U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended:
OR
[X] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from August 1, 2001 to December 31, 2001
Commission file number 333-61714
INVENTOY.COM, INC.
-----------------------------------------
(Exact name of small business issuer as
specified in its charter)
DELAWARE 13-418563
----------------------------- ---------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
6786 WILLOWOOD DRIVE, SUITE G1006, BOCA RATON, FLORIDA 33434
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (561) 482-6952
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the 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
As of April 5, 2002 there were 20,884,000 shares of the registrant's common
stock, par value $0.001, issued and outstanding.
Transitional Small Business Disclosure Format (check one):
Yes ; No X
--------- ---------
INVENTOY.COM, INC.
OCTOBER 31, 2001 TRANSITION REPORT ON FORM 10-QSB
TABLE OF CONTENTS
Page
Number
Special Note Regarding Forward Looking Statements ...................... 3
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements ................................................... 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.............................................. 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings....................................................... 11
Item 2. Changes in Securities and Use of Proceeds .............................. 11
Item 6. Exhibits and Reports on Form 8-K........................................ 11
2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
To the extent that the information presented in this Transition Report on
Form 10-QSB for the transition period ended December 31, 2001, discusses
financial projections, information or expectations about our products or
markets, or otherwise makes statements about future events, such statements are
forward-looking. We are making these forward-looking statements in reliance on
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Although we believe that the expectations reflected in these
forward-looking statements are based on reasonable assumptions, there are a
number of risks and uncertainties that could cause actual results to differ
materially from such forward-looking statements. These risks and uncertainties
are described, among other places in this Transition Report, in "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
In addition, we disclaim any obligations to update any forward-looking
statements to reflect events or circumstances after the date of this Transition
Report. When considering such forward- looking statements, you should keep in
mind the risks referenced above and the other cautionary statements in this
Transition Report.
3
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Balance Sheet as of December 31, 2001
and July 31, 2001.......................................................5
Statements of Operations for the five month periods ended December 31,
2001 and December 31, 2000 and the period from August 11, 1999 (inception) to
December 31, 2001..............................................................6
Statements of Cash Flows for the five month periods ended December 31,
2001 and December 31, 2000 and the period from August 11, 1999 (inception) to
December 31, 2001..............................................................7
Notes to Financial Statements.............................................8
4
Inventoy.com, Inc.
(A Development Stage Company)
Balance Sheets
December 31, July 31,
2001 2001
-------- --------
(Unaudited)
---------
Assets
Current assets:
Cash $ 17,289 $ 62,991
-------- --------
Total current assets 17,289 62,991
-------- --------
Other assets:
Purchased toy designs 3,000 3,000
-------- --------
Total assets $ 20,289 $ 65,991
======== ========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 6,145 $ 6,864
-------- --------
Total liabilities 6,145 6,864
-------- --------
Shareholders' equity:
Common stock, 20,000,000 shares
authorized; 5,211,000 shares
issued and outstanding; par
value $.001 5,211 5,211
Preferred stock, 5,000,000 shares
authorized; -0- shares issued
and outstanding; par value $.001 -- --
Additional paid in capital 78,524 81,849
Subscriptions receivable (600) (600)
Retained earnings (deficit) (68,991) (27,333)
-------- --------
Total shareholders' equity 14,144 59,127
-------- --------
Total liabilities and
shareholders' equity $ 20,289 $ 65,991
======== ========
See accompanying Notes to Financial Statements.
5
Inventoy.com, Inc.
(A Development Stage Company)
Statements of Operations
(Unaudited)
Period from
August 11, 1999
Five month periods ended (inception)
December 31, December 31, to December 31,
2001 2000 2001
---- ---- ----
Revenues:
Net sales $ -- $- $ --
------------ ------------ ------------
Expenses:
General and administrative 41,921 7,684 70,228
------------ ------------ ------------
Total expenses 41,921 7,684 70,228
Other Income:
Interest 263 77 1,237
------------ ------------ ------------
Net income (loss) $ (41,658) $ (7,607) $ (68,991)
============ ============ ============
Net income (loss) per share:
Basic $ (0.01) $ (0.01)
============ ============
Diluted $ (0.01) $ (0.01)
============ ============
Weighted average common shares used
in calculation of net income (loss)
per share 5,211,000 3,800,980
============ ============
See accompanying Notes to Financial Statements.
6
Inventoy.com, Inc.
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
Period from
August 11,1999
Five Month Periods (inception)
Ended December 31, to December 31,
2001 2000 2001
---- ---- ----
Cash flows from operating activities:
Net loss $(41,658) $ (7,607) $(68,991)
Adjustments to reconcile net loss
to cash provided (used) for operating activities:
Common stock issued for services -- -- 50,000
-------- -------- --------
(41,658) (7,607) (18,991)
Increase (decrease) in operating accounts payable (719) 5,711 6,145
-------- -------- --------
Cash provided (used) for operating activities (42,377) (1,896) (12,846)
-------- -------- --------
Cash flows from financing activities:
Proceeds of private placement offering net of
$3,325, $2,014 and $80,965 direct costs (3,325) 22,986 30,135
-------- -------- --------
Cash provided (used) for financing activities (3,325) 10,486 30,135
-------- -------- --------
Increase (decrease) in cash (45,702) 21,090 17,289
Cash, beginning of period 62,991 -- --
-------- -------- --------
Cash, end of period $ 17,289 $ 12,505 $ 17,289
======== ======== ========
Supplemental Disclosure of non-cash investing
and financing activities:
Receivable from shareholders in
connection with subscription
from common stock $ -- $ -- $ 600
Issuance of common stock for
purchased toy designs $ -- $ -- $ 3,000
See accompanying Notes to Financial Statements.
7
Inventoy.com, Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
1. Consolidated Financial Statements
The accompanying financial statements include the accounts of Inventoy.com, Inc.
(a development stage company).
Effective February 22, 2002, the Board of Directors of Inventoy.com, Inc.
("Inventoy", the "Company") approved a change of the Company's fiscal year from
July 31 to December 31. The five-month transition period of August 1, 2001
through December 31, 2001 ("transition period") precedes the start of the new
fiscal year. The unaudited financial information for the five months ended
December 31, 2000 ("prior period") is presented for comparative purposes and
includes any adjustments (consisting of normal, recurring adjustments) which
are, in he opinion of management, necessary for fair presentation.
The unaudited financial statements included herein have been prepared in
accordance with the instructions to Form 10-QT and the Rule 10-01 of Regulation
S-X, and do not include all the information and footnotes required by U.S.
generally accepted accounting principles. However the financial statements do
include all adjustments of a normal recurring nature, which, in the opinion of
management, are necessary to present fairly the results of operations of the
Company for the interim periods presented. The balance sheet data for July 31,
2001 are derived from the audited financial statements that are included in the
Company's report on Form SB-2 registration Statement filed on October 29, 2001,
which should be read in connection with these financial statements.
The accounting policies followed in the presentation of the interim financial
results are the same as those followed on an annual basis. Those policies are
presented in Note 3, "Significant Accounting Policies" in the consolidated
financial statements included in the Company's annual report on Form SB-2.
The interim financial results as of the five months ended December 31, 2001 are
not necessarily indicative of the results that will be obtained for the year
ending December 31, 2002.
2. Supplemental Cash Flow Information
December 31 December 31
2001 2000
---- ----
Cash paid during the five month periods for:
Interest $ - $ -
===== =====
Income taxes $ - $ -
===== =====
Non-cash financing transaction:
Direct stock placement costs $ - $3,325
===== =====
8
Inventoy.com, Inc.
(A Development Stage Company)
Notes to Financial Statements
(Unaudited)
3. Subsequent Events
(a) On February 15, 2002 the Board of Directors of Inventoy.com, Inc. approved a
plan, and filed an amended certificate of incorporation, to increase the
Company's authorized capital. The new capitalization plan calls for an increase
in the Company's authorized common stock from 20,000,000 shares to 100,000,000
shares. There was no change in the number of authorized preferred stock that
remained at 5,000,000 shares.
The Company's Board of Directors, voted to forward split the outstanding common
stock of the Company, in the ratio of four (4) to one (1). The record date of
the Stock split was February 25, 2002 (the Record Date). As a result,
shareholders of record as of the close of business on the Record Date were
eligible to receive an additional three shares for every one share they held in
the Company.
As a result of the stock split the Company's 5,211,000 shares of common stock
issued and outstanding, were increased to 20,884,000 shares of common stock
issued and outstanding.
(b) On March 14, 2002 the Company signed an asset purchase agreement with
Inventoy.com International, Inc., through which Inventoy assigned all of its
rights, titles and exclusive interests in and to all patents, trademarks, trade
names, technical processes, know-how and other intellectual property associated
with the business of the Company, including the twenty seven (27) toy designs
the Company acquired from Kaplan Design Group upon its formation, in exchange
for all of the outstanding shares of Inventoy.com International, Inc., (100
shares, par value $.001).
(c) On March 19, 2002 the Company borrowed $100,000 and executed a 5% unsecured
promissory note due March 19, 2003.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion contains forward-looking statements involving
risks and uncertainties based on our current expectations and the development of
our business. All statements in this report relate to our intended business
plans, prospective financial operations and expected future growth or
profitability constitute forward-looking statements. Forward-looking statements
are subject to a number of risks and uncertainties. Our actual results may
differ significantly from those anticipated or expressed in these statements.
You should read the following discussion and analysis in conjunction with the
audited financial statements (and notes thereto) and other financial information
of our company appearing elsewhere in this report.
OVERVIEW
Inventoy was incorporated on August 11, 1999, and seeks to license toy
designs to toy manufacturers and to act as a toy inventor's agent in licensing
toy designs developed by others. Additionally Inventoy will seek revenue from
the sale of banner ads on the web page it plans to create. However, the
expectation is that any revenue from the sale of banner ads will be minimal.
Inventoy's licensing efforts began with twenty-seven toy designs which were
acquired from Kaplan Design Group, a New Jersey general partnership. Inventoy
expects to market those toy designs by both direct meetings with toy
manufacturers' representatives as well as through a website that will give the
manufacturers an opportunity to review pictures and descriptions of new
inventions at a single source in order to decide whether a face-to-face meeting
would be useful.
Inventoy's plan of operations for the next twelve months includes hiring a
web designer to build Inventoy's web page, and soliciting new toy designs. The
web page will take approximately four months to build and will cost
approximately $25,000. We plan to hire a web designer later this year. We will
rely on Ed Kaplan and Doug Kaplan's contacts in the toy industry to solicit new
toy designs. We plan for the web page to also solicit new toy designs. Also,
during the next twelve months Ed Kaplan will market Inventoy's current toy
designs directly to toy manufacturers' representatives.
From its inception to the time of filing this report, Inventoy has been
developing its business and had no operations. We anticipate that we will be
able to fund planned operations through approximately December 31, 2002.
Inventoy believes that it will not need to raise additional funds in the next
twelve months.
INTELLECTUAL PROPERTY
We have no trademark, copyright or patent protection at this time. None of
the designs we own are protected by patent protection. Generally, while some toy
designs may be entitled to patent protection, the majority of toy designs will
not meet the criteria for a utility patent protection. Some designs may be
eligible for a limited degree of protection provided by design patents. However,
in general most designs are protected only under the law of trade secrets. Under
the law of trade
10
secrets, the secret is legally protected only for so long as it is not disclosed
to others other than by someone under an obligation to maintain its secrecy.
COMPETITION
We expect to face intense competition both in our efforts to market new toy
inventions to toy manufacturers and in our efforts to get new inventor customers
for whom we can act as agent. There are several other companies seeking to
assist toy inventors, one of the more successful companies is Haystack Toy
Company. Insofar as marketing toy designs to the manufacturers is concerned, the
major competition will be from the manufacturers' own in-house design
departments. There are also approximately 150 independent toy design companies,
many of which are sole proprietorships. The principal bases on which industry
participants compete is on the perceived value of the toy design concept and the
likelihood of it being manufactured and marketed.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to nor are we aware of any existing, pending or
threatened lawsuits or other legal actions.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
INCREASE IN AUTHORIZED SHARES.
On February 15, 2002, the Board of Directors of the Company approved a plan
and filed an Amended Certificate of Incorporation to increase the Company's
authorized common stock from 20,000,000 shares to 100,000,000 shares. There was
no change in the number of authorized preferred stock, which remained at
5,000,000 shares.
FORWARD STOCK SPLIT.
On February 25, 2002, the Board of Directors of the Company voted to
forward split the outstanding common stock of the Company, in the ratio of four
(4) to one (1). The record date of the stock split was February 25, 2002 (the
"Record Date"). As a result, shareholders of record as of the close of business
on the Record Date were eligible to receive an additional three shares of
common stock for every share of common stock that they held in the Company.
As a result of the stock split, the Company's 5,211,000 shares of common
stock issued and outstanding, were increased to 20,884,000 shares of common
stock issued and outstanding.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
EXHIBIT
NUMBER DESCRIPTION
------- -----------
3.1 Certificate of Amendment to the Certificate of Incorporation.
(b) Reports on Form 8-K.
A Current Report on Form 8-K was filed on February 28, 2002,
reporting that the Company had changed its fiscal year to December 31 from July
31, effective February 22, 2002.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on this
8th day of April, 2002.
Inventoy.com, Inc.
By: /s/Ed Kaplan
-------------------------------
Ed Kaplan, President, CEO
and Chairman of the Board
(principal financial officer)
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