10QSB 1 reservenet10qsbjune03.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB (X) Quarterly report under section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2003. Commission File No: 333-68312 RESERVENET, INC. (Name of small business in its charter) DELAWARE 94-3381088 (State or other jurisdiction of Incorporation) (IRS Employer Id. No.) 3701 Sacramento St. #323 San Francisco, CA 94118 (Address of Principal Office) Zip Code Issuer's telephone number: (415) 752-2578 Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 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 Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes X No State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. At June 30, 2003, the following shares of common were outstanding: Common Stock, par value of $0.0001, 1,900,000 shares. Transitional Small Business Disclosure Format (Check one): Yes X No PART 1 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS AND EXHIBITS The unaudited financial statements of registrant for the period ended June 30, 2003 follow. The financial statements reflect all adjustments, which are, in the opinion of management, necessary to present a fair statement of the results for the periods presented. Beckstead and Watts, LLP Certified Public Accountants 3340 Wynn Road, Suite B Las Vegas, NV 89102 702.257.1984 702.362.0540 fax INDEPENDENT ACCOUNTANTS' REVIEW REPORT Board of Directors ReserveNet, Inc. (a Development Stage Company) Las Vegas, NV We have reviewed the accompanying balance sheet of ReserveNet, Inc. (a Nevada corporation) (a development stage company) as of June 30, 2003 and the related statements of operations for the three-months and six-months ended June 30, 2003 and 2002 and for the period October 31, 2000 (Inception) to June 30, 2003, and statements of cash flows for the six-months ended June 30, 2003 and 2002 and for the period October 31, 2000 (Inception) to June 30, 2003. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements referred to above for them to be in conformity with generally accepted accounting principles in the United States of America. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has had limited operations and has not commenced planned principal operations. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Beckstead and Watts, LLP has previously audited, in accordance with generally accepted auditing standards, the balance sheet of ReserveNet, Inc. (a development stage company) as of December 31, 2002, and the related statements of operations, stockholders' equity, and cash flows for the year then ended (not presented herein) and in our report dated July 3, 2003, we expressed an unqualified opinion on those financial statements. August 11, 2003 ReserveNet, Inc. (A Development Stage Company) Balance Sheet as of June 30, 2003 and Statements of Operations for the Three Months and Six Months Ended June 30, 2003 and 2002, and for the Period October 31, 2000 (Inception) to June 30, 2003 and Cash Flows for the Six Months Ending June 30, 2003 and 2002, and for the Period October 31, 2000 (Inception) to June 30, 2003 TABLE OF CONTENTS Page Independent Accountants' Review Report 1 Balance Sheet 2 Statements of Operations 3 Statements of Cash Flows 4 Footnotes 5 ReserveNet, Inc. (a Development Stage Company) Balance Sheet (unaudited) June 30, 2003 -------- Assets Current assets: Cash $ 1,022 -------- Total current assets 1,022 -------- $ 1,022 ======== Liabilities and Stockholders' Equity Current liabilities: Due to shareholder $ 5,282 -------- Total current liabilities 5,282 -------- Stockholders' equity: Common stock, $0.0001 par value, 100,000,000 shares authorized, 1,900,000 shares issued and outstanding 190 Additional paid-in capital 28,310 (Deficit) accumulated during development stage (32,760) -------- (4,260) -------- $ 1,022 ======== The accompanying notes are an integral part of these financial statements.
ReserveNet, Inc. (a Development Stage Company) Statements of Operations (unaudited) Three Months Ending Six Months Ending June 30, June 30, October 31, 2000 -------------------------- -------------------------- (Inception) to 2003 2002 2003 2002 June 30, 2003 ----------- ----------- ----------- ----------- ----------- Revenue $ -- $ -- $ -- $ -- $ -- ----------- ----------- ----------- ----------- ----------- Expenses: General and administrative expenses 1,871 2,615 1,984 5,266 31,960 General and administrative expenses - related party -- 500 -- 500 800 ----------- ----------- ----------- ----------- ----------- Total expenses 1,871 3,115 1,984 5,766 32,760 ----------- ----------- ----------- ----------- ----------- Net (loss) $ (1,871) $ (3,115) $ (1,984) $ (5,766) $ (32,760) =========== =========== =========== =========== =========== Weighted average number of common shares outstanding - basic and fully diluted 1,900,000 1,900,000 1,900,000 1,900,000 =========== =========== =========== =========== Net (loss) per share - basic & fully diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00) =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements.
ReserveNet, Inc. (a Development Stage Company) Statements of Cash Flows (unaudited) Six Months Ending June 30, October 31, 2000 -------------------- (Inception) to 2003 2002 June 30, 2003 -------- -------- ------------- Cash flows from operating activities Net (loss) $ (1,984) $ (5,766) $(32,760) Adjustments to reconcile net (loss) to net cash (used) by operating activities: (Decrease) in accounts payable (465) -- -- -------- -------- -------- Net cash provided (used) by operating activities (2,449) (5,766) (32,760) -------- -------- -------- Cash flows from financing activities Issuances of common stock -- -- 28,500 (Increase) in due from shareholder -- (1,100) (19,527) Increase in due to shareholder 3,500 1,489 24,809 (Decrease) in checks issued in excess of available cash (29) -- -- -------- -------- -------- Net cash provided by financing activities 3,471 389 33,782 -------- -------- -------- Net increase (decrease) in cash 1,022 (5,377) 1,022 Cash - beginning -- 5,720 -- -------- -------- -------- Cash - ending $ 1,022 $ 343 $ 1,022 ======== ======== ======== Supplemental disclosures: Interest paid $ -- $ -- $ -- ======== ======== ======== Income taxes paid $ -- $ -- $ -- ======== ======== ======== The accompanying notes are an integral part of these financial statements.
ReserveNet, Inc. (a Development Stage Company) Notes Note 1 - Basis of presentation The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the period ended December 31, 2002 and notes thereto included in the Company's Form 10-KSB. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim periods are not indicative of annual results. Note 2 - Going concern The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has not commenced its planned principal operations and it has not generated any revenues. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. Management plans to raise additional capital via an equity offering and an officer of the Company has agreed to loan the Company funds as needed to sustain business for a period of twelve months. However, the Company is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, without sufficient financing it would be unlikely for the Company to continue as a going concern. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty. Note 3 - Related party transactions As of June 30, 2003, an officer, director and shareholder of the Company is owed a total of $5,282 due to various expenses paid on behalf of the Company. The Company does not lease or rent any property. Office services are provided without charge by a director. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Plan of Operation ReserveNet is a development stage company, whose business plan is to provide consumer reservation services to the restaurant industry. ReserveNet hopes to develop a web-based reservation system that allows consumers to place reservations directly with restaurants through the www.ReserveNet.ws website. The company anticipates revenue will be generated through restaurant subscriptions and advertising through its website. Consumers will have the ability to search an interactive database of available restaurant reservations that may be refined to a particular geographic location convenient to the consumer. The search may also be further refined by type of cuisine, average price, and/or favorable restaurant reviews. ReserveNet is seeking to raise capital in three tranches; $300,000 , $1,500,000, and $1,500,000 for a total of $3,300,000 by way of a private equity offering, debt, or some combination thereof to fund its product development, initial product rollout, establish offices, pay salaries and purchase capital equipment. ReserveNet will seek to raise this money in three private offering installments, but may elect to undertake a public offering. The company has not received any additional financing commitments and may rely on funds loaned to it by its founder and CEO. Results of Operations The company has not begun its planned operations. Expenditures since inception and for the requisite reporting periods have been General and Administrative in nature. These represent the costs associated with professional fees, phone expenses, small equipment, and expenses related to investor, engineering and strategic partnership meetings, amongst other categories. For the six months ended June 30, 2003 operating expenses were $1,871 compared to $3,115 for the comparable period in 2002. These amounts represent Net Losses for the company that will provide tax credits to offset Net Income in future periods. As a result of the lack of operating capital, efforts were made to decrease spending in all categories including travel, postage, communications, and other general and administrative expenses. The company had relied upon its founder to provide capital to fund its limited operations for at least the last six months. Liquidity ReserveNet's founder has provided financing for the short-term operating needs of the Company. The Company hopes to raise additional capital through a private placement equity offering, public equity offering or debt offering. The net proceeds of the capital raised would be allocated to fund product development and operations. The ability of the company to secure financing, however, will affect its status as a going concern. There can be no guarantee or assurance that the Company would be successful in raising additional proceeds. If additional financing cannot be secured, ReserveNet, Inc. would be unlikely to progress its business plan. The Company has and continues to rely on its founder to finance its limited operations. He has not provided any guarantees or assurances that he would continue to provide ReserveNet with additional financing. In the event that management anticipates a deficiency in working capital, the officers may elect to suspend its business until sufficient financing is secured, market its intellectual property, or cease operations entirely. STATEMENT REGARDING FORWARD-LOOKING INFORMATION This report contains various forward-looking statements that are based on the Company's beliefs as well as assumptions made by and information currently available to the Company. When used in this report, the words "believe," "expect," "anticipate," "estimate" and similar expressions are intended to identify forward-looking statements. Such statements may include statements regarding seeking business opportunities, payment of operating expenses, and the like, and are subject to certain risks, uncertainties and assumptions which could cause actual results to differ materially from projections or estimates contained herein. Factors which could cause actual results to differ materially include, among others, unanticipated, or unexpected costs and expenses, competition and changes in market conditions, lack of adequate management personnel and the like. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. The Company cautions against placing undue reliance on forward-looking statements. PART II ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibit 99.1 - Certification of Chief Executive Officer. (b) Exhibit 99.2 - Certification of Chief Financial Officer. 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. RESERVENET, INC. (Registrant) Date: August 14, 2003 By: /s/ Daniel Regidor ---------------- Daniel Regidor President, CEO, Director