-----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, FdcjJgwzUdeqK2m5k9X+1Sji1E5VErOzR3cg+plIscMOYPk7nbxohS5D+dHkw8so V9eh/KbqHZV5PLhX4Mi4Uw== 0001016843-99-000842.txt : 19990813 0001016843-99-000842.hdr.sgml : 19990813 ACCESSION NUMBER: 0001016843-99-000842 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUTRICEUTICALS COM CORP CENTRAL INDEX KEY: 0000921878 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HEALTH SERVICES [8000] IRS NUMBER: 341755390 STATE OF INCORPORATION: FL FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-24362 FILM NUMBER: 99685353 BUSINESS ADDRESS: STREET 1: 6505 ROCKSIDE RD STREET 2: STE 425 CITY: INDEPENDENCE STATE: OH ZIP: 44131 BUSINESS PHONE: 2165736522 MAIL ADDRESS: STREET 1: 6505 ROCKSIDE RD STREET 2: STE 425 CITY: INDEPENDENCE STATE: OH ZIP: 44131 FORMER COMPANY: FORMER CONFORMED NAME: NUMED SURGICAL INC DATE OF NAME CHANGE: 19940419 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter Ended June 30, 1999 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-24362 NUTRICEUTICALS.COM CORPORATION -------------------------------------------------------- (Exact name of small business issuer as specified in its charter) STATE OF NEVADA 34-1755390 ----------------------------- ------------------------------ (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 6950 BRYAN DAIRY ROAD, LARGO, FLORIDA 33777 ---------------------------------------- --------- (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code: (727) 544-8866 Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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. [X] Yes [ ] No The number of shares outstanding of the Issuer's common stock at $.001 par value as of August 6, 1999 was 5,353,414. NUTRICEUTICALS.COM CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 MARCH 31, 1999 ------------- -------------- (UNAUDITED) (AUDITED) ASSETS Current assets: Cash and cash equivalents............................................. $ 14,599 $ 56,986 Accounts receivable, net.............................................. 19,038 9,278 Due from related party................................................ 5,570 5,171 Inventory, net of allowance........................................... 19,163 16,303 Prepaids and other current assets..................................... 25,000 -- --------- --------- Total current assets........................................................ 83,370 87,738 --------- --------- Computer software, net..................................................... 45,000 47,500 Deposits................................................................... 200 380 --------- --------- TOTAL ASSETS............................................................... $ 128,570 $ 135,618 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable.................................................... $ 62,614 $ 80,186 Accrued expenses.................................................... 60,478 17,505 Related party notes payable......................................... 50,000 -- --------- --------- Total current liabilities................................................. 173,092 97,691 ========= ========= Shareholders' equity: Common stock, at par value.......................................... 5,352 5,352 Additional paid-in capital.......................................... 137,050 137,050 Accumulated deficit................................................. (104,475) -- Net loss.......................................... ................. (82,449) (104,475) --------- --------- Net shareholders' equity.................................................. (44,522) 37,927 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY................................ $ 128,570 $ 135,618 ========= =========
See notes to condensed consolidated financial statements -2- NUTRICEUTICALS.COM CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 1999 ------------- Net revenues ............................................................... $ 33,899 Cost of revenues ........................................................... 14,786 ----------- Gross profit ........................................................ 19,113 Selling, general and administrative expenses ............................... 101,308 ----------- Operating loss before other income and expense ............................. (82,195) Other income (expense): Interest income ..................................................... 335 Other income and expenses, net ...................................... -- Interest expense .................................................... (589) ----------- Total other income (expense) ............................................... (254) ----------- NET LOSS ................................................................... $ (82,449) =========== Basic and diluted loss per share ........................................... $ (0.02) =========== Basic and diluted weighted number of common shares outstanding ............. 5,351,028 ===========
See notes to condensed consolidated financial statements - 3 - NUTRICEUTICALS.COM CORPORATION AND SUBSIDIARY STATEMENT OF CHANGES IN NET DEFICIENCY IN LIQUIDATION FOR THE THREE MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
THREE MONTHS ENDED JUNE 30, 1998 ------------- Increase in net assets in liquidation: Sales ........................................................ $ -- Decreases in net assets in liquidation: Professional fees ............................................ 3,375 Office expense ............................................... 20 --------- Decrease in net assets in liquidation ................... (3,395) Beginning net liabilities in liquidation ........................... (8,663) --------- Ending net liabilities in liquidation .............................. $ (12,058) ========= Loss per share: Loss attributable to common stockholders ..................... $ (3,395) ========= Basic and diluted loss per share ............................. $ (0.01) ========= Basic and diluted weighted number of common shares outstanding 351,028 =========
See notes to condensed consolidated financial statements - 4 - NUTRICEUTICALS.COM CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
June 30, 1999 -------------- CASH FLOWS USED IN OPERATING ACTIVITIES: Net loss ............................................................... $(82,449) Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 2,500 Changes in operating assets and liabilities: Accounts receivable .......................................... (9,760) Inventory .................................................... (2,860) Prepaid expenses and other current assets .................... (25,399) Accounts payable ............................................. (17,572) Accrued expenses ............................................. 42,973 -------- NET CASH USED IN OPERATING ACTIVITIES ........................................ (92,567) -------- CASH FLOWS FROM INVESTING ACTIVITIES: Deposits ............................................................... 180 -------- NET CASH PROVIDED BY INVESTING ACTIVITIES .................................... 180 -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from related party obligation ................................. 50,000 -------- NET CASH PROVIDED BY FINANCING ACTIVITIES .................................... 50,000 -------- NET INCREASE (DECREASE) IN CASH .............................................. (42,387) CASH AT BEGINNING OF PERIOD .................................................. 56,986 -------- CASH AT END OF PERIOD ........................................................ $ 14,599 ======== Supplemental cash flow information: Cash paid during the period for interest ............................... $ -- ========
See notes to condensed consolidated financial statements - 5 - Nutriceuticals.com Corporation and Subsidiary Notes to Condensed Consolidated Financial Statements (Unaudited) June 30, 1999 NOTE A-BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instruction to Form 10-QSB and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month periods ended June 30, 1999 and 1998 are not necessarily indicative of the results that may be expected for the year ending March 31, 2000. For further information, refer to the consolidated financial statements and footnotes included in the Company's Form 10-KSB for the year ended March 31, 1999. NOTE B-PRINCIPLES OF CONSOLIDATION The accompanying condensed consolidated financial statements include the accounts of Nutriceuticals.com Corporation and its subsidiary, Healthseek.com Corp. (collectively the "Company"). All intercompany balances and transactions have been eliminated. NOTE C-STOCKHOLDERS' EQUITY The Company has adopted Financial Accounting Standards Board ("FASB") Statement of Financial Accounting Standards No. 128, "Earnings Per Share". Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share gives effect to convertible preferred shares which are considered to be dilutive common stock equivalents. - 6 - ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. OVERVIEW The Company derives its revenues from online retail sales of natural products. Revenues are billed and recognized when product is shipped to the customer, net of discounts, allowances, returns and credits. Cost of goods sold is comprised of direct product costs. Selling, general and administrative costs include administrative, sales and marketing and other indirect operating costs. RESULTS OF OPERATIONS Three Months ended June 30, 1999 and June 30, 1998 In March 1997, the Company adopted a plan of liquidation by which it sold its major product line and subsequently disposed of all of its operating assets by March 31, 1998. In March 1999, the Company acquired all of the outstanding common stock of Nutriceuticals.com Corporation ("Nutriceuticals"), a Florida corporation, which was organized in September 1998. The Company then merged with Nutriceuticals and changed its name to Nutriceuticals.com Corporation. For the three months ended June 30, 1998 and prior to the acquisition of Nutriceuticals on September 8, 1998, the Company was accounted for on the liquidation basis of accounting. The Company had revenues of $33,899 for the three months ended June 30, 1999. Gross profit was 56.4% for the period. Selling, general and administrative expenses were $101,308 for the period ended June 30, 1999. The Company has no income tax provision for the period presented due to its net operating losses. These net operating losses may be carried forward for up to 15 years to offset future taxable income. Management believes that there was no material effect on operations or the financial condition of the Company as a result of inflation for the three months ended June 30, 1999. Management also believes that its business is not seasonal; however, significant promotional activities can have a direct impact on sales volume in any given quarter. Interest expense, net of interest income, was $254 for the three months ended June 30, 1999, and was a result of increased borrowings for financing of additional working capital needs. FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES The Company has financed its operations through loans from within the Company. The Company had a working capital deficit of $89,722 at June 30, 1999. The Company estimates that it will need the proceeds from its secondary offering for on-going Web site development, marketing, promotions, and for general working capital purposes over the next nine months, including the Company's plans to hire additional full-time management personnel and acquire new office space. - 7 - Net cash used in operating activities was ($92,567) for the three months ended June 30, 1999. The usage of cash is primarily attributable to the net operating loss as well as an increase in accounts receivable ($9,760), as a result of increased sales by the Company during such period, and an increase in inventory ($2,860), an increase in prepaid expenses and other current assets ($25,399), and a decrease in accounts payable ($17,572), partially offset by an increase in accrued expenses $42,973. Net cash provided by investing activities was $180 representing a decrease in deposits. Net cash provided by financing activities was $50,000 representing proceeds from a related party obligation. In May 1999, 21st Century Healthcare Fund, LLC, an affiliate of the Company's Chairman, Jugal K. Taneja, loaned $50,000 to the Company for the purpose of assisting the Company with its working capital needs. The principal sum, together with interest on the unpaid principal balance at an annual rate equal to prime plus one percent, is due and payable on demand at any time following the earlier to occur of either (i) a public offering of the Company's common stock pursuant to a registration statement filed with the Securities and Exchange Commission, or (ii) December 31, 1999. The Company will need additional capital in the future. In order to satisfy its cash requirements in the next nine months, the Company estimates that it will need approximately $5 million to fund its operations and its marketing strategies designed to build its customer base through increased recognition of the Company's brand names and increased traffic to its Web sites. The Company also anticipates expending approximately $500,000 for development of its Web site infrastructures, $1 million for the employment of current and additional personnel (up to 15 additional persons), and $100,000 for the acquisition of office and warehouse facilities. There can be no assurances that future capital will become available when needed, or at all. In the event that the Company is not able to obtain the needed funds in the future, it may not be able to continue operations or put its business plan into full effect. The Company has filed a pending registration statement with the Securities and Exchange Commission however there can be no assurance as to the completion of the secondary offering. Future equity investments in the Company may have a dilutive effect on the percentage ownership of the Company's present shareholders. YEAR 2000 STATEMENT The Year 2000 issue encompasses the required recognition of computer hardware and software systems and computer controlled devices, including equipment, used in the Company's distribution and manufacturing operations to properly acknowledge the change from Year 1999 to Year 2000. The failure of any hardware and software systems or equipment to timely and accurately recognize such change could result in partial or complete systems failure. In the normal course of business, the Company relies on products and services from critical vendors, customers and other third parties whose computer systems must also be Year 2000 compliant in order for the Company to realize the uninterrupted flow of its business operations. The Company is actively taking steps to ensure that its systems and equipment will be Year 2000 compliant, including assessing the scope of work, prioritizing, certifying compliance, and testing compliance. - 8 - The Company has identified those systems and equipment in its operations that are considered to be critical to the Company's day to day operations. All of the Company's systems and equipment utilized in the its operations was tested for Year 2000 compliance during February and March 1999, with approximately 95% of such systems and equipment being certified as Year 2000 compliant as of June 30, 1999. The Company is in the process of obtaining written assurances from its third-party software providers that the software used by the Company is Year 2000 compliant. In addition, the Company is actively seeking assurances of Year 2000 compliance from each of its key suppliers, customers and other third parties with whom the Company conducts business. A lack of response or inadequate or inaccurate information from such third parties could materially affect the Company's assessment for Year 2000 readiness. Until assessments are completed, which is expected to occur during 1999, the Company cannot predict whether the failure of any such third party to be Year 2000 compliant will have a material adverse effect on the Company's business. To date, the costs incurred by the Company to address Year 2000 issues have been immaterial, and the Company expects that the costs to complete Year 2000 compliance certification, testing and verifications will also be immaterial. Where appropriate, the Company will develop contingency plans in areas it determines that Year 2000 readiness is insufficient. However, no assurances can be given that the Company's Year 2000 efforts are appropriate, adequate, or complete. In addition, the Company is unable to fully determine the effect of a failure of its own systems or those of any third party with whom it conducts business, but any significant failures could have a material adverse effect on the Company's financial condition, results of operations and cash flows. - 9 - PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. From time to time, the Company may become involved in litigation arising in the ordinary course of its business. The Company is not presently subject to any material legal proceedings. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None. ITEM 3. - NOT APPLICABLE. ITEM 4. - NOT APPLICABLE. ITEM 5. OTHER INFORMATION. On April 14, 1999 the Company effected a stock split, in the form of a stock dividend, whereby one additional share of common stock was issued for each outstanding share of common stock. As a result, there was issued and outstanding 5,353,414 shares of common stock. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) EXHIBITS. The following exhibits are filed with this report: 10.1 Employment Agreement by and between Nutriceuticals.com Corporation and Stephen M. Watters, dated as of April 1, 1999. (1) 10.2 Employment Agreement by and between Nutriceuticals.com Corporation and Jugal K. Taneja, dated as of April 1, 1999. (1) 10.3 Strategic Alliance Agreement by and between IndigoCity.com, Inc. and Nutriceuticals.com Corporation, dated as of April 13, 1999. (1) 27.1 Financial Data Schedule (for SEC use only). (1) Incorporated by reference to the Company's Registration Statement on Form SB-2, filed June 29, 1999, file number 0-24362, filed in Washington, D.C. (b) REPORTS ON FORM 8-K. During the three months ended June 30, 1999, the Company filed no reports on Form 8-K. - 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. NUTRICEUTICALS.COM CORPORATION Date: August 6, 1999 By: /s/ JUGAL K. TANEJA --------------------------------- Jugal K. Taneja Chief Executive Officer, Chief Accounting Officer, and Director - 11 - EXHIBIT INDEX EXHIBIT NO. DESCRIPTION - ----------- ----------- 27.1 Financial Data Schedule (for SEC use only) EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS MAR-31-1999 JUN-30-1999 14,599 0 19,038 0 19,163 83,370 50,000 5,000 128,570 173,092 0 0 0 5,352 (49,874) 128,570 33,899 33,899 14,786 14,786 0 0 589 (82,449) 0 (82,499) 0 0 0 (82,449) (.02) (.02)
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