-----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, VNhPEqO1VLxqkVyHcN1gGkeV5qKzFKLsV7xmuf9QSx+wO4oD+t315Eykxim5A6oc ig09Iq0nkSqK9fjmNuRhNA== /in/edgar/work/0001116502-00-500179/0001116502-00-500179.txt : 20001122 0001116502-00-500179.hdr.sgml : 20001122 ACCESSION NUMBER: 0001116502-00-500179 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20001121 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WATCHOUT INC CENTRAL INDEX KEY: 0000736314 STANDARD INDUSTRIAL CLASSIFICATION: [6792 ] IRS NUMBER: 840959153 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-11424 FILM NUMBER: 774470 BUSINESS ADDRESS: STREET 1: 20283 STATE ROAD 7 STREET 2: SUITE #400 CITY: BOCA RATON STATE: FL ZIP: 33498 BUSINESS PHONE: 5614829420 MAIL ADDRESS: STREET 1: 1900 N W CORP BLVD STREET 2: SUITE 400 E CITY: BOCA RATON STATE: FL ZIP: 33431 FORMER COMPANY: FORMER CONFORMED NAME: WHITE CLOUD EXPLORATION INC DATE OF NAME CHANGE: 19920703 10QSB/A 1 0001.txt QUARTERLY REPORT 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 March 31, 2000 [ ] TRANSITION REPORT UNDER SECTION 14 OR 15(D) OF THE EXCHANGE ACT For the transition period from__________ to ___________ WATCHOUT! INC. (Name of Registrant as specified in its charter) WHITE CLOUD EXPLORATION INC. --------------------------------------------- (Former Name of Registrant) Utah 0-114244 84-0959153 ------ -------- ---------- (State or other jurisdiction of (Commission File No.) (IRS Employer incorporation or organization) Identification No.) 20283 State Road 7 Suite 400, Boca Raton, Florida 33428 ------------------------------------------------------- (Address and telephone number of principal executive offices) Check whether the issuer has (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months, (or such shorter period that the Registrant was required to file such report(s), and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No ( ) APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity , as of the latest practicable date: March 31, 2000 -------------- CLASS Outstanding at March 31, 2000 - ---------------------------- ----------------------------- Common stock $.001 Par Value 15,205,245 WATCHOUT! INC.
PART I: FINANCIAL INFORMATION PAGE ---- Consolidated Balance Sheets as of 3 March 31, 2000 and 1999 (Unaudited) and December 31, 1999 Consolidated Statements of Profit and Loss for the Three Month Periods Ended March 31, 2000 and 1999 (unaudited) and for the Twelve Months Ended December 31, 1999 4 Consolidated Statement of Cash Flows for the Period Ending March 31, 2000 And March 31, 1999 (Unaudited) 5 Notes to Consolidated Financial Statements (Unaudited) as of March 31, 2000 6-8 Management Discussion and Analysis of Financial Condition and Results of Operations 9
2 WatchOUT!, Inc. Balance Sheet As of March 31, 2000
(unaudited) (unaudited) (audited) Mar 31, '00 Mar 31, 99 Dec. 31, 99 ---------------- ---------------- ---------------- ASSETS Current Assets Checking/Savings Cash $ 11,653.00 $ -- $ -- Accounts Receivable 2,025.00 Prepaid Expenses 2,500.00 ---------------- ---------------- ---------------- Total Checking/Savings 16,181.00 -- -- ---------------- ---------------- ---------------- Total Current Assets 16,181.00 -- -- Other Assets Investments 636,500.00 -- -- Organization Cost Amortization (6,862.50) (3,812.00) (6,100.00) Organization Costs 15,250.00 15,250.00 15,250.00 ---------------- ---------------- ---------------- Total Other Assets 642,397.50 11,438.00 9,150.00 ---------------- ---------------- ---------------- TOTAL ASSETS $ 661,068.50 $ 11,438.00 $ 9,150.00 ================ ================ ================ LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable Accounts Payable & Accrued Ex 784,069.00 1,047,270.00 1,047,270.00 Due to Stockholders 35,000.00 457,945.00 466,445.00 Notes Payable 1,061,500.00 450,000.00 450,000.00 ---------------- ---------------- ---------------- Total Current Liabilities 1,880,569.00 1,921,147.00 1,963,715.00 ---------------- ---------------- ---------------- Shareholder's Equity (Deficit) Additional Paid in Capital 989,502.00 989,502.00 989,502.00 Preferred Stock, no par value 10,000,000 shares authorized no shares issued or outstanding Common Stock, $0.001 par value 15,205.00 15,030.00 15,030.00 50,000,000 shares authorized 15,205,245 issued and outstanding Accumulated Deficit (2,224,208.00) (2,914,241.00) (2,959,097.00) ---------------- ---------------- ---------------- Total Stockholders' Deficit (1,219,501.00) (1,909,709.00) (1,954,565.00) ---------------- ---------------- ---------------- TOTAL LIABILITIES & EQUITY $ 661,068.00 $ 11,438.00 $ 9,150.00 ================ ================ ================
The accompanying notes are an integral part of these financial statements 3 WatchOUT!, Inc. Profit & Loss January through March 2000
(unaudited) (unaudited) (audited) Jan - Mar '00 Mar. 31, 99 Dec. 31, 99 ----------------- ----------------- ------------ Revenues $ -- $ -- $ -- Operating expense Amortization expense 762.50 -- 3,050 Bank charges 213.00 Consulting fees 30,913.00 -- -- Dues and Subscriptions 235.00 -- -- Marketing and Promotion 9,875.00 -- -- Office Expense 911.00 580.00 -- Payroll Expenses 11,250.00 -- -- Employee Benefits 860.00 -- -- Professional Fees 81,036.00 -- 9,080 Telephone & Communications 3,857.00 -- -- Travel 28,158.00 -- -- ----------------- ----------------- ------------ Total Operating Expense 168,158.00 580.00 12,130 ----------------- ----------------- ------------ Net Operating (Loss) (168,071.00) (580.00) (12,130.00) Other Income (Expense) 902,960.00 Forgiveness of debt Interest 0.00 (13,500.00) (34,066) ----------------- ----------------- ------------ Total Other Income 902,960.00 (13,500.00) (34,066) ----------------- -------------- ------------ Net Other Income 902,960.00 (13,500.00) (34,066) ----------------- -------------- ------------ Net Income $ 734,889.00 $ (14,080.00) (46,196) ================= ================= ============ Weighted Average Common Shares 15,205,245.00 15,030,245.00 15,030,245 Loss Per Share $ 0.05 $ (0.00) $ (0.00) ================= ================= ============
The accompanying notes are an integral part of this financial statement. 4 WatchOUT!, INC. Statement of Cash Flows For the Period Ending March 31, 2000
(unaudited) (unaudited) Mar. 31, 00 Mar. 31, 99 --------- --------- NET INCOME FOR THE PERIOD $ 734,889 $ (580) ADJUSTMENTS Depreciation and amortization 763 CASH FLOWS FROM OPERATING ACTIVITIES Increase in accounts payable and accrued liabilities 6,286 13,500 Increase in prepaid expenses (2,500) --------- --------- Net cash provided (used) by operating activities 739,438 (14,080) --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Payment for the purchase of investments (636,500) -- --------- --------- Net cash used in investing activities (636,500) -- --------- --------- CASH FLOW FROM FINANCING Proceeds from debt instruments 811,500 -- Proceeds from common stock 175 --------- --------- Net cash from financing activities 811,675 -- --------- --------- Forgiveness of debt (902,960) Net increase (decrease) in cash and cash equivalents 11,653 (580) Cash at the beginning of the period -- $ 580 --------- --------- Cash at the end of the period $ 11,653 -- ========= ========= Supplemental Disclosures of Cash Flow Information: Cash Paid During the Year for: Interest $ 0 $ --
The accompanying notes are an integral part of this finanical statement 5 WATCHOUT! INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 NOTE 1-Organization and summary of Significant Accounting Policies: Organization The company was incorporated July 22, 1983 under the laws of Utah for the purpose of obtaining, capital to seek potentially profitable business opportunities. Since inception, the Company has been engaged in organizational activities. In 1997, the Company acquired two entities: Watchout, a California Corporation, and Goldpoint International, a limited liability company. In November of 1998, the corporation changed it's name to Watchout!, Inc. The Company's fiscal year end is December 31. Cash and Cash Equivalents: For the purpose of the statement of cash flows, cash and cash equivalents include in banks and money market accounts. Research & Development Research and development costs are expenses when incurred. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the reported amount of assets and liabilities at the date of the financial statements and the reported activities during the reporting period. Actual results may differ from those estimates. Income Taxes No provisions have been made for income taxes. As of December 31, 1999, the company had net operating loss (NOL) carryfowards for federal income tax purposes of approximately $2,959,047. These operating losses may be used to offset future taxable income. Unused carryfowards will expire in 2014. 6 WATCHOUT!, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 NOTE 1- Organization and Summary of Significant Accounting Policies: (Continued) Income Taxes: The Financial Accounting Standards Board (FASB) has issued Statement of Financials Accounting Standard Number 109 ("SFAS 109"), "Accounting for Income Taxes", which requires a change from the deferred method to the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred income taxes are recognized for the tax consequences of "temporary differences" by applying enacted statutory tax rates applicable to future years to differences between the financial statements carrying amounts and the tax basis of existing assets and liabilities. At December 31, 1999, the company had net operating loss carryfowards of approximately $2,959,097 for federal income tax purposes. The carryfowards, if not utilized to offset taxable income will expire at the end of the indicated years: 2009 $ 102,487 2010 89,956 2011 895,058 2012 968,502 2013 856,896 2014 46,198 ---------- $2,959,097 ========== There was no provision or benefit for income taxes in fiscal 1999. NOTE 2-Investments: The company made an investment in WirelessOn.com, a Canadian wireless communication company. WatchOUT!, Inc. made three payments totaling $336,500 for this investment. This represents a five percent (5%) ownership in WirelessOn.com. 7 WATCHOUT!, INC. NOTES TO FINANCIAL STATEMENTS MARCH 31, 2000 The company made an investment in Micromatix.net. Two payments of $150,000 were made in exchange for 483,000 shares in Micromatix.net. Micromatix.net is a publicly traded company, traded on the OTCBB under the symbol "IMTL". On February 25, 2000 the company made an investment in MJAC Communications (MJAC). In consideration for 2,500,000 shares of restricted stock, Watchout! received a 51% ownership stake in MJAC. MJAC holds the marketing and licensing rights to become a level one Internet Service Provider in the greater Washington DC area. NOTE 3- Notes Payable: Following is a summary of notes payable at March 31, 2000. Note Payable to individual, 12%, unsecured due on demand 166,000 Note Payable to individual, 12%, unsecured, due on demand 84,000 Notes Payable to individual 811,500 ----------- $ 1,061,500 ----------- NOTE 4 - Going Concern: The company has incurred net losses of $3,062,828. As of March 31,2000, current liabilities exceeded current assets by $2,842,743. In view of these matters, the future success of the Company is likely to depend on its ability to obtain additional capital and its ability to attain future profitable operations. There can be no assurance that the Company will be successful in obtaining such financing, or that it will attain positive cash flow from operations. NOTE 5 - Related Party Transactions: Due to Stockholders The Company has entered into loan agreements with shareholders in which to finance operations and the acquisitions of investments in Micromatix.net and WirelessOn.com. The amounts included in these loans total $811,500. The Company has entered into loan an agreement with a shareholder for reimbursements of expenses of operations by the Company. The amounts outstanding on the loan totals $ 35,000 at March 31, 2000. The loan agreement is unsecured and non-interest-bearing. 8 ITEM II MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE FOLLOWING DISCUSSION OF THE RESULTS OF OUR OPERATIONS AND FINANCIAL CONDITION SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS REPORT. EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE DISCUSSION CONTAINED IN THIS REPORT CONTAINS "FORWARD-LOOKING STATEMENTS" THAT INVOLVE RISK AND UNCERTAINTIES. THESE STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES," "EXPECTS," "MAY," "WILL," "SHOULD" OR "ANTICIPATES" OR THE NEGATIVE THEREOF OR SIMILAR EXPRESSIONS OR BY DISCUSSIONS OF STRATEGY. THE CAUTIONARY STATEMENTS MADE IN THIS REPORT SHOULD BE READ AS BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING STATEMENTS WHEREVER THEY APPEAR IN THIS REPORT. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN THIS REPORT. Results of Operations. The Company has not been profitable and has no revenues. Since the change in its management and the implementation of the Company's new business plan, the Company had devoted a substantial amount of its efforts and assets towards the investigation and consummation of joint ventures and acquisitions. The Company anticipates that it will continue to be dependent upon obtaining loans from its shareholders. Net losses increased from $14,080.00 to 103,730.00 for the quarters ending March 31, 1999 and March 31, 2000, respectively, reflecting the fact that the Company was dormant during the March 31, 1999 period. The most significant expenses incurred during the quarter ending March 31, 2000 were professional fees of approximately $54,197.00, travel, lodging and meals expenses, which totaled approximately 24,284.00, Payroll expenses of approximately $8,777.00, marketing and promotional expenses of approximately $8,500. There were no corresponding expenses for the same quarter of the previous year as the Company was dormant and conducted no operations. The Company can book revenues by acquiring a majority or wholly owned interest in a company that has revenues or by selling its interest in a minority owned entity at a profit. The Company is now principally focused upon the location of additional strategic alliances and acquisition targets. While the Company presently has no wholly or majority owned subsidiaries that have earnings, management believes that the Company will book revenues during the next six months. However, no assurances can be given in this regard. 9 Liquidity and Capital Resources March 31, 1999 as compared to March 31, 2000. Total cash and cash equivalents as of March 31, 1999 were $16,236 as compared to $0.00 as of March 31, 2000, which were the results of loans received by the Company from one or more of its shareholders. Investments increased from $0.00 as of March 31, 1999 to $638,850 in March 31, 2000 reflecting the execution of the Company's new business plan. Accounts payable increased from $475,989 to $622,601 as a result of the Company discovering increased payables from previous periods. Credit cards payable increased from $0.00 to $9,479 reflecting the use of credit card debt as a method of partially financing the Company's operations during the quarter ending March 31, 2000. Amounts due stockholders increased from $457, 945 to $1,205,105 reflecting loans made by shareholders during the current quarter that were used to fund the Company's acquisitions and ongoing operations. December 31, 1999 as compared to March 31, 2000. Total cash and cash equivalents as of March 31, 1999 were $16,236 as compared to $0.00 as of December 31, 1999, which were the results of loans received by the Company from one or more of its shareholders. Investments increased from $0.00 as of December 31, 1999 to $638,850 in March 31, 2000 reflecting the execution of the Company's new business plan. Accounts payable increased from $475,989 to $622,601 as a result of the Company discovering increased payables from previous periods. Credit cards payable increased from $0.00 to $9,479 reflecting the use of credit card debt as a method of partially financing the Company's operations during the quarter ending March 31, 2000. Amounts due stockholders increased from $466,445 to $1,205,105 reflecting loans made by shareholders during the current quarter that were used to fund the Company's acquisitions and ongoing operations. Until the Company earns revenues and can operate profitably, it will continue to be dependent upon loans from its shareholders to remain viable. No assurances are given that the Company will incur revenues, will be profitable thereafter or that its shareholders will continue to fund its operations. Our current liabilities continue to exceed our current assets. This renders us insolvent. Demand for payment by our creditors could force us to seek bankruptcy law protection. 10 PART II. OTHER INFORMATION AND SIGNATURES SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Watchout! Inc. BY: /s/ Todd Violette - -------------------------------- Todd Violette, president Dated: This 19th day of November 2000. 11 EX-27 2 0002.txt FDS --
5 3-MOS DEC-31-2000 MAR-31-2000 16,236 0 0 0 0 16,236 0 0 663,274 2,858,979 0 0 0 15,030 0 663,274 0 0 0 0 103,731 0 404 103,731 103,731 103,731 0 0 0 (103,731) (.01) (.01)
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