the name of the Company from Omninet Media.Com Inc. to OmniNet Media Corporation. On June 4, 2001, a Certificate of Amendment of Certificate of Incorporation was filed with the State of Nevada to affect this name change. The effect of this agreement is to divest OmniNet of 1,928,978 shares of U.S./Ace Securities Laminates, Inc. which were previously acquired by OmniNet from controlling stockholders of U.S./Ace, and recover for cancellation 964,489 common shares of OmniNet issued to the stockholders in the exchange. 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: July 23, 2001 ______________________________________ By:/s/ Don A. Steffens, President -----END PRIVACY-ENHANCED MESSAGE-----