Quarterly report pursuant to section 13 and 15(d) for small business issuersWhat is Form 10QSB?
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended March 31, 2001 Commission File No. 0-30727 NEWCOM INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Nevada 88-0320439 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) 515 West Pender Street Vancouver, British Columbia V6B 6H5 (Address of principal executive offices) (Zip Code) (604) 681-5678 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (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 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 APPLICABLE ONLY TO CORPORATE ISSUERS: As of April 30, 2001, there were 15,500,000 shares of the Registrant's $.01 par value common stock issued and outstanding. <PAGE> NEWCOM INTERNATIONAL, INC. INDEX PART I Page Item 1. Financial Statements Balance Sheet - March 31, 2001 (unaudited) 1 Statements of Operations - Three Months Ended March 31, 2001 and 2000 (unaudited) and the period from September 12, 1996 (inception) to March 31, 2001 (unaudited) 2 Statements of Cash Flows - Three Months Ended March 30, 2001 and 2000 (unaudited) and the period from September 12, 1996 (inception) to March 31, 2001 (unaudited) 3 Notes to Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 6 PART II Item 1. Legal Proceedings 7 Item 2. Changes In Securities 7 Item 3. Defaults Upon Senior Securities 7 Item 4. Submission of Matters to a Vote of Security Holders 7 Item 5. Other Information 7 Item 6. Exhibits and Reports on Form 8-K 7 Signatures 8 I <PAGE> NewCom International, Inc. (A blank-check company) Balance Sheet March 31, 2001 (unaudited) <TABLE> <S> <C> ASSETS Current assets: Cash $ 843 Prepaid expenses 82,300 Total current assets 83,143 Notes receivable 170,660 Other receivables 45,825 $ 299,628 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 97,779 Note payable to related party 70,133 Total current liabilities 167,912 Stockholders' equity: Common stock, $.001 par value; 100,000,000 shares authorized; 15,500,000 shares issued and outstanding 15,500 Additional paid-in capital 1,218,500 Deficit accumulated as a blank-check company (1,102,284) Total stockholders' equity 131,716 $ 299,628 </TABLE> See accompanying notes to financial statements. 1 <PAGE> NewCom INTERNATIONAL INC. (A blank-check company) Statements of Operations <TABLE> <CAPTION> For the Period from Inception, For the Three September 12, Months Ended 1996, Through March 31, March 31, 2001 2000 2001 (Unaudited) (Unaudited) <S> <C> <C> <C> Operating expenses: Management and consulting fees $ 10,500 $ 10,500 $ 422,000 General and administrative expenses 11,147 12,889 217,732 Total operating expenses 21,647 23,389 639,732 Operating loss (21,647) (23,389) (639,732) Other expenses (income): Interest expense 1,405 6,254 22,564 Interest (income) (1,140) (5,067) (19,513) Write-off of acquisition costs - - 461,000 Other (income) - - (1,500) Total other expenses (income) 265 1,187 462,551 Net loss $ (21,912) $ (24,576) $(1,102,283) Basic and diluted weighted average shares outstanding 15,500,000 15,500,000 Basic and diluted loss per common share $ - $ - </TABLE> See accompanying notes to financial statements 2 <PAGE> NewCom INTERNATIONAL INC. (A blank-check company) Statements of Cash Flows <TABLE> <CAPTION> For the Three September 12, Months Ended 1996 through March 31, March 31, 2001 2000 2001 <S> <C> <C> <C> CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (21,912) $ (24,576) $(1,102,283) Adjustment to reconcile net loss to net cash used in operating activities: Value of stock options granted below fair value - - 233,000 Write-off of acquisition costs - - 461,000 Changes in operating assets and liabilities: Prepaid expenses 18,500 - (82,300) Other receivables - - 1,884 Accounts payable and accrued expenses 2,650 5,569 87,278 Net cash used in operating activities (762) (19,007) (401,421) CASH FLOWS FROM INVESTING ACTIVITIES: Increase in notes receivable (1,140) - (478,926) Payments on notes receivable - - 260,557 Fees paid on fibre-optic cable network investment - - (461,000) Redemption (Purchase) of certificate of deposit - - - Net cash provided (used) in investing activities (1,140) - (679,369) CASH FLOWS FROM FINANCING ACTIVITIES: Initial capitalization - - 51,000 Issuance of common stock - - 950,000 Proceeds (payments) of note payable - - - Advances from related party 1,405 6,500 80,633 Net cash provided by financing activities 1,405 6,500 1,081,633 Net increase (decrease) in cash (497) (12,507) 843 Cash, beginning of period 1,340 16,706 - Cash, end of period $ 843 $ 4,199 $ 843 Cash paid during the period for: Interest $ - $ 4,108 $ 16,046 </TABLE> See accompanying notes to financial statements. 3 <PAGE> NewCom International, Inc. (A blank-check company) Notes to Financial Statements Note 1. Description of Business and Summary of Significant Accounting Policies Description of Business NewCom International Inc. (the 'Company') was incorporated in Nevada in September 1996 under the name of AgriNet, Inc. In October 1996, NewCom amended its Articles of Incorporation to change its name to NewCom International Inc. Since its incorporation, NewCom has not conducted any significant operations. NewCom's activities to date have focused primarily on incorporation activities and the identification of potential operating opportunities or acquisitions targets. Since NewCom has not yet commenced any principal operations and has not yet earned significant revenues, NewCom is considered to be a blank-check company. Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Unaudited Interim Financial Statements The interim financial data as of March 31, 2001, and for the three months ended March 31, 2001 and 2000, is unaudited; however, in the opinion of management, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary to present fairly and Company's financial position as of March 31, 2001, and the results of its operations and cash flows for the three months ended March 31, 2001 and 2000. 4 <PAGE> NewCom INTERNATIONAL INC. (A blank-check company) Going Concern and Management's Plans NewCom has not commenced significant operations, and has limited liquid resources. Such matters raise substantial doubt about NewCom's ability to continue as a going concern. Management's plans with respect to these conditions are to continue collecting on its notes receivable, searching for additional sources of capital and new operating opportunities. In the interim, NewCom will continue operating with minimal overhead, and key administrative and management functions which will be provided by consultants. Accordingly, the accompanying financial statements have been presented under the assumption NewCom will continue as a going concern, and accordingly, no adjustments have been made to accompanying financial statements as a result of this uncertainty. Note 2. Commitments Effective October 1, 1999, NewCom entered into an Advisory and Management Agreement (the "Agreement") with NuVen Advisors Limited Partnership ("NuVen" or the "Advisor"). In April 2000, the Agreement, and the amount due was assigned to NewBridge Capital, Inc. ("NewBridge") by NuVen. Pursuant to the terms of this agreement, NewCom is required to pay $3,500 per month, plus expenses, in exchange for Advisor's assistance in the formulation of possible acquisition strategies, and the management of financial and general and administrative matters. In addition, NewCom is required to pay a fee equal to 10% of the asset value or investment made in NewCom resulting from Advisor's efforts, and a transaction fee (as defined) equal to 5% of the proceeds received by NewCom in connection with a sale of its assets. Note 2. Commitments (continued) In May 2000, the Company paid NewBridge $258,000, of which $75,000 was for services rendered in preparation and filing of its Form 10-SB with the Securities and Exchange Commission, among other services, and amounts due from NuVen and Newbridge totaling $63,100 for advisory fees and out of pocket expenses. Of such amount paid to Newbridge, $82,300 was accounted for as a prepaid expense at March 31, 2001 to be used for future fees and expenses. 5 <PAGE> ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000 There were no operating revenues recorded during the three months ended March 31, 2001 or 2000. The Registrant's general and administrative expenses were $22,000 for the three months ended March 31, 2001, as compared to $23,000 for the same period last year. The change is primarily attributable to costs and expenses accured or amortized. Liquidity and Capital Resources The Registrant has incurred net losses and negative cash flows from operating activities. The Registrant had minimal cash and cash equivalents at March 31, 2001 and had negative working capital of $85,000 as of March 31, 2001. The limited working capital is a direct result of the Registrant incurring expenses for professional, consulting and advisory services and other overhead during the periods. As of the date of this Report, the Registrant has no material commitments for capital expenditures and no commitments for additional equity or debt financing. During the fiscal year 2000, $260,557 of cash was received on notes receivable. Additionally during fiscal year 2000, the Company paid NewBridge $258,000, of which $75,000 was for services rendered advisory fees and out of pocket expenses. Of such amount paid to Newbridge, $82,000 was accounted for as a prepaid expense at March 31, 2001 to be used for future fees and expenses. During the first quarter of 2001, the Company was not required to pay any expenses in cash. Going Concern As a result of the Registrant having no revenue producing activities, the Registrant has limited cash and cash equivalents remaining as of March 31, 2001, to finance future operations. Such conditions raise substantial doubt about the Registrant's ability to continue as a going concern. The Registrant believes it will continue collecting on its notes receivable and will continue to search for additional sources of capital and new operating opportunities. In the interim, the Registrant will continue operating with minimal overhead, and key administrative and management functions which will be provided by consultants. 6 <PAGE> PART II: OTHER INFORMATION Item 1.Legal Proceedings None Item 2. Changes In Securities 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) Exhibits - None (b) Form 8-K - None 7 <PAGE> SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Company NewCom International Inc. Date: May 14, 2001 by: /s/ David Lo David Lo President and Director 8